Morning Market Internals

NYSE Composite Index:

• Volume Running -5.8% Below 100-Day Average 
• 1 Sector Declining, 10 Sectors Rising
• 83.7% of Issues Advancing, 14.0% Declining
• 53 New 52-Week Highs, 19 New Lows
• 40.7%(+3.4%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 55.0 +5.0
  
• Bloomberg Global Risk-On/Risk-Off Index 54.4 -1.3%
  
• Russell 1000: Growth/Value 13,724.7 -.42%
  
• Vix 21.6 -3.8%
• Total Put/Call .94 -7.8%
• TRIN/Arms 1.96 +90.3% 

Friday Watch

Night Trading 

• Asian equity indices are -.5% to +.5% on average.

• Asia Ex-Japan Investment Grade CDS Index 119.75 +.5 basis point. 

• China Sovereign CDS 65.5 -3.0 basis points. 
• China Iron Ore Spot 114.7 USD/Metric Tonne -.41%.

• Bloomberg Emerging Markets Currency Index 47.5 +.02%.
• Bloomberg Global Risk-On/Risk Off Index  55.78 +1.2%. 
• Bloomberg US Financial Conditions Index -.25 -2.0 basis points.
  
• Volatility Index(VIX) futures 23.5 -.28%.
• Euro Stoxx 50 futures +.25%.

• S&P 500 futures +.24%.

• NASDAQ 100 futures +.27%.  

Morning Preview Links

Earnings of Note 
Company/Estimate 

 

Before the Open: 

• (GBX)/.49

After the Close:

• None of note
  

Economic Releases

8:30 am EST

• The Change in Non-Farm Payrolls for Dec. is estimated at 203K versus 263K in Nov.
• The Unemployment Rate for Dec. is estimated at 3.7% versus 3.7% in Nov.
• Average Hourly Earnings MoM for Dec. is estimated to rise +.4% versus a +.6% gain in Nov.
• The Labor Force Participation Rate for Dec. is estimated to fall to 62.2% versus 62.1% in Nov.

10:00 am EST

• The ISM Services Index for Dec. is estimated to fall to 55.0 versus 56.5 in Nov.
• Factory Orders for Nov. is estimated to fall -1.0% versus a +1.0% gain in Oct.
  

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Fed's Cook speaking and the German Factory Orders report could also impact global trading today.

US Equity Market Hours

• 9:30 am - 4:00 pm EST
  

BOTTOM LINE: Asian indices are mostly higher, boosted by energy and industrial shares in the region. I expect US stocks to open mixed and to weaken into the afternoon, finishing modestly lower. The Portfolio is 25% net long heading into the day.

Stocks Falling into Final Hour on US Policy-Induced Stagflation Fears, Rising Fed Rate-Hike Odds, Dollar Strength, Tech/REIT Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Lower
  

• Sector Performance: Most Sectors Declining
  

• Volume:  Around Average

• Market Leading Stocks: Underperforming
  

Equity Investor Angst:

• Volatility(VIX) 22.6 +2.5%
• DJIA Intraday % Swing 1.15%
  
• Bloomberg Global Risk On/Risk Off Index 55.0 +1.8%

• Euro/Yen Carry Return Index 145.3 -.2%

• Emerging Markets Currency Volatility(VXY) 10.8 -.6%

• CBOE S&P 500 Implied Correlation Index 43.2 +2.0% 

• ISE Sentiment Index 84.0 -1.0 point
  

• Total Put/Call 1.02 -9.7%

• NYSE Arms .92 +31.4%

Credit Investor Angst:

• North American Investment Grade CDS Index 79.2 +.57%
  

• US Energy High-Yield OAS 387.66 -.21%
• Bloomberg TRACE # Distressed Bonds Traded 315.0 +32.0
  

• European Financial Sector CDS Index 94.4 +1.5% 
• Credit Suisse Subordinated 5Y Credit Default Swap 437.6 -2.6%
  

• Italian/German 10Y Yld Spread 202.0 basis points +2.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 120.0 -2.6%
  

• Emerging Market CDS Index 235.05 +1.7%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 27.65 +1.02%

• 2-Year Swap Spread 28.75 basis points +.75 basis point
  

• TED Spread 25.0 basis points -3.0 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -16.0 basis points -.5 basis point
  
• MBS  5/10 Treasury Spread  146.0 +2.0 basis points
  
• Bloomberg US Agg CMBS Avg OAS 116.0 unch.
  
• Avg. Auto ABS OAS .81 -1.0 basis point
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 47.46 -.14%
• 3-Month T-Bill Yield 4.60% +10.0 basis points
  

• China Iron Ore Spot 114.2 USD/Metric Tonne -.8%
• Dutch TTF Nat Gas(European benchmark) 69.4 euros/megawatt-hour +6.7%

• Citi US Economic Surprise Index 9.1 +9.6 points

• Citi Eurozone Economic Surprise Index 75.9 -.7 point
  

• Citi Emerging Markets Economic Surprise Index -24.1 -.9 point
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 230.06 +.27:  Growth Rate +11.4% +.1 percentage point, P/E 16.6 -.2
  
• Bloomberg US Financial Conditions Index -.24 +14.0 basis points
  
• Yield Curve -73.5 basis points (2s/10s) -6.25 basis points
• US Atlanta Fed GDPNow Forecast +3.76% -15.0 basis points
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +4.52% unch.: CPI YoY +6.64% unch.
  
• 10-Year TIPS Spread 2.22 -1.0 basis point
  
• Highest target rate probability for March 22nd FOMC meeting: 59.3%(-3.5 percentage points) chance of 4.75%-5.0%. Highest target rate probability for May 3rd meeting: 44.1%(+4.3 percentage points) chance of 5.0%-5.25%.
  

US Covid-19:

• 119 new infections/100K people(last 7 days total). 6.8%(-0.0 percentage points) of 1/14/22 peak(1,740) -0/100K people from prior report.
  
• New Covid-19 patient hospital admissions per 100K population -69.9%(+0.0 percentage points) from peak 7-day avg. of 1/9/22 - 1/15/22
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -60 open in Japan 
• China A50 Futures: Indicating +74 open in China

• DAX Futures: Indicating +88 open in Germany

Portfolio:

• Higher:  On gains in my commodity sector longs, index hedges and emerging market shorts
  

• Disclosed Trades:  None
  

• Market Exposure: 25% Net Long
  

Bear Radar

Style Underperformer:

• Large-Cap Growth -1.2%
  

Sector Underperformers:

• 1) Cyber Security -3.0% 2) Software -2.6% 3) REITs -2.6%

Stocks Falling on Unusual Volume: 

• DHR, ANET, ENPH, KRG, AZEK, JEF, TAP, ETR, ASH, VRDN, SBNY, MRVI, TGTX, AR, AES, RRC, ZS, APLS, MSM, WWW, RIVN, SNOW, PBT, DDOG, PBT, WDAY, GME, OFIX, DDOG, JAMF, ZI, SGH, ARRY, WBA, NET, QLYS, CRWD, VSCO, GTLB, LPG, GSHD, COIN, EPAM, STZ, XMTR, CFLT, SMPL, ASAN, S, RPM and SI
  

Stocks With Unusual Put Option Activity:

• 1) BBBY 2) STZ 3) FANG 4) HOG 5) KSS
  

Stocks With Most Negative News Mentions:

• 1) SI 2) BBBY 3) COIN 4) WBA 5) STZ
  

Charts:

• ETFs Falling on Unusual Volume
• Stocks Falling on Unusual Volume

Bull Radar

Style Outperformer:

• Large-Cap Value -.7%

Sector Outperformers:

• 1) Steel +2.4% 2) Energy +2.3% 3) Oil Service +2.1%

Stocks Rising on Unusual Volume:

• NVCR, ANGO, FGEN, LW, LOVE, WDC, ORMP and STAA
  

Stocks With Unusual Call Option Activity:

• 1) NTNX 2) CNK 3) GRPN 4) STZ 5) CZR

Stocks With Most Positive News Mentions:

• 1) NVCR 2) VYNT 3) ZLAB 4) AMV 5) RKLY
  

Charts:

• ETFs Rising on Unusual Volume
• Stocks Rising on Unusual Volume

Morning Market Internals

NYSE Composite Index:

• Volume Running -8.4% Below 100-Day Average 
• 10 Sectors Declining, 1 Sector Rising
• 27.6% of Issues Advancing, 68.8% Declining
• 30 New 52-Week Highs, 28 New Lows
• 39.5%(-2.9%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 50.0 unch.
  
• Bloomberg Global Risk-On/Risk-Off Index 55.1 +1.9%
  
• Russell 1000: Growth/Value 13,860.1 -.36%
  
• Vix 22.5 +2.2%
• Total Put/Call 1.06 -6.2%
• TRIN/Arms .85 +21.4%