Thursday, February 01, 2024

Friday Watch

Evening Headlines

Bloomberg:    

Zero Hedge:

Wall Street Journal:

TheGatewayPundit.com:

The Epoch Times:

X:
OpenVAERS:
SKirsch.com:
Night Trading 
  • Asian equity indices are +.5% to +1.5% on average.
  • Asia Ex-Japan Investment Grade CDS Index 102.0 -1.0 basis point.
  • China Sovereign CDS 65.5 -1.5 basis points.
  • China Iron Ore Spot 128.7 USD/Metric Tonne -1.7%.
  • Bloomberg Emerging Markets Currency Index 40.8 -.1%.
  • Bloomberg Global Risk-On/Risk Off Index 56.8 +1.3%.
  • Volatility Index(VIX) futures 15.3 -1.6%.
  • Euro Stoxx 50 futures +.9%
  • S&P 500 futures +.6%.
  • NASDAQ 100 futures +1.1%.  
Morning Preview Links

BOTTOM LINE: Asian indices are modestly higher, boosted by technology and industrial shares in the region. I expect US stocks to open modestly higher and to weaken into the afternoon, finishing mixed.  The Portfolio is 100% net long heading into the day.

Stocks Surging into Final Hour on Rising Fed Rate-Cut Odds, Diminished Mid-East Regional War Worries, Earnings Outlook Optimism, Tech/Consumer Discretionary Sector Strength

Broad Equity Market Tone:

  • Advance/Decline Line: Substantially Higher
  • Sector Performance: Almost Every Sector Rising
  • Volume: Heavy
  • Market Leading Stocks: Performing In Line
Equity Investor Angst:
  • Volatility(VIX) 13.9 -3.1%
  • DJIA Intraday % Swing .74 +69.3%
  • Bloomberg Global Risk On/Risk Off Index 55.8 -3.0%
  • Euro/Yen Carry Return Index 171.7 +.09%
  • Emerging Markets Currency Volatility(VXY) 7.2 -.96%
  • CBOE S&P 500 Implied Correlation Index 18.8 -4.5% 
  • ISE Sentiment Index 149.0 unch.
  • Total Put/Call 1.01 +12.2%
  • NYSE Arms 1.49 +2.05% 
  • NYSE Non-Block Money Flow +$181.1M 
Credit Investor Angst:
  • North American Investment Grade CDS Index 55.4 -1.2%
  • US Energy High-Yield OAS 333.40 -.29%
  • Bloomberg TRACE # Distressed Bonds Traded 331 +21
  • European Financial Sector CDS Index 70.66 +2.5% 
  • Deutsche Bank Subordinated 5Y Credit Default Swap 208.92 +3.8%
  • Italian/German 10Y Yld Spread 158.0 basis points +2.0 basis points
  • Asia Ex-Japan Investment Grade CDS Index 102.81 +2.1%
  • Emerging Market CDS Index 179.0 -2.1%
  • Israel Sovereign CDS 129.4 -.3%
  • China Corp. High-Yield Bond USD ETF(KHYB) 24.47 +.14%
  • 2-Year SOFR Swap Spread -14.5 basis points +.25 basis point
  • Treasury Repo 3M T-Bill Spread 5.25 basis points +1.0 basis point
  • 3-Month EUR/USD Cross-Currency Basis Swap -8.75 +1.75 basis points
  • MBS  5/10 Treasury Spread 139.0 +1.0 basis point
  • Bloomberg CMBS Investment Grade Bbb Average OAS 887.0 -10.0 basis points
  • Avg. Auto ABS OAS 70.0 unch.
Economic Gauges:
  • Bloomberg Emerging Markets Currency Index 40.88 +.19%
  • 3-Month T-Bill Yield 5.36% unch.
  • China Iron Ore Spot 128.8 USD/Metric Tonne -1.7%
  • Dutch TTF Nat Gas(European benchmark) 29.0 euros/megawatt-hour -4.1%
  • Citi US Economic Surprise Index 30.7 +5.0 points
  • Citi Eurozone Economic Surprise Index 4.4 +5.5 points
  • Citi Emerging Markets Economic Surprise Index -4.9 -3.4 points
  • S&P 500 Current Quarter EPS Growth Rate YoY(208 of 500 reporting) -.4% -.8 percentage point
  • S&P 500 Blended Forward 12 Months Mean EPS Estimate 244.03 +.28:  Growth Rate +10.2% +.1 percentage point, P/E 20.0 unch.
  • S&P 500 Current Year Estimated Profit Margin 11.49% +1.0 basis point
  • NYSE FANG+ Current Quarter EPS Growth Rate YoY(4 of 10 reporting) +31.1% unch.
  • NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 295.66 +1.08: Growth Rate +38.6% +.5 percentage point, P/E 30.8 -.1
  • Bloomberg US Financial Conditions Index .85 -9.0 basis points
  • Bloomberg Euro-Zone Financial Conditions Index .60 -16.0 basis points
  • US Yield Curve -33.75 basis points (2s/10s) -4.5 basis points
  • US Atlanta Fed 1Q GDPNow Forecast +3.0% unch.
  • US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 67.6% +3.2 percentage points
  • Cleveland Fed Inflation Nowcast Core PCE YoY +2.66% unch.: CPI YoY +2.96% unch.
  • 10-Year TIPS Spread 2.19 -6.0 basis points
  • Highest target rate probability for May 1st FOMC meeting: 59.6%(+13.3 percentage points) chance of 5.0%-5.25%. Highest target rate probability for June 12th meeting: 50.3%(+8.8 percentage points) chance of 4.75%-5.0%.
Overseas Futures:
  • Nikkei 225 Futures: Indicating +140 open in Japan 
  • China A50 Futures: Indicating +9 open in China
  • DAX Futures: Indicating +170 open in Germany
Portfolio:
  • Higher:  On gains in my consumer discretionary/industrial/tech/biotech/utility sector longs
  • Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges and some of my emerging market shorts
  • Market Exposure: Moved to 100% Net Long

Bear Radar

Style Underperformer:

  • Small-Cap Value +.6%
Sector Underperformers:
  • 1) Regional Banks -2.7% 2) Insurance -1.1% 3) Oil Service -.9%
Stocks Falling on Unusual Volume: 
  • INDB, HON, KEY, SWK, FRO, CPRI, STNG, MTB, EWBC, QCOM, OZK, AXS, WAL, ING, ATI, ZION, OCSL, PNFP, SIGI, MTH, KLIC, AFL, MXL, WOLF, ZIM, CNMD and CHRW
Stocks With Unusual Put Option Activity:
  • 1) NYCB 2) RKLB 3) HON 4) WAL 5) CMA
Stocks With Most Negative News Mentions:
  • 1) PTON 2) NYCB 3) AFL 4) CHRW 5) LFST
Charts:

Bull Radar

Style Outperformer:

  • Small-Cap Growth +1.6%
Sector Outperformers:
  • 1) Gold & Silver +3.0% 2) Alt Energy +2.6% 3) Computer Hardware +2.2%
Stocks Rising on Unusual Volume:
  • NXT, CTVA, OLMA, PTGX, DGII, RACE, UGI, ARVN, BOOT, ALGM, CGEM, SMCI, HLIT, ETSY, VSTO, ZGN, GOOS, BALL, THC, GFI, NSC, DLX, TT, DLX, ETN, PH, DB, LI, SHLS, CLS, CORT, VRT, PCVX, QRVO, FLEX, JHG, KEX, MGNX, WBD, WNC, ROK, MEOH, BC, FTV, ALGN, DOV and TTEK
Stocks With Unusual Call Option Activity:
  • 1) NYCB 2) ALGN 3) EU 4) ETN 5) NXT
Stocks With Most Positive News Mentions:
  • 1) CELU 2) NXT 3) ELAB 4) DGII 5) CTVA

Tomorrow's Earnings/Economic Releases of Note; Market Movers

Earnings of Note 
Company/Estimate 

Before the Open:
  • (ABBV)/2.80
  • (AON)/4.07
  • (BMY)/1.55
  • (CBOE)/2.04
  • (CHTR)/8.72
  • (CVX)/3.19
  • (CHD)/.65
  • (XOM)/2.20
  • (LYB)/1.33
  • (MGA)/1.47
  • (PIPR)/2.61
  • (REGN)/10.74
  • (SAIA)/3.20
  • (CI)/6.54
After the Close: 
  • None of note
Economic Releases

8:30 am EST

  • The Change in Non-Farm Payrolls for Jan. is estimated to fall to +185K versus +216K in Dec.
  • The Unemployment Rate for Jan. is estimated to rise to 3.8% versus 3.7% in Dec.
  • Average Hourly Earnings MoM for Jan. is estimated to rise +.3% versus a +.4% gain in Dec.
10:00 am EST
  • Final Univ. of Mich. Consumer Sentiment readings for Jan.
  • Factory Orders for Dec. is estimated to rise +.2% versus a +2.6% gain in Nov.
  • Factory Orders Ex Transports for Dec. is estimated to rise +.2% versus a +.1% gain in Nov.
  • Final Durable Goods Orders readings for Dec.

Upcoming Splits 

  • None of note
Other Potential Market Movers
  • The US government funding deadline, US Baker Hughes Rig Count, CFTC speculative net positioning reports and (CHD) analyst day could also impact global trading tomorrow.
US Equity Market Hours
  • 9:30 am - 4:00 pm EST

Morning Market Internals

NYSE Composite Index:

  • Volume Running +16.9% Above 100-Day Average 
  • Nasdaq/NYSE Volume Ratio 8.9 -.7
  • 2 Sectors Declining, 9 Sectors Rising
  • 50.6% of Issues Advancing, 46.6% Declining 
  • TRIN/Arms 1.42 -2.7% 
  • Non-Block Money Flow +$10.1M
  • 74 New 52-Week Highs, 19 New Lows
  • 59.9%(+1.5%) of Issues Above 200-day Moving Average
  • Average 14-Day RSI 58.0 -9.0
Other:
  • Bloomberg Global Risk-On/Risk-Off Index 56.1 -2.6%
  • Bloomberg Cyclicals/Defensives Pair Index 136.5 -.15%
  • Russell 1000: Growth/Value 18,939.6 +.86%
  • CNN Fear & Greed Index 64.0 (Greed) -5.0
  • 1-Day Vix 12.5 -7.4%
  • Vix 14.5 +1.2%
  • Total Put/Call 1.02 +13.3%