Friday Watch

Night Trading 

• Asian equity indices are -.5% to +1.5% on average.

• Asia Ex-Japan Investment Grade CDS Index 116.25 +3.0 basis points.

• China Sovereign CDS 72.0 +.25 basis point.
  
• China Iron Ore Spot 118.1 USD/Metric Tonne +.18%.

• Bloomberg Emerging Markets Currency Index 39.2 -.06%
• Bloomberg Global Risk-On/Risk Off Index 72.3 +4.8%.
• Volatility Index(VIX) futures 15.6 -2.8%.
• Euro Stoxx 50 futures +.63%.

• S&P 500 futures +.86%.

• NASDAQ 100 futures +1.21%.  

Morning Preview Links

BOTTOM LINE: Asian indices are mostly higher, boosted by industrial and technology shares in the region. I expect US stocks to open modestly higher and to maintain gains into the afternoon.  The Portfolio is 75% net long heading into the day.

Stocks Lower into Final Hour on US Policy-Induced Stagflation Fears, Massive Capital Gains Tax Hike Proposal, Declining Fed Rate-Cut Odds, Tech/Biotech Sector Weakness

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 39.3 +.13%
• 3-Month T-Bill Yield 5.41% unch.
  

• China Iron Ore Spot 116.6 USD/Metric Tonne -1.1%
• Dutch TTF Nat Gas(European benchmark) 29.8 euros/megawatt-hour +2.6%

• Citi US Economic Surprise Index 13.2 -6.9 points

• Citi Eurozone Economic Surprise Index 31.6 -1.1 points

• Citi Emerging Markets Economic Surprise Index 39.0 +8.4 points
• S&P 500 Current Quarter EPS Growth Rate YoY(189 of 500 reporting) +1.5% -3.3 percentage points
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 252.82 +.39:  Growth Rate +13.3% +.1 percentage point, P/E 19.9 -.1
  
• S&P 500 Current Year Estimated Profit Margin 12.84% +2.0 basis points
  
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(3 of 10 reporting) +62.5% +68.9 percentage points
  
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 315.61 -.66: Growth Rate +31.4% -.2 percentage point, P/E 30.1 -.2
  
• Bloomberg US Financial Conditions Index 1.03 +5.0 basis points
  
• Bloomberg Euro-Zone Financial Conditions Index .79 +1.0 basis point
  
• US Yield Curve -29.5 basis points (2s/10s) -1.0 basis point
  
• US Atlanta Fed 1Q GDPNow Forecast +2.7% unch.
  
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 42.2% unch.
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +2.74% unch.: CPI YoY +3.49% unch.
  
• 10-Year TIPS Spread 2.43 +2.0 basis points
  
• Highest target rate probability for June 12th FOMC meeting: 90.5%(+7.0 percentage points) chance of 5.25%-5.5%. Highest target rate probability for July 31st meeting: 68.1%(+12.2 percentage points) chance of 5.25%-5.5%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +87 open in Japan 
• China A50 Futures: Indicating +4 open in China

• DAX Futures: Indicating +207 open in Germany

Portfolio:

• Slightly Lower:  On losses in my tech/consumer discretionary/financial sector longs
  

• Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges
  

• Market Exposure: Moved to 75% Net Long
  

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

Earnings of Note 
Company/Estimate 

Before the Open:

• (ABBV)/2.26
• (AON)/5.89
• (ALV)/1.44
• (B)/.35
• (CRI)/.77
• (CHTR)/7.86
• (CVX)/2.92
• (CL)/.81
• (XOM)/2.19
• (GNTX)/.48
• (HCA)/5.06
• (LYB)/1.36
• (NWL)/-.07
• (PIPR)/2.12
• (SAIA)/3.45
• (TROW)/2.04
• (PSX)/2.20
  

After the Close: 

• None of note
  

Economic Releases

8:30 am EST

• Personal Income for March is estimated to rise +.5% versus a +.3% gain in Feb.
• Personal Spending for March is estimated to rise +.6% versus a +.8% gain in Feb.
• The PCE Core Deflator MoM for March is estimated to rise +.3% versus a +.3% gain in Feb.
  

10:00 am EST

• The Univ. of Mich. Consumer Sentiment Final Readings for April.
  

11:00 am EST

• The Kansas City Fed Services Activity Index for April.
  

Upcoming Splits 

• None of note
  

Other Potential Market Movers

• The Atlanta Fed 2Q GDPNow update, US Baker Hughes rig count, CFTC speculative net positioning reports, (ZION) annual meeting, (LTH) annual meeting, (LDOS) annual meeting, (ABT) annual meeting, (BMI) annual meeting, (SWK) annual meeting and the (K) annual meeting could also impact global trading tomorrow.

US Equity Market Hours

• 9:30 am - 4:00 pm EST

Mid-Day Market Internals

NYSE Composite Index:

• Volume Running +1.9% Above 100-Day Average 
• Nasdaq/NYSE Volume Ratio 9.0 -1.5
  
• 11 Sectors Declining, 0 Sectors Rising
• 17.7% of Issues Advancing, 80.7% Declining 
• TRIN/Arms .49 -38.8%
  
• Non-Block Money Flow -$226.1M
  
• 28 New 52-Week Highs, 43 New Lows
• 53.5% (-4.5%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 45.0 -3.0
  

Other:

• Bloomberg Global Risk-On/Risk-Off Index 67.6 -.6%
• Bloomberg Cyclicals/Defensives Pair Index 141.7 +.2%
  
• Russell 1000: Growth/Value 18,508.2 -.84%
• CNN Fear & Greed Index 38.0 (Fear) -3.0
  
• 1-Day Vix 14.0 +5.3%
  
• Vix 16.9 +5.8%
  
• Total Put/Call .92 -1.1%

Thursday Watch

Night Trading 

• Asian equity indices are -1.0% to unch. on average.

• Asia Ex-Japan Investment Grade CDS Index 113.25 +1.0 basis point.

• China Sovereign CDS 71.75 +1.75 basis points.
  
• China Iron Ore Spot 119.0 USD/Metric Tonne +.9%.

• Bloomberg Emerging Markets Currency Index 39.2 unch.
• Bloomberg Global Risk-On/Risk Off Index 69.0 +1.3%.
• Volatility Index(VIX) futures 16.1 +3.2%.
• Euro Stoxx 50 futures n/a.

• S&P 500 futures -.62%.

• NASDAQ 100 futures -1.14%.  

Morning Preview Links

BOTTOM LINE: Asian indices are modestly lower, weighed down by industrial and technology shares in the region. I expect US stocks to open modestly lower and to maintain losses into the afternoon.  The Portfolio is 50% net long heading into the day.

Stocks Reversing Slightly Lower into Final Hour on US Policy-Induced Stagflation Fears, Higher Long-Term Rates, Earnings Outlook Jitters, Transport/Alt Energy Sector Weakness

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 39.2 -.06%
• 3-Month T-Bill Yield 5.41% +1.0 basis point
  

• China Iron Ore Spot 118.7 USD/Metric Tonne +.7%
• Dutch TTF Nat Gas(European benchmark) 29.0 euros/megawatt-hour +2.1%

• Citi US Economic Surprise Index 20.1 -8.3 points

• Citi Eurozone Economic Surprise Index 32.7 +3.1 points

• Citi Emerging Markets Economic Surprise Index 30.6 -1.5 points
• S&P 500 Current Quarter EPS Growth Rate YoY(138 of 500 reporting) +4.8% -2.0 percentage points
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 252.43 -.23:  Growth Rate +13.2% -.1 percentage point, P/E 20.0 unch.
  
• S&P 500 Current Year Estimated Profit Margin 12.82% -2.0 basis points
  
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(2 of 10 reporting) -6.4% -85.0 percentage points
  
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 316.27 +.49: Growth Rate +31.6% +.1 percentage point, P/E 30.3 +.1
  
• Bloomberg US Financial Conditions Index .98 +2.0 basis points
  
• Bloomberg Euro-Zone Financial Conditions Index .78 +10.0 basis points
  
• US Yield Curve -28.5 basis points (2s/10s) +4.25 basis points
  
• US Atlanta Fed 1Q GDPNow Forecast +2.7% -20.0 basis points
  
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 42.2% -.1 percentage point
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +2.74% unch.: CPI YoY +3.49% +3.0 basis points
  
• 10-Year TIPS Spread 2.41 +1.0 basis point
  
• Highest target rate probability for June 12th FOMC meeting: 83.1%(+1.9 percentage points) chance of 5.25%-5.5%. Highest target rate probability for July 31st meeting: 55.6%(+3.0 percentage points) chance of 5.25%-5.5%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -290 open in Japan 
• China A50 Futures: Indicating -11 open in China

• DAX Futures: Indicating +200 open in Germany

Portfolio:

• Slightly Lower:  On losses in my industrial/consumer discretionary sector longs
  

• Disclosed Trades: Added to my (IWM)/(QQQ) hedges
  

• Market Exposure: Moved to 75% Net Long