Stocks Slightly Higher into Final Hour on Less US/European/Emerging Markets Debt Angst, Economic Optimism, Oil Gain, Pharma/Homebuilding Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Modestly Higher
  

• Sector Performance: Mixed
  

• Volume: Above Average

• Market Leading Stocks: Underperforming
  

Equity Investor Angst:

• Volatility(VIX) 19.39 +1.36%

• Euro/Yen Carry Return Index 137.33 -.72%

• Emerging Markets Currency Volatility(VXY) 8.55 -.93%

• S&P 500 Implied Correlation 43.74 +2.93%

• ISE Sentiment Index 100.0 +6.38%
  

• Total Put/Call .89 -3.26%

• NYSE Arms 1.11 +34.3%

Credit Investor Angst:

• North American Investment Grade CDS Index 52.72 -3.23%
  

• America Energy Sector High-Yield CDS Index 382.0 -.84%

• European Financial Sector CDS Index 51.20 -3.56%

• Italian/German 10Y Yld Spread 128.0 -2.25 basis points
  

• Asia Pacific Sovereign Debt CDS Index 12.62 -.98%

• Emerging Market CDS Index 120.21 -2.25%
  

• iBoxx Offshore RMB China Corporate High Yield Index 147.72 +.02%

• 2-Year Swap Spread 27.0 -.75 basis point

• TED Spread 27.75 +1.0 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -32.5 -.25 basis point

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 76.01 -.03%
• 3-Month T-Bill Yield 1.60% +1.0 basis point
  

• Yield Curve 68.5 -3.25 basis points

• China Iron Ore Spot 76.35 USD/Metric Tonne n/a

• Citi US Economic Surprise Index 50.20 +15.0 points

• Citi Eurozone Economic Surprise Index 35.70 -1.4 points

• Citi Emerging Markets Economic Surprise Index 2.50 +.1 point

• 10-Year TIPS Spread 2.10 -2.0 basis points
  
• 100.0% chance of Fed rate hike at May 2 meeting, 100.0% chance at June 13 meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating +130 open in Japan 
• China A50 Futures: Indicating +389 open in China

• DAX Futures: Indicating +23 open in Germany

Portfolio: 

• Slightly Lower: On losses in my tech/biotech sector longs

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

• Market Exposure: Moved to 75% Net Long

Bear Radar

Style Underperformer:

• Mid-Cap Growth +.3%

Sector Underperformers:

• 1) Gold & Silver -2.1% 2) Networking -.7% 3) Restaurants -.5%

Stocks Falling on Unusual Volume: 

• ANET, IO, SHAK, PI, COHU, PCRX, TRUE, LOGM, CGNX, MDRX, SNBR, VFC, R, IPGP, MDXG and PDFS

Stocks With Unusual Put Option Activity:

• 1) GNC 2) ANET 3) DKS 4) RIOT 5) TJX

Stocks With Most Negative News Mentions:

• 1) RIOT 2) COHU 3) LYB 4) AAP 5) SHLM

Charts:

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

Bull Radar

Style Outperformer:

• Small-Cap Value +1.1%

Sector Outperformers:

• 1) Steel +3.1% 2) Pharma +1.7% 3) I-Banking +1.4%

Stocks Rising on Unusual Volume:

• MULE, RRR, AIA, JELD, WAAS, EFAV, GLOB, BL, THS, BRX, DE, CARB, TYPE, FBR, KURA, KMPR, VRSN, WEN, DOOR, BXC, X, TWLO, QTEC, MHO, FWRD, COWN, CENX, NMIH, RRR, ETSY, CMG, ICHR, AMN, THS, KMPR, SYNT, BRX, AMAT and VRSN

Stocks With Unusual Call Option Activity:

• 1) GNC 2) ANET 3) FOXA 4) FITB 5) DE

Stocks With Most Positive News Mentions:

• 1) DE 2) WEN 3) GVA 4) OMC 5) HD

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running -3.8% Below 100-Day Average
• 8 Sectors Rising, 2 Sectors Declining
• 63.3% of Issues Advancing, 33.3% Declining
• 51 New 52-Week Highs, 14 New Lows
• 48.8% of Issues Above 200-day Moving Average
• Average 14-Day RSI 44.6%
• Vix 18.5 -3.5%
• Total Put/Call .85 -7.6%
• TRIN/Arms 1.08 +26.8%

Friday Watch

Night Trading 

• Asian equity indices are +.25% to +.75% on average.

• Asia Ex-Japan Investment Grade CDS Index 695.0 -1.5 basis points. 

• Asia Pacific Sovereign CDS Index 12.75 -.5 basis point.

• Bloomberg Emerging Markets Currency Index 76.14 +.13%.

• FTSE 100 futures +.41%.

• S&P 500 futures +.05%.

• NASDAQ 100 futures +.12%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (AXL)/.78

• (B)/.67

• (CPB)/.81

• (KO)/.38

• (DE)/1.19

• (IPGP)/1.70

• (ITT)/.59

• (SJM)/2.16

• (KHC)/.95

• (NHI)/1.33

• (NWL)/.68

• (R)/1.36

• (VFC)/1.02

• (VMC)/.74

Economic Releases

8:30 am EST

• The Import Price Index MoM for January is estimated to rise +.6% versus a +.1% gain in December. 

• The Import Price Index Ex Petrol for January is estimated to rise +.1% versus a -.2% decline in December.

• The Export Price Index MoM for January is estimated to rise +.3% versus a -.1% decline in December.

• Housing Starts for January are estimated to rise to 1235K versus 1192K in December.

• Building Permits for January is estimated to fall to 1300K versus 1302K in December.

10:00 am EST

• Univ. of Mich. Consumer Sentiment for February is estimated to fall to 95.4 versus 95.7 in January.

Upcoming Splits

• None of note

Other Potential Market Movers

• The UK Retail Sales report, (HAS) investor update and the (MAT) analyst meeting could also impact trading today.

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

Stocks Surging into Final Hour on Less US/European/Emerging Markets Debt Angst, Earnings Optimism, Oil Gain, Tech/Telecom Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Higher
  

• Sector Performance: Most Sectors Rising
  

• Volume: Above Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 19.57 +1.6%

• Euro/Yen Carry Return Index 138.43 -.27%

• Emerging Markets Currency Volatility(VXY) 8.78 unch.

• S&P 500 Implied Correlation 41.80 -2.9%

• ISE Sentiment Index 86.0 -5.49%
  

• Total Put/Call .90 -22.41%

• NYSE Arms .99 +112.17%

Credit Investor Angst:

• North American Investment Grade CDS Index 54.05 -6.39%
  

• America Energy Sector High-Yield CDS Index 386.0 -4.07%

• European Financial Sector CDS Index 53.04 -5.48%

• Italian/German 10Y Yld Spread 130.25 -.5 basis point
  

• Asia Pacific Sovereign Debt CDS Index 12.71 -3.42%

• Emerging Market CDS Index 122.69 -4.96%
  

• iBoxx Offshore RMB China Corporate High Yield Index 147.69 +.15%

• 2-Year Swap Spread 27.75 +.25 basis point

• TED Spread 26.75 +2.75 basis points

• 3-Month EUR/USD Cross-Currency Basis Swap -32.25 +.75 basis point

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 76.05 +.35%
• 3-Month T-Bill Yield 1.59% +1.0 basis point
  

• Yield Curve 71.75 -2.75 basis points

• China Iron Ore Spot 76.35 USD/Metric Tonne unch.

• Citi US Economic Surprise Index 35.20 -5.3 points

• Citi Eurozone Economic Surprise Index 37.10 -1.2 points

• Citi Emerging Markets Economic Surprise Index 2.40 +1.4 points

• 10-Year TIPS Spread 2.12 unch.
  
• 100.0% chance of Fed rate hike at May 2 meeting, 100.0% chance at June 13 meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating +76 open in Japan 
• China A50 Futures: Indicating +309 open in China

• DAX Futures: Indicating +25 open in Germany

Portfolio: 

• Higher: On gains in my tech/retail/biotech/medical sector longs

• Disclosed Trades: None

• Market Exposure: 100% Net Long