Thursday Watch

Night Trading 

• Asian equity indices are +.5% to +1.0% on average.
• Asia Ex-Japan Investment Grade CDS Index 74.25 +1.25 basis points. 
• Asia Pacific Sovereign CDS Index 11.75 -.5 basis point.
• Bloomberg Emerging Markets Currency Index 74.99 -.01%.
• FTSE 100 futures +.20%.
• S&P 500 futures +.06%.
• NASDAQ 100 futures +.28%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (ABB)/.30
• (ADS)/4.22
• (BK)/.96
• (GPC)/1.32
• (DHR)/.94
• (KEY)/.38
• (NVS)/1.25
• (NUE)/1.12
• (NVR)/31.79
• (PPG)/1.40
• (DGX)/1,51
• (TSM)/3.48
• (ETFC)/.79
• (MRTN)/.19
• (WERN)/.36

Economic Releases

8:30 am EST

• Initial Jobless Claims for last week are estimated to fall to 230K versus 233K the prior week.
• Continuing Claims are estimated to fall to 1845K versus 1871K prior.
• The Philly Fed Business Outlook Index for April is estimated to fall to 21.0 versus 22.3 in March.
  

10:00 am EST

• The Leading Index for March is estimated to rise +.3% versus a +.6% gain in February.

Upcoming Splits

• None of note

Other Potential Market Movers

• The Japan CPI report, Australia Unemployment report, Bloomberg Economic Expectations Index for April, weekly Bloomberg Consumer Comfort Index, weekly EIA natural gas inventory report and the (PIR) analyst day could also impact trading today.

BOTTOM LINE:  Asian indices are higher, boosted by commodity and technology 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 Higher into Final Hour on Earnings Optimism, Diminished Geopolitical/Trade War Fears, Oil Gain, Commodity/Transport Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Higher
  

• Sector Performance: Most Sectors Rising
  

• Volume: Around Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 15.6 +1.9%

• Euro/Yen Carry Return Index 138.23 +.28%

• Emerging Markets Currency Volatility(VXY) 8.02 -.74%

• S&P 500 Implied Correlation 38.26 -3.2%

• ISE Sentiment Index 108.0 +.93%
  

• Total Put/Call .98 +3.16%

• NYSE Arms .70 -20.94%

Credit Investor Angst:

• North American Investment Grade CDS Index 59.18 -.21%
  

• America Energy Sector High-Yield CDS Index 415.0 -.30%

• European Financial Sector CDS Index 56.40 +1.6%

• Italian/German 10Y Yld Spread 118.5 -7.25 basis points
  

• Asia Pacific Sovereign Debt CDS Index 11.83 -2.31%

• Emerging Market CDS Index 135.31 -1.75%
  

• iBoxx Offshore RMB China Corporate High Yield Index 149.47 +.05%

• 2-Year Swap Spread 28.50 -.5 basis point

• TED Spread 56.25 -2.0 basis points

• 3-Month EUR/USD Cross-Currency Basis Swap -3.75 +1.0 basis point

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 75.0 +.36%
• 3-Month T-Bill Yield 1.81% +3.0 basis points
  

• Yield Curve 44.0 +1.5 basis points

• China Iron Ore Spot 67.71 USD/Metric Tonne +2.40%

• Citi US Economic Surprise Index 29.40 unch.

• Citi Eurozone Economic Surprise Index -91.50 +.3 point

• Citi Emerging Markets Economic Surprise Index 6.2 +.3 point

• 10-Year TIPS Spread 2.16 +2.0 basis points
  
• 90.2% chance of Fed rate hike at June 13 meeting, 90.8% chance at August 1 meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating +37 open in Japan 
• China A50 Futures: Indicating +92 open in China

• DAX Futures: Indicating +5 open in Germany

Portfolio: 

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

• Disclosed Trades: None

• Market Exposure: 100% Net Long

Today's Headlines

Bloomberg:

•  Fed Says Tariff Concerns Cloud Otherwise Solid Growth Outlook.

•  Bank Stocks Dumped in ‘Glass Half Empty’ Season; Bonds Disagree.

•  Metals Gripped by Turmoil as Rusal's Sanctions Fallout Spreads.

Wall Street Journal:

• Seoul Sees Path for Peace Deal to Formally End Korean War.

• Flattening Yield Curve Raises Warning Flag.

• Is the U.S. Shale Boom Hitting a Bottleneck?

MarketWatch.com:

• In one chart: The VIX says the stock-market low may be in. 

• Bitcoin whales dump $100 million of digital currency in 24 hours .

Fox News:

• Nearly a dozen GOP lawmakers demand criminal probes of Comey, McCabe, Lynch, Clinton.

CNBC:

• Roku(ROKU) plunges after Best Buy and Amazon partner to sell smart TVs.

• US targeting NAFTA deal in three weeks: Sources.

• Energy stocks are catching up to the oil rally – and a bigger breakout is coming.

• Goldman Sachs CEO Lloyd Blankfein: Economy looks 'awfully good' and should keep growing.

Zero Hedge:

• Barclays Summarizes 89-Page Tesla(TSLA)-Bashing Report To 5 Tweets For Dumb Americans And Tech Investors.

• Puerto Rico Hit With Island-Wide Blackout.

• IMF Sounds The Alarm On Global Debt, Warns "United States Stands Out".

• WTI/RBOB Surge After Across-The-Board Inventory Draws.

• Trump Confirms: "Mike Pompeo Met With Kim Jong Un".

• US Launches Anti-Dumping Probe Into Steel Wheels From China.

Bear Radar

Style Underperformer:

• Large-Cap Value +.4%

Sector Underperformers:

• 1) Computer Services -2.8% 2) Tobacco -2.1% 3) Banks -.6%

Stocks Falling on Unusual Volume: 

• LTXB, IBM, HCSG, HBHC, ROKU, ADTN, MTG, LRCX, RDN, ELY and ESNT

Stocks With Unusual Put Option Activity:

• 1) IBM 2) JNPR 3) SPWR 4) HLF 5) MOS

Stocks With Most Negative News Mentions:

• 1) DLNG 2) MO 3) JNPR 4) ELY 5) RIOT

Charts:

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

Bull Radar

Style Outperformer:

• Small-Cap Value +.9%

Sector Outperformers:

• 1) Steel +4.3% 2) Airlines +3.6% 3) Oil Service +3.3%

Stocks Rising on Unusual Volume:

• ISRG, LX, STO, TXT, BBBY, FSLR, MGRC, NVCR, CSX, PUMP, IIN, ALGT, WBT, TUR, CKH, KTOS, SP, SNE, ASIX, GPRK, MMLP, USLV, YNDX, DRQ, ZAYO, OAS, UAL, FSS and PACW

Stocks With Unusual Call Option Activity:

• 1) MAS 2) URI 3) NUE 4) UAL 5) OAS

Stocks With Most Positive News Mentions:

• 1) ISRG 2) CSX 3) BBY 4) AA 5) FSLR

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running -3.3% Below 100-Day Average
• 8 Sectors Rising, 3 Sectors Declining
• 65.8% of Issues Advancing, 31.0% Declining
• 126 New 52-Week Highs, 37 New Lows
• 46.2% of Issues Above 200-day Moving Average
• Average 14-Day RSI 51.6%
• Vix 16.1 +5.4%
• Total Put/Call 1.06 +11.6%
• TRIN/Arms .65 -27.9%