>Some Morning Highlights

>By: Elliot Turner

• Yesterday afternoon Nike (NKE) reported blowout earnings, beating on both EPS and revenues. On the report, the stock rallied to new all-time highs. The earnings in the sector are really starting to backup the explosive rally in retail of late.

• This morning FedEx (FDX) also reported a beat on EPS and revs, yet the stock is trading lower due to vague and semi-weak guidance. Over the last two days, the stock had attempted to fill its last earnings gap from mid-December. Looks like that will take a little more time right now.

• In yesterday’s session, “A total of 130 S&P 500 companies hit 52-week highs today, or 26% of the index. No companies hit 52-week lows.” This is a great illustration by Bespoke highlighting the expansion in new 52-week highs as the rally continues. There is no question that the increase in bullishness from traders, analysts and investors alike is reflective of the expansion of participation in this rally. Whereas in the past there were significant divergences as the indices made highs, right now we are truly seeing some cross-the-board strength.

• Tomorrow is the ever-feared “Quadruple Witching” where stock options, index options, futures options and single-stock options all expire. Adam Warner of the Daily Options Report does an excellent job of debunking some of the day’s myths as well as providing the rationale behind some of the wacky moves we tend to see. This is an must read for traders.

• The Big Picture asks the question as to whether the April 1st end date for the Fed’s MBS purchase program will mark the program’s end, or merely a pause. With inflation remaining low, and the Fed continuing its aggressive monetary policy, there seems to be merit to the argument that it will ultimately restart at some point in the not-too-distant future. The expectation of its continuity in MBS trading pits sounds an awful lot like moral hazard in action to me. A little scarier than quad witching!