Stocks Falling into Afternoon on Diminished Russia/Ukraine Ceasefire Hopes, US Policy-Induced Stagflation Fears, Earnings Outlook Worries, Consumer Discretionary/Financial Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line:  Lower
  

• Sector Performance:  Mixed
  

• Volume:  Around Average

• Market Leading Stocks: Underperforming
  

Equity Investor Angst:

• Volatility(VIX) 20.2 +4.4%
• Bloomberg Global Risk On/Risk Off Index 4,275.0 -301.0 points

• Euro/Yen Carry Return Index 138.83 -.9%

• Emerging Markets Currency Volatility(VXY) 11.6 -3.5%

• CBOE S&P 500 Implied Correlation Index 37.0 +7.1% 

• ISE Sentiment Index 89.0 -10.0 points
  

• Total Put/Call .91 +7.1%

• NYSE Arms 1.8 +43.9%

Credit Investor Angst:

• North American Investment Grade CDS Index 66.39 +.34%
  

• US Energy High-Yield OAS 358.11 -.28%

• European Financial Sector CDS Index 80.93 -.52%

• Italian/German 10Y Yld Spread 149.0 +1.0 basis point
  

• Asia Ex-Japan Investment Grade CDS Index 100.7 +1..6%
  

• Emerging Market CDS Index 227.64 +.85%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 29.68 +1.17% 
• Ukraine Sovereign Debt Credit Default Swap 2,792.09 +3.1%
  

• 2-Year Swap Spread 21.25 +.25 basis point
  

• TED Spread 50.0 +6.5 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -21.75 +1.0 basis points
  
• MBS  5/10 Treasury Spread  110.0 +1.0 basis point
  
• iShares CMBS ETF 49.89 +.12%
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 53.76 +.07%
• 3-Month T-Bill Yield .50% -2.0 basis points
  

• Yield Curve 2.0 -.5 basis point
  

• China Iron Ore Spot 161.4 USD/Metric Tonne +.4%

• Citi US Economic Surprise Index 55.4 -3.7 points

• Citi Eurozone Economic Surprise Index 44.8 -.2 point
  

• Citi Emerging Markets Economic Surprise Index 39.4 -.5 point

• 10-Year TIPS Spread 2.90 +1.0 basis point
  
• 0.0%(unch.) chance of no change at June 15th FOMC meeting, 0.0%(unch.) chance of no change at July 27th meeting

US Covid-19:

• 63 new infections/100K people(last 7 days total). 4.0%(unch.) of 1/14 peak +1/100K people from prior report.
  
• New Covid-19 patient hospital admissions per 100K population -92.7%(-.1 percentage point) from peak 7-day avg. of 1/9/21 - 1/15/22
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -121 open in Japan 
• China A50 Futures: Indicating -73 open in China

• DAX Futures: Indicating -14 open in Germany

Portfolio:

• Slightly Higher: On gains in my commodity/medical sector longs, index hedges and emerging market shorts
  

• Disclosed Trades:  None
  

• Market Exposure:  50% Net Long
  

Bear Radar

Style Underperformer:

• Large-Cap Growth -.6%

Sector Underperformers:

• 1) Homebuilding -2.4% 2) Retail -2.0% 3) Computer Hardware -2.0%

Stocks Falling on Unusual Volume: 

• LPX, SNBR, DHI, TPX, AMC, SWM, BROS, LEVI, BBY, SYNA, IEA, KRP, AMC, RCII, AN, GSHD, JELD, BRZE, MASI, THO, TREX, SAIA, GFS, WBA, IOT, DELL, HPQ, HYFM, HOOD, FND, PVH, CORT, CONN, AMD, PHR, AOSL, AMLX and PATH
  

Stocks With Unusual Put Option Activity:

• 1) FISV 2) WBA 3) TPX 4) CZR 5) NLSN
  

Stocks With Most Negative News Mentions:

• 1) AMD 2) AFIB 3) BIDU 4) MASI 5) FFIE
  

Charts:

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

Bull Radar

Style Outperformer:

• Mid-Cap Value unch.

Sector Outperformers:

• 1) Steel +1.2% 2) Airlines +1.1% 3) Shipping +.8%

Stocks Rising on Unusual Volume:

• VGR, CG, CALM, CUTR, BJRI and PRG
  

Stocks With Unusual Call Option Activity:

• 1) CLVS 2) FLEX 3) SPTN 4) SWCH 5) HEAR

Stocks With Most Positive News Mentions:

• 1) VGR 2) ICVX 3) AMPG 4) CRNX 5) DTST
  

Charts:

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

Mid-Day Market Internals

NYSE Composite Index:

• Volume Running -6.7% Below 100-Day Average 
• 6 Sectors Rising, 5 Sectors Declining
• 55.1% of Issues Advancing, 41.0% Declining
• 103 New 52-Week Highs, 43 New Lows
• 49.8% of Issues Above 200-day Moving Average
• Average 14-Day RSI 52.8% 
• Bloomberg Global Risk-On/Risk-Off Index 4,291.0 -285.0 points
• Russell 1000: Growth/Value 16,706 -.17%
  
• Vix 20.3 +5.1%
• Total Put/Call .92 +8.2%
• TRIN/Arms 1.98 +61.0%

Thursday Watch

Evening Headlines

Bloomberg:         

• Breakaway Georgian Region Seeks to Be Putin’s Next Annexation.
• Putin ‘Misinformed’ by Advisers on the War, White House Says.
  
• Ukraine Update: U.S. Says Putin Feels Misled by Military Leaders.
• Kuroda Favors BOJ Policy Credibility at Cost of Weakening Yen.  
• China’s Mega Banks Face New Obstacles After Comeback Year.
  
• Fuel Hikes Anger Food Delivery Drivers and Truckers Across Asia.
• Indian Cookie Giant’s Price Plans Shows Coming Inflationary Pain.
• U.S. Futures Rise as Oil Drops on Reserves Report: Markets Wrap.   
• Oil Retreats as U.S. Weighs Reserves Release to Combat Inflation.
• OPEC Mulls Snubbing IEA Oil Data as Political Rift Deepens.
  
• SEC Chief Casts Doubt on Imminent Deal to Avoid China Delistings.  
• Crypto-Bridge Hacks Reach Over $1 Billion in Little Over a Year.   
• Bird Flu Is Spreading in the U.S., Threatening Chicken Exports.  
• Fed Keeps Wary Eye on Yield Curve While Signaling Hikes on Track.

Wall Street Journal:

• Big Stock Sales Are Supposed to Be Secret. The Numbers Indicate They Aren’t.
• Russia Plays Down Peace Talks, Steps Up Eastern Assault.
• Latest Updates: U.S. Says Putin Advisers Misinformed Him.
• Biden’s Global Quest for Oil Triggers Political Pushback.

Fox News:  

• China defies Biden admin, calls Russia sanctions 'illegal'.
• GOP gov takes action to protect 'fairness' in women's sports.

CNBC.com:

• Why Russia’s invasion of Ukraine could spark a NATO defense spending spree.
• How Google and Amazon bankrolled a group of small business owners to lobby against Big Tech oversight.

 MarketWatch: 

• What stock-market investors need to know about the bond market’s recession signal.
  
• Apple reportedly wants to handle its own financial services, and partners’ stocks paid the price.
  
• Office buildings sit more than half empty. Why the next recession could spur more trouble.
  
• These 10 dividend stocks with yields of at least 5% can help you take on stagflation or a recession.

Zero Hedge:

• White House Cites Intel Claiming Putin Being "Misled" By His Own Generals On War's Progress.
• Watch: DeSantis Accuses Disney Of "Sexualizing Kindergarteners".
• FEC Fines Hillary Clinton, DNC Over Steele Dossier Hoax.
• Yen At Risk Of "Explosive" Downward Spiral With Kuroda Trapped... And Why China May Soon Devalue.
• Hunter Biden Dam About To Burst? WaPo, CNN Go Scorched Earth Over 'Laptop From Hell'.
• Lavrov: Russia, China Moving Towards Multipolar 'Fair World Order'.
• Pandemic Lessons Learned: CDC Versus Natural Immunity.
• "Sounding The Alarm": A $3 Trillion Problem Emerges As The Fed Prepares To Launch QT.
• Shanghai Residents Struggle To Obtain Food & Medicine As Citywide Lockdown Continues.
• Xi's "Maradona Theory" Of Policy Making Needs Tweak.
• "Cannibal" Coronal Mass Ejection Detected By NASA, Will Hit Earth Tonight.
• The Global Rush To Own Gold Has Only Just Begun.
• UN Establishes War Crimes Tribunal To Probe Russian Actions In Ukraine.
• Matt Gaetz Enters Hunter Biden Laptop Data Into Congressional Record.
• Bonds, Bullion, & Black Gold Bid As Putin Sparks Stock Skid, Dollar Dump.

Newsmax: 

• UK Intel: Russia Seeking Cyber Targets in Nations That Oppose Its Invasion. 
• Russian Planes Carrying Nukes Strayed Into Swedish Airspace.
• Ruble Rebound Raises Questions of Sanctions' Impact.

TheGatewayPundit.com: 

• RINO Susan Collins Flips — Will Vote for Radical Judge Ketanji Jackson Despite Her Leniency of Child Porn Traffickers.
• TOTALLY UNHINGED: Day After FEC Fines Hillary’s 2016 Campaign for Lying About Creating and Funding the Fake Trump-Russia Conspiracy — She Tweets Out a NEW Trump-Russia Conspiracy.
• IT BEGINS: UK Reporter Confronts Liar Fauci on Origins of COVID Virus in China Lab (VIDEO).
• 21 States Sue Biden Administration to Permanently End Federal Mask Mandates for Planes and Public Transportation.
• Farmers Warn About Rising Food Prices — One Way To Prepare.
• Joe Biden Will Drop Trump-Era Title 42 Border Restrictions May 23 – 170,000 Illegals Amass at Southern Border Ready to Storm into US.
• American Households Face $5,200 Biden Inflation Tax This Year – San Fran Fed Blames Historic Inflation Rate on Government Spending.
• Fauci Says Americans Need to be “Prepared” For Another Round of Covid Restrictions (VIDEO).
• FOIA Reveals NIH Secretly DELETED COVID Data Provided by the Wuhan Lab at the BEGINNING of the Pandemic.
• “Our Country is Paying a Big Price for that Rigged Election” – President Trump.

The Epoch Times:

• ‘I Cannot Watch My Father Waiting to Die at Home:’ Residents in Locked-Down Shanghai Being Denied Medical Care.

OpenVAERS:

• VAERS US COVID Vaccine Adverse Event Reports. 795,782 Reports(+7,159 from prior week) Through March 18th, 2022.
  

SKirsch.com:

• Using the MGH numbers with our own VAERS queries, we have 247 cases per million doses from the MGH study divided by 5.97 cases per million doses from VAERS. 247/5.97 = 41. This suggests that the VAERS under-reporting factor (URF) is 41X.

Covid-19(Data, Maps, Graphs):

• Our World in Data:  New Global Covid-19 Cases(7-day rolling average graphs). New US Covid Hospital Admissions/ICU Admissions/Deaths
  
• FT.com:  Fully Vaccinated by Country(graph). Global Lockdown Stringency Index(map).
• Bloomberg.com:  International Travel Restrictions.  Case Graphs by State.
  
• NYTimes.com:  County Trends and Clusters. Local ICU Occupancy.
  
• Brown School of Public Health:  Covid Severity by State/County(map).  US Hospital Capacity(region).
  
• CovidActNow:  Covid Severity/Infection Rate by Metro Area.
  
• KFF:  US Vaccinations by Race/Ethnicity.
  
• Carnegie Mellon: Covid-Like Symptoms in Community. Covid Symptom Searches on Google. Covid-Related Dr.Visits.  Restaurant Visits. Wearing Masks. (graphs)
  
• Safegraph.com:  Commerce Patterns(graphs).

Night Trading 

• Asian equity indices are -.25% to +.5% on average.

• Asia Ex-Japan Investment Grade CDS Index 98.75 +1.5 basis points. 

• China Sovereign CDS 59.0 +1.75 basis points.
  

• Bloomberg Emerging Markets Currency Index 53.74 +.03%. 
• Bloomberg Global Risk-On/Risk Off Index 4,507.0 -68.0 points.
• Volatility Index(VIX) futures 21.9 -1.0%.
• Euro Stoxx 50 futures +.57%.

• S&P 500 futures +.32%.

• NASDAQ 100 futures +.52%. 

Morning Preview Links

Earnings of Note 
Company/Estimate 

 

Before the Open: 

• (WBA)/1.39
  

After the Close:

• (BB)/-.03

Economic Releases

7:30 am EST

• Challenger Job Cuts YoY for March.
  

8:30 am EST

• Personal Income for Feb. is estimated to rise +.5% versus unch. in Jan.
• Personal Spending for Feb. is estimated to rise +.5% versus a +2.1% gain in Jan.
• The PCE Core MoM for Feb. is estimated to rise +.4% versus a +.5% gain in Jan.
• Initial Jobless Claims for last week are estimated to rise to 196K versus 187K the prior week.
• Continuing Claims are estimated to fall to 1340K versus 1350K prior.
  

9:45 am EST

• The MNI Chicago PMI for March is estimated to rise to 57.0 versus 56.3 in Feb.

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The China Non-Manufacturing PMI report, UK GDP report, EU Unemployment Rate, weekly EIA natural gas inventory report, (SPWR) analyst day and the BofA Energy/Utilities Conference could also impact global trading today.

US Equity Market Hours

• 9:30 am - 4:00 pm EST
  

BOTTOM LINE: Asian indices are mostly higher, boosted by technology and consumer shares in the region. I expect US stocks to open modestly higher and to weaken into the afternoon, finishing mixed. The Portfolio is 50% net long heading into the day.

Stocks Falling into Final Hour on Diminished Russia/Ukraine Ceasefire Hopes, US Policy-Induced Stagflation Fears, Earnings Outlook Worries, Tech/Consumer Discretionary Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line:  Lower
  

• Sector Performance:  Most Sectors Declining
  

• Volume:  Around Average

• Market Leading Stocks: Underperforming
  

Equity Investor Angst:

• Volatility(VIX) 19.3 +2.2%
• Bloomberg Global Risk On/Risk Off Index 4,555.0 -40.0 points

• Euro/Yen Carry Return Index 140.02 -.23%

• Emerging Markets Currency Volatility(VXY) 12.0 -1.96%

• CBOE S&P 500 Implied Correlation Index 35.0 +4.8% 

• ISE Sentiment Index 105.0 +1.0 point
  

• Total Put/Call .77 -17.2%

• NYSE Arms 1.3 +27.2%

Credit Investor Angst:

• North American Investment Grade CDS Index 67.28 -4.7%
  

• US Energy High-Yield OAS 358.65 +.53%

• European Financial Sector CDS Index 81.35 +1.3%

• Italian/German 10Y Yld Spread 148.0 unch.
  

• Asia Ex-Japan Investment Grade CDS Index 98.50 -3.6%
  

• Emerging Market CDS Index 226.40 +3.6%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 29.4 -.20% 
• Ukraine Sovereign Debt Credit Default Swap 2,708.35 +7.2%
  

• 2-Year Swap Spread 21.0 +.75 basis point
  

• TED Spread 44.5 +1.5 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -22.75 -1.75 basis points
  
• MBS  5/10 Treasury Spread  109.0 -3.0 basis points
  
• iShares CMBS ETF 49.58 +.08%
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 53.68 +.39%
• 3-Month T-Bill Yield .52% unch.
  

• Yield Curve 2.5 -1.5 basis points
  

• China Iron Ore Spot 160.6 USD/Metric Tonne +4.7%

• Citi US Economic Surprise Index 59.1 -.4 point

• Citi Eurozone Economic Surprise Index 45.0 +11.1 points
  

• Citi Emerging Markets Economic Surprise Index 39.9 -.8 point

• 10-Year TIPS Spread 2.89 +1.0 basis point
  
• 0.0%(unch.) chance of no change at June 15th FOMC meeting, 0.0%(unch.) chance of no change at July 27th meeting

US Covid-19:

• 62 new infections/100K people(last 7 days total). 4.0%(unch.) of 1/14 peak -0/100K people from prior report.
  
• New Covid-19 patient hospital admissions per 100K population -92.6%(unch.) from peak 7-day avg. of 1/9/21 - 1/15/22
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -92 open in Japan 
• China A50 Futures: Indicating -68 open in China

• DAX Futures: Indicating -59 open in Germany

Portfolio:

• Slightly Higher: On gains in my commodity sector longs and index hedges
  

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

• Market Exposure:  Moved to 50% Net Long
  

Bear Radar

Style Underperformer:

• Small-Cap Value -.9%

Sector Underperformers:

• 1) Retail -2.6% 2) Banks -2.1% 3) Semis -1.4%

Stocks Falling on Unusual Volume: 

• QCOM, CRC, ZUO, UMPQ, MTDR, SCVL, LOW, IGMS, SAIA, HRI, JELD, FBP, FND, HOOD, FIVE, BLD, PBCT, W, MTB, PLCE, PVH, WSM, BGFV, NWN, CONN, SGHT, AMC, RCUS, CNXC, RH and CHWY
  

Stocks With Unusual Put Option Activity:

• 1) REI 2) RH 3) IVV 4) INDA 5) KBE
  

Stocks With Most Negative News Mentions:

• 1) SDIG 2) RH 3) AKBA 4) CHWY 5) GLOB
  

Charts:

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

Bull Radar

Style Outperformer:

• Large-Cap Value -.2%

Sector Outperformers:

• 1) Energy +1.6% 2) Shipping +1.4% 3) Agriculture +1.3%

Stocks Rising on Unusual Volume:

• VIR, AMBC, LTHM, YETI, CALM, PLL, MLKN, MSM, AXSM, BROS, NEO, DICE, PINC, TVTY, QS, VIRT and AOSL
  

Stocks With Unusual Call Option Activity:

• 1) RH 2) MBI 3) HMHC 4) PLAY 5) NLSN

Stocks With Most Positive News Mentions:

• 1) VIR 2) LULU 3) NAT 4) SRAD 5) FRPT
  

Charts:

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