Wednesday Watch

Evening Headlines

Bloomberg:            

• China Stockpiles Chips and Chip-Making Machines to Resist U.S.   
• China Faces a Liquidity Test Just Days After Crunch Passed.
• Equities Extend Rally in Asia; Dollar Holds Losses: Markets Wrap.
• Oil Jumps to One-Year High With Depleting Supplies Aiding Rally.  
• Powell’s Taper Future, Phantom Stimulus, N.Z. Jobs Boom: Eco Day.  
• U.S. to Deliver Doses to Pharmacies; Yang Infected: Virus Update.
• Meme Stocks Lose $167 Billion as Reddit Crowd Preaches Defiance.
• Reddit’s Market ‘Hype Machine’ Is in a Quest to Drive Out Bots.  
• Senate Democrats Move to Put Biden Stimulus Plan on Fast Track.
• Pelosi Steps Up Security for Traveling Members of Congress.  
• California Poll Shows Newsom’s Support Slipping as Foes Push Recall.  
• Mark Cuban Tells WallStreetBets to Hold ‘If You Can Afford to’.

Wall Street Journal:

• The Risks of Too Much ‘Stimulus’.
• Coup Puts Myanmar at the Center of U.S.-China Clash.
• Joe Biden’s New Trans Policy.
• Tesla Recalls 135,000 Vehicles Over Touch-Screen Failures.
  

CNBC.com:

• Jeff Bezos to step down as Amazon CEO, Andy Jassy to take over in Q3.
• Amazon’s next CEO transformed e-commerce company into a cloud giant.
• Reddit user who helped inspire GameStop mania says he lost $13 million, but is still holding on.
• Chipotle shares fall 4% as surging digital orders ease from record pace, earnings fall short.
• GameStop plunges 60%, has lost more than 70% of its value since Friday.
• Stocks making the biggest moves after hours: Alphabet, Amazon, GameStop and more.

Zero Hedge:

• Dave Portnoy Loses '700K-ish' After Selling 'Meme Stocks'.
• Amazon Reports Blowout Quarter, Jeff Bezos Stepping Down As CEO.
• NY Times Calls For Biden To Appoint "Reality Czar" To Fight "Misinformation".
• China Suspected In Hack Of US Federal Payroll Agency Using SolarWind Exploit.
• Former ECB Chief Mario Draghi Tapped To Lead Italy As Government Collapses.
• GameStop's Stock May Have Exploded, But Traffic To Its Stores Is Still Tumbling.
• WTI Extends Gains After Another Big Crude Inventory Drawdown.
• Gone In 60 Seconds: Catalytic Converter Theft Erupts Across Country.
• SpaceX's Starship Prototype Rocket Crashes On Landing Attempt.
• Alphabet Shares Soar To New Record High After Crushing Expectations.
• Stocks, Crypto, & Bond Yields Pop As WSB Game Stopped.

Newsmax:

• Florida Gov. DeSantis Declares War on 'Big Tech Cartel'.
• WH Indicates It's in No Hurry to Engage China. 
• Iran Deepens Breach of Nuclear Deal at Underground Site.

TheGatewayPundit.com:

• America Last: Joe Biden to Open Special COVID Vaccination Sites for Illegal Aliens.
• Author, Filmmaker and Activist Mike Cernovich to Challenge Governor Newsom as Likelihood of Recall Looms.
• Lindsay Graham Offers Support for Liz Cheney and Then Warns the Trump Team About Attempting to Present Evidence of Election Fraud In Front of the Senate.
• “There Are Many Democrats Who Said Unsavory Things – Anti-Semitic Things” – Rep. Devin Nunes Defends Rep. Marjorie Taylor Greene from Media Onslaught (VIDEO).
• WATCH: Newsmax Host Has Mike Lindell on to Talk About Tech Censorship — Ends Up Censoring Him As Well — Then Storms Out of Studio.
• Top Democrat Calls on Pentagon to Screen Social Media Accounts of All Recruits for Ties to White Supremacy and “Violent Extremism”.
• Why Has Wisconsin Done Nothing With the 200,000 Ballots Its Supreme Court Claimed Were Likely Invalid In the 2020 Election?
• Trump Was Right! CNN Sees Viewership Shrink by 44% in First Post-Trump Week – MSNBC Down 20%.
• Joe Biden to Divert $30 Billion in Aid Trump Left For Farmers to Climate Change without Waiting For Congress.

HereIsTheEvidence.com:

• This is for aggregating publicly available items of voter fraud evidence in the US election that would be admissible in court.
  

Digital Blackboard:

• Daily New Cases by Region.

Worldometer:

• New Cases/Deaths by state.

Rt Covid-19:

• How fast virus is growing by state.

KFF:

• State Data(Tests/Hospitalizations).

Night Trading 

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

• Asia Ex-Japan Investment Grade CDS Index 60.0 -1.75 basis points.

• China Sovereign CDS 30.25 -.75 basis point.

• Bloomberg Emerging Markets Currency Index 62.45 +.05%.
• Bloomberg Global Risk-On/Risk Off Index 1,938.0 +36.0 points.
• Volatility Index(VIX) futures 28.42 -1.11%.
• FTSE 100 futures +.31%.

• S&P 500 futures +.40%.

• NASDAQ 100 futures +.50%.

Morning Preview Links

Earnings of Note 
Company/Estimate 

 

Before the Open: 

• (ABBV)/2.85
• (APTV)/1.01
• (BIIB)/4.76
• (BSX)/.31
• (GWW)/3.84
• (HUM)/-2.32
• (SMG)/-.68
  

After the Close:

• (ADTN)/.07
• (AFL)/1.04
• (ALGN)/2.13
• (ALL)/3.83
• (UHAL)/7.08
• (AVB)/2.09
• (CTSH)/.90
• (EBAY)/.83
• (GRUB)/.04
• (IAC)/-.34
• (KLAC)/3.21
• (MET)/1.51
• (PYPL)/1.00
• (QCOM)/2.09
• (RGLD)/.88
• (SUM)/.17
• (YUMC)/.26
  

Economic Releases

8:15 am EST

• The ADP Employment Change for Jan. is estimated to rise to 50K versus -123K in Dec.

10:00 am EST

• The ISM Services Index for Jan. is estimated to fall to 56.7 versus 57.2 in Dec.

10:30 am EST

• Bloomberg consensus estimates call for a weekly crude oil inventory decline of -971,550 barrels versus a -9,910,000 barrel decline the prior week. Gasoline supplies are estimated to rise by +914,450 barrels versus a +2,469,000 barrel gain the prior week. Distillate inventories are estimated to rise to -246,090 barrels versus a -815,000 barrel decline the prior week. Finally, Refinery Utilization is estimated to fall -.02% versus a -.8% decline prior.
  

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The German Services PMI report, weekly MBA Mortgage Applications report and the (COST) Jan. sales results could also impact trading today.

Market Hours
Normal:

• 9:30 am - 4:00 pm EST
  

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

Stocks Substantially Higher into Final Hour on Stimulus Hopes, Vaccine Optimism, Oil Gain, Transport/Financial Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Higher
  

• Sector Performance: Almost Every Sector Rising
  

• Volume: Above Average

• Market Leading Stocks: Outperforming
  

Equity Investor Angst:

• Volatility(VIX) 25.4 -15.9%
• Bloomberg Global Risk On/Risk Off Index 1,899.0 +481.0 points

• Euro/Yen Carry Return Index 130.70 -.17%

• Emerging Markets Currency Volatility(VXY) 10.3 -1.1%

• S&P 500 Implied Correlation 52.1 -.02%

• ISE Sentiment Index 101.0 -54.0 points
  

• Total Put/Call .76 -1.3%

• NYSE Arms 2.27 +180.0%

Credit Investor Angst:

• North American Investment Grade CDS Index 53.01 -3.4%
  

• US Energy High-Yield OAS 510.40 -1.60%

• European Financial Sector CDS Index 60.83 -2.2%

• Italian/German 10Y Yld Spread 114.0 -2.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 61.50 -1.79%
  

• Emerging Market CDS Index 165.47 -3.37%
  

• iBoxx Offshore RMB China Corporate High Yield Index 185.40 -.12%

• 2-Year Swap Spread 7.75 unch.

• TED Spread 15.25 -.25 basis point
  

• 3-Month EUR/USD Cross-Currency Basis Swap -4.75 +.25 basis point
  
• MBS  5/10 Treasury Spread  66.5 -2.25 basis points
  
• IHS Markit CMBX BBB- 6 73.75 unch.

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 62.42 +.34%
• 3-Month T-Bill Yield .04% -1.0 basis point
  

• Yield Curve 98.75 +2.5 basis points
  

• China Iron Ore Spot 144.15 USD/Metric Tonne -3.71%

• Citi US Economic Surprise Index 60.50 -.1 point

• Citi Eurozone Economic Surprise Index 125.4 +1.4 points
  

• Citi Emerging Markets Economic Surprise Index 68.70 +4.9 points

• 10-Year TIPS Spread 2.14 +5.0 basis points
• 100.0% chance of no change at April 28th meeting, 100.0% chance of no change at June 16th meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating +113 open in Japan 
• China A50 Futures: Indicating -103 open in China

• DAX Futures: Indicating +12 open in Germany

Portfolio:

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

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

• Market Exposure: Moved to 100% Net Long
  

Bear Radar

 Style Underperformer:

• Small-Cap Value +.6%

Sector Underperformers:

• 1) Retail -7.2% 2) Gold & Silver -4.6% 3) Networking -.6%

Stocks Falling on Unusual Volume: 

• KMPR, CURI, AHCO, LGND, KPTI, AQUA, VRTX, CRUS, SPCE, LITE, PSAC, GATO, FIZZ, KMT, SKT, INO, MAC, MITK, THCB, BCRX, TR, BGS, FLGT, RVP, HOG, VRNT, IMVT and GME
  

Stocks With Unusual Put Option Activity:

• 1) GOGO 2) SAVA 3) LITE 4) MNST 5) VXRT
  

Stocks With Most Negative News Mentions:

• 1) EXPR 2) LLNW 3) AAL 4) KR 5) IRTC
  

Charts:

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

Bull Radar

Style Outperformer:

• Mid-Cap Growth +2.1%

Sector Outperformers:

• 1) Gaming +6.2% 2) Banks +3.2% 3) Road & Rail +2.7%

Stocks Rising on Unusual Volume:

• SAVA, ALVR, MWK, VXRT, AKTS, ATKR, CDXS, HAE, CCIV, CRDF, SKY, DKNG, WAT, SLM, NRIX, TSIA, LPG, XONE, LSXMA, SWCH, CLDR, LSXMK, ALDX, CLGX, GPRE, CENX, OMCL, POWI, PEGA, STPK and OMER
  

Stocks With Unusual Call Option Activity:

• 1) DVAX 2) SLM 3) XLI 4) VTV 5) AEZS

Stocks With Most Positive News Mentions:

• 1) TECH 2) PRTA 3) TVTX 4) DKNG 5) PANW
  

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running +37.7% Above 100-Day Average 
• 11 Sectors Rising, 0 Sectors Declining
• 79.5% of Issues Advancing, 18.8% Declining
• 104 New 52-Week Highs, 0 New Lows
• 83.0% of Issues Above 200-day Moving Average
• Average 14-Day RSI 47.3% 
• Bloomberg Global Risk-On/Risk-Off Index 1,853.0 +436.0 points
• Vix 26.3 -13.1%
• Total Put/Call .75 -2.6%
• TRIN/Arms 2.60 +220.9%

Tuesday Watch

Evening Headlines

Bloomberg:      

• Myanmar’s Army Chief Challenges Biden, Bets Big on China.  
• Diverging Inflation Paths Shape Asian Central Banks’ Room to Act.
• WHO in Wuhan; Japan to Extend State of Emergency: Virus Update.  
• Asian Stocks Gain After U.S. Rally; Dollar Steady: Markets Wrap.
• Oil Holds Biggest Advance in Three Weeks on Demand Optimism.  
• Inflation Pockets of Asia, Climate Fail, U.S. Recovery: Eco Day.
• Covid Deaths Are Starting to Drop in Every Part of the U.S.
• Robinhood’s Forbidden-Stocks List Saw Price Swings Narrow Monday.  
• Carson Block Suspects Hedge Fund Coordination in Short Squeezes.  
• Apple Sells $14 Billion of Bonds as Share Buybacks Seen Rising.  
• Biden’s GOP Relief Talks Called ‘Productive,’ Will Continue.  
• J&J’s One-Dose Shot Gives U.S. a Chance to Plug Vaccination Gaps.  
• Silver Rally Runs Into Roadblock as Margins Rise, Warnings Mount.  
• Muni-Bond Downgrades Top Upgrades for First Time Since 2014.

Wall Street Journal:

• Catholic Schools Are Beating Covid.
• Officer Who Shot Capitol Rioter Shouldn’t Be Charged, Investigators Say.
• Covid-19’s Effects May Linger in Your Body, Even After Asymptomatic Cases.
• Covid Wears on, Essential Workers Carry on: ‘Everybody Forgets You’re Still on the Front Line’.
• Covid-19 Vaccines to Stress-Test Grocery Stores and Pharmacies.
• Exxon to Create ‘Low Carbon’ Business Unit as It Faces Activists.

Fox News:   

• Money talks as Biden pushes green industry's agenda.
  
• Deputy State Dept. spox called police 'largest threat' to national security.
  
• NEWT GINGRICH: Biden says 'unity' but really means 'conformity' – what the real deal would look like.
  

CNBC.com:

• GameStop’s slide continues, down 16% in after-hours trading.
• Amazon, Alphabet and Salesforce are all investing in a $28 billion company that crunches big data.
• Fed’s Bostic says economy could recover more quickly than expected.
• SpaceX to fly first civilian crew to space later this year, with public competitions for two seats.
• Stocks making the biggest moves after hours: Virgin Galactic, GameStop, Cirrus Logic and more.
• Why the GameStop frenzy may hurt retirees along with hedge funds.

MarketWatch.com:     

• AMC Entertainment stock now a ‘sell’ at MKM, as price target drops to $1.  
• Fed’s Kashkari not ‘fazed’ by rush of stock market speculation.  
• Tesla is in decline, SUVs are king, and more insights from the world’s largest electric-vehicle market.  
• GameStop stock tumbles 30% after more than half of short positions eliminated.

Zero Hedge:

• US COVID Vaccinations Top Cases For First Time... But A Majority Of Americans Still Remain Skeptical.
• How FinTech F**ked Financial Market Structure, Exposed The Social Contract, & What Comes Next.
• Financial Services Committee To Hold GameStop Hearing On Feb 18.
• Steve Cohen Opens Fund To New Investor Cash After Losses From Melvin Capital Bailout.
• Carson Block Defends Short Selling, Says He's "Not Part Of The Establishment".
• CME Hikes Silver Margins By 18%: Paper-Physical Disconnect Set To Explode.
• Treasury Now Projects Borrowing $900 Billion Less This Quarter: What That Means For Markets.
• Morgan Stanley: "This Correction Has Arrived And It's Likely To Get Worse And Feel Bad".
  
• Showdown In Chicago As Teachers Defy Mayor's Orders, Ignore Science; Strike Imminent.
• Short-Squeeze Stampede Sends Silver Soaring; Stocks Surge Off Overnight Slump.

Newsmax: 

• Dems Move to Pass $1.9 Trillion Bill Without GOP Support.
• Cotton: Biden's Immigration Orders Will Have 'Sweeping Effect'.
• Biden Asks Supreme Court to Cancel Asylum, Border Wall Arguments.
• US May Delay Afghanistan Withdrawal Amid Violence.

TheGatewayPundit.com:

• BREAKING: Democrat Pennsylvania Secretary of State at Center of Trump Election Concerns Resigns After Botching Requirement for Constitutional Amendment.
• As We Predicted: Non-Voters and Registered Democrats were Among Those Arrested at US Capitol Riots.
• Chris Salcedo Runs Montage of Democrats Threatening Violence Against Trump — But Trump Is Being “Impeached” for Calling for Peaceful Protest? (VIDEO).
• DC Public Schools Using Black Lives Matter Curriculum That Prioritizes ‘Disrupting the Nuclear Family’.
• Dr. Shiva, Jovan Pulitzer and Others Join World View Weekend and Discuss Steps Going Forward to Uncover the Accurate Results of the 2020 Election.
• Michigan’s Governor Aids CNN In Propaganda Campaign To Label Dissenters Of Democrat Party’s Radical Agenda, “Domestic Terrorists” [VIDEO].
• MEDIA BLACKOUT: Antifa Terrorists Armed with Hatchets Take Over Red Lion Hotel in Olympia, WA – Occupy 17 Rooms, Demand Shelter For Homeless (VIDEO).
• Biden White House OUTRAGED After Burmese Military Arrests Country’s Leaders over Alleged November Voter Fraud.
• Stacy Abrams Nominated for Nobel Peace Prize for Overwhelming Georgia Elections System with Questionable Ballots.

The Epoch Times: 

• Majority of Residents in Shanghai District Refuse to Take Chinese COVID-19 Vaccine: Govt Survey.
• Pentagon Commits $30 Million to Texas Rare Earth Plant, Aims to Reduce Reliance on China.
• Secretary of State Blinken Says US Should Allow in Hong Kong Refugees Fleeing Beijing’s Repression.

HereIsTheEvidence.com:

• This is for aggregating publicly available items of voter fraud evidence in the US election that would be admissible in court.
  

Digital Blackboard:

• Daily New Cases by Region.

Worldometer:

• New Cases/Deaths by state.

Rt Covid-19:

• How fast virus is growing by state.

KFF:

• State Data(Tests/Hospitalizations).

Night Trading 

• Asian equity indices are +.25% to +1.25% on average.

• Asia Ex-Japan Investment Grade CDS Index 61.75 -.25 basis point.

• China Sovereign CDS 31.0 -.75 basis point.

• Bloomberg Emerging Markets Currency Index 62.23 +.03%.
• Bloomberg Global Risk-On/Risk Off Index 1,476.0 +59.0 points.
• Volatility Index(VIX) futures 31.07 +.14%.
• FTSE 100 futures unch.

• S&P 500 futures +.01%.

• NASDAQ 100 futures +.12%.

Morning Preview Links

Earnings of Note 
Company/Estimate 

 

Before the Open: 

• (AMG)/3.68
• (CNA)/1.00
• (ENR)/.89
• (GPN)/1.77
• (HAS)/1.14
  

After the Close:

• (CHGG)/.41
  
• (LEG)/.70
  
• (SPG)/2.24
  
• (TTWO)/.94
  

Economic Releases

Afternoon

• Wards Total Vehicle Sales for Jan. is estimated to fall to 16.15M versus 16.27M in Dec.
  

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Eurozone GDP report, China PMI report and the US weekly retail sales reports could also impact trading today.

Market Hours
Normal:

• 9:30 am - 4:00 pm EST
  

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

Stocks Substantially Higher into Final Hour on Stimulus Hopes, Vaccine Optimism, Oil Gain, Tech/Financial Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Higher
  

• Sector Performance: Almost Every Sector Rising
  

• Volume: Heavy

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 29.2 -11.8%
• Bloomberg Global Risk On/Risk Off Index 1,518.0 +375.0 points

• Euro/Yen Carry Return Index 131.07 -.36%

• Emerging Markets Currency Volatility(VXY) 10.44 +.77%

• S&P 500 Implied Correlation 51.9 -4.1%

• ISE Sentiment Index 131.0 +23.0 points
  

• Total Put/Call .75 -19.4%

• NYSE Arms .75 -37.5%

Credit Investor Angst:

• North American Investment Grade CDS Index 54.55 -2.6%
  

• US Energy High-Yield OAS 519.31 -.52%

• European Financial Sector CDS Index 62.23 -1.7%

• Italian/German 10Y Yld Spread 116.0 -2.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 62.60 +.1%
  

• Emerging Market CDS Index 173.40 -1.08%
  

• iBoxx Offshore RMB China Corporate High Yield Index 185.51 -.03%

• 2-Year Swap Spread 7.75 -.25 basis point

• TED Spread 15.5 -.25 basis point
  

• 3-Month EUR/USD Cross-Currency Basis Swap -5.0 -.5 basis point
  
• MBS  5/10 Treasury Spread  68.75 +.75 basis point
  
• IHS Markit CMBX BBB- 6 73.75 +.75 basis point

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 62.22 +.21%
• 3-Month T-Bill Yield .05% unch.
  

• Yield Curve 96.25 +3.25 basis points
  

• China Iron Ore Spot 149.75 USD/Metric Tonne 4.12%

• Citi US Economic Surprise Index 60.60 -4.7 points

• Citi Eurozone Economic Surprise Index 124.0 -4.2 points
  

• Citi Emerging Markets Economic Surprise Index 63.80 -1.6 points

• 10-Year TIPS Spread 2.09 -3.0 basis points
• 100.0% chance of no change at April 28th meeting, 100.0% chance of no change at June 16th meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating +164 open in Japan 
• China A50 Futures: Indicating -69 open in China

• DAX Futures: Indicating +35 open in Germany

Portfolio:

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

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

• Market Exposure: Moved to 75% Net Long
  

Bear Radar

 Style Underperformer:

• Large-Cap Value +1.0%

Sector Underperformers:

• 1) Retail -4.9% 2) Pharma +.1% 3) Foods +.4%

Stocks Falling on Unusual Volume: 

• GRTS, WSM, BDTX, MRTX, BPMP, CONN, ACAD, RXT, PVH, COLL, STIM, CHRS, WW, EVLO, SKT, SEET, SHLX, TR, GOGO, DD, CRTX, SPWR, MRNA, SFIX, PETS, FIZZ, GME and KOSS
  

Stocks With Unusual Put Option Activity:

• 1) DISCA 2) HOG 3) DD 4) SWKS 5) SLV
  

Stocks With Most Negative News Mentions:

• 1) TRIT 2) SFIX 3) EXPR 4) BTBT 5) WSM
  

Charts:

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