Wednesday Watch

Evening Headlines

Bloomberg:                 

• Didi Plunges Below IPO Price as China Expands Crackdown.  
• Nike Shares Lose Out to Chinese Sneaker Rivals After Xinjiang Cotton Boycott.
• Japan Expected to Deliver at Least $180 Billion in New Stimulus.
• Asian Stocks Fall as Growth Concerns Bolster Bonds: Markets Wrap.
• Oil Slumps With Stronger Dollar Cooling OPEC-Fueled Rally.  
• U.S. Fuel Use Seen at Post-Virus High in Run-Up to Holiday.  
• Jeff Bezos Hits Wealth Record of $211 Billion on Pentagon Move.
• Aging Condos Are a ‘Ticking Time Bomb’ and Need More Oversight.  
• Authentic Brands Files for IPO Taking Forever 21 Owner Public.  
• Maker of $2,000 Barbecue Grill Traeger Files for U.S. IPO.  
• Western Fires Halt Hundreds of Canada Rail Cars, Slowing Exports.   
• Oil, Gas Stock ETFs Are Attracting Most Money in a Decade.

Wall Street Journal:

• OPEC, Biden and Gas Prices.
• The DNC’s Dishonest Voting Case Against Arizona.
• The Culture War Must Go On.
• Hospitals Often Charge Uninsured People the Highest Prices, New Data Show.
• Grubhub to Use Robots to Deliver on College Campuses.

Fox News:

• Biden warns admin is coming to your door if you haven't been vaccinated yet.
  

CNBC.com:

• OPEC discord could unleash a new level of volatility in oil market.
• Pentagon cancels $10 billion JEDI cloud contract that Amazon and Microsoft were fighting over.

MarketWatch.com:       

• Here are Wall Street’s 20 favorite energy stocks as crude oil hits a 6-year high.
  
• Didi and other Chinese stocks are sinking: Bargain hunters beware.

Zero Hedge: 

• The Peak Is In For Global Manufacturing PMI.
• Eric Adams Wins New York Democratic Primary After Mail-In Ballots Tallied.
• Watch: Looters Ransack San Francisco Neiman Marcus In Broad Daylight.
• Pelosi's Husband Bought Amazon Stock Before Pentagon JEDI Shakeup Sent Shares Soaring.
• US Forces Are Under Constant Rain Of Fire In Both Syria And Iraq.
• Critical Race Theory Should Be Banned, And A Black Parent Explains Why.
• The Central Banks New Mandate: Social Justice, Race, Gender Issues, Climate Change And Inequality.
• Jan. 6 Detainees Confined 23 Hours A Day, Attorneys Say.
• Georgia On My Mind: Biden Admin Doubles-Down On New Challenge Despite Losing Arizona "Racist" Voting Case.
• Their Endgame For The Flag, The National Anthem, The Declaration Of Independence, & The Constitution.
• 'Growth' Gains, 'Value' Pains As Yields Plunge, Dollar Jumps, Crude Dumps.

Newsmax:

• Trump Calls Upon Swing States to 'Pass Real Election Reform'.  
• Rep. Harshbarger: Vital to Protect Supply Chains From China.

TheGatewayPundit.com:

• Identity of Ashli Babbitt Killer Confirmed — Careless Capitol Police Lieutenant Is Being Protected by Democrats, Pelosi and Deep State FBI.
• Here We Go: Scientists Claim “Lambda” Variant May Be Resistant to Covid-19 Vaccines.

The Epoch Times: 

• Columbia Professor Who Thanked Fauci for Dismissing Lab Leak Theory Has History of Collaboration With China.

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 -.5% to +.25% on average.

• Asia Ex-Japan Investment Grade CDS Index 85.5 +1.75 basis points.

• China Sovereign CDS 37.5 +1.5 basis points.
  

• Bloomberg Emerging Markets Currency Index 60.05 -.02%.
• Bloomberg Global Risk-On/Risk Off Index 3,131.0 -41.0 points.
• Volatility Index(VIX) futures 19.8 -.2%.
• FTSE 100 futures +.16%.

• S&P 500 futures -.09%.

• NASDAQ 100 futures -.05%. 

Morning Preview Links

Earnings of Note 
Company/Estimate 

 

Before the Open: 

• (MSM)/1.39
  

After the Close:

• (WDFC)/1.15
  

Economic Releases

10:00 am EST

• JOLTS Job Openings for May is estimated to rise to 9325K versus 9286K in April.
  

2:00 pm EST

• June 16 FOMC Meeting Minutes.

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Russia rate decision, weekly MBA Mortgage Applications report and weekly US retail sales reports could also impact global trading today.

US Equity Market Hours

• 9:30 am - 4:00 pm EST
  

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

Stocks Lower into Final Hour on Virus Variant Concerns, China Tech Crackdown, Oil Decline, Commodity/Financial Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Lower
  

• Sector Performance: Almost Every Sector Declining
  

• Volume: Around Average

• Market Leading Stocks: Underperforming
  

Equity Investor Angst:

• Volatility(VIX) 16.6 +10.0%
• Bloomberg Global Risk On/Risk Off Index 3,155.0 -240.0 points

• Euro/Yen Carry Return Index 135.14 -.62%

• Emerging Markets Currency Volatility(VXY) 8.75 +2.1%

• S&P 500 Implied Correlation 48.6 +2.4%

• ISE Sentiment Index 119.0  +15.0 points
  

• Total Put/Call .85 +10.4%

• NYSE Arms 1.96 +69.0%

Credit Investor Angst:

• North American Investment Grade CDS Index 47.53 +1.3%
  

• US Energy High-Yield OAS 378.92 +1.1%

• European Financial Sector CDS Index 53.84 +.98%

• Italian/German 10Y Yld Spread 101.0 -4.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 84.91 +1.14%
  

• Emerging Market CDS Index 157.51 +2.6%
  

• China Corp. High-Yield Bond USD ETF(KCCB) 38.60 -.71%

• 2-Year Swap Spread 7.75 +1.0 basis point

• TED Spread 9.5 +.5 basis point
  

• 3-Month EUR/USD Cross-Currency Basis Swap -5.0 -1.5 basis points
  
• MBS  5/10 Treasury Spread  68.25 +1.25 basis points
  
• IHS Markit CMBX BBB- 6 73.5 +.25 basis point
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 60.08 -.69%
• 3-Month T-Bill Yield .04% unch.
  

• Yield Curve 121.0 +1.0 basis point
  

• China Iron Ore Spot 206.05 USD/Metric Tonne -1.39%

• Citi US Economic Surprise Index 1.6 -9.9 points

• Citi Eurozone Economic Surprise Index 96.50 -11.7 points
  

• Citi Emerging Markets Economic Surprise Index 71.0 -3.4 points

• 10-Year TIPS Spread 2.33 -1.0 basis point
• 100.0% chance of no change at Nov. 3rd meeting, 100.0% chance of no change at Dec. 15th meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating -233 open in Japan 
• China A50 Futures: Indicating -222 open in China

• DAX Futures: Indicating +3 open in Germany

Portfolio:

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

• Disclosed Trades: None
  

• Market Exposure: 75% Net Long
  

Mid-Day Market Internals

NYSE Composite Index:

• Volume Running +1.6% Above 100-Day Average 
• 2 Sectors Rising, 9 Sectors Declining
• 24.1% of Issues Advancing, 71.3% Declining
• 132 New 52-Week Highs, 20 New Lows
• 84.5% of Issues Above 200-day Moving Average
• Average 14-Day RSI 48.9%
  
• Bloomberg Global Risk-On/Risk-Off Index 3,070.0 -323.0 points
• Vix 17.6 +16.6%
• Total Put/Call .87 +13.0%
• TRIN/Arms 2.28 +96.6%

Tuesday Watch

Today's Headlines

Bloomberg:           

• China Widens Probe Beyond Didi, Roiling Global Investors.  
• China Defaults Threaten an Eerily Calm $12 Trillion Bond Market.  
• The Ticking Debt Bomb in China’s $18.1 Trillion Bond Market.  
• Tesla’s Fall From Grace in China Shows Perils of Betting on Beijing.
• Tehran Says It’s Ready to Pump More Oil Rapidly: Iran Snapshot.  
• Economic Sentiment Rises to Record in Canada on Vaccine Rollout.
• Plastic Makers Reel on Soaring Oil Costs, Rising Competition.
• Mexico’s Biggest Private Oil Find Will Be Operated by State-Owned Pemex.  
• U.K. Plans to End Distancing; Biden Celebrates: Virus Update.
  
• U.S. Futures Fluctuate; Oil Jumps on OPEC+ Dispute: Markets Wrap.
• OPEC+ Deal Fails, Leaving Oil Market Tighter as Prices Surge.
  
• Bitcoin Resumes Losing Streak After Weekend Strength Evaporates.  
• Tropical Storm Elsa Headed to Landfall on Central Cuba Coast.  
• Investors Don’t See End to Record-Breaking Equity Rally Just Yet.

Wall Street Journal:

• Tech Firms Threaten to Quit Hong Kong Over Data Law Plan.
• Does the Pentagon Take China Seriously?
• Retail Investors Power the Trading Wave With Record Cash Inflows.
• Midsize Pharmaceutical Firms Are the Industry’s Big Deal Makers.
• Rising Inflation Looks Less Severe Using Pre-Pandemic Comparisons. 
• Chinese Regulators Suggested Didi Delay Its U.S. IPO.
• Lina Khan’s Power Grab at the FTC.
• Big Tech and Big Finance Breed Hubris. 
• In OPEC Deadlock, U.A.E. Steps Out of Saudi Shadow.
  

Barron's:

• Had bullish commentary on (BKNG), (JCI) and (NCR).
• Had bearish commentary on (HOOD).

Fox News:  

• Nearly 100 shot across the country during holiday weekend, several killed, including 14-year-old boy.
• Walmart shoppers break out into ‘Star-Spangled Banner’ in viral video.

CNBC:

• Wages are finally going up and that’s going to have to continue to get people back to work.
• Boris Johnson says England on track to lift Covid restrictions.
• After crackdown on Didi, China opens cybersecurity probes into 3 more tech firms.
• Porsche to create hypercar company with Bugatti and Croatian electric vehicle maker Rimac.
• China’s tech crackdown has a new battleground — data. 
• The honeymoon is over for streaming services: Here’s where the major players stand.

Zero Hedge: 

• Global Stocks Rise To New Record High As US Futures Drift In Muted Holiday Session.
• Oil Jumps After OPEC+ Abandons Meeting With No Deal.
• US Army Directs Commands To Prep For Mandatory COVID Shots For Troops; Report.
• 'Wikipedia Is More One-Sided Than Ever' Writes Disaffected Co-Founder Larry Sanger.
• Multiple Rockets Hit Iraq's Largest US Base In Apparent Revenge Attack.
• Zoltan Sees Reverse Repo Hitting $2 Trillion In Weeks: What Happens Then.
• Fauci-Funded EcoHealth Refuses To Give Wuhan Documents To Congress.
• A Stunned Wall Street Responds To China's Droconian Didi Crackdown.
• Have you seen the surge in SKEW bro?
• Key Events This Week: ISM, FOMC Minutes And Jobless Claims.
• The Global Minimum Corporate Tax Exposes The G-7's Hypocrisy.
• China On Verge Of Contraction After Sudden Plunge In Services PMI.
• Report Shows South Becoming Increasingly Popular Among Asian Americans.
• The Race Is On: GM Makes Multimillion Dollar Investment In U.S. Lithium Project.
• As Housing, Gas, & Healthcare Costs Soar; Biden Admin Distracts With Ridiculous Brag About 16c Savings On July 4th BBQ Costs.
• Why Isn't The US Preparing For EMP War Like The Rest Of The World?
• South China Port Congestion Worsens As Traffic Jam Of Container Ships Builds.
• Target To Close Stores Early In San Francisco Due To Chronic Shoplifting.
• Here Are The Best And Worst Performing Assets Of The First Half.

MarketWatch.com:      

• China expands probe of U.S.-listed companies after similar move against Didi.  
• There are plenty of jobs, but not enough people to fill them. What’s going on?  
• The 5 most eye-popping disclosures in Robinhood’s long-awaited IPO filing.
  

NewsMax:  

• Surfside Mayor Burkett: Implosion Allows More Thorough Search.
• Only 36% of Young Adults Proud of America: Poll.
• Our Unsafe Cities: At Least 118 Shot in Chicago, NY Over July 4 Weekend.

TheGatewayPundit.com:

• Marxist Democrat Rep. Cori Bush’s 4th of July Message: “This Land is Stolen and Black People Still Aren’t Free”.
• China Upped Its Donations to the Biden Center 400% with $50M in Donations After Biden Announced his Campaign.
• Top Secret Meeting of Mainstream Media, Big Tech, and Intelligence Heads Is Taking Place This Week In Idaho.
• Democrat Senator Excited 25 People Showed Up to Greet 81 Million Vote Recipient Joe Biden in Michigan (VIDEO).
• Nation’s Largest Teachers Union Approves Plan to Promote Hate-Based Critical Race Theory in All 50 States and 14,000 School Districts. 
• Several Women on US Soccer Team Turn Away From US Flag as 98-Year-Old Veteran Plays National Anthem on Harmonica (VIDEO).

The Epoch Times:

• US Should Learn From CCP’s Authoritarianism, Billionaire Investor Charlie Munger Says.  
• China Border City to Burma Tightens COVID-19 Travel Restriction Again.

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 indices are -.25% to +.5% on average.
• Asia Ex-Japan Investment Grade CDS Index 83.75 -.25 basis point.
• China Sovereign CDS 36.0 +.25 basis point.
• Bloomberg Emerging Markets Currency Index 60.5 +.01%.
• Bloomberg Global Risk-On/Risk Off Index 3,370.0 -23.0 points.
• Volatility Index(VIX) futures 19.33 -.87%. 
• Euro Stoxx 50 futures -.09%.
• S&P 500 futures +.07%.
• NASDAQ 100 futures +.03%

Morning Preview Links

Earnings of Note

Company/Estimate

Before the Open:

• None of note
  

After the Close:

• (SGH)/1.09
  

Economic Releases

10:00 am EST

• The ISM Services Index for June is estimated to fall to 63.5 versus 64.0 in May.

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Eurozone ZEW Sentiment Index could also impact trading today.

US Equity Market Hours

• 9:30 am - 4:00 pm EST

BOTTOM LINE: Asian indices are mostly higher, boosted by industrial 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 75% net long heading into the week.

Monday Watch

Today's Headlines

Bloomberg:           

• China’s Industrial Profits Grow at Slower Pace as Costs Rise.
• China Asks Citic Group to Examine Huarong’s Finances
• Australia to Notch Up Another Record Year for Resource Exports.
• U.K. Names New Minister; AstraZeneca Vaccine Trial: Virus Update.   
• Asia Stocks, U.S. Futures Steady; Dollar Edges Up: Markets Wrap. 
• Oil Steady Near $74 With OPEC+ Expected to Trail Demand Revival.
• GOP Senators Say Biden’s Infrastructure Deal Back on Track.
• Crypto Exchange Binance Banned From Doing Business in U.K.  
• Record Stock Sales From Money-Losing Firms Ring the Alarm Bells.  
• The IPO Market Has Never Been Hotter Than It Is Right Now.  
• Strategists Flag Near-Term Risks for Bitcoin Price Outlook.  
• U.S. Investment-Grade Bond Supply Seen Subdued Ahead of July 4.  
• Search for Survivors Continues at Collapsed Miami-Area Building.  
• Bond Market’s Bears Undaunted by Post-Fed Shakeout of Short Bets.  
• U.S. Jobs to Be Scrutinized for Signs of Faster Hiring: Eco Week.

Wall Street Journal:

• A Conservative Court Awakening.
• Has the Military Gone ‘Woke’?
• Unemployment Rolls Shrink Faster in States Cutting Aid.
• The Apple-Microsoft Tech War Reignites for a New Era.
• During Covid-19, Most Americans Got Richer—Especially the Rich.
• Commodities Remain Popular Bet Despite Recent Declines.
• The Stock Market Hasn’t Been This Placid in Years.
• Far From Texas, Huge Gas Bills Stoke Anger.
• France’s Macron Under Pressure as Recent Terrorist Attacks Weigh on Regional Elections.
• The Battle Over Critical Race Theory.
• ‘Drill, Baby, Drill’ Is the Future.

Fox News:  

• Local businesses struggle to find workers despite Biden's suggestion to just 'pay them more'.
• Athlete turns away from flag during national anthem at Olympic trials.

CNBC:

• Doximity CEO ignored Silicon Valley wisdom and built a $10 billion health-tech company.
• Biden reiterates support for bipartisan infrastructure plan, clarifies he did not issue veto threat.
• With demand for rentals sky high, more homeowners consider adding an apartment over the garage. 
• These are the best long-term stocks to own right now, top Wall Street analysts say.

Zero Hedge: 

• FDA Adds Warning About Heart Inflammation To COVID-19 mRNA Vaccines.
• Yet More Olympics "Activism": Medalist Turns Back To Flag During Anthem At Trials.
• How Has Trader Positioning Changed Since The FOMC Meeting.
• Biden Orders Series Of Airstrikes Along Syria-Iraq Border.
• Labor Shortages And Inflation Plague California Businesses.
• United States Ranks Last In Global Media Trust, New Report Finds.
• Ford Electric Mustang Breaks Quarter-Mile Record, Challenges Elon Musk To "Race".
• More Police Officers Have Retired Or Quit In The Past Year Than Ever Before, New Survey Shows.
• Market Rallies To All-Time Highs As Bulls Dismiss Fed.
• Happy Birthday, Global Warming: Climate Change At 33.
• Virginia's First 3D-Printed Home Under Construction Amid "Hyperinflating" Housing Market.
• Losing The Plot On COVID.
• Ivermectin: Can a Drug Be "Right-Wing"?
• US Threatens Sanctions On Gulf Allies If They Normalize Relations With Assad.
• Why Gold?
• US Food Banks Warn Soaring Prices Will Affect Distributions .
• Blackouts Loom In California As Electricity Prices Are "Absolutely Exploding".
• Senate Republicans Urge CDC To End Mask Mandate On Airplanes, Public Transit.
• Japan Trails The World In Vaccination Race As Olympics Loom.
• 'You Were Wrong About A Lot Of Sh*t': Maher Blasts Big Tech, CDC Over Lab-Leak Censorship.
• "Enough Is Enough": Los Angeles Sheriff Urges State Of Emergency On Homelessness.

MarketWatch.com:      

• Opinion: Buy stocks now that the S&P 500 is finally charging out of its range.
  

NewsMax:   

• Trump: Biden 'Destroying Our Nation Right Before Our Very Own Eyes'.
• Trump Mocks 'Woke' Military Generals, Critical Race Theory.

TheGatewayPundit.com:

• Biden Signs Executive Order that Mandates Race Training at Every Level and Lectures on ‘White Privilege’ and ‘Male Privilege’.
• Biden/Obama Again Negotiating with Iran – No American Wants This – Siding with Iran Will Not Bring Peace.
• Stephen Miller: Kamala Harris’s Objective is to Destroy the Border, Eliminate Border Security and Facilitate Mass Entry of Illegal Aliens (VIDEO).
• NEVER FORGET: Republican ‘Leaders’ Like Pence, Romney, McConnell, McCarthy, Cheney and McDaniel Were Completely AWOL During Entire Arizona Audit Process.
• Newly Uncovered Emails Show Top Biden Officials DEMANDING Facebook Censor Their Opponent Then President Trump Before Election.
• Female Customer Freaks After She Sees Biological Male Walking Around with His Penis Out Around Children in LA Women’s Day Spa – Spa Defends Naked Man! (VIDEO). 
• HERE WE GO: WHO Recommends Masks and Social Distancing For Everyone – Vaccinated and Unvaccinated – Due to Covid “Delta” Variant.

The Epoch Times:

• Vatican Foreign Minister to Epoch Times: Church Has No Positive Contribution to Make in Hong Kong.

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 indices are -.50% to +.25% on average.
• Asia Ex-Japan Investment Grade CDS Index 83.25 -1.0 basis point.
• China Sovereign CDS 35.5 -2.0 basis points.
• Bloomberg Emerging Markets Currency Index 60.75 -.06%.
• Bloomberg Global Risk-On/Risk Off Index 3,480.0 -1.0 point.
• Volatility Index(VIX) futures 17.69 -.07%. 
• Euro Stoxx 50 futures -.06%.
• S&P 500 futures +.03%.
• NASDAQ 100 futures -.01%

Morning Preview Links

Earnings of Note

Company/Estimate

Before the Open:

• None of note
  

After the Close:

• (MLHR)/.39
  

Economic Releases

10:30 am EST

• The Dallas Fed Manufacturing Activity Index for June is estimated to fall to 32.5 versus 34.9 in May.

Upcoming Splits

• (CSX) 3-for-1
  

Other Potential Market Movers

• The Fed's Quarles speaking, Fed's Williams speaking, Japan Retail Sales report and the Mobile World Congress could also impact trading today.

US Equity Market Hours

• 9:30 am - 4:00 pm EST

BOTTOM LINE: Asian indices are slightly lower, weighed down by metals/mining and consumer 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 week.