Morning Market Internals

NYSE Composite Index:

• Volume Running +6.3% Above 100-Day Average 
• 3 Sectors Rising, 8 Sectors Declining
• 24.9% of Issues Advancing, 71.1% Declining
• 56 New 52-Week Highs, 50 New Lows
• 82.2% of Issues Above 200-day Moving Average
• Average 14-Day RSI 46.5%
  
• Bloomberg Global Risk-On/Risk-Off Index 2,897.0 -238.0 points
• Russell 1000: Growth/Value 17,448 -25.0 points
  
• Vix 18.4 +13.6%
• Total Put/Call .87 +3.6%
• TRIN/Arms 1.29 -14.6%

Thursday Watch

Night Trading 

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

• Asia Ex-Japan Investment Grade CDS Index 86.75 +1.25 basis points.

• China Sovereign CDS 37.5 unch.
  

• Bloomberg Emerging Markets Currency Index 59.88 -.03%.
• Bloomberg Global Risk-On/Risk Off Index 3,110.0 -32.0 points.
• Volatility Index(VIX) futures 19.9 -.03%.
• FTSE 100 futures -.13%.

• S&P 500 futures -.09%.

• NASDAQ 100 futures -.02%. 

Morning Preview Links

Earnings of Note 
Company/Estimate 

 

Before the Open: 

• (HELE)/2.51
• (FIZZ)/.52
  

After the Close:

• (LEVI)/.09
• (PSMT)/.64
  

Economic Releases

8:30 am EST

• Initial Jobless Claims for last week are estimated to fall to 350K versus 364K the prior week. 
• Continuing Claims are estimated to to fall to 3350K versus 3469K prior.
  

11:00 am EST

• Bloomberg consensus estimates call for a weekly crude oil inventory decline of -4,478,550 barrels versus a -6,718,000 barrel decline the prior week. Gasoline supplies are estimated to fall by -1,631,700 barrels versus a +1,522,000 barrel gain the prior week. Distillate inventories are estimated to fall by -93,200 barrels versus a -869,000 barrel decline the prior week. Finally, Refinery Utilization is estimated to rise by +.39% versus a +.7% gain prior.

2:00 pm EST

• Consumer Credit for May is estimated to fall to $18.0B versus $18.612B in April.

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The German trade data report, weekly EIA natural gas inventory report, (COST) June sales results and the (FEYE) July investor briefing 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 mixed and to rally into the afternoon, finishing modestly higher. The Portfolio is 75% net long heading into the day.

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.