Tuesday Watch

Evening Headlines

Bloomberg:             

• China Doesn’t Care How Much Money You Lose.
• South Korea’s Economy Slows More Than Expected Last Quarter.  
• Didi’s IPO Underwriters Go Silent as Volatility Dominates.
• Asia Eyes Cautious Open Amid China Curbs, Earnings: Markets Wrap.  
• Oil Edges Higher as Investors Assess Demand Amid Delta Spread.
• Goldman on Growth, China’s Regional Gap, Taper Tantrum: Eco Day.
• Elon Musk Says He May Skip Future Tesla Earnings Calls.
• Bitcoin Tumbles After Reaching $40,000 on Amazon Speculations.
• Infrastructure Bill Stalls as GOP Rejects Offer From Democrats.  
• California, NYC, Veterans Affairs Issue Vaccine Mandates.  
• Insatiable Demand for All Things Plastic Has Ethane Skyrocketing.  
• Prices for Young Cattle Are Soaring, Signaling Expensive Beef.  
• U.S. Infrastructure Spending Seen Rising After Decade of Decline.

Wall Street Journal:

• Aon, Willis Towers Scrap $30 Billion Merger.
• Infrastructure Negotiators Try to Overcome Late Hurdles.
• A Socialist Chairs the Budget Committee.
• How to Avert Disaster in Afghanistan.
• A New National Climate Army.
• Vaccine Mandates Imposed on Some Government Workers.
• China Tech Stocks Slump as Regulators Apply Fresh Pressure.

Fox News:

• Dem mayors hire private security with taxpayer funds but want to defund protection for you.
• ESPN writer troubled by American flag at Olympics and it doesn't stop there.
  

CNBC.com:

• Tesla reports more than $1 billion in net income during Q2, up tenfold from a year ago.
• Housing boom is over as new home sales fall to pandemic low.
• Americans are ‘mixing and matching’ Covid vaccines over concerns about the delta variant.
• American Airlines warns about fuel shortages around the country, asks pilots to conserve.
• Stocks making the biggest moves after hours: Tesla, F5 Networks, Coinbase and more.
• Moderna says it plans to expand vaccine trial for kids 5 to 11, will seek FDA OK as early as year-end.
  

MarketWatch.com:       

• Intel stock dips as new chip designation, production schedule revealed.

Zero Hedge:

• Bitcoin Tumbles After Amazon Denies It Will Accept Crypto This Year.
• Did Today's Shockingly Bad Home Sales Data Just Derail The Fed's Tapering Plans.
• Big Tech Forms 'White Supremacist' Counterterror Database; PayPal Works With ADL To 'Fight Extremism And Hate'.
• The Net-Zero Narrative Is Riddled With Holes.
• Biden Administration Spending $3 Million A Day To Suspend Border Wall Construction: Senate Report.
• Decline In UK COVID Cases Signals Coming "Inflection" For US As Delta Fears Subside.
• Fully-Masked, Crowd-Free Olympics Opening Ceremony Attracts Fewest TV Watchers In 33 Years.
• Cascade Of Consequences.
• Tesla Jumps After Beating Expectations, Says Shanghai Is Now Main Hub For Auto Exports.
• Crypto Pops, Dollar Drops, Bonds & Stocks Chop.

Newsmax:

• Hunter Biden's Art Dealer Has Had Deep Ties to China Since 2014.
  

TheGatewayPundit.com:

• CA Governor Gavin Newsom Compares Unvaccinated People to Murderous Drunk Drivers (VIDEO).
• Former Democrat Senator Barbara Boxer Assaulted, Robbed in Oakland.
• BREAKING HUGE: Georgia’s Raffensperger, Sterling and Fuchs All Connected to Firm that Helps Georgia Democrats Run as Republicans.
• Reps. Gaetz, Gohmert, Gosar, and Greene to Hold Press Conference at DOJ Demanding Answers on Inhumane Treatment of January 6th Political Prisoners.
• PayPal Partnering With Anti-Defamation League to Share Info With Law Enforcement, Determine Who Can Use Their Services.

The Epoch Times:

• France Warned US in 2015 About Wuhan Lab It Helped Build, Former COVID-19 Investigator Claims.

Covid-19(Data, Maps, Graphs):

• Our World in Data:  New Global Covid-19 Cases(7-day rolling average graphs). New Covid Hospital Admissions/ICU Admissions/Deaths
  
• FT.com:  Fully Vaccinated by Country(graph). Global Lockdown Stringency Index(map).
  
• NYTimes.com:  County Trends and Clusters.
  
• Brown School of Public Health:  Covid Severity by State/County(map).  US Hospital Capacity.
  
• 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 +.75% on average.

• Asia Ex-Japan Investment Grade CDS Index 87.0 +1.75 basis points.

• China Sovereign CDS 39.0 +1.0 basis point.
  

• Bloomberg Emerging Markets Currency Index 59.79 +.05%.
• Bloomberg Global Risk-On/Risk Off Index 2,795.0 -6.0 points.
• Volatility Index(VIX) futures 20.20 +.25%.
• FTSE 100 futures +.08%.

• S&P 500 futures -.08%.

• NASDAQ 100 futures -.05%. 

Morning Preview Links

Earnings of Note 
Company/Estimate 

 

Before the Open: 

• (MMM)/2.28
• (ADM)/1.02
• (BSX)/.37
• (GLW)/.51
• (GE)/.03
• (JBLU)/-.74
• (PCAR)/1.39
• (PII)/2.17
• (PHM)/1.73
• (RTX)/.93
• (RGEN)/.52
• (ROK)/2.09
• (SHW)/2.59
• (SIRI)/.07
• (SWK)/2.89
• (UPS)/2.81
  

After the Close:

• (AMD)/.54
• (GOOG)/19.15
• (AAPL)/1.01
• (BXP)/1.62
• (BYD)/.94
• (CAKE)/.76
• (CB)/3.01
• (JNPR)/.39
• (MXIM)/.85
• (MSFT)/1.92
• (MDLZ)/.65
• (OLN)/1.47
• (SBUX)/.77
• (SYK)/2.12
• (TDOC)/-.54
• (TER)/1.75
• (V)/1.35
  

Economic Releases

8:30 am EST

• Durable Goods Orders for June is estimated to rise +2.0% versus a +2.3% gain in May.
• Durables Ex Transports for June is estimated to rise +.8% versus a +.3% gain in May.
• Cap Goods Orders Non-Defense Ex Air for June is estimated to rise +.8% versus a +.1% gain in May.
  

9:00 am EST

• The FHFA House Price Index MoM for May is estimated to rise +1.6% versus a +1.8% gain in April.
•  The S&P CoreLogic CS 20-City MoM for May is estimated to rise +1.5% versus a +1.62% gain in April.
  

10:00 am EST

• The Conference Board Consumer Confidence Index for July is estimated to fall to 123.9 versus 127.3 in June.
• The Richmond Fed Manufacturing Index for July is estimated to fall to 20.0 versus 22.0 in June.
  

Upcoming Splits

• (GE) 1-for-8
  

Other Potential Market Movers

• The Eurozone Private Load data report, $61B 5Y T-Note auction and the 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, boosted by commodity and industrial shares in the region. I expect US stocks to open modestly higher and to weaken into the afternoon, finishing mixed. The Portfolio is 75% net long heading into the day.

Stocks Reversing Higher into Final Hour on Diminished Global Virus Shutdown Fears, Earnings Optimism, Short-Covering, Commodity/Airlines Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Lower
  

• Sector Performance: Mixed
  

• Volume: Around Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 18.1 +5.2%
• Bloomberg Global Risk On/Risk Off Index 2,749.0 -137.0 points

• Euro/Yen Carry Return Index 134.50 +.08%

• Emerging Markets Currency Volatility(VXY) 8.7 +1.1%

• S&P 500 Implied Correlation 50.9 +.9%

• ISE Sentiment Index 99.0  -25.0 points
  

• Total Put/Call .87 unch.

• NYSE Arms 1.13 -36.9%

Credit Investor Angst:

• North American Investment Grade CDS Index 48.81 +.58%
  

• US Energy High-Yield OAS 419.17 -.08%

• European Financial Sector CDS Index 53.87 +.33%

• Italian/German 10Y Yld Spread 105.0 -3.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 85.59 +1.8%
  

• Emerging Market CDS Index 162.80 +1.2%
  

• China Corp. High-Yield Bond USD ETF(KCCB) 38.64 -.34%

• 2-Year Swap Spread 8.75 +.5 basis point

• TED Spread 8.5 -1.0 basis point
  

• 3-Month EUR/USD Cross-Currency Basis Swap -5.0 unch.
  
• MBS  5/10 Treasury Spread  72.5 -.75 basis point
  
• IHS Markit CMBX BBB- 6 73.75 +.25 basis point
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 59.77 +.04%
• 3-Month T-Bill Yield .04% -1.0 basis point
  

• Yield Curve 106.0 +5.0 basis points
  

• China Iron Ore Spot 200.20 USD/Metric Tonne +.4%

• Citi US Economic Surprise Index -1.9 -13.5 points

• Citi Eurozone Economic Surprise Index 48.1 -11.5 points
  

• Citi Emerging Markets Economic Surprise Index 52.9 -1.6 points

• 10-Year TIPS Spread 2.40 +9.0 basis points
• 100.0% chance of no change at Nov. 3rd meeting, 100.0% chance of no change at Dec. 15th meeting

US Covid-19:

• 111 infections/100K people(last 7 days) +26/100K people
• 21% of Jan. 7th, 2021 peak(highest daily avg. new infections) +5.0 percentage points
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +127 open in Japan 
• China A50 Futures: Indicating -108 open in China

• DAX Futures: Indicating -11 open in Germany

Portfolio:

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

• Disclosed Trades: None
  

• Market Exposure: 75% Net Long
  

Bear Radar

 Style Underperformer:

• Mid-Cap Growth -.6%

Sector Underperformers:

• 1) Video Gaming -2.7% 2) Social Media -2.7% 3) Digital Health -2.0%

Stocks Falling on Unusual Volume: 

• LMT, HLMN, ENVX, CANO, RCKT, DNLI, INMB, BABA, JD,  and NRXP
  

Stocks With Unusual Put Option Activity:

• 1) FXI 2) SPRT 3) ASHR 4) GE 5) PVH
  

Stocks With Most Negative News Mentions:

• 1) ATIP 2) EDU 3) TAL 4) COE 5) IMAB
  

Charts:

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

Bull Radar

Style Outperformer:

• Small-Cap Value +.6%

Sector Outperformers:

• 1) Steel +2.4% 2) Oil Service +2.3% 3) Airlines +1.8%

Stocks Rising on Unusual Volume:

• ORMP, MAT, XENT, SAM, PKI, MARA, TBIO, COIN, BTU, MBI, CLSK, PTRA, XM, BOOM, CEIX, TRIP, EB, FIVN, ZM, ASPN, CUK, CAKE, AA, PII, AMBC, SSB, IPSC, CCL and AGFY
  

Stocks With Unusual Call Option Activity:

• 1) CL 2) BLDR 3) SMSI 4) XME 5) LMT

Stocks With Most Positive News Mentions:

• 1) MARA 2) TBIO 3) ZM 4) GPS 5) HPE
  

Charts:

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

Mid-Day Market Internals

NYSE Composite Index:

• Volume Running +12.4% Above 100-Day Average 
• 7 Sectors Rising, 4 Sectors Declining
• 52.0% of Issues Advancing, 44.0% Declining
• 98 New 52-Week Highs, 45 New Lows
• 76.2% of Issues Above 200-day Moving Average
• Average 14-Day RSI 45.6%
  
• Bloomberg Global Risk-On/Risk-Off Index 2,742.0 -144.0 points
• Russell 1000: Growth/Value 17,840 -.19%
  
• Vix 18.2 +6.1%
• Total Put/Call .89 +2.3%
• TRIN/Arms 1.2 -31.3%

Monday Watch

Today's Headlines

Bloomberg:                             

• China’s Ongoing Recovery Showed Signs of Weakness in July.
• U.K. Reports Fifth Daily Decline of Virus Cases in Johnson Boost.
• German Politicians Float Bans, Mandatory Jabs, for Unvaccinated.
• Early Crypto Mogul Says China Crackdown May Lead to Outright Ban.
  
• Asia Stocks Rise After U.S. Hit Record on Earnings: Markets Wrap.
• OPEC+ Decision, Earnings Drive Mideast Market Gains: Inside EM.   
• Oil Edges Higher With Robust Demand Outlook Clouded by Delta.
• Five Things You Need to Know to Start Your Day.   
• ‘Freak Out’ Factor, China Cools, Yellen on Default Risk: Eco Day.
  
• Fauci Issues a Warning; Vietnam Adds New Cases: Virus Update.
• Bitcoin’s Corporate Diehards Face Earnings Reckoning After Slump.
• Pelosi Says Infrastructure Won’t Get Vote Without Larger Plan.
  
• White House Shifts Messaging on Inflation as Republicans Attack.
  
• Fed’s MBS Buying High on Agenda as Officials Begin Taper Talk.
  
• Hedge Funds Back Away From Binance on Regulatory Risks, FT Says.  
• Record Profits and Blockbuster Dividends: Here Come the Miners.   
• Second Democrat Insists on Immigration Path in Budget Bill.

Wall Street Journal:

• Race for Covid-19 Pill Heats Up.
• Global Investors Are Buying American.
• The Temptation of Judging for the ‘Common Good’.
• Rush to Build EV Charging Stations Comes Without Promise of Profit.
• Supply-Chain Woes Come to School Cafeterias.
• Battle for the Cloud, Once Amazon vs. Microsoft, Now Has Many Fronts.
• Senators Try to Finalize Deal on Infrastructure Package.
• No, Inflation Isn’t Good for Workers.
• Anthony Fauci, Rand Paul and Wuhan.
• Congress Can’t Enact a Chicken.

Fox News:  

• Team USA star reveals WNBA players' national anthem plans for Olympics.
• Anti-cop group cashes in as liberal financier makes donation.
• Fauci ignites firestorm after hinting at upcoming COVID protocols: 'Sure as hell not about science'.

CNBC:

• ‘Disturbing’ actions by China signal early stages of a cold war, economist Stephen Roach warns.

Zero Hedge: 

• Maine Becomes First State To Charge Firms That Don't Use Eco-Friendly Packaging Materials.
• The US Energy Sector Is In Chronic Atrophy, And That Could Be A Good Thing For Energy Investors. 
• Pelosi Holds Bipartisan Infrastructure Plan Hostage Until She Gets Senate Reconciliation Deal.
• The Role Of Impaired Liquidity On The Recent Treasury Market Rollercoaster.
• Chicago Chamber Of Commerce Rages As Average Unemployed Illinoisan Parent Earns $35/Hour Sitting On The Couch. 
• What Effect Would Tether Being A Complete Fraud Have On Cryptos?
• Watch: RINO AZ Senator Who Voted Against Election Integrity Bill Booed Off Stage.
• America Has Lost The Trade War With China, And The Real Pain Has Yet To Begin.
• FBI: China Is Behind Past Oil & Gas Pipeline Cyberattacks.
• Cybersecurity Experts Encourage System Of Reporting Workers To Employers For "Online Abuse".
• Semi Shortage May Let Up For Autos, But Broader Supply To Remain Limited Until 2022.
• CIA Chief Says Taliban In "Strongest Military Position Since 2001".
• 1,250 Clergy Members Warn Vaccine Passports Would Create "Medical Apartheid" In UK.
• Protesters Rage Across Europe As Lockdown, Vaccination Mandates Begin.
• America Is Only One Step Away From A South African-Style Social Implosion.
• It's About Time We Stopped "Trying Communism".
• These Are The World's Highest-Paid Athletes.
• Electrical Engineer Gets Five Years In Prison For Selling Missile Technology To China.
• Philadelphia's Murder Rate Highest Among Largest US Cities.
• Iran Opens Export Terminal To Bypass World's Biggest Oil Chokepoint.

MarketWatch.com:             

• 4 in 10 workers say they’ll look for another job if they have to go back to the office full-time.
  
• Tesla earnings preview: Semi truck, Cybertruck pickup and chip shortage in focus.

NewsMax:

• Trump: 'The Crime of the Century Is Being Fully Exposed'.
• Trump on Hunter Biden's Art: What 'If My Kids Did That?'
• Pelosi Names Anti-Trump Republican Kinzinger to Jan. 6 Panel.

TheGatewayPundit.com:

• Bill Melugin: Border Patrol Apprehends 20,000 Illegal Aliens at Del Rio Crossing in ONE WEEK – Enough to Fill Staples Center (VIDEO).
• Budget Watchdogs Project Democrat Infrastructure Bill Will Cost TWO TRILLION MORE Than They’re Saying.
• Another Weekend at the Bidens: Video Emerges of Hunter Biden Whining to His Girlfriend and Dead Brother’s Widow Over Recent Rehab While Smoking Crack.
• VIDEO: Mother of Ashli Babbitt Receives STANDING OVATION at Trump’s “Rally to Protect Our Elections” in Arizona.
• “This is Under Active Consideration – I Am Part of the Discussion” – Dr. Fauci Says Masks May Come Back for Vaccinated Americans (VIDEO).
• Get Woke, Go Broke: Olympic Ratings with Activist Athletes Sink to 33-Year Low (VIDEO).
• Horrific Video Shows Teen Mob Brutally Attack New York City Firefighter Who Was Walking His Dog.

Covid-19(Data, Maps, Graphs):

• Our World in Data:  New Global Covid-19 Cases(7-day rolling average graphs). New Covid Hospital Admissions/ICU Admissions/Deaths
  
• FT.com:  Fully Vaccinated by Country(graph). Global Lockdown Stringency Index(map).
  
• NYTimes.com:  County Trends and Clusters.
  
• Brown School of Public Health:  Covid Severity by State/County(map).  US Hospital Capacity.
  
• 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 indices are -.5% to +.5% on average.
• Asia Ex-Japan Investment Grade CDS Index 85.25 -.25 basis point.
• China Sovereign CDS 38.0 -.25 basis point.
• Bloomberg Emerging Markets Currency Index 59.72 -.04%.
• Bloomberg Global Risk-On/Risk Off Index 2,890.0 +4.0 points.
• Volatility Index(VIX) futures 20.70 +1.6%. 
• Euro Stoxx 50 futures -.39%.
• S&P 500 futures -.21%.
• NASDAQ 100 futures +.01%

Morning Preview Links

Earnings of Note

Company/Estimate

Before the Open:

• (CHKP)/1.56
• (HAS)/.47
• (LII)/4.41
• (LMT)/6.52
• (OTIS)/.72
  

After the Close:

• (BRO)/.40
• (CDNS)/.76
• (CR)/1.39
• (FFIV)/2.46
• (LOGI)/1.07
• (PKG)/1.77
• (TSLA)/.98
• (UHS)/2.69
  

Economic Releases

10:00 am EST

• New Home Sales for June is estimated to rise to 800K versus 769K in May.
  

10:30 am EST

• The Dallas Fed Manufacturing Activity Index for July is estimated to rise to 32.5 versus 31.1 in June.

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The German IFO Business Climate Index and the $60B 2Y T-Note auction 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 consumer and technology shares in the region. I expect US stocks to open modestly lower and to rally nto the afternoon, finishing mixed.  The Portfolio is 75% net long heading into the week.