Mid-Day Market Internals

NYSE Composite Index:

• Volume Running +1.1% Above 100-Day Average 
• 5 Sectors Rising, 6 Sectors Declining
• 50.6% of Issues Advancing, 44.7% Declining
• 68 New 52-Week Highs, 14 New Lows
• 76.6% of Issues Above 200-day Moving Average
• Average 14-Day RSI 46.0%
  
• Bloomberg Global Risk-On/Risk-Off Index 2,642.0 +105.0 points
• Russell 1000: Growth/Value 17,706.0 +.37%
  
• Vix 18.6 -4.2%
• Total Put/Call .69 -32.4%
• TRIN/Arms .46 -46.5%

Wednesday Watch

Evening Headlines

Bloomberg:             

• Spiraling Debt Crisis Confronts Evergrande Billionaire — and Xi.  
• China State Media Seeks to Calm Investor Nerves After Stock Rout. 
• China’s Escalating Property Curbs Underline Xi’s New Priority.
• The China Model: What the Country’s Tech Crackdown Is Really About.
• Sydney Lockdown Extended Four Weeks as Delta Surge Worsens.
• End of ‘America First’ Stock Trade Postponed After China Wipeout.  
• Asian Stocks Track U.S. Decline Amid China Risk: Markets Wrap.  
• Oil Resumes Gains as Report Points to Shrinking U.S. Stockpiles.  
• U.S. Copper Buyers Face World’s Highest Prices as Demand Booms.  
• White House Orders Staff to Again Wear Masks Amid New Danger.
• NY, LA Among Big Cities Joining Rural Areas in CDC Mask Zone.
  
• Visa Card Spending Buoyed by Return of Travel, Stimulus Checks.  
• No Crabs, No Scallops: Seafood Is Vanishing From Menus in U.S.   
• Landlords Sue U.S. for Rent Unpaid Under Eviction Moratorium.

Wall Street Journal:

• Work-From-Anywhere Perks Give Silicon Valley a New Edge in Talent War.
• CDC Urges Some Vaccinated People to Wear Masks Indoors.
• Who Wants to Mask Up for Delta?
• Airlines Struggle With Fuel Shortages at Some Small Western U.S. Airports.
• Lawmakers Say Infrastructure Deal Within Reach.

Fox News:

• Dem mayor pleads for more police after bloody weekend leaves 4 dead, 7 injured..
  

CNBC.com:

• Google advertising revenue rises 69% from last year.
• Apple’s iPhone hot streak is going to run into the global chip shortage.
• Microsoft posts big earnings beat and gives optimistic revenue forecast.
• Starbucks earnings beat, fueled by U.S. cold drink sales, but stock drops on weak China outlook.
• Former President Barack Obama is now a minority owner in NBA’s Africa business.
• Stocks making the biggest moves after hours: Alphabet, Microsoft, Apple and more.

Zero Hedge:

• Here Comes China's "National Team" To Bailout Markets.
• Obama-Era Drone Program Whistleblower Given Stiff Prison Sentence Under Biden DOJ.
• Gov. Newsom Panics, Pulls Kids From Summer Camp After Maskless Photo Of Son Surfaces.
• Orange Juice Futures Soar Amid 'Frost Threats' In Brazil.
• Arizona Senate Issues Fresh Subpoena For 2020 Election Audit.
• Hundreds Of San Francisco Bars To Require Proof Of Vaccination Or Negative COVID-19 Test.
• CDC Reverses Indoor-Mask Rules, Biden Mulls Mandating Vaccines For Federal Workers, Threatens Lockdowns.
• "An Excuse To Get To Be Racist": 'White Fragility' Author Issues Warning On The Dangers Of The Comedy.
• Colombian COVID Variant Hits Florida.
• Buchanan: Why The Left Can't Let Go Of Jan. 6.
• Robinhood Working On New Features To Invest Users' "Spare Change", Limit Crypto Volatility.
• Inflation Shock: Are You Ready To Start Paying "$40 Or $50" For A Hamburger?
• Over 40,000 Mostly-Unvaccinated Migrants Released By Biden Skip Out On ICE Appointments.
• The Overall Mood In The US Grows More Pessimistic.
• A Tale Of Two COVID Narratives.
• WTI Extends Intraday Rebound After Bigger Than Expected Crude, Gasoline Draws.
• Stocks, Dollar, & Bond Yields Tumble After Beijing Bloodbath, Mask-Mandate Miasma.

Newsmax:

• Rep. Reschenthaler: Jan. 6 Probe Nothing but 'Political Theater'.
  

TheGatewayPundit.com:

• JUST IN: Democrat Donor and Hillary Clinton Pal Ed Buck Convicted in Meth Overdose Deaths of Two Black Men at His West Hollywood Apartment.
• Side By Side Video Of Hunter Biden Smoking Crack With Joe Biden Praising Strict Penalties For Crack, Goes Viral.
• 50,000 Illegal Aliens Who Crossed Border Released into US without Court Date – No Mandatory Vaccinations, No Contact Tracing.
• Clown Show: Adam Schiff Pretends to Cry During January 6 Hearing, “God Help Us” (VIDEO).

The Epoch Times:

• Chinese Regime Turns US–China Meetings Into Propaganda Coup.

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 -1.25% to -.25% on average.

• Asia Ex-Japan Investment Grade CDS Index 90.75 +3.75 basis points.

• China Sovereign CDS 40.5 +1.5 basis points.
  

• Bloomberg Emerging Markets Currency Index 59.75 +.04%.
• Bloomberg Global Risk-On/Risk Off Index 2,540.0 +3.0 points.
• Volatility Index(VIX) futures 20.8 +.5%.
• FTSE 100 futures +.07%.

• S&P 500 futures -.03%.

• NASDAQ 100 futures -.10%. 

Morning Preview Links

Earnings of Note 
Company/Estimate 

 

Before the Open: 

• (AMG)/3.85
• (ADP)/1.14
• (AVY)/2.03
• (BA)/-.72
• (BMY)/1.90
• (BG)/1.62
• (CME)/1.61
• (GNRC)/2.32
• (GD)/2.55
• (HES)/.19
• (HUM)/6.84
• (MCD)/2.12
• (NSC)/2.97
• (ODFL)/2.22
• (PFE)/.98
• (R)/1.38
• (SHOP)/.96
• (TMO)/5.48
• (WING)/.33
  

After the Close:

• (AFL)/1.28
• (ALGN)/2.53
• (CP)/1.01
• (CRUS)/.39
• (FB)/3.03
• (F)/.04
• (IR)/.42
• (IRBT)/.31
• (LRCX)/7.61
• (ORLY)/7.38
• (PYPL)/1.12
• (QCOM)/1.68
• (RJF)/2.36
• (NOW)/1.21
• (URI)/4.84
• (WH)/.66
• (XLNX)/.83
• (XPO)/1.69
• (YUMC)/.43
  

Economic Releases

8:30 am EST

• Advance Goods Trade Balance for June is estimated at -$88.0B versus -$88.1B in May.
• Retail Inventories MoM for June is estimated to fall -.5% versus a -.8% decline in May.
• Wholesale Inventories MoM for June is estimated to rise +1.1% versus a +1.3% gain in May.
  

10:30 am EST

• Bloomberg consensus estimates call for a weekly crude oil inventory decline of -2,407,560 barrels versus a +2,107,000 barrel gain the prior week. Gasoline supplies are estimated to fall by -1,110,130 barrels versus a -121,000 barrel decline the prior week. Distillate inventories are estimated to fall by -715,880 barrels versus a -1,349,000 barrel decline prior. Finally, Refinery Utilization is estimated to rise +.3% versus a -.4% decline prior.
  

2:00 pm EST

• The FOMC is expected to leave the benchmark Fed Funds rate at 0.0-.25%.
  

Upcoming Splits

• (GE) 1-for-8
  

Other Potential Market Movers

• The FOMC press conference, weekly MBA Mortgage Applications report and the Australian Inflation Data 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 Lower into Final Hour on US Mask Mandate Concerns, China Economic Crackdown Fears, Earnings Jitters, Transport/Alt Energy Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Lower
  

• Sector Performance: Most Sectors Declining
  

• Volume: Around Average

• Market Leading Stocks: Underperforming
  

Equity Investor Angst:

• Volatility(VIX) 19.7 +12.2%
• Bloomberg Global Risk On/Risk Off Index 2,500.0 -300.0 points

• Euro/Yen Carry Return Index 133.98 -.4%

• Emerging Markets Currency Volatility(VXY) 8.7 +.8%

• S&P 500 Implied Correlation 52.1 +4.5%

• ISE Sentiment Index 100.0  -4.0 points
  

• Total Put/Call 1.07 +25.9%

• NYSE Arms .78 -16.1%

Credit Investor Angst:

• North American Investment Grade CDS Index 49.62 +2.1%
  

• US Energy High-Yield OAS 425.88 +1.7%

• European Financial Sector CDS Index 54.89 +1.9%

• Italian/German 10Y Yld Spread 106.0 +1.0 basis point
  

• Asia Ex-Japan Investment Grade CDS Index 92.08 +4.9%
  

• Emerging Market CDS Index 167.02 +2.6%
  

• China Corp. High-Yield Bond USD ETF(KCCB) 38.36 -.67%

• 2-Year Swap Spread 7.25 -1.5 basis points

• TED Spread 8.75 +.25 basis point
  

• 3-Month EUR/USD Cross-Currency Basis Swap -5.25 -.25 basis point
  
• MBS  5/10 Treasury Spread  74.5 +2.0 basis points
  
• IHS Markit CMBX BBB- 6 73.75 unch.
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 59.74 -.05%
• 3-Month T-Bill Yield .04% unch.
  

• Yield Curve 107.0 +1.0 basis point
  

• China Iron Ore Spot 198.60 USD/Metric Tonne -1.2%

• Citi US Economic Surprise Index 3.1 +5.0 points

• Citi Eurozone Economic Surprise Index 40.9 -7.2 points
  

• Citi Emerging Markets Economic Surprise Index 50.5 -2.4 points

• 10-Year TIPS Spread 2.37 -3.0 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:

• 121 infections/100K people(last 7 days) +10/100K people
• 23% of Jan. 7th, 2021 peak(highest daily avg. new infections) +2.0 percentage points
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -425 open in Japan 
• China A50 Futures: Indicating -254 open in China

• DAX Futures: Indicating -9 open in Germany

Portfolio:

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

• Disclosed Trades: None
  

• Market Exposure: 75% Net Long
  

Bear Radar

 Style Underperformer:

• Small-Cap Growth -2.1%

Sector Underperformers:

• 1) Alt Energy -3.6% 2) Gaming -3.1% 3) Video Gaming -2.9%

Stocks Falling on Unusual Volume: 

• PEGA, MKSI, LEGN, SCPL, WYNN, CANO, FDX, WDAY, HARP, ROKU, AGFY, SSTK, JBLU, UPS, IRT, ACMR, SKIN, XPEL, LW, ORMP, TDUP and SKYT
  

Stocks With Unusual Put Option Activity:

• 1) ASHR 2) UPS 3) FXI 4) SAVE 5) GLW
  

Stocks With Most Negative News Mentions:

• 1) YMM 2) SKYT 3) ATIP 4) NIO 5) UPS
  

Charts:

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

Bull Radar

Style Outperformer:

• Large-Cap Value -.1%

Sector Outperformers:

• 1) Utilities +2.0% 2) Medical Equipment +.6% 3) Homebuilding +.4%

Stocks Rising on Unusual Volume:

• IDYA, APG, INOV, NKTX, AAN, RGEN, TNET, PRLD, BTAI, FFIV, GPK, CR, IART, BSX, LSXMA and RTX
  

Stocks With Unusual Call Option Activity:

• 1) WEN 2) TPX 3) UPS 4) ATVI 5) RTX

Stocks With Most Positive News Mentions:

• 1) TPB 2) EYEG 3) INOV 4) AAN 5) SIRI
  

Charts:

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

Mid-Day Market Internals

NYSE Composite Index:

• Volume Running +4.3% Above 100-Day Average 
• 4 Sectors Rising, 7 Sectors Declining
• 24.0% of Issues Advancing, 72.1% Declining
• 82 New 52-Week Highs, 57 New Lows
• 77.6% of Issues Above 200-day Moving Average
• Average 14-Day RSI 47.2%
  
• Bloomberg Global Risk-On/Risk-Off Index 2,508.0 -293.0 points
• Russell 1000: Growth/Value 17,556.0 -1.45%
  
• Vix 19.7 +12.3%
• Total Put/Call .90 +5.9%
• TRIN/Arms .88 -5.4%