Wednesday Watch

Evening Headlines

Bloomberg:                

• China’s Latest Outbreak Threatens to Derail Consumer Recovery.
• China Stocks Are Better Shelter Than Hong Kong in Xi’s Clampdown.
• Tencent Weighs Kids Games Ban After ‘Spiritual Opium’ Rebuke.  
  
• Iran Probably Was Behind Tanker Attack, U.K. Tells UN Council.
  
• Yen Libor Death Knell Sounds as Traders Close In on Replacement.
• Asia Stocks Open Steady as Virus, China Weigh: Markets Wrap.
• China Virus Hit, Tough Fed Choice, N.Z. Rate-Hike Talk: Eco Day.
• Delta Spikes Herd Immunity Threshold to Over 80%: Virus Update.
• Cuomo Faces Day of Reckoning Over Sexual Abuse Claims.  
• Report Drills NCAA on Equity, Calls for Combined Final Four.  
• Spirit, American Cancel Hundreds of Flights for a Second Day.  
• Americans Are Willing to Take Pay Cuts to Never Go Into the Office Again.  
• Judge Temporarily Halts Texas Restrictions on Migrant Transports. 
• Covid Shots Targeting Delta May Be Needed, Researchers Say.  
• Bitcoin Traders Eye ‘Scary’ Retreat After Return to Recent Range.

Wall Street Journal:

• Pentagon Police Officer Is Fatally Stabbed.
• Cuomo Sexually Harassed Multiple Women, Inquiry Finds.
• Read the Full Report.
• The Eviction Ban Has to End Sometime.
• If Biden Is Serious About Covid, He’ll Protect the Border.
• The Andrew Cuomo Standard.
• Law School Loses Luster as Debts Mount and Salaries Stagnate.
• Crypto ‘Wild West’ Needs Stronger Investor Protection, SEC Chief Says.
• Two More Cops Who Responded to Capitol Attack Died by Suicide.

Fox News:

• Cuomo slammed for bizarre slideshow of him touching, kissing people.
  

CNBC.com:

• Biden approval ratings on Covid and economy fall in new CNBC All-America survey.
• Lyft revenue grows 125% from last year.
• CDC bans evictions for another two months.
• Incident with multiple tankers in Gulf of Oman raises concerns in oil market.
• NY Lt. Gov. Hochul says she believes Cuomo accusers, calls his behavior ‘repulsive & unlawful’.
• Stocks making the biggest moves after hours: Lyft, Match, Robinhood and more.
  

MarketWatch.com:       

• Junk-bond spreads see sharpest monthly selloff since September 2020.
  
• Credit-card debt increased by $17 billion in 2Q as stimulus payments level off.
  
• This crypto scam bilked investors out of $11 million — and paid action star Steven Seagal to promote it.

NY Post: 

• US companies riddled with members of Chinese Communist Party: Devine. Boeing(BA), Qualcomm(QCOM) and Pfizer(PFE) are just three US companies that have employed dozens of CCP members in their Chinese facilities, the database reveals. 

Zero Hedge:

• 'Biden Took An Oath To Uphold The Constitution, Not Violate It': Turley Opines On CDC's Revised Eviction Moratorium.
• "Don't Go Anywhere Near Your Grandkids": Australian Health Official Warns Grandparents. 
• Banks Are Literally Begging Americans To Take Out Loans And Max Out Credit Cards.
• Vanguard Offers $1,000 To Vaccine Holdouts To Get Jabbed.
• Infrastructure Bill Mandates Drunk-Driver Detectors For New Cars.
• Virtue Signaling: What Is It And Why Is It So Dangerous?
• US Navy Sends Ship To Shadow Hijacked Tanker As It Heads Toward Iranian Waters.
• Buchanan Blasts America's 'Great Leap Forward' Into Socialism.
• Fired For Refusing COVID-19 Vaccine? You May Not Receive Unemployment Benefits.
• Biden, Pelosi, Schumer Call On Cuomo To Resign As New Criminal Investigation Announced.
• Delta Is The Latest Risk Facing Chinese Stocks, Goldman Warns.
• Going To Public Places Should Be A "Privilege" Reserved For The Vaccinated, Elitist Profs Declare.
• $12 Billion Hedge Fund Suffers $1.5 Billion Loss On Massive Treasury Short Squeeze.
• WTI Dips After Disappointingly Small Crude Inventory Draw.
• Stocks Dump'n'Pump To Record Highs As Real Yields Hit New Record Lows.

Newsmax:

• Rep. McCaul: COVID 'Worst Cover-Up in Human History'.
• Rep. Burchett: US Must Cut Off China Financially.
• Sen. Blackburn: Kids Will Pay Price for Infrastructure Bill.
  

TheGatewayPundit.com:

• Breaking: Record 210,000 Illegal Aliens Apprehended at US Southern Border in July – During COVID Pandemic – A 21-Year High.
• California District to Hold Secret Meeting to Discuss Implementing Mandatory Vaccination Requirements But We Got the Zoom Link — Here it Is, Please Join In at 4 PM PST…
• Joe Biden Singles Out Texas and Florida for COVID Surge after Flooding Texas Border with Historic Number of Untested Illegals (VIDEO).
• NIH Director Francis Collins: “It May Sound Weird” But Parents Should Wear Masks at Home in Front of Their Unvaccinated Kids (VIDEO).
• ** CodeMonkeyZ BOMBSHELL ** Dominion Whistleblower Speaks Out – Releases Admin Password Proving Remote Access –VIDEO.

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 +.5% on average.

• Asia Ex-Japan Investment Grade CDS Index 89.25 -.5 basis point.

• China Sovereign CDS 38.75 -.25 basis point.
  

• Bloomberg Emerging Markets Currency Index 60.13 -.02%.
• Bloomberg Global Risk-On/Risk Off Index 2,636.0 +29.0 points.
• Volatility Index(VIX) futures 22.1 +.9%.
• FTSE 100 futures +.1%.

• S&P 500 futures -.15%.

• NASDAQ 100 futures -.09%. 

Morning Preview Links

Earnings of Note 
Company/Estimate 

 

Before the Open: 

• (ABC)/2.04
• (BWA)/.80
• (CVS)/2.07
• (EMR)/.97
• (FDP)/.83
• (GM)/1.85
• (HMC)/59.54
• (JLL)/1.73
• (KHC)/.72
• (LL)/.22
• (RCL)/-4.38
• (SMG)/3.52
• (TUP)/.57
• (VMC)/1.65

After the Close:

• (ALB)/.83
• (BKNG)/-2.26
• (ALL)/3.16
• (DOX)/1.18
• (ELF)/.14
• (EA)/.64
• (EOG)/1.55
• (ETSY)/.74
• (FOXA)/.58
• (IAC)/-.34
• (JACK)/1.48
• (KLIC)/1.36
• (LESL)/.56
• (MRO)/.18
• (MCK)/4.14
• (MELI)/.19
• (MET)/1.66
• (MGM)/-.37
• (RMAX)/.57
• (RCII)/1.36
• (RVLV)/.21
• (RGR)/1.73
• (UBER)/-.32
• (WDC)/1.50
• (WYNN)/-1.58
  

Economic Releases

8:15 am EST

• The ADP Employment Change for July is estimated to fall to 683K versus 692K in June.
  

10:00 am EST

• The ISM Services Index for July is estimated to rise to 60.5 versus 60.1 in June.

10:30 am EST

• Bloomberg consensus estimates call for a weekly crude oil inventory decline of -2,941,640 barrels versus a -4,089,000 barrel decline the prior week. Gasoline supplies are estimated to fall by -1,356,200 barrels versus a -2,253,000 barrel decline the prior week. Distillate inventories are estimated to fall by -754,500 barrels versus a -3,088,000 barrel decline the prior week. Finally, Refinery Utilization is estimated to rise by +.44% versus a -.3% decline prior.
  

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Fed's Clarida speaking, Eurozone Services PMI report, weekly MBA Mortgage Applications report and the (COST) sales results 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 consumer and industrial 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 day.

Stocks Reversing Higher into Afternoon on Earnings Optimism, Diminished Virus Shutdown Fears, Stable Long-Term Rates, Road & Rail/Energy 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) 18.3 -6.1%
• Bloomberg Global Risk On/Risk Off Index 2,600.0 +53.0 points

• Euro/Yen Carry Return Index 133.66 -.28%

• Emerging Markets Currency Volatility(VXY) 8.64 +.6%

• S&P 500 Implied Correlation 51.3 -4.7%

• ISE Sentiment Index 119.0  +14.0 points
  

• Total Put/Call .76 -13.6%

• NYSE Arms .90 -31.8%

Credit Investor Angst:

• North American Investment Grade CDS Index 50.0 +.18%
  

• US Energy High-Yield OAS 437.38 +1.4%

• European Financial Sector CDS Index 54.11 +.56%

• Italian/German 10Y Yld Spread 105.0 -1.0 basis point
  

• Asia Ex-Japan Investment Grade CDS Index 90.8 -.26%
  

• Emerging Market CDS Index 162.57 -.41%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 38.14 +.43%

• 2-Year Swap Spread 7.25 -.5 basis point

• TED Spread 7.75 unch.
  

• 3-Month EUR/USD Cross-Currency Basis Swap -3.75 +.25 basis point
  
• MBS  5/10 Treasury Spread  72.75 unch.
  
• IHS Markit CMBX BBB- 6 73.5 unch.
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 60.11 -.13%
• 3-Month T-Bill Yield .04% unch.
  

• Yield Curve 101.0 -3.0 basis points
  

• China Iron Ore Spot 175.90 USD/Metric Tonne -1.8%

• Citi US Economic Surprise Index -11.7 +2.7 points

• Citi Eurozone Economic Surprise Index 37.1 -1.4 points
  

• Citi Emerging Markets Economic Surprise Index 39.0 -2.5 points

• 10-Year TIPS Spread 2.35 -2.0 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:

• 182 new infections/100K people(last 7 days total) +12/100K people
• 34% of Jan. 7th, 2021 peak(highest daily avg. new infections) +2.0 percentage points
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +30 open in Japan 
• China A50 Futures: Indicating -164 open in China

• DAX Futures: Indicating +21 open in Germany

Portfolio:

• Higher: On gains in my tech/biotech/consumer discretionary/industrial sector longs
  

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

• Market Exposure: Moved to 100% Net Long
  

Mid-Day Market Internals

NYSE Composite Index:

• Volume Running -2.7% Below 100-Day Average 
• 10 Sectors Rising, 1 Sector Declining
• 49.6% of Issues Advancing, 45.7% Declining
• 99 New 52-Week Highs, 25 New Lows
• 75.2% of Issues Above 200-day Moving Average
• Average 14-Day RSI 47.6%
  
• Bloomberg Global Risk-On/Risk-Off Index 2,549.0 +4.0 points
• Russell 1000: Growth/Value 17,555 -.1%
  
• Vix 18.7 -4.2%
• Total Put/Call .73 -17.1%
• TRIN/Arms .80 -39.4%

Tuesday Watch

Evening Headlines

Bloomberg:      

• China Traders Add to Bets on Easing as Economic Prospects Dim.
• Yesterday’s Wars Didn’t Prepare the Pentagon for Tomorrow’s China.  
• Tokyo Shows an Inflation Pulse for the First Time in a Year.  
• Korea’s Inflation Quickens as Central Bank Mulls Rate Hike.
• Asia Stocks Set to Dip as Growth Risk Boosts Bonds: Markets Wrap.
• Crude Oil Steadies as Investors Size Up Delta’s Threat to Demand.
• September Taper Talk, N.Z. Housing Curbs, Debt Ceiling: Eco Day.
• ‘Very Real Fourth Wave’ Presses FDA to Fully Approve Covid Shots.
  
• Soaring Aluminum Drives Up Cost of Everything From Beer to Foil.
• Smallest U.S. Firms Lost Revenue Last Year, Fed Survey Finds.  
• A Top Zinc Miner Is Hunting for Copper in an Electrifying World.

Wall Street Journal:

• The Infrastructure ‘Pay-Fors’ That Aren’t.
• Portland Can’t Find Police for Gun-Violence Unit.
• Yellen to Enact Steps to Avoid Breaching Debt Ceiling.
• Federal Labor Official Recommends Alabama Amazon Workers Hold New Vote, Union Says.
• Delta Variant Stalls Asia’s Economic Recovery.
• Fuel-Efficiency Standards Are Set to Get Tougher. The Question Is by How Much.

Fox News:

• Psaki attacks DeSantis over handling of coronavirus pandemic, governor's office fires back.
  

CNBC.com:

• How language in the infrastructure bill could roil the crypto markets.
• Cramer says it is the ‘height of irresponsibility’ to invest in Chinese stocks right now.
• Goldman Sachs joins Wall Street rivals in boosting junior banker salaries. 
• Mall owner Simon Property says sales at its centers returned to pre-pandemic levels in June.
• Stocks making biggest moves after hours: Simon Property Group, Take-Two Interactive and more.

MarketWatch.com:        

• Fed’s Waller suggests ‘early and fast’ tapering of bond purchases.  
• While air travel hits another pandemic high, flight delays grow.

Zero Hedge:

• Bay Area Imposes Mandatory Masking As Cuomo Demands Private Businesses Ban Unvaxxed. 
• Beijing Quietly Issued 'Buy Chinese' Procurement Guidelines For Hospitals & State Companies.
• IMF Creates Record $650 Billion Slush Fund For Pandemic Relief.
• Trump Amends Big Tech Lawsuit As 65,000 Americans Submit Censorship Stories.
• Evictions Start With Nancy Pelosi & The House On A 7-Week Break.
• Delta Wave Has Likely Peaked In UK, Europe, Goldman Analysts Say.
• Drought, Frost Plunge Brazil's Second Corn Yields To Decade Low.
• US Women's Soccer Team Smoked By Canada; Rapinoe Mocked.
• Turley: The Biden Administration Goes To War With The "Non-Vacs".
• Obama Risks Superspreader Event As 700 Expected To Attend 60th Birthday Party At Martha's Vineyard Mansion.
• Fmr US Intel Boss: COVID Lab Leak "Very Close To A Certainty" After Seeing 'Most Sensitive Intel' Related To Pandemic.
• Stealth QE Is Over: Treasury Projects Adding $350BN In Cash By Dec 31, Reversing "Liquidity Tsunami".
• World's Largest Pension Fund Slashes US Treasury Exposure By Record Amount.
• Fauci, HHS "Hiding Something" With Redacted Emails: Sen. Johnson.
• Stocks, Bond Yields, & Crude Tumble As ISM Peaks & Fed Speaks.

Newsmax:

• Hawley Hits 'Gender Identity' Element in Infrastructure Bill.
  

TheGatewayPundit.com:

• Third DC Metro Police Officer Who Was at Capitol on January 6 Dies by Suicide.
• Drone Footage Shows Hundreds Of Migrants Held By Border Patrol Under Texas Bridge – Biden To Provide Them Free Hotels, Plane Tickets, Lawyers.
• 74% of Covid-19 Cases in “Cape Cod Cluster Outbreak” Were Fully Vaccinated.
• CCP Chairman Jack Sellers Delivers Letter To Senate After Defiance of Subpoenas — Senator Wendy Rogers Calls for Treason Charges.
• FBI Agents with Shields, Weapons Drawn, Raid SoCal Home of Non-Violent January 6 Protester who Walked Through Capitol, Took Photos (VIDEO).
• JUST IN: Fully Vaccinated GOP Senator Lindsey Graham Reveals Covid-19 Infection – Experiencing Flu-Like Symptoms, Goes Into Quarantine.
• Sky News Ban: “Big Brother is a Bunch of Woke Billionaires in T-Shirts and Sneakers Imposing their Millennial Activism on the World”. 
• COVID Rules are for the Little People: 400,000 Fans and Mask-less Lori Lightfoot Party at Lolla Palooza Chicago Festival (VIDEO).

The Epoch Times:

• Millions Under Lockdown as China Attempts to Control Delta Outbreak.

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 +.25% on average.

• Asia Ex-Japan Investment Grade CDS Index 89.75 -.25 basis point.

• China Sovereign CDS 39.0 -.5 basis point.
  

• Bloomberg Emerging Markets Currency Index 60.20 +.03%.
• Bloomberg Global Risk-On/Risk Off Index 2,562.0 +12.0 points.
• Volatility Index(VIX) futures 22.3 -1.9%.
• FTSE 100 futures -.04%.

• S&P 500 futures +.29%.

• NASDAQ 100 futures +.20%. 

Morning Preview Links

Earnings of Note 
Company/Estimate 

 

Before the Open: 

• (BABA)/14.29
• (ATI)/-.19
• (BP)/.10
• (CLX)/1.31
• (COP)/1.13
• (CMI)/4.03
• (DISCA)/.83
• (DISH)/.86
• (DD)/.95
• (ETN)/1.57
• (LLY)/1.89
• (EXPD)/1.63
• (IT)/1.73
• (IGT)/.23
• (LDOS)/1.58
• (LGIH)/3.91
• (LPX)/4.38
• (MAR)/.46
• (NKLA)/-.40
• (PSX)/.60
• (PBI)/.05
• (RL)/.86
• (SEE)/.78
• (SWI)/.22
• (UAA)/.06
• (ZBH)/1.86
  

After the Close:

• (ATVI)/.75
• (AKAM)/1.38
• (AMGN)/4.01
• (CAR)/1.27
• (CZR)/-.28
• (COHR)/1.65
• (HST)/.03
• (H)/-.85
• (LSCC)/.22
• (LYFT)/-.25
• (MTCH)/.55
• (MCHP)/1.91
• (MYGN)/-.11
• (NCR)/.62
• (OXY)/.03
• (PRU)/3.09
• (RNG)/.28
• (SPWR)/.04
  

Economic Releases

10:00 am EST

• Factory Orders for June is estimated to rise +1.0% versus a +1.7% gain in May.
  

Afternoon:

• Wards Total Vehicle Sales for July is estimated to fall to 15.3M versus 15.36M in June.

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Fed's Bowman speaking, China Services PMI report, weekly US retail sales reports, Jefferies Industrials Conference and the Keefe Bruyette Woods Community Bank Conference 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 consumer and technology 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.