Wednesday Watch

Evening Headlines

Bloomberg:             

• China Eyes Afghanistan’s $1 Trillion of Minerals With Risky Bet on Taliban.  
• Fed Policy Draws Chinese Criticism as PBOC Goes Its Own Way.
• U.S. Tells Aid Groups to Prepare for 50,000 Afghan Refugees.  
• Asia Stocks Edge Up After U.S. Record; Oil Steady: Markets Wrap.
  
• Oil Steady After Rally With Report Pointing to Easing Stockpiles.
• Five Things You Need to Know to Start Your Day.
  
• Biden to Stick to Aug. 31 Deadline for Withdrawal: Afghanistan Update.
• House Adopts $3.5 Trillion Budget Blueprint Backed by Biden.
• Bears Surrendering Again With S&P 500 Rally Defying All Bad News.  
• Goldman Requires Vaccines and Masks at Work to Fight Variant.  
• Wall Street During the Pandemic: The Impossible Is Now Commonplace.  
• Hedge Funds Are Hot Again. Good Luck Finding One That’ll Take Your Money.  
• Toll Brothers Misses on Orders as Luxury-Home Sales Falter.  
• U.S. Food Suppliers Are Having Trouble Keeping Shelves Stocked.

Wall Street Journal:

• Supreme Court Reinstates ‘Remain in Mexico’ Policy for Asylum Applicants.
• Biden Maintains Afghan Exit Deadline as Taliban Block Airport Access.
• Biden’s Rush to the Afghan Exits.
• The Democratic Centrists Fold, on Schedule.
• Teach Respect, Not Critical Race Theory.
• Let the Spooks Speak on Covid.

Fox News:

• Democrat points out the obvious to president over crucial withdrawal deadline backlash.
• Husband frustrated as he tries to rescue wife stranded in Afghanistan: 'I feel betrayed'.
• Arizona AG warns of potential border threat from terrorists freed by Taliban in Afghanistan.
• Kevin McCarthy: There is 'no possible way' we can evacuate Americans from Afghanistan by Aug 31.

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. 
  

CNBC.com: 

• Biden’s approval ratings have plummeted, and that could spell trouble for Democrats in Congress.
• Cramer says the turnaround of Best Buy proves Amazon’s ‘death star days’ are over.
• House Democrats clear path toward passing $3.5 trillion budget bill and infrastructure plan.
• Eyeglass retailer Warby Parker in IPO filing reveals rising sales—but also widening losses.
• Coinbase slammed for what users say is terrible customer service after hackers drain their accounts.
• Stocks making the biggest moves after hours: Nordstrom, Toll Brothers & more. 
  

MarketWatch.com:           

• The latest threat to Chinese stocks could come from U.S. regulators, experts warn.

Zero Hedge:

• Biden Finally Does 6-Minute Afghan Presser, Reiterates "Support Of Allies", Takes No Questions.
• It Finally Peaked: The Delta Of Delta Turns Negative.
• Largest US Food Distributor Having Trouble Keeping Shelves Stocked; Price Shock Imminent.
• It's Not The Jab, It's The Precedent.
• Taliban Appoints Former Gitmo Detainee As Afghanistan's New Defense Minister.
• Do Empty Shelves Count As Inflation?
• Container Ship Movement At Suspended Port Terminal In China Signals Imminent Reopening.
• Global Semi Crunch Could Once Again Worsen, As Delta Variant Ravages Key Production Outpost In Malaysia.
• 'All But One Turned Out To Be Negative': Rice University Retests Dozens Of Students After COVID False-Positives.
• Gundlach Warns US Is On A "Roadmap To Losing Global Reserve Currency Status".
• WTI Holds Gains Despite Smaller Than Expected Crude Draw.
• House Democrats Adopt $3.5T Budget Blueprint.
• "The Time Has Come. Enough Is Enough" - Fauci Dismisses "Freedom" In Call For Vaccine Mandates.
• Short-Squeeze Surge Sends Stocks To Record High As 'Soft' Data Slumps To 14-Month Lows.

Newsmax:  

• CIA Director Burns Secretly Met With Taliban Leader in Kabul.
• Taliban Warn of 'Consequences' If US Stays Beyond Deadline.
  

TheGatewayPundit.com:

• America’s Humiliating Defeat in Afghanistan Centered Around Misunderstanding the True-Enemy, Pakistan, and by Extension, China.
• BREAKING: US Military Has Started Withdrawing From Afghanistan – Biden Turns His Back on Thousands of Americans Stranded Behind Enemy Lines.
• “Surrenderer-in-Chief” – Trump’s New Ad Attacking Joe Biden is Fire (VIDEO).
• CNN Shockingly Pushes Back On Biden Press Secretary’s Claim That Americans Are Not Stranded In Afghanistan (VIDEO).
• NYC Mayor De Blasio on New Vaccine Mandates: “Human Beings Do Well When They Have Carrot and Stick” (VIDEO).
• “Radicalism We Haven’t Seen Since Lyndon Baines Johnson” – Democrats and Pelosi Pass $3.5 Trillion Spending Plan (VIDEO).
• Psaki: We Expect There Could be Some Americans Left Behind in Afghanistan (VIDEO).
• Biden White House Confirms Mission in Kabul Will End ‘Based on Achievement of Our Goals’ — Arming Taliban to the Teeth, Creating Terror State and Leaving Thousands of Americans Behind.

The Epoch Times:

• LIVE NOW: What’s Behind China’s Cyberwar?

Covid-19(Data, Maps, Graphs):

• Our World in Data:  New Global Covid-19 Cases(7-day rolling average graphs). New US Covid Hospital Admissions/ICU Admissions/Deaths
  
• FT.com:  Fully Vaccinated by Country(graph). Global Lockdown Stringency Index(map).
• Bloomberg.com:  International Travel Restrictions.  Case Graphs by State.
  
• NYTimes.com:  County Trends and Clusters. Local ICU Occupancy.
  
• Brown School of Public Health:  Covid Severity by State/County(map).  US Hospital Capacity(region).
  
• 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 72.0 -1.0 basis point.

• China Sovereign CDS 34.75 unch.
  

• Bloomberg Emerging Markets Currency Index 59.73 -.02%.
• Bloomberg Global Risk-On/Risk Off Index 2,710.0 +1.0 point.
• Volatility Index(VIX) futures 19.65 -.41%.
• FTSE 100 futures +.11%.

• S&P 500 futures +.01%.

• NASDAQ 100 futures +.04%. 

Morning Preview Links

Earnings of Note 
Company/Estimate 

 

Before the Open: 

• (DKS)/2.82
• (DY)/.76
• (PLAB)/.22
  

After the Close:

• (ADSK)/1.12
• (BOX)/.19
• (GES)/.70
• (NTAP)/.95
• (CRM)/.93
• (SNOW)/-.15
• (SPLK)/-.69
• (ULTA)/2.55
• (WSM)/2.58
  

Economic Releases

8:30 am EST

• Durable Goods Orders for July is estimated to fall -.3% versus a +.9% gain in June.
• Durables Ex Transports for July is estimated to rise +.5% versus a +.5% gain in June.
• Cap Goods Orders Non-Defense Ex-Air for July is estimated to rise +.7% versus a +.6% gain in June.

10:30 am EST

• Bloomberg consensus estimates call for a weekly crude oil inventory decline of -2,552,700 barrels versus a -3,233,000 barrel decline the prior week. Gasoline supplies are estimated to fall by -1,003,110 barrels versus a +696,000 barrel gain the prior week. Distillate inventories are estimated to fall by -909,110 barrels versus a -2,697,000 barrel decline the prior week. Finally, Refinery Utilization is estimated to fall -.06% versus a +.4% gain prior.
  

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Eurozone Import/Export Price reports and the weekly MBA Mortgage Applications report could also impact global trading today.

US Equity Market Hours

• 9:30 am - 4:00 pm EST
  

BOTTOM LINE: Asian indices are higher, boosted by commodity 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 Rising into Final Hour on Diminishing Virus Lockdown Fears, Oil Gain, Short-Covering, Consumer Discretionary/Commodity Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Higher
  

• Sector Performance: Most Sectors Rising
  

• Volume: Around Average

• Market Leading Stocks: Outperforming
  

Equity Investor Angst:

• Volatility(VIX) 17.0 -.6%
• Bloomberg Global Risk On/Risk Off Index 2,705.0 +92.0 points

• Euro/Yen Carry Return Index 132.96 -.01%

• Emerging Markets Currency Volatility(VXY) 8.9 -1.3%

• S&P 500 Implied Correlation 49.3 -.06%

• ISE Sentiment Index 100.0  -29.0 points
  

• Total Put/Call .70 -14.6%

• NYSE Arms .48 -32.4%

Credit Investor Angst:

• North American Investment Grade CDS Index 48.39 -.56%
  

• US Energy High-Yield OAS 444.18 -2.2%

• European Financial Sector CDS Index 52.78 -.38%

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

• Asia Ex-Japan Investment Grade CDS Index 72.28 -1.16%
  

• Emerging Market CDS Index 160.06 -2.0%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 38.4 +.18%

• 2-Year Swap Spread 9.5 +.75 basis point

• TED Spread 8.5 unch.
  

• 3-Month EUR/USD Cross-Currency Basis Swap -3.0 -.75 basis point
  
• MBS  5/10 Treasury Spread  74.5 -2.0 basis points
  
• IHS Markit CMBX BBB- 6 72.5 +.25 basis point
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 59.74 +.52%
• 3-Month T-Bill Yield .04% unch.
  

• Yield Curve 104.0 unch.
  

• China Iron Ore Spot 151.10 USD/Metric Tonne +12.5%

• Citi US Economic Surprise Index -47.3 -10.7 points

• Citi Eurozone Economic Surprise Index -7.7 -.1 point
  

• Citi Emerging Markets Economic Surprise Index 33.7 -1.2 points

• 10-Year TIPS Spread 2.31 +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:

• 320 new infections/100K people(last 7 days total) +6/100K people
• 60% of Jan. 7th, 2021 peak(highest daily avg. new infections) +1.0 percentage point
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +108 open in Japan 
• China A50 Futures: Indicating +96 open in China

• DAX Futures: Indicating +2 open in Germany

Portfolio:

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

• Disclosed Trades: None
  

• Market Exposure: 100% Net Long
  

Bear Radar

 Style Underperformer:

• Large-Cap Growth +.4%

Sector Underperformers:

• 1) Pharma -1.1% 2) Biotech -1.0% 3) Disk Drives -.8%

Stocks Falling on Unusual Volume: 

• OSCR, ALIT, AGFY and MCW
  

Stocks With Unusual Put Option Activity:

• 1) PANW 2) SPRT 3) BBY 4) GME 5) EMB
  

Stocks With Most Negative News Mentions:

• 1) TBPH 2) NVAX 3) SESN 4) WDC 5) AHCO
  

Charts:

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

Bull Radar

Style Outperformer:

• Mid-Cap Growth +1.2%

Sector Outperformers:

• 1) Gaming +5.8% 2) Airlines +4.1% 3) Steel +3.6%

Stocks Rising on Unusual Volume:

• SKYT, TSP, PANW, BXC, INDI, CRWD, BBY, ASTR, ABNB, WYNN, CLSK, LVS, CANO, NRZ, OLO, FIGS, CARA, DVAX, KURA, CWH, ENVX, NVRO, CUK, URBN, ACMR, SANA, LPI and KRP
  

Stocks With Unusual Call Option Activity:

• 1) PANW 2) BBY 3) DKS 4) IGT 5) TOL

Stocks With Most Positive News Mentions:

• 1) PANW 2) PDD 3) GEVO 4) CRWD 5) BBY
  

Charts:

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

Mid-Day Market Internals

NYSE Composite Index:

• Volume Running -5.9% Below 100-Day Average 
• 8 Sectors Rising, 3 Sectors Declining
• 63.9% of Issues Advancing, 31.7% Declining
• 85 New 52-Week Highs, 36 New Lows
• 67.7% of Issues Above 200-day Moving Average
• Average 14-Day RSI 46.8%
  
• Bloomberg Global Risk-On/Risk-Off Index 2,666.0 +56.0 points
• Russell 1000: Growth/Value 17,674 -.01%
  
• Vix 17.3 +.9%
• Total Put/Call .68 -17.1%
• TRIN/Arms .52 -26.8%

Tuesday Watch

Evening Headlines

Bloomberg:         

• Johnson Musters G-7 to Press Biden for More Time in Afghanistan.
• China Has Improved Accuracy of Its Missile Force, U.S. Army Finds.  
• China’s Biggest Fears Are Giving Dollar All the Support It Needs.  
• Asia Stocks to Gain on Vaccine Boost; Dollar Falls: Markets Wrap.  
• Oil Jumps by Most in Nine Months as Commodities, Stocks Rally.
• U.S. Holds Largest Sale of Strategic Oil Reserves in 7 Years.  
• Dry Bulk Shipping Rates Are Soaring and the Rally Looks Set.
• Covid Optimists See U.S. Nearing Delta Peak, But Risks Abound.
• Aviation Rebound Stalls; U.S. Mandates Multiply: Virus Update.
• Apple’s Tim Cook, Microsoft’s Satya Nadella Plan to Visit White House.
• Digital Identity Startup ForgeRock Files IPO as Losses Shrink.

Wall Street Journal:

• The Taliban’s Aug. 31 ‘Red Line’.
• Police Vindicate the ‘Thin Blue Line’ Patch Every Day.
• The Deeper Crisis Behind the Afghan Rout.
• A Taliban 9/11.
• The Agony of the ‘Centrist’ Democrats.
• U.S. Struggles to Count Citizens in Afghanistan as Biden Weighs Pullout Delay.
• Fed Chairman Powell Navigates the Inflation Debate.
• Cryptocurrency’s Surge Leaves Global Watchdogs Trying to Catch Up.
• Democrats Near Showdown on Infrastructure, Spending Packages.
• Iron-Ore Prices Tank as China’s Steel Output Slows.

Fox News:

• Psaki gets heated when pressed about rescuing 'stranded' Americans in Afghanistan.
• Veterans issue 'gut-wrenching' message to Biden over Afghan 'mess'.
• Listen to caller's hateful tirade slamming Pledge of Allegiance in schools.

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. 
  

CNBC.com:

• Wall Street is telling investors to prepare for the two big spending bills Congress is set to pass.
• Elon Musk says Tesla’s latest beta self-driving software is ‘not great’. 
  

MarketWatch.com:         

• Office building prices tumble in heart of big American cities. 
  
• These 15 stocks of retailers are expected to rise up to 97% over the next year.
  
• Doctors question the optics and the scientific rationale behind the plan for COVID-19 booster shots in the U.S.  
• Employers face a dilemma: keeping workers safe with vaccine mandates — and holding onto their employees.

Zero Hedge:

• Biden Celebrates FDA Approval With Message To Unvaxxed: "The Time For You To Get Your Vaccine Is Here".
• As Pentagon's Afghan Debacle Unfolds, Russia Announces Joint War Drills With China & Iran In Gulf.
• America's Latest COVID Wave Appears To Have Peaked As "Hot Spots" Turn The Corner.
• SEC Gives Chinese Companies New Requirements For US IPO Disclosures.
• NY Still Needs To Come Clean On COVID-19 Nursing Home Deaths Scandal.
• Peak Retail Season: Let The Chaos Commence.
• Pentagon To Mandate Covid Vaccine For All Service Members; One-Third Have Refused Jab.
• No, CBS News, Global Warming Did Not Create Taliban Victory.
• 7 Afghans Killed Outside Kabul Airport As Unrest Worsens.
• 'We Must Not Squander Our Majority': Pelosi Assembles House Dems As Infighting Threatens To Derail Trillions In Spending.
• Crypto, Gold, Oil, & Stocks Soar On Dismal Data As Dollar Dumps.

TheGatewayPundit.com:

• FDA Approval of Pfizer Vaccine Sparks Wave of Mandates: Pentagon, New York City Public Schools Announce Requirements.
• BREAKING: Taliban Won’t Extend Aug. 31 Deadline for US Withdrawal – Threatens Biden Regime, “Complete the Evacuations by Aug. 31 or Face Consequences” (VIDEO).
• Thanks to Joe Biden the Taliban Now has Over 200 Military Aircraft — Ranks them as #26 in List of Nations in Combat Aircraft Strength.
• China News Taunts United States for Afghanistan Failure — Mocks Afghans Falling from Planes (VIDEO).
• Biden Admin Asks Overworked US Border Patrol Guards to Deploy to Afghanistan to Process Afghan Citizens Fleeing Taliban.

The Epoch Times:

• Beijing Says the US Cannot Abandon Afghanistan Amid Anti-American Propaganda Offensive.

Covid-19(Data, Maps, Graphs):

• Our World in Data:  New Global Covid-19 Cases(7-day rolling average graphs). New US Covid Hospital Admissions/ICU Admissions/Deaths
  
• FT.com:  Fully Vaccinated by Country(graph). Global Lockdown Stringency Index(map).
• Bloomberg.com:  International Travel Restrictions.  Case Graphs by State.
  
• NYTimes.com:  County Trends and Clusters. Local ICU Occupancy.
  
• Brown School of Public Health:  Covid Severity by State/County(map).  US Hospital Capacity(region).
  
• 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 +1.25% on average.

• Asia Ex-Japan Investment Grade CDS Index 73.0 -.25 basis points.

• China Sovereign CDS 34.75 -.5 basis point.
  

• Bloomberg Emerging Markets Currency Index 59.42 unch.
• Bloomberg Global Risk-On/Risk Off Index 2,638.0 +33.0 points.
• Volatility Index(VIX) futures 19.75 -.49%.
• FTSE 100 futures +.15%.

• S&P 500 futures +.18%.

• NASDAQ 100 futures +.18%. 

Morning Preview Links

Earnings of Note 
Company/Estimate 

 

Before the Open: 

• (AAP)/3.05
• (BBY)/1.89
• (MDT)/1.32
• (EDU)/.03
  

After the Close:

• (INTU)/1.59
• (JWN)/.30
• (SCSC)/.57
• (TOL)/1.53
• (URBN)/.80
  

Economic Releases

10:00 am EST

• The Richmond Fed Manufacturing Index for Aug. is estimated to fall to 24.0 versus 27.0 in July.
• New Home Sales for July is estimated to rise to 700K versus 676K in June.
  

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The 2Y T-Note auction, weekly US Retail Sales reports, Eurozone GDP report, Raymond James Industrials Conference and the BMO Tech Summit could also impact global trading today.

US Equity Market Hours

• 9:30 am - 4:00 pm EST
  

BOTTOM LINE: Asian indices are higher, boosted by commodity 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 100% net long heading into the day.