Stocks Reversing Lower into Afternoon on Tax Hike Fears, Labor/Product Shortage Worries, Fed Taper Concerns, Biotech/Road & Rail Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Slightly Higher
  

• Sector Performance: Mixed
  

• Volume: Around Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 20.7 -1.3%
• Bloomberg Global Risk On/Risk Off Index 2,012.0 -1.0 point

• Euro/Yen Carry Return Index 134.05 -.03%

• Emerging Markets Currency Volatility(VXY) 8.6 -.12%.

• S&P 500 Implied Correlation 56.0 -.3%

• ISE Sentiment Index 96.0  -3.0 points
  

• Total Put/Call .82 -15.5%

• NYSE Arms .63 -58.8%

Credit Investor Angst:

• North American Investment Grade CDS Index 47.07 -.5%
  

• US Energy High-Yield OAS 392.61 -.38%

• European Financial Sector CDS Index 51.48 +.35%

• Italian/German 10Y Yld Spread 102.0 -1.0 basis point
  

• Asia Ex-Japan Investment Grade CDS Index 65.85 +.4%
  

• Emerging Market CDS Index 153.34 +1.11%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 38.4 -.05%

• 2-Year Swap Spread 10.25 +.25 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  73.5 +1.5 basis points
  
• IHS Markit CMBX BBB- 6 72.25 unch.
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 60.18 +.04%
• 3-Month T-Bill Yield .04% unch.
  

• Yield Curve 112.0 +3.0 basis points
  

• China Iron Ore Spot 123.15 USD/Metric Tonne -4.7%

• Citi US Economic Surprise Index -54.9 +5.6 points

• Citi Eurozone Economic Surprise Index -19.7 -1.9 points
  

• Citi Emerging Markets Economic Surprise Index 12.1 +2.0 points

• 10-Year TIPS Spread 2.37 -4.0 basis points
• 98.3% chance of no change at Nov. 3rd meeting, 98.3% chance of no change at Dec. 15th meeting

US Covid-19:

• 313 new infections/100K people(last 7 days total) -9/100K people
• 59% of Jan. 7th, 2021 peak(highest daily avg. new infections) -2.0 percentage points
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -47 open in Japan 
• China A50 Futures: Indicating -6 open in China

• DAX Futures: Indicating -6 open in Germany

Portfolio:

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

• Disclosed Trades: Added to my (IWM)/(QQQ) hedges
  

• Market Exposure: Moved to 50% Net Long
  

Bear Radar

 Style Underperformer:

• Mid-Cap Growth -.7%

Sector Underperformers:

• 1) Medical Equipment -1.6% 2) Steel -1.4% 3) Video Gaming -1.2%

Stocks Falling on Unusual Volume: 

• VRT, CRWD, MTTR, GRBK, CROX, BMBL, FTNT, CURI, APLS, IRNT, S, HYFM, LOVE, ALB, APG, STAA, VGR, METC, DSP, LESL, AFRM, ORGO, CURV, DVAX, PRCH, RKLB, SEMR and LYEL
  

Stocks With Unusual Put Option Activity:

• 1) RNG 2) OCGN 3) CNC 4) BOX 5) XHB
  

Stocks With Most Negative News Mentions:

• 1) DVAX 2) VGR 3) NKE 4) LIVE 5) TME
  

Charts:

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

Bull Radar

 Style Outperformer:

• Small-Cap Value +.9%

Sector Outperformers:

• 1) Oil Service +3.8% 2) Energy +3.3% 3) Airlines +2.3%

Stocks Rising on Unusual Volume:

• ATER, IRTC, RGNX, NGM, TROX, CMAX, SD, RLAY, OSPN, ALGM, DOCN, MGNX, ASAN, PTY, EFTR, MCFE, ETQ, DELL and SWTX
  

Stocks With Unusual Call Option Activity:

• 1) REI 2) TELL 3) IEF 4) IOVA 5) TPX

Stocks With Most Positive News Mentions:

• 1) MEC 2) ATER 3) NGM 4) IQST 5) RVLV
  

Charts:

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

Mid-Day Market Internals

NYSE Composite Index:

• Volume Running -.1% Below 100-Day Average 
• 6 Sectors Rising, 5 Sectors Declining
• 60.2% of Issues Advancing, 35.4% Declining
• 69 New 52-Week Highs, 23 New Lows
• 61.7% of Issues Above 200-day Moving Average
• Average 14-Day RSI 43.7%
  
• Bloomberg Global Risk-On/Risk-Off Index 2,960.0 +48.0 points
• Russell 1000: Growth/Value 17,847 -.87%
  
• Vix 19.9 -5.1%
• Total Put/Call .78 -19.6%
• TRIN/Arms .61 -61.0%

 

Monday Watch

Today's Headlines

Bloomberg:     

• Cracks in China’s Growth Put Risk-Market Rally on Shaky Ground.  
• With Economies on the Brink, Southeast Asia Chooses to Reopen.
• Here’s What the Next Six Months of the Pandemic Will Bring. One key danger is if a vaccine-resistant variant develops, although it is not the only risk ahead.  
• U.K. Business Warns Tax Hikes Risk Strangling Economic Growth.
• Israel Eyes Fourth Dose; U.K. Drops Vaccine Passes: Virus Update.  
• Stocks Set to Dip on Concern About Slower Recovery: Markets Wrap.
  
• Oil Extends Advance as U.S. Supply Is Slow to Return After Ida.
• Back-to-School Season Has Stock Sellers Tapping Market in Droves.
• The World’s Shippers Are Earning the Most Money Since 2008.
• Fewer Pediatricians, More Cooks Seen in Dismal U.S. Jobs Outlook.
• Kansas City Southern to Accept CP Rail Offer, Rebuffing CN.
• Epic Games Files Notice of Appeal in Case Versus Apple.
• House Democrats Consider 26.5% Corporate Tax Rate.
  

Wall Street Journal:

• Some Chinese Property Bonds Suffer as Evergrande Struggles.
• Stocks Face Possible Autumn Pullback, Analysts Warn.
• Libor Transition Stokes Sales of Risky Corporate Debt.
• Secret to Apple’s iPhone Sales Boom: 5G Deals From Wireless Carriers.
• Shipping Options Dry Up as Businesses Try to Rebuild.
• California Recall Puts Governor’s Pandemic Leadership to the Test.
• Costs From Extended Covid-19 Border Closures Accumulate.
• Short-Lasting Inflation Depends on Long-Lasting Goods.
• Chip Shortage Drives Tech and Car Industries Closer.  
• El Salvador Runs a Bitcoin Scam.  
• Those Still Left Behind in Afghanistan.

Fox News:  

• Liberal justice reveals true feelings on court packing, term limits as some Dems call for resignation.
• GOP governor torches 'pretty ignorant' Biden for vax mandate. 
• America’s top doc puts vaccine exemptions on notice as outrage over Biden’s controversial move grows.

CNBC:

• Sen. Joe Manchin says there’s no way to pass $3.5 trillion budget bill by September 27.
• Markets brace for hot consumer inflation report in the week ahead.
• Top Wall Street analysts remain bullish on these five stocks.
• Kansas City Southern picks Canadian Pacific’s $31 billion bid for railroad.
• A Medicare trust fund faces insolvency in 2026 yet Democrats want to expand coverage.

Zero Hedge: 

• "Extreme Cover-Up" - Scientists Who Penned Lancet Letter To Bat Down Lab Theory Have Links To China.
• "Americans Are Tired Of All The Lies" - General Mike Flynn Warns Nation Being Overtaken By Small, Powerful Group Of Marxists. 
• Navy SEAL Who Shot Bin Laden Says Internal Division Now Biggest Threat To America.
• North Korea Reportedly Test-Fires New Long-Range Cruise Missile.
• California Medical Ethics Prof With Natural Immunity Sues University Over Vaxx Mandate.
• "F**k Joe Biden" Chants Heard Across US College Football Stadiums. 
• Hedge Fund CIO: "We Have Entered The Most Uncertain Period Of Our Lifetimes".
• Al Qaeda Leader Appears In New Video Marking 9/11, Despite Death Rumors.
• Two Years Ago Today: Wuhan Bat Lab Mysteriously Scrubbed Database With 22,000 Specimens.
• Harvard's $42 Billion Endowment Says It Will Stop Investing In Fossil Fuels.
• Morgan Stanley: Countries Will Transition Toward Acceptance Of COVID As An Endemic Problem They Must Live With. 
• DeSantis Responds To Biden's Vaccine Mandate: "In Florida, We Will Fight Back".
• Members Of Congress, Staff Exempt From Biden Vaccine Mandate.
• Boston Suburb Attempts To Limit Gun Stores With New Zoning Proposal.
• In Surprising Reversal, England Drops Vaccine Passport Plan.
• FBI Declassifies 9/11 Memo After Biden Executive Order: "Puts To Bed Any Doubts About Saudi Complicity".
• These Dangers Loom Over The Fragile US Economy In The Next 12 Months.
• "Something's Not Matching Up": Manchin Refuses To Support $3.5 Trillion Spending Plan.
• 5 Divergences In The Stock Market To Keep An Eye On This Fall.
• American Workers No Longer Want To Work Into Their 60s.
• Europe Is Subsidizing Its Way Into Electric Vehicle Leadership.
• Reporters May Face 14 Years In Prison For 'Embarrassing' UK Government Officials.

Reuters:

• U.S.-bound migrants fill Colombia town as COVID-19 border closures lifted. (Aug. 11)
  
• Colombia has administered at least 35,750,492 doses of COVID vaccines so far. (graph) Assuming every person needs 2 doses, that’s enough to have vaccinated about 35.5% of the country’s population.
• COVID-19 infections are decreasing in Colombia, with 1,959 new infections reported on average each day. That’s 6% of the peak — the highest daily average reported on June 27.
• South Africa loosens COVID curbs as third wave eases.
• South Africa has administered at least 14,670,161 doses of COVID vaccines so far. Assuming every person needs 2 doses, that’s enough to have vaccinated about 12.5% of the country’s population.

 Jerusalem Post:

• COVID-19: New 'Mu variant' from Colombia could be vaccine resistant - WHO.

Nature: 

• Why US coronavirus tracking can’t keep up with concerning variants. (April 7) Laboratories supported by the US government have doubled the rate at which they are sequencing SARS-CoV-2 genomes over the past two months. Still, the number of genomes that the country shared in the online genome repository GISAID in March represented only 1.6% of its positive COVID-19 cases that month.

Newsweek:

• Mu COVID Variant, Which Could Be Resistant to Vaccines, Now in Almost Every State.
  

NewsMax:

• Sen. Joe Manchin Won't Vote for $3.5T Bill: 'What's the Urgency?'
• Dershowitz: Courts Will Rule Against Biden on Mandate Penalties.
• Nebraska Gov. Ricketts: Biden Vax Mandates an 'Egregious Outreach'.
  

TheGatewayPundit.com:

• EXCLUSIVE: Large Sections of the Border Wall Have Been REMOVED and Left WIDE OPEN Along Heavily Trafficked Drug Route in Southern Arizona.
• Kentucky Health Care Workers Refused to Comply With Vaccine Mandate, Forced Hospital to Fire Them (VIDEOS).
• WEIRD: Last Night FBI Releases Heavily Redacted Records from Secret Probe “Operation Encore” into 9-11 Hijackers Support Network Inside US.
• Software Company Salesforce Offers to Relocate Texas Employees Over State’s Abortion Law.
• Republicans in SoCal Have Trouble Casting Recall Ballots – Many Told ‘They Already Voted’ – Even Though They Had Not.
• Putin’s Puppet: Russians Are Now Barking Orders at Joe Biden – They Are Against Any US Base in Central Asian Region.
• WATCH: Bill Maher Says the Race-Obsessed Left is ‘Embarrassing’ Him.

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 indices are -.5% to +.25% on average.
• Asia Ex-Japan Investment Grade CDS Index 65.75 -.25 basis point.
• China Sovereign CDS 32.75 -.75 basis point.
• Bloomberg Emerging Markets Currency Index 60.13 -.02%.
• Bloomberg Global Risk-On/Risk Off Index 2,913.0 +1.0 point.
• Volatility Index(VIX) futures 20.44 -3.2%. 
• Euro Stoxx 50 futures -.1%.
• S&P 500 futures +.36%.
• NASDAQ 100 futures +.32%

Morning Preview Links

Earnings of Note

Company/Estimate

Before the Open:

• None of note
  

After the Close:

• (ORCL)/.97

Economic Releases

2:00 pm EST

• The Monthly Budget Statement for Aug. is estimated to widen to -$225.0B versus -$200.0B in July.
  

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Australia Home Price report, Barclays Financial Services Conference, Citi Tech Conference, HC Wainwright Investment Conference, JPMorgan Gaming/Lodging/Restaurant/Leisure Forum, Credit Suisse Basic Materials Conference, BofA Media/Communications/Entertainment Conference, (PANW) analyst day and the (ZM) financial analyst briefing could also impact trading today.

US Equity Market Hours

• 9:30 am - 4:00 pm EST

BOTTOM LINE: Asian indices are mostly lower, weighed down by technology 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 week.

Today's Headlines

Bloomberg:                   

• The World Remembers 9/11 on 20th Anniversary of Attacks: Update.
• China’s Poor Regions Worry About Climate Justice in Net-Zero Push.  
• China Counts Cost of Renewed Virus Shutdowns: Eco Week Ahead.
• World Economy Like a Patient on Experimental Drugs, Says Tooze. 
• Global Capex Booms as Companies Prepare for Post-Pandemic Era.
• India, Australia Deepen Defense, Trade Ties Amid China Tensions.  
• Retired Seniors in U.S. Aren’t Covered by Biden’s Vaccine Plan.  
• Disappointed Consumers Temper U.S. Economy’s Main Growth Engine.  
• Los Angeles Port Logjam Tops 50 Ships; Wait Exceeds Eight Days.
• Sky-High Faang Stocks Were Never Anything But Screaming Bargains.  
• Bond Market Set for Fresh Take on Its Burning Inflation Question.  
• Stablecoins Face Crackdown as U.S. May Seek Scrutiny, Oversight.

Wall Street Journal:  

• America Marks 20th Anniversary of 9/11 With Memorials.
• Car Dealerships Seek New Model as Sales Move Online.
• Funds Overseas Cash In on Crypto Boom.
• Apple Judge’s Warning Suggests Fight Far From Over.
• DoorDash and Grubhub’s Tussles With Regulators Heat Up.
• A War on Terror Accounting Since 9/11.  
• Arizona’s Border Crisis Threatens Public Safety and Health.  
• Remember Todd Beamer of United 93.
• Disney Will Release Rest of 2021 Films Exclusively in Theaters.
• Natural-Gas Market Conditions Look Unnatural.
• School Is Back and the Covid Rules Keep Changing: ‘It’s as Chaotic as You Can Get.’.  
• Get Ready for the Blackouts.
• Biden’s Vaccine Command.  
• 9/11 Coverage From the Journal Editorial Page.  
• Britain’s Tax Warning to America.

CNBC:

• In pictures: A nation marks the 20th anniversary of the 9/11 terror attacks.
• U.S. Democrats propose dramatic expansion of EV tax credits that favors Big Three.
• Kroger gets hit by higher costs, theft—even as shoppers fill up grocery carts.

IG:

• Weekend Markets Trading Live.

Barron's:

• Had bullish commentary on (DIH), (MDC), (RKLB), (CSCO), (SIVB) and (MTH).

MarketWatch.com:          

• Opinion: Companies are now issuing more stock than they did at top of the internet bubble and here’s why that matters .
  
• 9/11 changed air travel forever — will COVID-19 do the same?  
• 3 in 4 Americans are angry about the way things are going in the country today.
  
• Delta and shortages trip up U.S. economy and spur Wall Street to chop GDP forecasts.

Fox News:    

• Army football players lead tribute to heroes lost on 9/11 in powerful display that will give you chills.
• Poll: Two-thirds think 9/11 permanently changed life in US.
• ‘The Lost Calls of 9/11’ reveals never-before-heard calls.
• Former flight attendant pushing beverage cart to honor 9/11 victims.
• NASA satellite image shows impact of 9/11 attacks, smoke seen from space.

Reuters:

• U.S.-bound migrants fill Colombia town as COVID-19 border closures lifted. (Aug. 11)
  
• Colombia has administered at least 35,750,492 doses of COVID vaccines so far. (graph) Assuming every person needs 2 doses, that’s enough to have vaccinated about 35.5% of the country’s population.
• COVID-19 infections are decreasing in Colombia, with 1,959 new infections reported on average each day. That’s 6% of the peak — the highest daily average reported on June 27.

 Jerusalem Post:

• COVID-19: New 'Mu variant' from Colombia could be vaccine resistant - WHO.

Nature: 

• Why US coronavirus tracking can’t keep up with concerning variants. (April 7) Laboratories supported by the US government have doubled the rate at which they are sequencing SARS-CoV-2 genomes over the past two months. Still, the number of genomes that the country shared in the online genome repository GISAID in March represented only 1.6% of its positive COVID-19 cases that month.

Newsweek:

• Mu COVID Variant, Which Could Be Resistant to Vaccines, Now in Almost Every State.

Zero Hedge:

• Why Did The USA Hand Afghanistan To China?
• Members Of Congress, Staff Exempt From Biden Vaccine Mandate.
• Stagflation "Phase 1" Begins As Democrats Scramble To Pass Largest Fiscal Stimulus Of All Time.
• Taliban Holds Flag Raising Ceremony On Same Day Americans Commemorate 9/11.
• Fauci: No "Firm Answer" On Why Americans Who Recovered From COVID-19 Should Get Vaccinated.
• Container Ship Congestion At LA Ports Hits Record High As More Ships Join Queue.
• It's Official: Tapering To Begin In November, End In July.
• Study Finds Teenage Boys Six Times More Likely To Suffer Heart Problems From Vaccine Than Be Hospitalized by COVID.
• 20 Years Since 9/11: How Events Unfolded That Morning.
• "Physical Demand Will Completely Overwhelm Supply" And How Silver Could Wind Up Over $270.
• Nord Stream 2 Pipeline Fully Completed - Russia Celebrates 'Failure' Of US Efforts To Stop It
• More And More Australians Are Seeking To Leave The Country.
• Mysterious Radio Signals From The Center Of The Milky Way Detected.
• Trudeau's Chances Of Winning Snap Election Dwindle As Conservatives Surge.
• New Study Finds 'Excess Suicides' In Japan Surged Due To COVID Restrictions.
• Justice Breyer Issues Warning To Democrats Who Want To Remake Supreme Court.
• Exxon To Start Measuring And Disclosing Shale Gas Emissions Amidst ESG Pressure.

TheGatewayPundit.com:

• Biden Blasts Americans on Eve of 9/11: ‘We Have Witnessed Violence in America Against Muslims – True Followers of a Peaceful Religion’ (VIDEO). 
• Afghan Women Chant “Death to America” at Pro-Taliban Rally on 20th Anniversary of 9/11 After Biden Arms Them with Weapons (VIDEO).
• Investigation: 26 Out Of 27 Scientists Who Claimed Wuhan COVID Origins Were “Conspiracy Theories” — Had Ties To Wuhan.
• Firefighters and Police Officers Break Into Cheers as Trump Makes Surprise Visit to NYC on 20th Anniversary of 9/11 (VIDEO).
• New York Hospital to Pause Baby Deliveries After Too Many Staffers in Maternity Unit Quit Over Vaccine Mandate.
• 20 Years Ago Today… The Islamist Terrorist Attacks on America and 20 Years Later Joe Biden Has Armed Our Enemy.
• Trump On 20th Anniversary Of 9/11 — “America Will Be Made Great Again”.
• “If They Fight Wars Like They Do Rigged Elections, That They Do Well” – President Trump on Democrats Cheating in Elections.
• “I Wanted to Get Out with Dignity, with Victory, with Pride, not the Way We Got Out.  It Looks Like Total Surrender.  It Was a Disgrace.” – President Trump on Biden’s Afghan Capitulation.
• If You Are Vaccinated and You Fear the Un-Vaccinated, You Might Be a Moron.

The Epoch Times:

• Persecution of Falun Gong Continues While CCP Tightens Control on PLAC: Leaked Documents.
• Taiwan Raps Fitch for Calling It Part of China in Ratings Upgrade.

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).