Wednesday Watch

Evening Headlines

Bloomberg:      

• Biden Floated Meeting With Xi That Chinese Leader Declined.
• Macau Casinos Downgraded by JPMorgan as Relicensing Begins.
• Korea Unemployment Drops to Record Low as Job Seekers Stay Home.
• An Expensive Surprise for Rich Heirs Lurks Inside the Democrats' Tax Plan.
• Deese Hails ‘Major Progress’ From House Democrats on Tax Changes .
  
• Elizabeth Warren Asks Fed to Break Up Wells Fargo.  
• N.Y. Vaccine Rule Must Allow Religious Exemptions, Judge Rules.  
• Video Game Spending Hit Record for August, Boosted by Consoles.
• Fidelity Pushed for Bitcoin ETF Approval in Private SEC Meeting. 
• Microsoft Unveils $60 Billion Buyback; Smith Is Named Vice Chair.

Wall Street Journal:  

• Facebook Knows Instagram Is Toxic for Teen Girls, Company Documents Show.  
• Here Comes the Biden Tax Bill.
• Inflation Begins to Erase Wage Gains for Low-Pay Workers.
• Americans’ Incomes Fell in 2020.
• Newsom Faces Recall Election in California.

Fox News:  

• Biden's top military adviser reached out to US enemy about Trump in last months of presidency, book says.
• President's low approval ratings dragged even lower by 2 crucial issues, poll finds.
• Retired Lt. Col. Alexander Vindman says Gen. Milley 'must resign' if his secret calls with China occurred.
  

CNBC.com:

• SEC chair Gary Gensler wants to crack down on the ‘wild west’ of crypto.
• Amazon CEO Andy Jassy: ‘It’s still early days for us in media’.
• Here’s everything Apple just announced at its iPhone 13 event.
• EV start-up Rivian beats Tesla, GM, Ford as first automaker to produce electric pickup.
• DOJ official signals firm stance against ‘killer acquisitions’.
• Senators demand cryptocurrency regulation guidance from SEC Chair Gary Gensler.
• America is short more than 5 million homes, and builders can’t make up the difference.

MarketWatch.com:         

• Apple reveals iPhone 13, iPad Mini price increase and larger Apple Watch.

Zero Hedge:

• Global Debt Hits A Record $300 Trillion, Up $36 Trillion Since COVID.
• "Several Senior Executives" From Chinese Banks Investigated And Arrested In Recent Weeks, Global Times Reports. 
• Massachusetts Activates National Guard To Bus School Children After Vax Mandate Staffing Shortages.
• Jeff Gundlach Warns "History Books Won't Say Inflation Was Transitory", Remains Long-Term Dollar Bear.
• Elizabeth Warren Demands Amazon Censor Best-Selling Books.
• Why The Biden COVID-19 Vaccine Mandate Is Unconstitutional.
• The Political Alchemy Called Modern Monetary Theory.
• Internal Study Finds 32% Of Teen Girls Say "Instagram Makes Me Feel Bad About My Body".
• WTI Extends Gains After Across The Board Inventory Draws.
• The US Economy In A Nutshell: When Critical Parts Are On "Indefinite Back Order", The Machine Grinds To A Halt.
• Bonds, Bullion, & Bitcoin Jump As Stocks Pump'n'Dump After CPI.

Reuters:

• South Africa loosens COVID curbs as third wave eases. Authorities reported 3,961 new cases on Sunday, compared with a peak of about 26,500 per day in early July.
• 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.

Newsmax:

• Trump to Newsmax: Obama's 'Probably Running the Government'.
• Rep. Ferguson: Dems Tax Hike Will Leave Businesses 'Gutted'.

TheGatewayPundit.com:

• Japan Warns Citizens to Avoid “Western-owned” Facilities in Six Southeast Asian Countries Due to Possible Terror Attack.
• Chuck Schumer Unveils Legislation to Make Voter Fraud Legal in the US (VIDEO).
• “If it is Actually True… That’s Treason” – President Trump Reacts to Reports Milley Called China Behind His Back (AUDIO).
• National Guard Activated in Massachusetts to Take Children to School.
• Clinton-Appointed Judge Blocks New York’s Vaccine Mandate for Healthcare Workers.
• An Inside Look at Australia’s ‘Mandatory Quarantine Camps:’ A Dystopian Reality in 2021 Where Travelers are Confined “Like Animals at the Zoo” – (Video).
• “I Don’t Know” – Secretary of State Blinken When Asked if Biden Admin Droned an Aid Worker or High-Level ISIS Operative (VIDEO).

The Epoch Times:

• CIA’s Bid to Throttle Down Chinese Espionage May Be Easier Said Than Done: Experts.
• Clyde Prestowitz: How Communist China Entrapped America’s Elite, from Washington to Wall Street
  

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 -.5% to +.25% on average.

• Asia Ex-Japan Investment Grade CDS Index 65.75 unch.

• China Sovereign CDS 33.25 +.25 basis point.
  

• Bloomberg Emerging Markets Currency Index 60.12 -.01%.
• Bloomberg Global Risk-On/Risk Off Index 2,907.0 -11.0 points.
• Volatility Index(VIX) futures 21.3 -1.2%.
• FTSE 100 futures -.06%.

• S&P 500 futures +.17%

• NASDAQ 100 futures +.20%. 

Morning Preview Links

Earnings of Note 
Company/Estimate 

 

Before the Open: 

• (JKS)
  

After the Close:

• None of note
  

Economic Releases

8:30 am EST

• Empire Manufacturing for Sept. is estimated to fall to 18.0 versus 18.3 in Aug.
• The Import Price Index MoM for Aug. is estimated to rise +.2% versus a +.3% gain in July.
• The Import Price Index ex Petroleum for Aug. is estimated to rise +.2% versus a +.1% gain in July.
• The Export Price Index MoM for Aug. is estimated to rise +.4% versus a +1.3% gain in July. 
  

9:15 am EST

• Industrial Production MoM for Aug. is estimated to rise +.5% versus a +.9% decline in July.
• Capacity Utilization for Aug. is estimated to rise to 76.4% versus 76.1% in July.
• Manufacturing Production for Aug. is estimated to rise +.4% versus a +1.4% gain in July.
  

10:30 am EST

• Bloomberg consensus estimates call for a weekly crude oil inventory decline of -2,739,450 barrels versus a -1,528,000 barrel decline the prior week. Gasoline supplies are estimated to fall by -3,311,300 barrels versus a -7,215,000 barrel decline the prior week. Distillate inventories are estimated to fall by -2,623,400 barrels versus a -3,141,00 barrel decline the prior week. Finally, Refinery Utilization is estimated to rise by +1.44% versus a -9.4% decline prior.
  

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The UK PPI report, weekly MBA Mortgage Applications report, BofA Healthcare Conference and the (CSCO) investor day could also impact global trading today.

US Equity Market Hours

• 9:30 am - 4:00 pm EST
  

BOTTOM LINE: Asian indices are mostly lower, weighed down by industrial and financial shares in the region. I expect US stocks to open mixed and to weaken into the afternoon, finishing modestly lower. The Portfolio is 50% net long heading into the day.

Stocks Reversing Lower into Final Hour on Tax Hike Fears, Labor/Product Shortage Worries, Technical Selling, Gambling/Financial Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Lower
  

• Sector Performance: Most Sectors Declining
  

• Volume: Below Average

• Market Leading Stocks: Underperforming
  

Equity Investor Angst:

• Volatility(VIX) 19.6 +1.0%
• Bloomberg Global Risk On/Risk Off Index 2,895.0 -95.0 points

• Euro/Yen Carry Return Index 133.75 -.27%

• Emerging Markets Currency Volatility(VXY) 8.5 -.82%.

• S&P 500 Implied Correlation 56.4 +15.7%

• ISE Sentiment Index 112.0  +13.0 points
  

• Total Put/Call .95 +4.4%

• NYSE Arms 1.29 +95.5%

Credit Investor Angst:

• North American Investment Grade CDS Index 46.74 -.11%
  

• US Energy High-Yield OAS 387.30 -1.0%

• European Financial Sector CDS Index 50.88 -1.17%

• Italian/German 10Y Yld Spread 98.75 -3.25 basis point
  

• Asia Ex-Japan Investment Grade CDS Index 65.56 -.46%
  

• Emerging Market CDS Index 154.26 +1.0%
  

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

• 2-Year Swap Spread 10.25 unch.
  

• TED Spread 8.25 +.5 basis point
  

• 3-Month EUR/USD Cross-Currency Basis Swap -3.5 +.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 60.11 -.19%
• 3-Month T-Bill Yield .04% unch.
  

• Yield Curve 112.0 unch.
  

• China Iron Ore Spot 118.90 USD/Metric Tonne -2.1%

• Citi US Economic Surprise Index -61.7 -5.8 points

• Citi Eurozone Economic Surprise Index -20.8 -1.1 points
  

• Citi Emerging Markets Economic Surprise Index 11.7 -.4 point

• 10-Year TIPS Spread 2.34 -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:

• 378 new infections/100K people(last 7 days total) +65/100K people
• 71% of Jan. 7th, 2021 peak(highest daily avg. new infections) +12.0 percentage points
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -460 open in Japan 
• China A50 Futures: Indicating -86 open in China

• DAX Futures: Indicating -30 open in Germany

Portfolio:

• Slightly Higher: On gains in my medical sector longs, index hedges and emerging market shorts
  

• Disclosed Trades: Added to my (IWM)/(QQQ) hedges and to my emerging market shorts
  

• Market Exposure: Moved to 25% Net Long
  

Bear Radar

 Style Underperformer:

• Small-Cap Value -1.0%

Sector Underperformers:

• 1) Gambling -4.9% 2) Banks -2.1% 3) Homebuilding -1.5%

Stocks Falling on Unusual Volume: 

• MP, VGR, PNC, ORCL, MGM, OPEN, CHTR, AXSM, IRTC, LCID, TXG, CMCSA, JAMF, SMG, INMB, LPG, HYFM, VMEO, LVS, WYNN, GRWG, AVO, BRP, PAR, HLF, SPRT and ATER
  

Stocks With Unusual Put Option Activity:

• 1) FCEL 2) TPX 3) URA 4) LVS 5) APO
  

Stocks With Most Negative News Mentions:

• 1) PAR 2) HLF 3) AVO 4) HYRE 5) BBIG
  

Charts:

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

Bull Radar

 Style Outperformer:

• Large-Cap Growth unch.

Sector Outperformers:

• 1) Gold & Silver +1.2% 2) Medical Equipment +1.2% 3) Software +.6%

Stocks Rising on Unusual Volume:

• CROX, SBTX, SRNG, ANGI, RGNX, OSCR, ACIC, OPAD, ISEE, ZBH, IRNT, PRLD, ZI, TROX, KRP, ESPR and RPRX
  

Stocks With Unusual Call Option Activity:

• 1) LIFE 2) IVC 3) FCEL 4) REI 5) CROX

Stocks With Most Positive News Mentions:

• 1) LIFE 2) ANGI 3) ICLR 4) NSSC 5) PANW
  

Charts:

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

Mid-Day Market Internals

NYSE Composite Index:

• Volume Running -16.2% Below 100-Day Average 
• 4 Sectors Rising, 7 Sectors Declining
• 38.5% of Issues Advancing, 57.4% Declining
• 54 New 52-Week Highs, 26 New Lows
• 63.7% of Issues Above 200-day Moving Average
• Average 14-Day RSI 46.2%
  
• Bloomberg Global Risk-On/Risk-Off Index 2,935.0 -54.0 points
• Russell 1000: Growth/Value 18,001 +.77%
  
• Vix 19.5 +.5%
• Total Put/Call .81 -11.0%
• TRIN/Arms 1.4 +110.6%

Tuesday Watch

Evening Headlines

Bloomberg:   

• China Likely Suffered Another Economic Slowdown Last Month.  
• Debt Load Threatens Latin America Jobs Recovery, World Bank Says
• Indonesia Eases Restrictions; Philippines Perks: Virus Update.   
• Asia Stocks Set for Steady Start as CPI Awaited: Markets Wrap.
• Oil Rises to Six-Week High as Another Storm Heads for U.S. Gulf.
• House Democrats Float 26.5% Top Corporate Rate in Tax Plan.
• Durbin Says $3.5 Trillion is Starting Point for Economic Plan.
• Apple Rushes to Block Spyware That Doesn’t Need User’s Click.  
• Blinken Defends Afghan Pullout as He Faces Angry Lawmakers.  
• Tankers Flee Deeper Into Gulf as Nicholas Heads for Texas Ports

Wall Street Journal:  

• Energy Prices in Europe Hit Records After Wind Stops Blowing.
• Democrats Release Details of Proposed Tax Increase.  
• Gavin Newsom’s White Privilege.
• Here Comes the Biden Tax Bill.  
• Iran’s Dangerous Nuclear Dance.  
• Where the Covid Origin Inquiry Goes Now.
• NYC’s Covid-19 Vaccination Proof Mandate for Restaurants and Dining: What to Know.

Fox News:  

• Afghan war vet scolds Blinken in heated exchange for deceiving nation over withdrawal screw up.
• FLASHBACK: Biden’s prediction on herd immunity falls short.
• FB responds to bombshell report that they do more than play favorites.

CNBC.com:

• House Democrats propose new tax hikes to pay for their $3.5 trillion bill: Here are the details.
• Data shows Covid booster shots ‘not appropriate’ at this time, U.S. and international scientists say.
• Tuesday’s CPI report likely to show inflation continuing to run hot, putting the Fed in tough spot.
• Apple to announce new iPhones, Apple Watch and AirPods on Tuesday.
• Europe’s gas shortage could make the whole world pay more to get warm this winter.

MarketWatch.com:               

• Here are two large tech stocks to avoid, according to Goldman Sachs.  
• Buyback tax proposal could blunt a major driver of stock market returns, experts warn.  
• Vehicle thefts are way up — here’s where the most cars are getting stolen.

Zero Hedge:

• Trump Slams Bush's 9/11 Speech: Man "Responsible For Death Of Perhaps Millions Of People" Shouldn't Lecture Anybody.
• California Republicans Shocked To Discover They've 'Already Voted' In Recall Election.
• Counterfeit Capitalism: Why A Monopolized Economy Leads To Inflation And Shortages.
• Kolanovic Says Time To "Reduce Tech" Just As Hedge Funds Finally Cover Their Nasdaq Puts.
• Aluminum Tops $3,000 For First Time Since 2008 On Supply Woes.
• High School Barred Students From Commemorating 9/11 Over 'Racial Insensitivity'.
• Capitol Fencing To Go Back Up Ahead Of Sept. 18 "Justice For J6" Rally.
• Fox Agrees To Buy TMZ In Latest Major Media Deal.
• Goldman Sounds Red Alert Over The Debt Ceiling: "Upcoming Deadline Looks As Risky As The 2011 Debt Limit Fight".
• Over 2/3rds Of Investors See At Least 5% Correction By Year-End, Blame Vaccine-Beating Variants.
• Uranium Stocks Explode As WallStreetBets Goes Nuclear.
• Top UPS Exec Warns Supply Chain Disarray Will Leave Permanent Scar.
• Bubble-Wrapping History: The National Archives Moves To "Reimagine" The Founding.
• Last-Minute Panic-Bid Saves Stocks From Longest Losing Streak In 19 Months.

Reuters:

• South Africa loosens COVID curbs as third wave eases. Authorities reported 3,961 new cases on Sunday, compared with a peak of about 26,500 per day in early July.
• 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.

TheGatewayPundit.com:

• ‘Violates Florida Law’ – Gov. DeSantis Announces Cities, Counties That Require Employees to Get Vaxxed will Be Fined $5,000 Per Infraction (VIDEO).
• Secretary Blinken Admits to Ongoing Hostage Situation in Afghanistan — Americans STILL Blocked from Leaving Mazar-i-Sharif Airport.
• EXCLUSIVE VIDEO: Federally Contracted Workers Destroy Building Materials From Trump’s Border Wall in Arizona for Scrap as Holes in the Wall Remain.
• Secretary of State Blinken Says Only “Some” of the 60,000 Afghans Brought to US Meet the Qualifications For SIV (VIDEO).
• Teenage Boys 6X More Likely to Suffer Heart Problems From COVID Vax Than Be Hospitalized From Coronavirus.
• WAYNE ROOT: Why Larry Elder Will Win the California Recall Election…But He Will Lose a Rigged Election Just Like Trump.
• Pelosi Masks Up for the Official Photos at Ground Zero — Then Drops the Mask When She Thinks the Cameras are Off.

The Epoch Times:

• China Vehicle Sales Fall Amid Chip Shortages as Companies Drive up Prices.
• China Evergrande Debt Woes Raise Financing Pressure on Peers.

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 +.25% on average.

• Asia Ex-Japan Investment Grade CDS Index 65.75 unch.

• China Sovereign CDS 33.0 +.25 basis point.
  

• Bloomberg Emerging Markets Currency Index 60.23 unch.
• Bloomberg Global Risk-On/Risk Off Index 2,985.0 -15.0 points.
• Volatility Index(VIX) futures 21.3 -.24%.
• FTSE 100 futures +.01%.

• S&P 500 futures +.13%

• NASDAQ 100 futures +.08%. 

Morning Preview Links

Earnings of Note 
Company/Estimate 

 

Before the Open: 

• (FCEL)/-.05
  

After the Close:

• None of note
  

Economic Releases

6:00 am EST

• The NFIB Small Business Optimism Index for Aug. is estimated to fall to 99.0 versus 99.7 in July.
  

8:30 am EST

• The CPI MoM for Aug. is estimated to rise +.4% versus a +.5% gain in July.
• The CPI Ex Food and Energy MoM for Aug. is estimated to rise +.3% versus a +.3% gain in July.
• Real Avg. Weekly Earnings YoY for Aug. 
  

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The China industrial production report, Cali Governor recall election, weekly US retail sales reports, Jefferies Software Conference, Baird Healthcare Conference, Raymond James Consumer Conference and the (CROX) investor day 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 industrial and consumer shares in the region. I expect US stocks to open mixed and to weaken into the afternoon, finishing modestly lower. The Portfolio is 50% net long heading into the day.