Tuesday Watch

Evening Headlines

Bloomberg:                 

• Drones Take Center Stage in U.S.-China War on Data Harvesting.  
• China Ordered Amazon to Delete Reviews of Xi Jinping’s Book, Reuters Reports.
• Global Selloff Abates as U.S. Futures, Stocks Rise: Markets Wrap.  
• Oil Edges Higher After Two-Day Drop as Investors Assess Demand.
• Omicron Cancellations Starting to Pile Up: Here’s a Short List.  
  
• School Closings Surge 82% as Omicron Spreads Across the U.S.   
• Nike Gains as Growth in U.S. Helps Overcome China Collapse.
• Democrats Wrestle With Where to Cut Wish List to Satisfy Joe Manchin.
• Progressives Prod Biden to Act on Own After Manchin’s Roadblock.  
• SEC Demands Chinese Firms Bolster Risk Disclosures for Investors.
  
• Traders Sent $30 Billion Into the Dip and This Time Got Bruised.  
• Cathie Wood's 40% Return Prediction Draws Rebuke After Ark’s Rough Year.  
• Small Caps Pummeled as Omicron Spread Clouds Growth Outlook.

Wall Street Journal:

• The U.S. Pursued Professors Working With China. Cases Are Faltering.
• Behind a New Pill to Treat Covid: A Husband-and-Wife Team and a Hunch.
• America’s Mixed Response Comes Down to Geography.
• U.S. Sets 55-Mile-a-Gallon Fuel-Efficiency Standard for 2026 Models.
• The Slow Meltdown of the Chinese Economy. Beijing’s troubles are an opportunity for the U.S.—if Washington can recognize it.
• Turkey’s Borrowing Costs Soar as Crisis Enters New Phase.
• Nike’s Supply Crunch Stunts Growth Again.
• China’s Growing Access to Global Shipping Data Worries U.S.

Fox News:

• Democrats turn on Joe for lack of accountability on multiple crises and they don't stop there.
• Sen. Tom Cotton says Democrats want to 'destroy' Senate customs following Manchin dissent.
  
• Manchin blasts WH staff for leaking 'absolutely inexcusable' things about him after rejecting BBB.
  

CNBC.com:

• Santa rally won’t restart due to Covid risks & profit-taking, top investor says.

MarketWatch                   

• Oracle follows Microsoft into healthcare push with Cerner — is Salesforce next? 

Zero Hedge:

• Fauci's War on Science: The Smoking Gun.
• South African Officials Advise End To Contact-Tracing, Quarantining Because Most Don't Experience Any Symptoms.
• "She Was A Grown Woman Who Preyed On Kids": Prosecutors Make Closing Arguments In Ghislaine Maxwell Trial.
• Stagflation Is Coming To A Theater Near You.
• It's Official: Durham Is Investigating The Clinton Campaign.
• Biden Staff Did 'Inexcusable' Things: Manchin.
• Here Is The "Fallback Plan" Manchin Would Support... And Why Goldman Thinks It Wouldn't Move The Needle.
• Pentagon Cracks Down On 'Extremism' Within US Military.
• The Real Brandon Speaks: "People Have A Right To Frustration & Anger".
• Court Fight Over Dead People On Voter Lists Heats Up In Michigan.
• Morgan Stanley: Our "Ice" Scenario Will Be Worse Than Most Expect.
• Watch: Pelosi Startled, Abruptly Leaves Podium At Press Event After "Let's Go Brandon" Chant.
• Stocks Suffer Biggest 3-Day Drop Since May; Turkish Lira Explodes Most In 40 Years.

Newsmax:

• Ric Grenell: California Built Culture Leading to Crime Wave.
• Poll: Biden Approval at New Low.

TheGatewayPundit.com:  

• White House Promises “Winter of Severe Illness and Death” for Unvaccinated “And Their Families”.
• America Must Decide – Will It Be a Constitutional Republic or a One-Party Totalitarian State?
• Joe Biden Shows Off His New Puppy to Distract From Cratering Poll Numbers, Inflation, Supply Chain Crisis and Soaring Gas Prices (VIDEO).
• “It’s Not a Matter of If, But When” – Psaki Echoes Fauci When Asked if Biden Regime will Change the Definition of “Fully Vaccinated” to Include Booster (VIDEO).
• BREAKING: DC Judge Orders Release of 3 Hours of Capitol Surveillance Video from inside West Terrace Tunnel on Jan. 6 Where Police Were Beating the Hell Out of Trump Supporters.
• Hearing to Remove the Use of Dominion Voting Machines in Georgia Marred by Multiple False Claims and Judge’s Interruptions.
• Six Men Charged with Hate Crimes in Bay Area Robberies Targeting More Than 100 Asian Women.
• Eric Swalwell, Famous for Sleeping with Chinese Spy, Now Wants Vaccine Mandates for All Americans In Order to Fly.
• PANIC INCREASES: Democrats in PA Now Suing PA Senate Over Whether It Has the Subpoena Power to Request Voter Data in Senate’s 2020 Election Forensic Audit.
• VIDEO: New COVID Microchip Implanted Under Your Skin Will Show Your Vaccination Status.

Independent:

• Ghislaine Maxwell trial - live: Jury begins deliberation after closing arguments centred around Epstein.

Twitter:

•  @DiscloseTV - NEW - Three vaccine doses are not enough to stop #Omicron, says BioNTech CEO Ugur Sahin now.
  

OpenVAERS:

• VAERS COVID Vaccine Adverse Event Reports. 691,883 (US) Reports Through December 10, 2021.

SKirsch.com:

• Using the MGH numbers with our own VAERS queries, we have 247 cases per million doses from the MGH study divided by 5.97 cases per million doses from VAERS. 247/5.97 = 41. This suggests that the VAERS under-reporting factor (URF) is 41X.

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 unch. to +.75% on average.

• Asia Ex-Japan Investment Grade CDS Index 84.0 +2.0 basis points. 

• China Sovereign CDS 44.0 +1.5 basis points.
  

• Bloomberg Emerging Markets Currency Index 53.44 -.32%. 
• Bloomberg Global Risk-On/Risk Off Index 2,259.0 +30.0 points.
• Volatility Index(VIX) futures 23.9 -1.6%.
• Euro Stoxx 50 futures +.90%.

• S&P 500 futures +.27%.

• NASDAQ 100 futures +.46%. 

Morning Preview Links

Earnings of Note 
Company/Estimate 

 

Before the Open: 

• (APOG)/.53
• (FDS)/3.00
• (GIS)/1.05
• (RAD)/-.18
  

After the Close:

• (BB)/-.07
• (CAMP)/.08
• (AIR)/.54
  

Economic Releases

8:30 am EST

• The Current Account Deficit for 3Q is estimated to widen to -$205.0B versus -$190.3B in 2Q.

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The PBOC rate decision, 20Y Bond auction and the weekly US retail sales reports could also impact global trading today.

US Equity Market Hours

• 9:30 am - 1:00 pm EST
  

BOTTOM LINE: Asian indices are mostly higher, boosted 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 50% net long heading into the day.

Stocks Substantially Lower into Final Hour on Global Virus Mandate/Lockdown Fears, US Policy-Induced Stagflation Worries, Oil Decline, Financial/Commodity Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line:  Substantially Lower
  

• Sector Performance:  Almost Every Sector Declining
  

• Volume:  Above Average

• Market Leading Stocks: Underperforming
  

Equity Investor Angst:

• Volatility(VIX) 23.6 +9.5%
• Bloomberg Global Risk On/Risk Off Index 2,168.0 -268.0 points

• Euro/Yen Carry Return Index 132.22 +.31%

• Emerging Markets Currency Volatility(VXY) 11.1 +4.6%

• CBOE S&P 500 Implied Correlation Index 38.4 +8.0% 

• ISE Sentiment Index 113.0  -21.0 points
  

• Total Put/Call .83 -7.8%

• NYSE Arms .97 -14.9%

Credit Investor Angst:

• North American Investment Grade CDS Index 53.71 +2.0%
  

• US Energy High-Yield OAS 430.50 +1.8%

• European Financial Sector CDS Index 59.0 +1.5%

• Italian/German 10Y Yld Spread 130.0 +3.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 84.1 +2.0%
  

• Emerging Market CDS Index 205.25 +3.8%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 33.12 +.05%

• 2-Year Swap Spread 23.5 -.25 basis point
  

• TED Spread 18.25 unch.
  

• 3-Month EUR/USD Cross-Currency Basis Swap -13.25 +9.75 basis points
  
• MBS  5/10 Treasury Spread  74.0 +1.0 basis point
  
• IHS Markit CMBX BBB- 6 72.25 +.25 basis point
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 53.41 +4.3%
• 3-Month T-Bill Yield .04% +1.0 basis point
  

• Yield Curve 76.25 -3.25 basis points
  

• China Iron Ore Spot 127.5 USD/Metric Tonne +4.3%

• Citi US Economic Surprise Index 23.5 -1.4 points

• Citi Eurozone Economic Surprise Index 11.1 -.7 point
  

• Citi Emerging Markets Economic Surprise Index -9.7 +3.0 points

• 10-Year TIPS Spread 2.42 +1.0 basis point
• 50.8%(-1.4 percentage points) chance of no change at March 16th meeting, 36.2%(+.2 percentage point) chance of no change at May 4th meeting

US Covid-19:

• 282 new infections/100K people(last 7 days total) +19/100K people
• 53% of Jan. 7th, 2021 peak(highest daily avg. new infections) +4.0 percentage points
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +327 open in Japan 
• China A50 Futures: Indicating +51 open in China

• DAX Futures: Indicating +63 open in Germany

Portfolio:

• Slightly Lower: On losses in my tech/industrial/consumer discretionary sector longs and emerging market shorts

• Disclosed Trades:  Added to my (IWM)/(QQQ) hedges, then covered some
  

• Market Exposure:  50% Net Long
  

Bear Radar

Style Underperformer:

• Small-Cap Value -2.9%

Sector Underperformers:

• 1) Alt Energy -5.5% 2) Steel -4.0% 3) Retail -3.6%

Stocks Falling on Unusual Volume: 

• NRZ, AINV, ACRE, STWD, TLYS, MEG, CIM, RNST, RC, MRNA, ARI, NVAX, SCS, SPWH, GPMT, EFC, WBS, HSC, LADR, GTN, NEWT, BLUE, HPP, ORCL, SRG, CAL, PLCE, AB, DX, AIMC, NVAX, NOTV, HAYW, RWT, SBRA, LTHM, ENPH, NOVA, ICHR, MDC, CTLT, HOOD, CVNA, KRON, RKT, RUN, BKE, HIBB, DRVN, DNUT, GPK, CRC, XPRO, VERI, RVLV, NVTA, BV, FORG, AMTX and SAVA
  

Stocks With Unusual Put Option Activity:

• 1) TIP 2) TUR 3) AMLP 4) CFX 5) IYR
  

Stocks With Most Negative News Mentions:

• 1) SQM 2) CLW 3) BEKE 4) GPK 5) NIO
  

Charts:

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

Bull Radar

Style Outperformer:

• Large-Cap Growth -1.8%

Sector Outperformers:

• 1) Video Gaming +1.5% 2) Pharma -.5% 3) Gold & Silver -.6%

Stocks Rising on Unusual Volume:

• BRG, ITCI, BPMP, APTS, QDEL, CIT, FLGT and ASAN
  

Stocks With Unusual Call Option Activity:

• 1) ONDS 2) ICPT 3) ECH 4) MET 5) ACAD

Stocks With Most Positive News Mentions:

• 1) SRT 2) ITCI 3) KMPH 4) VRS 5) CSSE
  

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running +19.4% Above 100-Day Average 
• 0 Sectors Rising, 11 Sectors Declining
• 15.6% of Issues Advancing, 81.0% Declining
• 5 New 52-Week Highs, 168 New Lows
• 43.7% of Issues Above 200-day Moving Average
• Average 14-Day RSI 43.2% 
• Bloomberg Global Risk-On/Risk-Off Index 2,004.0 -433.0 points
• Russell 1000: Growth/Value 18,167 +.19%
  
• Vix 25.8 +19.6%
• Total Put/Call .78 -13.3%
• TRIN/Arms 1.28 +12.3%

Monday Watch

Today's Headlines

Bloomberg:                 

• Hawkish Fed, Dovish PBOC Diverge in New Phase of Pandemic Policy.  
• Drones Take Center Stage in U.S.-China War on Data Harvesting.  
• Singapore’s Economy Faces Multiple Threats as Growth Slows.
• Europe Braces for Energy Crunch This Week as Deep Freeze Sets in.
• Fossil Fuels to Drive Record Australian Resources Revenue.  
• European Power Prices for Monday Rise to Record on Cold Snap.   
• Stocks Drop With Oil on Manchin Shock, Omicron: Markets Wrap.  
• Brent Crude Extends Decline With Bearish Headwinds Mounting.
• Manchin Says No to Biden Agenda, Killing Momentum for Bill.
  
• Democrats Limp to 2022 Fighting History, Biden’s Low Ratings.
• GM’s Barra Dismissed Cruise CEO Ammann Over Mission, IPO Timing.  
• Crypto Attracts More Money in 2021 Than All Previous Years Combined.  
• Fauci Doesn’t Expect Lockdowns; Hospitals Likely Stressed.  
• Falling Corporate Bond Sales Are One of the Debt’s Few Positives. 
• Biden Climate Agenda Now Hinges on Rules Vulnerable to a Rewrite.
• SALT-Cap Expansion Has Nowhere to Go as Biden Agenda Stalled.
• Psaki Slams Manchin for ‘Inexplicable Reversal’ on Spending Plan.  
• GM’s Barra Dismissed Cruise CEO Ammann Over Mission, IPO Timing.

Wall Street Journal:

• Supply-Chain Mess Threatens Holiday Sales.
• Central Banks Worry Omicron Could Sustain Inflation.
• Inflation Adds to Cost of Clean Energy Transition.
• Super-Shoppers’ Secrets: How to Buy Anything Online, Even a PS5.
• Sky-High Lumber Prices Are Back.
• Tech-Savvy Kids Defeat Parental-Control Features.
• China Job Cuts Mount in Sectors Hit by Tighter Rules.
• Shipping and Logistics Costs Are Expected to Keep Rising in 2022.
• The Fickle ‘Science’ of Lockdowns. Experts foresaw before Covid that the strategy would fail. The authorities embraced it anyway.
• The Americans Stuck in Afghanistan. Months after its retreat, the White House admits some are still left behind.
• The Biden Stagflation Is Coming. His approach to the economy is already causing prices to rise. It will soon stifle growth as well.

Fox News:    

• Fauci severely contradicts Harris on a major COVID issue as omicron surges.   
• Fauci's controversial boss opens fire on COVID lab-leak possibility on last day in job: 'I'm really sorry...'.
• Elite university considers using 'woke score' system, campus backlash erupts.
• Former President Trump absolutely UNLOADS on Mitch McConnell.

CNBC:

• After homebuilders close out worst week since January, four traders weigh in on the weakness.
• The U.S. government has a massive, secret stockpile of bitcoin — Here’s what happens to it.
• Sen. Joe Manchin likely just killed Biden’s Build Back Better Act.
• Market turbulence may be a theme in the holiday week as investors fret over omicron, the Fed.

Zero Hedge:

• Emails Expose Fauci, Collins Collusion To 'Smear' Anti-Lockdown Scientists.
• Why Don't People "Trust The Science?" Because Scientists Are Often Caught Lying.
• Amazon Bowed To Beijing's Propaganda Arm To Keep Chinese Sales Secured, New Report Reveals.
• Senator Elizabeth Warren Tests Positive For COVID-19.
• Navarro: Biden, Democrats, & China Are To Blame For America's Stagflation Mess.
• Pfizer Pushes Third Vaccine Dose For Kids 5 And Under.
• Rickards: The Great Supply Chain Collapse.
• NFL, In Major Shift, To Test Vaccinated Players Less Frequently.
• It's Beginning To Look A Lot Like Pravda... Everywhere You Turn.
• London Mayor Says Lockdowns "Inevitable" As NHS Struggles With Surging Cases.
• "This Is A No": Manchin Announces He Won't Vote For Build Back Better.
• Exactly Which Dystopian Novel Are We Living In?
• Poll Finds Trump Is More Admired Than Biden Or The Pope.
• One Chart Traders Might Want To Ponder.
• Africa's Biggest Economies.
• Finding Strength Along A Post-COVID Fury Road.
• Escobar: Putin, Xi Running Circles Around Biden's Hybrid War.
• Meet The Scientists Hunting For The Next Variant Of Concern.
• Shellenberger: Why Democrats Self-Destruct On Crime.
• Parents Erupt At California School Board Meeting Over Alleged 'Coaching' Of Students Into LGBTQ Club.
• A Delusional AOC Provides The Tweet Irony Of The Day.
• The 16 US Cities That Hit All-Time Homicide Records This Year.
• Pandemic Could Be Solved Quickly If Politics Thrown Out: Dr. Ben Carson.

MarketWatch.com:     

• Stock buybacks can keep surging next year after a potential record for 2021, analysts say.

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.

NewsMax:

• OSHA Vaccine Mandate Penalties to Start Jan. 10.  
• Biden Agenda Collapses as Manchin Torpedoes Massive $2T Spending Plan.

TheGatewayPundit.com:

• Far-Left Mainstream Media Crashes and Burns – Loses as Much as 48% of Their Readership in 2021. 
• “I Don’t Think So” – Dr. Fauci Asked If He Ever Thinks Americans Will Be Able to Fly Without Face Masks Again (VIDEO).
• Not Making Headlines: Omicron Variant So Weak that South Africa will Stop Tracing and Quarantining of Contacts.
• Rep. Jim Jordan RIPS Adam Schiff After He Doctored His Text Message and Lied Again at Committee Hearing (VIDEO). 
• ABSOLUTE PANIC: Pennsylvania Democrat Secretary of State Sues to Prevent State Senate Audit from Examining Dominion Voting Machines.
• Fauci Says Not to Go to Christmas Gatherings Where You Don’t Know Everyone’s Vaccination Status (VIDEO).
• “A Global Coup Has Been Carried Out Across the World – Has Destroyed the Very Foundations of the Rule of Law” – Archbishop Vigano’s Message to America (Transcript and Audio).
• Robert Kennedy Jr. on The War Room: US Intelligence Agencies and Military Were Involved With The Wuhan Lab Research (VIDEO).
• Rep. Ramthun Lays Out Evidence of Undeniable Voter Fraud in Wisconsin 2020 Election — Calls for Forensic Audit in State (VIDEO).
• Ghislaine Maxwell Trial: Evidence from Jeffrey Epstein’s Safe Went Missing Following FBI Raid.
• Can’t Make This Up… Newsweek Mocks Trump for Having 200 Tickets Left Unsold in Arena That Holds 21,000 — But Say NOTHING About Joe Biden’s 20 Circle Crowds.
• BOMBSHELL: Revolver Investigation Exposes Massive Web Of Unindicted Operatives Who Coordinated Alongside Ray Epps To Turn January 6th Into a Riot.
• NY Governor Hochul Says Forcing Young Children to Wear Masks For Nearly 2 Years “is Not That Big a Deal” (VIDEO).

The Epoch Times:

• CCP’s Suppression of Hong Kong Is ‘Wake-Up Call’ to Free World: Democracy Activist Nathan Law.

The Sun:

• MAXWELL CAMERAS. Why is the Ghislaine Maxwell trial not being televised live?

TruthLion:

• Spanish Professional Basketball Match Suspended Due to Sudden Collapse of Óscar Cabrera. (video)
  

Twitter:

• @DiscloseTV - South Africa hospitalization rate plunges to only 1.7% in #Omicron wave, compared with 19% in previous "Delta-driven" wave - Health Minister. (graph) Massive protests against Covid restrictions and mandates are ongoing in Germany, Sweden, Austria and England. JUST IN - New York reports the highest one-day increase of #COVID19 cases on record. NY has the highest vaccination rate among the most populous states in the U.S.
• @ProtestNews_EN - Also, huge Covid restrictions/mandate protesting in Australia and New Zealand.

OpenVAERS:

• VAERS COVID Vaccine Adverse Event Reports. 691,883 (US) Reports Through December 10, 2021.

SKirsch.com:

• Using the MGH numbers with our own VAERS queries, we have 247 cases per million doses from the MGH study divided by 5.97 cases per million doses from VAERS. 247/5.97 = 41. This suggests that the VAERS under-reporting factor (URF) is 41X.

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 -.25% to -.75% on average.
• Asia Ex-Japan Investment Grade CDS Index 82.0 -1.0 basis point.
• China Sovereign CDS 42.5 +.5 basis point.
• Bloomberg Emerging Markets Currency Index 51.05 -.29%.
• Bloomberg Global Risk-On/Risk Off Index 2,396.0 -39.0 points.
• Volatility Index(VIX) futures 24.0 +1.8%. 
• Euro Stoxx 50 futures -1.21%.
• S&P 500 futures -.47%.
• NASDAQ 100 futures -.50%.

Morning Preview Links

Earnings of Note

Company/Estimate

Before the Open:

• None of note
  

After the Close:

• (MU)/2.11
• (NKE)/.63
  

Economic Releases

10:00 am EST

• The Leading Index for Nov. is estimated to rise +.9% versus a +.9% gain in Oct.

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Germany Consumer Confidence report could also impact trading today.

US Equity Market Hours

• 9:30 am - 4:00 pm EST

BOTTOM LINE: Asian indices are lower, weighed down by industrial and technology shares in the region. I expect US stocks to open modestly lower and to maintain losses into the afternoon.  The Portfolio is 50% net long heading into the week.