Wednesday Watch

Evening Headlines

Bloomberg:            

• Huarong Shares Resume Trading After Bailout: Evergrande Update.
• WHO Official Downplays Coronavirus Variant Found in France.
• North Korea Apparently Fires Missile After Kim Dismisses Talks.
• Asian Stocks Steady as Fed Rate Outlook Mulled: Markets Wrap.  
• Oil Holds Gain After OPEC+ Adds More Output as Market Tightens.   
  
• At CES, Chipmakers Show Off Plans to Go After Each Other’s Turf.  
• California Adopts Water Restrictions as Drought Drags on.  
• Jerome Powell’s Confirmation Hearing for Second Term Set for Jan. 11.  
• Drubbing in Tech Marks Biggest New-Year Stock Rotation Since ’95.  
• Treasury Yield Curve Steepens on Bet Fed Sticks to Hawkish Path.   
• NYC Economic Recovery to Lag Until 2025 Despite Revenue Growth.

Wall Street Journal:

• In Elizabeth Holmes Trial, U.S. Gave Patients a Small Stage.
• Manchin Deflates Democrats’ Hopes of Changing Filibuster, Passing Election Bills.
• Evergrande Told to Tear Down 39 Buildings on Man-Made Island.
• Lockdown of Chinese City Leaves 13 Million Stranded.
• Bloomberg Media CEO Justin Smith Steps Down to Found News Startup.
• Oil Jumps as OPEC Sees Limited Omicron Impact.

Fox News:

• Social media explodes after VP Harris sends 'tone-deaf' tweet about American infrastructure.
• State officials lay blame for travel disaster that stranded drivers overnight.
  

CNBC.com:

• CDC declines to add Covid testing recommendation to updated isolation guidance despite criticism.
• Global supply chain pressures may have peaked, a new index suggests.
• KFC to launch plant-based fried chicken made with Beyond Meat nationwide.
• Alphabet grants tens of millions of dollars in stock awards to top execs.

MarketWatch                   

• Dow set for best ‘Santa Claus’ rally in 13 years as blue-chip gauge extends record run.  
• 23 dividend stocks that can pass this strict quality screen.

Zero Hedge:

• Governments Admit Using 'Mass Formation Psychosis' As Tool of Population Control.
• CDC Director Walensky Flip-Flops On PCR Testing Guidance.
• Ron Paul: Taking Back Our Liberty In 2022.
• State Of Emergency Declared In Kazakhstan's Largest City After Fuel Price Riots, Internet Cut.
• Democrats Face Brutal Reckoning With Hispanic Voters.
• US Launches Preemptive Strike On "Rocket Sites" Near Occupied Syrian Oil Fields.
• Google Manipulates Results As "Mass Formation Psychosis' Searches Explode Due To Collapsing COVID Narrative.
• CDC Changes Booster Guidelines (Again) As US Reports Record Cases.
• 2021 Auto Sales Are In: Ford Shares Surge On F-150 Demand, Toyota Overtakes GM In U.S.
• Rand Paul Vows To Bring Fauci To Justice If GOP Wins Back Senate In Midterms.
• WTI Shrugs Off Major Product Builds Last Week, Big Crude Inventory Draw.
• They Said They Would Slow The Spread.
• Veteran Journo Resigns From CBC, Pens Scathing Indictment Of Canadian Narrative-Shaping Industry.
• Bond Bloodbath Batters Big-Tech, Sparks Bid For Banks.

Newsmax:

• Newsmax to Air 'Day of Outrage' for Jan. 6 Anniversary.
• Rep. McCarthy: Dems Using Jan. 6 Event to 'Divide' Country.
• Rep. Buck: Expect GOP to Take Over 25 House Seats in 2022.

TheGatewayPundit.com:  

• BREAKING: Georgia Investigators have ‘Ballot Trafficker’ Who Is Talking — Admits to Being Paid THOUSANDS in 2020 Election Ballot Boxes Ballot Harvesting Scheme — Via True the Vote.
• Kachelman: If Schumer and the Democrats Pass HR1 – The Democracy is Over.
• “The Associated Press” Releases Trashy Smear Piece on Veteran Ashli Babbitt in Honor of January 6th.
• Biden Looks Horrible After His Talk Yesterday – Sits and Ignores Questions with a Creepy Look on His Face.
• Joe Biden Instructs Parents to Not Let Their Children Play with Kids Who Aren’t Vaccinated (VIDEO).
• 25-Year-Old Guatemalan Soccer Star Dies After Suffering Heart Attack in Training.
• Biden Disapproval Hits New High; Voters Unhappy with Handling of Economy, Covid.
• Joe Biden’s America: Record 4.5 Million Americans Quit Their Jobs in November.

The Epoch Times: 

• China’s Harshest Lockdown Yet Tests Its ‘Zero-COVID’ Playbook.

Twitter:

•  @DiscloseTV - NEW Emmanuel Macron denounced France's 5 million unvaccinated as "non-citizens" and vows: "I really want to piss them off. And so we will continue to do so, to the bitter end. That's the strategy." (Le Parisien) German Health Minister demands more Covid restrictions and faster progress on compulsory vaccinations before they "become obsolete" due to "dirty" natural infections.

OpenVAERS:

• VAERS US COVID Vaccine Adverse Event Reports. 709,083 Reports(+7,757 from prior week) Through December 24, 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 -.25% to +.5% on average.

• Asia Ex-Japan Investment Grade CDS Index 75.0 -1.75 basis points. 

• China Sovereign CDS 39.25 unch.
  

• Bloomberg Emerging Markets Currency Index 53.68 -.17%. 
• Bloomberg Global Risk-On/Risk Off Index 3,441.0 -9.0 points.
• Volatility Index(VIX) futures 21.4 +.4%.
• Euro Stoxx 50 futures +.17%.

• S&P 500 futures -.12%.

• NASDAQ 100 futures -.21%. 

Morning Preview Links

Earnings of Note 
Company/Estimate 

 

Before the Open: 

• (RPM)/.83
• (SMPL)/.34
  

After the Close:

• (RGP)/.38

Economic Releases

8:15 am EST

• The ADP Employment Change for Dec. is estimated to fall to 400K versus 534K in Nov.

2:00 pm EST

• Dec 15th FOMC meeting minutes.

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Eurozone Services PMI report, weekly MBA Mortgage Applications report, CES 2022,  Goldman Energy/Clean Tech Conference, (FDS) investor call and the Morgan Stanley Auto Conference 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 industrial and commodity shares in the region. I expect US stocks to open modestly lower and to rally into the afternoon, finishing mixed. The Portfolio is 75% net long heading into the day.

Stocks Slightly Higher into Final Hour on Diminished Global Virus Mandate/Lockdown Fears, Sector Rotation, Oil Gain, Commodity/Financial Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line:  Substantially Lower
  

• Sector Performance:  Mixed
  

• Volume:  Above Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 17.2 +3.6%
• Bloomberg Global Risk On/Risk Off Index 3,422.0 +103.0 points

• Euro/Yen Carry Return Index 135.11 +.6%

• Emerging Markets Currency Volatility(VXY) 11.2 +.5%

• CBOE S&P 500 Implied Correlation Index 26.4 -.1% 

• ISE Sentiment Index 115.0  +23.0 points
  

• Total Put/Call .81 +8.0%

• NYSE Arms .68 +3.0%

Credit Investor Angst:

• North American Investment Grade CDS Index 49.66 +.35%
  

• US Energy High-Yield OAS 384.38 +.39%

• European Financial Sector CDS Index 54.67 -.18%

• Italian/German 10Y Yld Spread 134.0 +2.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 75.3 -2.3%
  

• Emerging Market CDS Index 189.5 +1.7%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 32.97 +.08%

• 2-Year Swap Spread 18.75 -.75 basis point
  

• TED Spread 14.0 -4.0 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap 2.0 unch.
  
• MBS  5/10 Treasury Spread  70.0 unch.
  
• IHS Markit CMBX BBB- 6 72.0 unch.
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 53.71 -.64%
• 3-Month T-Bill Yield .07% +2.0 basis points
  

• Yield Curve 85.0 +4.5 basis points
  

• China Iron Ore Spot 123.75 USD/Metric Tonne +2.3%

• Citi US Economic Surprise Index 14.0 -3.9 points

• Citi Eurozone Economic Surprise Index 40.7 +4.3 points
  

• Citi Emerging Markets Economic Surprise Index 2.1 +1.2 points

• 10-Year TIPS Spread 2.61 -2.0 basis points
• 36.8%(-2.7 percentage points) chance of no change at March 16th FOMC meeting, 23.4%(-1.3 percentage points) chance of no change at May 4th meeting

US Covid-19:

• 1,035 new infections/100K people(last 7 days total) +144/100K people
• New Covid-19 patient hospital admissions per 100K population -10.4%(+12.4 percentage points) from peak 7-day avg. of 1/3/21-1/9/21
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -7 open in Japan 
• China A50 Futures: Indicating -38 open in China

• DAX Futures: Indicating -21 open in Germany

Portfolio:

• Slightly Higher: On gains in my industrial/transport sector longs and index hedges

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

• Market Exposure:  75% Net Long
  

Bear Radar

Style Underperformer:

• Mid-Cap Growth -2.5%

Sector Underperformers:

• 1) Social Media -3.5% 2) Digital Health -3.4% 3) Software -3.2%

Stocks Falling on Unusual Volume: 

• NDAQ, DHR, TTGT, TW, NCNO, VECO, PFE, OCDX, DCPH, WMG, AOSL, COUP, TMO, ALGM, ETSY, ZTS, BBIO, PAYC, BLKB, PKI, OYST, FTNT, AVLR, AMD, WDAY, GNRC, SQ, SYNH, CRWD, QDEL, HOOD, NOW, NOTV, DDOG, MDB, MTTR, DT, AMBA, ARRY, DASH, YOU, PRCH, CNM, NVTA, SNOW, PINS, HUBS, CYRX, ITOS, PAY, LAW, SPT, FLGT, WEAV, NET, BILL, IAS and ITCI
  

Stocks With Unusual Put Option Activity:

• 1) GPRO 2) SIRI 3) GRWG 4) WM 5) IGT
  

Stocks With Most Negative News Mentions:

• 1) ZME 2) HLGN 3) JWEL 4) ITCI 5) STNE
  

Charts:

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

Bull Radar

Style Outperformer:

• Mid-Cap Value +1.0%

Sector Outperformers:

• 1) Oil Service +4.4% 2) Banks +3.6% 3) Energy +3.2%

Stocks Rising on Unusual Volume:

• F, RETA, LPI, OXY, VSTO, GM, DISCA, AXL, VNOM, HAL, ESTE, FIBK, SCHW, DE, OPI, TALO, BAC, ISBC, WFC, JPM, PB, MP, XOM, CNR, VIAC, EWBC, FRC, SNV and GS
  

Stocks With Unusual Call Option Activity:

• 1) DISCK 2) TXMD 3) COF 4) XLB 5) RF

Stocks With Most Positive News Mentions:

• 1) NEX 2) PSTV 3) HAL 4) RETA 5) ICNB
  

Charts:

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

Mid-Day Market Internals

NYSE Composite Index:

• Volume Running +25.9% Below 100-Day Average 
• 6 Sectors Rising, 5 Sectors Declining
• 48.8% of Issues Advancing, 48.3% Declining
• 84 New 52-Week Highs, 36 New Lows
• 51.9% of Issues Above 200-day Moving Average
• Average 14-Day RSI 49.8% 
• Bloomberg Global Risk-On/Risk-Off Index 3,437.0 +117.0 points
• Russell 1000: Growth/Value 17,815 -2.5%
  
• Vix 17.0 +2.6%
• Total Put/Call .80 +6.7%
• TRIN/Arms .68 +3.0%

Tuesday Watch

Evening Headlines

Bloomberg:            

• Chinese City Put in Partial Lockdown; HK Cluster: Virus Update.
• China’s $708 Billion Race for Cash Adds Pressure on PBOC to Ease.   
• Star China Stock Fund Manager Suffers a Disastrous 2021.  
• Australia Housing Boom Fades as Melbourne Falls, Sydney Slows.
• Coal Prices Forecast to Surge Again if Indonesia Halts Exports.  
• Venezuela Doubles Crude Oil Exports Defying U.S. Sanctions.
  
• Asia Stocks Track U.S. Gains; Treasuries Hold Drop: Markets Wrap.  
• Oil Steadies Near $76 Ahead of OPEC+ Meeting on Supply Policy.
• Omicron Cases Are Hitting Highs, But New Data Puts End in Sight.
• Elizabeth Holmes Found Guilty in Theranos Fraud Trial.  
• Elon Musk’s Fortune Climbs $30 Billion on Tesla’s Record Quarter for Deliveries.  
• No End in Sight for Auto Sales Slump on Chip-Constrained Output.   
• Jeffrey Epstein Paid Prince Andrew Accuser $500,000 in 2009 Settlement.

Wall Street Journal:

• Zuckerbucks Shouldn’t Pay for Elections. It fans mistrust to let private donors fund official voting duties.
• China Is Haunted by Its One-Child Policy.
• Covid Brings America’s Beer-vs.-Liquor Rivalry to a Head.
• Andrew Cuomo Nursing-Home Probe Ends.
• Tesla Opens Showroom in China’s Xinjiang.
• GM, VW Build Up Battery Supply Chains Amid EV Push.
• Steelmakers Dive Into Junk Business to Feed New Mills.

Fox News:

• DeSantis gets last laugh with joke about liberals from strict states flocking to vacation maskless in Florida.
• Masks and vaccines aren't saving Dem cities from COVID - here's proof.
  

CNBC.com:

• Jury finds Theranos founder Elizabeth Holmes guilty on multiple charges in criminal fraud trial.
• Tesla stock closes up 13% after reporting record vehicle deliveries for 2021.
• Apple’s rise to $3 trillion market cap shows the value of its massive share buybacks.
• Markets and the economy brace as the Federal Reserve’s first rate hike could come in two months. 
  
• Airline stocks surge as investors shrug off more than 3,000 new flight cancellations.

Zero Hedge:

• Life Insurance CEO Says Deaths Up 40% Among Those Aged 18-64.
• Iran Demands Trump Be Put On Trial For Soleimani Killing: "Muslims Will Take Revenge". 
• "Year Of The Super Billionaire" - World's Richest Earned More Than $1 Trillion In 2021. 
• Johnstone: Those Who Support Internet Censorship Lack Psychological Maturity.
• Jury Finds Theranos' Founder Elizabeth Holmes Guilty Of Fraud And Conspiracy.
• The Truths We Dared Not Speak In 2021.
• Byron Wien Releases 10 Surprises For 2022: Stocks Slump, Gold Jumps, 'Green New Deal' Goes Nowhere.
• Twitter Suspends Grabien Media For Quoting Congressman.
• LA County Teachers Now Have To Wear 'High-Quality' Masks: Health Department.
• What If The Largest Experiment On Human Beings In History Is A Failure?
• The Mainstream Media Is Losing The Fight Of Its Life...All Thanks To Joe Rogan.
• Biden Gives Ukraine's President 'Assurances' Of What US Will Do To Russia.
• Woman Arrested After Allegedly Injecting Teen With Vaccine On New Year's Eve.
• Bonds & Bullion Battered As Big-Tech Takes Off To Start The New Year.

Newsmax:

• Rep. Gohmert: Marjorie Taylor Greene's Ban on Twitter Orwellian.
• Many Schools Delaying Openings Over Omicron, Even as Others Regard It as Low-Risk Variant.  
• Rep. Perez: AOC's Fla. Jaunt Exposed Her 'Hypocrisy'.

TheGatewayPundit.com:  

• UPDATE: Stalinist Censorship of Gateway Pundit by T-Mobile Makes It on their Members Board — Users Urge Calls to State Attorneys General.
• Schumer Says Senate will Vote to Ditch Filibuster to Advance ‘Voting Rights’ Bill – Making it Easier for Democrats to Steal Elections.
• White House Releases Creepy Video Pushing Vaccines on Kids Who Have 99.995% Chance of Surviving COVID.
• Collusion: Facebook Suspends Rep. Marjorie Taylor Greene For ‘Misinformation’ One Day After Twitter Ban.
• Biden Shocked to Learn the Price of Beef Has Skyrocketed (VIDEO).
• “Couldn’t be Bothered to Vote”: MTG RIPS RINO Dan Crenshaw For Refusing to Show Up When It Counts – Often Allowing Radical Dem Proposals to Pass By Just ONE Vote.
• BREAKING: Feds Finally Admit to Running Secretive DOJ “Commandos” at Jan. 6 Trump Protests.
• ‘Will be Used Whether We Like it or Not’ – Developer of Covid Microchip Says There’s No Stopping Roll-Out.
• WATCH: Fauci Caught Lying AGAIN, Claims Non-mRNA Vaccines Like “Covaxin” Have Not Been Approved In the US Because “They Have Not Applied” – Turns Out, They HAVE.
• AOC Exposed Again at Drag Queen Event with No Mask In Miami – While Her Home State New York Crumbles Under COVID Tyranny and Socialist Policies.

The Epoch Times:  

• Third Independent Media Shuts in Wake of Hong Kong Police’s Arrest and Raid of Another Publication.

Twitter:

• @Krommsan - Love or hate #Fauci , in March of 2020, he explains how they rushed the #vaccine 1/2 way through the video is where we are now. 
• @21stCenturyWire - WATCH as this #CVS pharmacist in America, after a concerned citizen confronts him on the #Covid shot ingredients, has a mental episode and possibly an epiphany in the process. Incredible! (video)
  

OpenVAERS:

• VAERS US COVID Vaccine Adverse Event Reports. 691,883 Reports(+9,243 from prior week) Through December 17, 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 +.5% to +1.0% on average.

• Asia Ex-Japan Investment Grade CDS Index 76.75 -1.25 basis points. 

• China Sovereign CDS 39.25 -.75 basis point.
  

• Bloomberg Emerging Markets Currency Index 54.11 +.1%. 
• Bloomberg Global Risk-On/Risk Off Index 3,347.0 +28.0 points.
• Volatility Index(VIX) futures 21.5 +.4%.
• Euro Stoxx 50 futures -.02%.

• S&P 500 futures -.02%.

• NASDAQ 100 futures +.04%. 

Morning Preview Links

Earnings of Note 
Company/Estimate 

 

Before the Open: 

• None of note
  

After the Close:

• (JEF)/1.31
• (SGH)/2.00
  

Economic Releases

10:00 am EST

• ISM Manufacturing for Dec. is estimated to fall to 60.0 versus 61.1 in Nov.
• ISM Prices Paid for Dec. is estimated to fall to 79.3 versus 82.4 in Nov.
• JOLTS Job Openings for Nov. is estimated to rise to 11057K versus 11033K in Oct.

Afternoon:

• Wards Total Vehicle Sales for Dec. is estimated to rise to 13.1M versus 12.86M in Nov.

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The OPEC meeting, Eurozone Retail Sales report, weekly US retail sales reports, (AMD) product premiere, (INTC) CES news conference and the (AMBA) investor event 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 financial and commodity 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.