Mid-Day Market Internals

NYSE Composite Index:

• Volume Running +17.7% Above 100-Day Average 
• 6 Sectors Rising, 5 Sectors Declining
• 56.7% of Issues Advancing, 39.7% Declining
• 38 New 52-Week Highs, 153 New Lows
• 56.5% of Issues Above 200-day Moving Average
• Average 14-Day RSI 53.0% 
• Bloomberg Global Risk-On/Risk-Off Index 3,323.0 +73.0 points
• Russell 1000: Growth/Value 17,465 -.19%
  
• Vix 19.5 -1.2%
• Total Put/Call .98 -6.7%
• TRIN/Arms .75 -3.9%

Thursday Watch

Evening Headlines

Bloomberg:            

• Wall Street Loves China More Than Ever.  
• U.K. Inflation Concerns Hit the Highest on Record for Businesses.   
• Turmoil in Uranium-Rich Kazakhstan Threatens to Boost Prices. 
• Supermarkets Limit Purchases as Australian Supply Chains Hobbled.
• Asia Stocks Decline as Tech Rout Deepens on Fed: Markets Wrap.  
• Oil Falls on Tighter U.S. Monetary Policy, China Demand Angst.  
• Deep Freeze Disrupts Crude Flows in Oil Sands and Bakken Shale.
• Heaviest Tech Selling in a Decade Fueled Stock-Market Rate Rout.
  
• Fed Minutes Flag Chance of Earlier Hikes, Balance-Sheet Rundown.
  
• Bitcoin Declines to Lowest Level Since December’s Flash Crash.
• U.S. Attorney General Garland Vows to Go After All Jan. 6 Perpetrators ‘at Any Level’.  
• Rapid Covid Tests Are Reselling for Triple the Retail Price.  
• Debate Emerges Over How to Shrink Fed’s $8 Trillion Bond Pile.  
• Stock, Bond Market’s Worst Start in Decade Revives 60/40 Doubt.

Wall Street Journal:

• Fed Minutes Point to Possible Rate Increase in March.
• Auto Makers Supercharge Move Into Electric Vehicles.
• Inside a Covid-19 School Closing: A Pennsylvania Superintendent Agonizes Over Going Remote.
• Airlines Scrap Over 1,000 Flights for 11th Straight Day.
• Europe’s Trade Czar Walks Line Between U.S. and China.
• Best of CES 2022: New Tech That’s Practical, Innovative or Just Plain Crazy.

Fox News:

• 'Corrupt' and 'evil' teachers ignore Biden, and refuse to go back into classroom as students suffer.
• Chicago mayor threatens to withhold pay after teachers union votes against in-person classes.
• Another Dem caught maskless enjoying Florida’s freedom days after AOC. 
• Disney+ actress Kim Mi-soo dies 'suddenly' at just 29.

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:

• Federal Reserve puts wheels in motion for balance sheet reduction.
• CDC panel recommends Pfizer boosters for 12- to 15-year-olds amid omicron surge.
• Nike sues Lululemon for patent infringement over at-home Mirror gym and fitness apps.
• GM unveils Cadillac self-driving concept car, plans for personal autonomous vehicles by mid-decade.
• Roku tumbles 12% after analyst says competition from Amazon, Google is stunting user growth.

MarketWatch:

• Tech stocks get off to worst start to a calendar year since the 2008 financial crisis  
• Bitcoin, ether tumble after Fed minutes show talk of quicker end to easy policy stance.

Zero Hedge:

• Walensky Vs. Fauci Continues After CDC Director Says 'No Plans' To Change Definition Of 'Fully Vaccinated'.
• What Spooked Markets So Badly In Today's Fed Minutes? JPMorgan, Goldman Explain.
• President Biden Called Elizabeth Holmes "Inspiring", Praised Theranos As "Lab Of The Future" In 2015.
• Rivian Shares Plunge After Amazon Agrees To "Significant" EV Van Deal With Stellantis.
• Amid Hospital Bed Scare, Why Has Pritzker Admin Let Supply Of Illinois ICU Beds Collapse?
• The Defenestration Of Dr. Robert Malone.
• Ningbo Port Activity Grinds To A Halt As China Outbreak Worsens.
• Finally, Bloomberg Admits Renewables Mania Caused Energy Shortages.
• Russian-Led Bloc Agrees To Send Troops To Restore Order In Kazakhstan.
• Japan Boosts Coast Guard Over China's Patrols Near Senkaku Islands.
• "Get Ready" For Another Snowstorm To Blast Northeast.
• Kim Signals He's Boosting Arsenal As North Korea Claims It Test-Fired A Hypersonic Missile.
• A March Rate Hike? Not So Fast.
• First Two 'Flurona' Cases Detected In US: Officials.
• So Now It Has Been 666 Days Since A Pandemic Was Officially Declared...
• Cathie Wood's ARKK Sinks With Record 45% Drawdown.
• Markets Turmoil As FOMC Minutes Spark Surge In Rate-Hike-Odds.

Newsmax:

• Texas AG Ken Paxton: Guard Vaccine Mandate Violates Federal Law.
• Newsmax to Air 'Day of Outrage' for Jan. 6 Anniversary.

TheGatewayPundit.com:  

• Dr. Fauci Admits Definition of Fully Vaxxed is Changing: ‘Up-to-Date’ Shots Replacing ‘Fully Vaccinated’.
• Manhattan’s New Soros-Backed DA Orders Armed Robberies to Be Charged as Mere Misdemeanors.
• HUGE! Georgia Ballot Trafficking Whistleblower Admits to Making $45,000 for Stuffing Ballot Boxes — Just One of 242 Traffickers — HUNDREDS OF THOUSANDS of Ballots? (VIDEO).
• Dystopia Down Under: Australia Denies Entry to World’s Number One Tennis Player Novak Djokovic After Being Granted Immunity from COVID-19 Vaccination Exemption.
• Dominion is Panicking in Pennsylvania Because Their Machines Likely Weren’t Properly ‘Hardened’ and Shouldn’t Have Ever Been Put in Use. 
• Psaki Says Joe Biden Will Spend Tomorrow Attacking Trump For Jan 6 “Insurrection” That Never Happened as Everything Around Biden Crumbles (VIDEO).
• 36-Year-Old Brazilian Reporter Collapses and Suffers Cardiac Arrest During Live TV Broadcast (VIDEO).
• Bannon and Dr. Peter Navarro Are Right – Georgia Laws Were Changed Before the 2020 Election Outside the Legislature to Soften Signature Verification.

The Epoch Times:

• China’s Xi Orders Military to Create ‘Elite Force’ to Win Wars
• Taiwan Should Destroy Island’s Semiconductor Plants If China Invades, Paper Says.

The Center Square:

• Indiana life insurance CEO says deaths are up 40% among people ages 18-64. “Just to give you an idea of how bad that is, a three-sigma or a one-in-200-year catastrophe would be 10% increase over pre-pandemic,” he said. “So 40% is just unheard of.” Most of the claims for deaths being filed are not classified as COVID-19 deaths, Davison said.

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 -1.25% to -.5% on average.

• Asia Ex-Japan Investment Grade CDS Index 76.5 +1.5 basis points. 

• China Sovereign CDS 40.5 +1.25 basis points.
  

• Bloomberg Emerging Markets Currency Index 53.52 -.08%. 
• Bloomberg Global Risk-On/Risk Off Index 3,222.0 -28.0 points.
• Volatility Index(VIX) futures 22.6 -.2%.
• Euro Stoxx 50 futures -1.36%.

• S&P 500 futures +.12%.

• NASDAQ 100 futures +.19%. 

Morning Preview Links

Earnings of Note 
Company/Estimate 

 

Before the Open: 

• (ANGO)/.00
• (BBBY)/.01
• (CAG)/.68
• (STZ)/2.79
• (HELE)/3.16
• (LNN)/.88
• (SCHN)/1.74
• (WBA)/1.34
  

After the Close:

• (EDU)/.00
• (PSMT)/.91
• (WDFC)/1.25
  

Economic Releases

7:30 am EST

• Challenger Job Cuts YOY for Dec.

8:30 am EST

• The Trade Balance for Nov. is estimated to widen to -$81.0B versus -$67.1B in Oct.
• Initial Jobless Claims for last week is estimated to fall to 195K versus 198K the prior week.
• Continuing Claims is estimated to fall to 1680K versus 1716K prior.
  

10:00 am EST

• The ISM Services Index for Dec. is estimated to fall to 67.0 versus 69.1 in Nov.
• Factory Orders for Nov. is estimated to rise +1.5% versus a +1.0% gain in Oct.
• Factory Orders Ex Transports for Nov. is estimated to rise +1.1% versus a +1.6% gain in Oct.
  

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Eurozone Industrial Production report and the weekly EIA natural gas inventory report could also impact global trading today.

US Equity Market Hours

• 9:30 am - 4:00 pm EST
  

BOTTOM LINE: Asian indices are lower, weighed down by technology and commodity 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 Falling Substantially into Final Hour on Less Dovish Fed Commentary, Rising Long-Term Rates, Sector Rotation, Tech/Alt Energy 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) 18.1 +7.0%
• Bloomberg Global Risk On/Risk Off Index 3,370.0 -80.0 points

• Euro/Yen Carry Return Index 135.33 +.17%

• Emerging Markets Currency Volatility(VXY) 11.0 -1.5%

• CBOE S&P 500 Implied Correlation Index 28.8 +11.3% 

• ISE Sentiment Index 104.0  -8.0 points
  

• Total Put/Call .93 +16.3%

• NYSE Arms .90 +50.0%

Credit Investor Angst:

• North American Investment Grade CDS Index 51.02 +2.9%
  

• US Energy High-Yield OAS 384.64 -.31%

• European Financial Sector CDS Index 55.81 +2.1%

• Italian/German 10Y Yld Spread 132.0 -2.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 75.75 +.44%
  

• Emerging Market CDS Index 195.37 +3.0%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 32.84 -.41%

• 2-Year Swap Spread 19.5 +.75 basis point
  

• TED Spread 12.5 -1.5 basis points
  

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

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 53.59 -.35%
• 3-Month T-Bill Yield .08% +1.0 basis point
  

• Yield Curve 88.5 +3.5 basis points
  

• China Iron Ore Spot 126.10 USD/Metric Tonne +2.1%

• Citi US Economic Surprise Index 15.4 +1.4 points

• Citi Eurozone Economic Surprise Index 38.0 -2.7 points
  

• Citi Emerging Markets Economic Surprise Index 2.3 +.2 point

• 10-Year TIPS Spread 2.55 -6.0 basis points
• 28.6%(-8.2 percentage points) chance of no change at March 16th FOMC meeting, 17.2%(-6.2 percentage points) chance of no change at May 4th meeting

US Covid-19:

• 1,150 new infections/100K people(last 7 days total) +115/100K 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 -192 open in Japan 
• China A50 Futures: Indicating -54 open in China

• DAX Futures: Indicating -120 open in Germany

Portfolio:

• Slightly Lower: On losses in my consumer discretionary/tech/medical/transport sector longs

• 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 Growth -2.7%

Sector Underperformers:

• 1) Gambling -4.2% 2) Alt Energy -4.0% 3) Software -3.6%

Stocks Falling on Unusual Volume: 

• VSTO, FIGS, PAR, MRNA, PTCT, SBAC, MP, RQI, WSM, MDB, ADBE, DDOG, BLKB, SQ, PAYC, AMT, HOOD, SMPL, ARE, LAW, CRM, HMHC, HYFM, PEGA, ARCB, TOST, FRSH, HUBS, MTTR, SWIM, BPMC, AMBA and SGH
  

Stocks With Unusual Put Option Activity:

• 1) TRIP 2) CAG 3) RSX 4) GLW 5) GRWG
  

Stocks With Most Negative News Mentions:

• 1) GOCO 2) ENPH 3) CRM 4) ADBE 5) AMT
  

Charts:

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

Bull Radar

Style Outperformer:

• Large-Cap Value +.4%

Sector Outperformers:

• 1) Steel +2.5% 2) Energy +1.0% 3) Foods +.9%

Stocks Rising on Unusual Volume:

• EWTX, SAVA, CLF, NUE, STLD, INSP, X, VNOM, T, VC, ACI, GPN, WEX and MRK
  

Stocks With Unusual Call Option Activity:

• 1) ZEN 2) MPC 3) EWC 4) VMW 5) STLD

Stocks With Most Positive News Mentions:

• 1) ICCC 2) SRTS 3) CCJ 4) NUE 5) WEX
  

Charts:

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

Afternoon Market Internals

NYSE Composite Index:

• Volume Running +15.5% Above 100-Day Average 
• 7 Sectors Rising, 4 Sectors Declining
• 45.7% of Issues Advancing, 49.8% Declining
• 91 New 52-Week Highs, 55 New Lows
• 53.9% of Issues Above 200-day Moving Average
• Average 14-Day RSI 51.6% 
• Bloomberg Global Risk-On/Risk-Off Index 3,420.0 -30.0 points
• Russell 1000: Growth/Value 17,598 -1.8%
  
• Vix 17.4 +2.8%
• Total Put/Call .89 +11.3%
• TRIN/Arms .79 +31.7%