Morning Market Internals

NYSE Composite Index:

• Volume Running +13.9% Above 100-Day Average 
• 5 Sectors Rising, 6 Sectors Declining
• 35.4% of Issues Advancing, 60.4% Declining
• 36 New 52-Week Highs, 221 New Lows
• 53.2% of Issues Above 200-day Moving Average
• Average 14-Day RSI 49.0% 
• Bloomberg Global Risk-On/Risk-Off Index 3,279.0 -89.0 points
• Russell 1000: Growth/Value 16,817 -.26%
  
• Vix 23.8 +4.5%
• Total Put/Call .87 -14.7%
• TRIN/Arms .77 +20.3%

Wednesday Watch

Evening Headlines

Bloomberg:       

• PBOC Pledges to Avoid Credit Collapse: Evergrande Update.  
• Xi Jinping’s Covid Defense Gets Weaker With Every Omicron Case.  
• Australia Consumer Sentiment Slips in January on Omicron Surge.
• Stocks Extend Drop as Treasury Yields Stay Higher: Markets Wrap.  
• Oil Jumps Higher After Hitting 8-Year High on Iraq Pipe Blast.  
• Dwindling OPEC+ Spare Capacity Sets Oil Up for Sizzling Summer.
• Five Reasons Microsoft Is Making Activision Blizzard Its Biggest Deal Ever.
  
• Activision’s CEO Is Looking at $375 Million Payday in Microsoft Sale.
  
• NYC Property Values Projected to Rise 8.2% as Homebuyers Return.  
• Goldman’s Record Expenses Show Ballooning Costs of Talent War.  
• Ford Sees $8.2 Billion Gain on Its Investment Following Rivian’s IPO.

Wall Street Journal:

• Cancel Culture Targets Charity. Left-wing political activists want to destroy America’s long tradition of private philanthropy.  
  
• Gilead Alleges Counterfeiting Ring Sold Its HIV Drugs.
• Microsoft Expands Its Videogame Business With Activision Deal.
• U.S. Aims Sanctions at Pro-Russian Agents as Blinken Plans Ukraine, Russia Meetings.
• Sanders Says He Is Open to Supporting Primary Challenges to Sinema, Manchin.

Fox News:

• Suspect caught on camera just minutes after UCLA student sent 'bad vibe' text and was horrifically killed.
• Stunning stat about murder in US today as major cities shatter bloody records.
• Watchdog says Fauci 'profited' from COVID and vows to expose more records.

CNBC.com:

• Rising interest rates could keep a choke hold on tech and growth stocks.
• Microsoft sets record for biggest tech deal ever, topping Dell-EMC merger.
• SoFi stock soars after clearing final regulatory hurdle to become a bank.
• Peloton hires McKinsey to review cost structure; cycle maker may cut jobs, close stores.

 MarketWatch:      

• Here’s what history says about Nasdaq’s near-term returns after first close below its 200-day moving average.  
• More than 50% of top crypto companies call U.S. home, despite intensifying regulation, study shows.  
• Verizon, AT&T to limit 5G near airports to prevent flight delays, cancellations.

Zero Hedge:

• Despite Dem Theatrics Over 'Voting Rights' And Racism, Most Blacks Strongly Support Voter ID.
• Rand Paul Wonders If YouTube Will "Kiss My... And Apologize" After CDC Admits Cloth Masks Aren't Effective.
• Will The Fed Surprise With A 50bps Rate Hike: One Bank Explains Why This Could Happen. 
• WHO Crushes Biden COVID Plan, Says "No Evidence At All" That Healthy Kids Needs 'Booster' Jabs.
• Supreme Court To Hear Appeal By Christian High School Football Coach Fired For Praying On The Field.
• Oil Spikes To Fresh 7-Year High After Key Iraq-Turkey Pipeline Explosion.
• MIT-Educated Doctor Ordered To Undergo Psych Evaluation After Prescribing Ivermectin.
• World Anti-Doping Agency Warns Athletes Over Contaminated Chinese Meat Ahead Of Beijing 2022.
• US Gov't Probes Alibaba's Cloud Unit For National Security Risks.
• Experts Are Warning That Empty Shelves And Food Shortages Are Going To Continue For Many Weeks To Come.
• Buy the dip...or sell the dip?
• California Constitutional Amendment Seeks 18% Top Tax Rate For Universal Medicare.
• Fourth COVID Jab Won't Save Patients From Being Infected With Omicron, Study Finds.
• Foreign Holdings Of US Treasuries Hit A Record High In November.
• Psaki Says Russia Attack On Ukraine Coming "At Any Point"; US Sanctions 'Pro-Russian Agents'.
• Bonds, Stocks, & Bitcoin Battered As "Rage-Hike" Fears Grow.

Newsmax: 

• Peter Navarro: Woke Corporations Silent on China Because of the Money.
  
• Liz Harrington: Dems Want Hillary in '24, as She's All They Have.
• Rep. Tenney: Schumer's Push for Doomed Voting Bill 'Bewildering'.

TheGatewayPundit.com: 

• “I Am Upset Because We Don’t Talk Enough About the Side Effects” – Triple Vaccinated Swiss Olympic Athlete Sarah Atcho Develops Pericarditis.
• JUST IN: Pennsylvania Senate Pro Tempore Jake Corman Calls on Leaders of Pennsylvania House to Impeach Radical Philly DA Larry Krasner.
• President Trump Responds To DirecTV Canceling OANN: “Maybe What We Should Do Is NOT Use AT&T” (VIDEO).
• New Photos Show Ashli Babbitt Tried to Stop Protesters from Entering Pelosi’s Lobby — Was Shot Dead by Lt. Mike Byrd in Cold Blood Moments Later.
• Poll: Majority Of Democrats Support Fauci, Quarantine Camps, Fines And Prison Terms For Unvaccinated.
• Fulton County, Pennsylvania Responds to Secretary of State’s Request to Halt 2020 Election Investigation of Dominion Voting Machines in County.
• Media Blackout: Mueller’s Star Witness Pleads Guilty in Illegal Scheme to Funnel Foreign Money to Hillary Clinton’s 2016 Campaign.
• VIDEO: Canadian Truckers Against COVID Tyranny BLOCK HIGHWAY to and From United States – With “Mandate Freedom” Signs.
• We All Know It’s True: 58% of Voters Now Believe Cheating was Likely in 2020 Election — Up from 54%.

The Epoch Times:

• Hong Kong to Kill 2,000 Pets as Chinese Authorities Blame COVID-19 Spread on Imported Animals, Packages.

Twitter: 

• @Krommsan - In case anyone missed their beloved #PfizerCEO say the quiet parts out loud… Pfizer CEO: “Two doses of the vaccine offers very limited protection, if any. 3 doses with a booster offer reasonable protection against hospitalization and deaths. Less protection against infection.” (video)
  
• @SKMorefield - Tucker Carlson & Dr. Scott Atlas discuss how the CDC is finally coming clean after their years-long deception about Covid death numbers. "This was an intentional inculcation of fear in the American public." (video)

OpenVAERS:

• VAERS US COVID Vaccine Adverse Event Reports. 723,041 Reports(+7,185 from prior week) Through January 7, 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 -1.0% to unch. on average.

• Asia Ex-Japan Investment Grade CDS Index 89.25 -.25 basis point. 

• China Sovereign CDS 50.0 unch.
  

• Bloomberg Emerging Markets Currency Index 54.02 -.01%. 
• Bloomberg Global Risk-On/Risk Off Index 3,342.0 -25.0 points.
• Volatility Index(VIX) futures 23.1 -1.3%.
• Euro Stoxx 50 futures -.09%.

• S&P 500 futures +.08%.

• NASDAQ 100 futures +.03%. 

Morning Preview Links

Earnings of Note 
Company/Estimate 

 

Before the Open: 

• (ASML)/3.77
• (BAC)/.76
• (CMA)/1.58
• (FAST)/.37
• (HTLD)/.26
• (MS)/1.96
• (PG)/1.65
• (STT)/1.89
• (USB)/1.10
• (UNH)/4.31
  

After the Close:

• (AA)/2.01
• (DFS)/3.64
• (FUL)/1.08
• (KMI)/.27
• (UAL)/-2.09
  

Economic Releases

8:30 am EST

• Housing Starts for Dec. is estimated to fall to 1650K versus 1679K in Nov.
• Building Permits for Dec. is estimated to fall to 1705K versus 1712K in Nov.
  

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The UK CPI report, 20Y T-Bond auction, weekly US retail sales reports, weekly MBA Mortgage Applications report, CIBC Institutional Investor Conference and the Sidoti Small-Cap Conference 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 technology and financial shares in the region. I expect US stocks to open modestly higher and to weaken into the afternoon, finishing modestly lower. The Portfolio is 50% net long heading into the day.

Stocks Falling Substantially into Afternoon on US Policy-Induced Stagflation Fears, Increasing Russia/Ukraine Tensions, Dollar Strength, Homebuilding/Financial 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) 22.2 +15.9%
• Bloomberg Global Risk On/Risk Off Index 3,393.0 -215.0 points

• Euro/Yen Carry Return Index 133.65 -.73%

• Emerging Markets Currency Volatility(VXY) 9.8 unch.

• CBOE S&P 500 Implied Correlation Index 36.4 +12.8% 

• ISE Sentiment Index 107.0  +5.0 points
  

• Total Put/Call 1.05 -3.7%

• NYSE Arms .96 +50.0%

Credit Investor Angst:

• North American Investment Grade CDS Index 55.16 +3.2%
  

• US Energy High-Yield OAS 374.17 +.4%

• European Financial Sector CDS Index 62.32 +1.7%

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

• Asia Ex-Japan Investment Grade CDS Index 89.28 +3.11%
  

• Emerging Market CDS Index 218.60 +1.7%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 31.25 -1.6%

• 2-Year Swap Spread 19.75 +.25 basis point
  

• TED Spread 11.75 -1.5 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap 2.0 n/a
  
• MBS  5/10 Treasury Spread  89.0 +5.0 basis points
  
• IHS Markit CMBX BBB- 6 72.25 unch.
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 53.94 -.69%
• 3-Month T-Bill Yield .13% +1.0 basis point
  

• Yield Curve 80.5 -.5 basis point
  

• China Iron Ore Spot 129.90 USD/Metric Tonne +1.9%

• Citi US Economic Surprise Index -10.70 -7.8 points

• Citi Eurozone Economic Surprise Index 42.2 +6.3 points
  

• Citi Emerging Markets Economic Surprise Index 15.4 +8.9 points

• 10-Year TIPS Spread 2.49 +1.0 basis point
  
• 0.0%(-13.9 percentage points) chance of no change at March 16th FOMC meeting, 0.0%(-8.1 percentage points) chance of no change at May 4th meeting

US Covid-19:

• 1,409 new infections/100K people(last 7 days total). 82% of 1/14 peak -253/100K people from prior report.
  
• New Covid-19 patient hospital admissions per 100K population -3.4% from peak 7-day avg. of 1/7/21 - 1/13/22
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -230 open in Japan 
• China A50 Futures: Indicating +15 open in China

• DAX Futures: Indicating -10 open in Germany

Portfolio:

• Slightly Lower: On losses in my transport/industrial/tech/medical/consumer discretionary 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) Homebuilding -4.6% 2) I-Banking -3.7% 3) Semis -3.1%

Stocks Falling on Unusual Volume: 

• AXTA, UNP, WGO, RPD, ONEM, GPK, GMED, KMX, KOD, SRG, BURL, COWN, EQT, XPOF, HASI, CXM, IRED, JPM, OPRX, DFH, CHH, PECO, HOOD, OVV, NTRA, ATUS, INSP, ALGN, SIVB, RVMD, PTON, FRC, PII, RH, RXG, MS, VSTO, NTLA, RUN, SCHW, RSI, KBH, RLAY, PCVX, BBW, PACK, EXPI, PACB, SWAV, GPS, RRD, UCTT, TSP, ALLO, OSH, BEAM, EDIT, ACCD, GS, FLGT, CRCT, BRLT, SG, EWCZ, SEM, HAIN and SI
  

Stocks With Unusual Put Option Activity:

• 1) ARCC 2) ATUS 3) ATVI 4) INDA 5) EMB
  

Stocks With Most Negative News Mentions:

• 1) SI 2) SEM 3) GS 4) BNTX 5) GPS
  

Charts:

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

Bull Radar

Style Outperformer:

• Large-Cap Value -1.3%

Sector Outperformers:

• 1) Video Gaming +1.6% 2) Agriculture +.3% 3) Energy +.2%

Stocks Rising on Unusual Volume:

• ATVI, HMHC, BLNK, KSS, EA, CYH, ZGNX, ZS, CTXS, TTWO and CVNA
  

Stocks With Unusual Call Option Activity:

• 1) ATVI 2) BBIG 3) EXAS 4) THC 5) EA

Stocks With Most Positive News Mentions:

• 1) BBIG 2) ERBB 3) CTXS 4) SRGA 5) CTSO
  

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running +18.9% Above 100-Day Average 
• 1 Sector Rising, 10 Sector Declining
• 18.5% of Issues Advancing, 78.0% Declining
• 57 New 52-Week Highs, 195 New Lows
• 53.2% of Issues Above 200-day Moving Average
• Average 14-Day RSI 49.0% 
• Bloomberg Global Risk-On/Risk-Off Index 3,420.0 -88.0 points
• Russell 1000: Growth/Value 16,937 -.40%
  
• Vix 22.4 +16.5%
• Total Put/Call 1.05 -3.7%
• TRIN/Arms .77 +20.3%