Thursday Watch

Night Trading 

• Asian equity indices are -.25% to +1.25% on average.

• Asia Ex-Japan Investment Grade CDS Index 90.75 -.25 basis point. 

• China Sovereign CDS 50.0 unch.
  

• Bloomberg Emerging Markets Currency Index 54.44 -.08%. 
• Bloomberg Global Risk-On/Risk Off Index 3,385.0 +3.0 points.
• Volatility Index(VIX) futures 24.8 +4.7%.
• Euro Stoxx 50 futures -.27%.

• S&P 500 futures -1.0%.

• NASDAQ 100 futures -2.3%. 

Morning Preview Links

Earnings of Note 
Company/Estimate 

 

Before the Open: 

• (ABB)/.35
• (ABMD)/.97
• (APTV)/.56
• (BDX)/2.85
• (BIIB)/3.38
• (CAH)/1.23
• (CI)/4.71
• (COP)/2.18
• (CMI)/3.14
• (LLY)/2.51
• (EL)/2.64
• (HSY)/1.61
• (HON)/2.08
• (ITW)/1.91
• (ICE)/1.32
• (MRK)/1.52
• (PH)/3.93
• (PENN)/.52
• (DGX)/3.18
• (RL)/2.18
• (SNA)/3.29
  

After the Close:

• (ATVI)/1.32
• (AMZN)/3.54
• (BILL)/-.18
• (BYD)/1.25
• (CLX)/.18
• (CUZ)/.69
• (DECK)/8.15
• (F)/.41
• (FTNT)/1.15
• (MCHP)/1.17
• (NWSA)/.30
• (PRU)/2.35
• (SKYW)/-.02
• (SWKS)/3.11
• (SNAP)/.10
• (SYNA)/3.12
• (U)/-.07
• (WERN)/.97
  

Economic Releases

7:30 am EST

• Challenger Job Cuts YoY for Jan.
  

8:30 am EST

• 4Q Non-Farm Productivity is estimated to rise +3.9% versus a -5.2% decline in 3Q.
• 4Q Unit Labor Costs are estimated to rise +1.0% versus a +9.6% gain in 3Q.
• Initial Jobless Claims for last week are estimated to fall to 245K versus 260K the prior week.
• Continuing Claims are estimated to fall to 1620K versus 1675K prior.
  

10:00 am EST

• ISM Services Index for Jan. is estimated to fall to 59.6 versus 62.0 in Dec.
• Factory Orders for Dec. is estimated to fall -.4% versus a +1.6$% gain in Nov.
• Factory Orders Ex Transports for Dec. is estimated to rise +.4% versus a +.8% gain in Nov.
  

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The ECB meeting, BofE rate decision, Eurozone Services PMI 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 mostly higher, boosted by consumer and technology shares in the region. I expect US stocks to open lower and to maintain losses into the afternoon. The Portfolio is 75% net long heading into the day.

Stocks Higher into Final Hour on De-escalating Russia/Ukraine Tensions, Lower Long-Term Rates, Earnings Optimism, Healthcare/Homebuilding Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line:  Substantially Lower
  

• Sector Performance: Mixed
  

• Volume:  Around Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 21.3 -2.9%
• Bloomberg Global Risk On/Risk Off Index 3,438.0 +103.0 points

• Euro/Yen Carry Return Index 133.30 +.03%

• Emerging Markets Currency Volatility(VXY) 9.2 -.5%

• CBOE S&P 500 Implied Correlation Index 34.7 -2.0% 

• ISE Sentiment Index 84.0  -3.0 points
  

• Total Put/Call .96 +1.0%

• NYSE Arms 1.06 +19.1%

Credit Investor Angst:

• North American Investment Grade CDS Index 59.1 +.6%
  

• US Energy High-Yield OAS 399.04 -1.2%

• European Financial Sector CDS Index 65.12 -.9%

• Italian/German 10Y Yld Spread 139.0 +1.0 basis point
  

• Asia Ex-Japan Investment Grade CDS Index 91.10 -.08%
  

• Emerging Market CDS Index 204.92 -2.5%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 31.65 -.06% 
• Ukraine Sovereign Debt Credit Default Swap 730.94 -5.2%
  

• 2-Year Swap Spread 16.0 +.5 basis point
  

• TED Spread 12.25 +1.75 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -12.0 +.75 basis point
  
• MBS  5/10 Treasury Spread  86.25 -.75 basis point
  
• IHS Markit CMBX BBB- 6 74.75 unch.
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 54.47 -.04%
• 3-Month T-Bill Yield .18% -2.0 basis points
  

• Yield Curve 63.0 +2.5 basis points
  

• China Iron Ore Spot 141.60 USD/Metric Tonne +2.0%

• Citi US Economic Surprise Index -6.8 -1.2 points

• Citi Eurozone Economic Surprise Index 66.40 +19.3 points
  

• Citi Emerging Markets Economic Surprise Index 29.60 -2.1 points

• 10-Year TIPS Spread 2.43 -3.0 basis points
  
• 0.0%(unch.) chance of no change at May 4th FOMC meeting, 0.0%(unch.) chance of no change at June 15th meeting

US Covid-19:

• 924 new infections/100K people(last 7 days total). 54.0%(-3.0 percentage points) of 1/14 peak -59/100K people from prior report.
  
• New Covid-19 patient hospital admissions per 100K population -22.7%(-1.9 percentage points) from peak 7-day avg. of 1/9/21 - 1/15/22
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -68 open in Japan 
• China A50 Futures: Indicating +162 open in China

• DAX Futures: Indicating +21 open in Germany

Portfolio:

• Higher: On gains in my industrial/commodity/tech sector longs and emerging market shorts
  

• Disclosed Trades:  None
  

• Market Exposure:  100% Net Long
  

Bear Radar

Style Underperformer:

• Small-Cap Growth -1.2%

Sector Underperformers:

• 1) Alt Energy -3.3% 2) Retail -2.5% 3) Internet -2.4%

Stocks Falling on Unusual Volume: 

• DEN, PAR, IEX, APAM, BSX, RRD, GILD, NFLX, ESTE, MRCY, CHRW, SQ, DT, GRPN and PYPL
  

Stocks With Unusual Put Option Activity:

• 1) PYPL 2) ICLN 3) ITB 4) UNG 5) SBUX
  

Stocks With Most Negative News Mentions:

• 1) PYPL 2) ELMS 3) GRPN 4) AFRM 5) LDI
  

Charts:

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

Bull Radar

Style Outperformer:

• Large-Cap Value +.6%

Sector Outperformers:

• 1) Semis +1.9% 2) Road & Rail +1.5% 3) REITs +1.4%

Stocks Rising on Unusual Volume:

• ATI, EAT, ORMP, STAR, GOOGL, GOOG, BCC, AMD, XLNX, QCOM, MTCH, MPC, EQR, EA, GDRX, CRUS, TECH, FUN, MRTN, EXC, SBH, SLAB, HWM and IDXX
  

Stocks With Unusual Call Option Activity:

• 1) AMRS 2) HBI 3) GOOG 4) CHRW 5) AMGN

Stocks With Most Positive News Mentions:

• 1) ATI 2) EAT 3) AMD 4) EMR 5) CPRI
  

Charts:

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

Mid-Day Market Internals

NYSE Composite Index:

• Volume Running +8.2% Above 100-Day Average 
• 9 Sectors Rising, 2 Sectors Declining
• 39.7% of Issues Advancing, 56.8% Declining
• 50 New 52-Week Highs, 32 New Lows
• 38.5% of Issues Above 200-day Moving Average
• Average 14-Day RSI 44.1% 
• Bloomberg Global Risk-On/Risk-Off Index 3,369.0 +33.0 points
• Russell 1000: Growth/Value 16,994.0 -.21%
  
• Vix 22.0 +.05%
• Total Put/Call 1.02 +7.4%
• TRIN/Arms 1.50 +64.0%

Wednesday Watch

Evening Headlines

Bloomberg:     

• U.K. Retailers Raise Prices at Fastest Pace Since 2012, BRC Says.
• Stocks, Futures Rise on Earnings, Easing Fed Angst: Markets Wrap.
• Oil Holds Near Seven-Year High as Traders Count Down to OPEC+.
• OPEC Barely Increased Supply Last Month Amid Chronic Struggles  
• Goldman Sees QT Fueling Treasury Volatility and Hurting Liquidity.
• CME to Launch More Battery-Metals Contracts as Demand Surges.   
• Fewest Americans Ever Are Laid Off in Frenzy to Retain Workers.  
• Ford to Spend Up to $20 Billion Reorganizing for Shift to Electric Cars.  
• Fed Won’t Be Rushed in Its Hiking Path by Wall Street Frenzy.
• Invesco to Hire Dozens in China as Assets Sail Past $100 Billion.
• Biden Consults With Key Senators on Supreme Court Nominee.  
• A Major Homebuilder Sees No Improvement Coming to the Supply Chain In 2022.  
• Anxiety Over Beef Shortages Reaches Fever Pitch in Golden Corral Fistfight.

Wall Street Journal:

• Putin Says West Failed to Address His Demands in Ukraine Standoff.
• Russia Confronts Ukraine With Upgraded Military Rebuilt After Soviet Collapse.
• Brian Flores Sues NFL Alleging Discrimination Against Black Coaches. 
• Biden’s Southern Border Crisis Isn’t Going Away. The administration lets a crisis fester, and the Democratic Party will pay a political price. 
• VR to the ER: Metaverse Early Adopters Prove Accident-Prone.

Fox News:

• College shooter kills beloved campus security officers, suspect arrested after massive manhunt.
• Fraternal Order of Police accuses White House press secretary Psaki of laughing off rising crime rates.
• 'Squad,' Dems mum on police funding as crime continues to rise in major cities.
• Top schools ditch vaccine mandates instant new GOP AG turns up heat.

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:

• AMD rises 10% after issuing strong 2022 sales outlook.
• GM forecasts earnings ‘at or near record levels’ in 2022 as chip shortage eases.
• Alphabet reports big fourth-quarter beat; stock pops.
• After a huge year for growth, the U.S. economy is about to slam into a wall.
• Pfizer asks FDA to expand use of Covid vaccine to kids under 5.
• Stocks making the biggest moves after hours: Alphabet, AMD, PayPal and more.

MarketWatch:     

• Gilead earnings slammed by legal settlement, stock falls.
• PayPal stock drops as eBay impacts weigh on earnings outlook.
  
• Starbucks to raise prices as inflation, labor issues hit earnings.  
• Watch: 40-person brawl breaks out in Golden Corral over reported steak shortage.  
• With chicken wing prices rising by as much as 26%, will Super Bowl parties still be happening?

Zero Hedge:

• Quebec Scraps Planned Tax On Unvaccinated Residents Amid Growing Backlash.
• Bill Maher Is Right: It's The Left That Has Gotten More Radical. 
• Taibbi: The British Medical Journal Story That Exposed Politicized "Fact-Checking".
• 500 Dead In Northeast Syria "Major ISIS Comeback Plot".
• San Francisco Residents Flocking To Montana As Demand Has "Exploded".
• Ukraine Drone Strike Kills Separatist Fighter At Donbas Front Line: Russian Media.
• Illinois Democrat Rep. Calls For "Quarantine To Observe" Those Refusing Vaccines.
• WTI Dips After Gasoline Inventories Build For 5th Straight Week.
• Alphabet Explodes 7% Higher After Beating Estimates Across The Board, 20-For-One Stock Split.
• These Were The Best And Worst Performing Assets During January's Rollercoaster Month.
• Fourth Turning 2022: Bad-Moon Rising, Part 3.
• Stocks Shrug Off Bullard, Bad-Data, & 'BBB' Bust As Dollar Drops.

Newsmax:

• FIRE Poll: Majority Say Cancel Culture Rising Threat to Freedom.
• Sen. Blackburn: Beijing Focused on Propaganda Olympics Brings.

TheGatewayPundit.com: 

• Senator Ben Ray Luján Hospitalized After Suffering a Stroke.
• Biden’s Nominee to be Judge of Central District of California Won’t Answer Whether Racial Discrimination is Wrong Under Questioning From Ted Cruz (VIDEO).
• Outraged Citizens Surround Pfizer Headquarters In Paris: ‘Assassins!’ (VIDEO).
• BREAKING: Key Evidence Uncovered Shows State Dept Thought Ukrainian Prosecutor Shokin Was a Good Guy and Yet Biden Bragged About Firing Him Because He Was Investigating Hunter, Biden’s Son.
• Illinois HB4244 Mandatory Vaccine Registry is Now in Subcommittee – Lawmaker Proposes HB4640 to Quarantine Exposed to Infectious Disease.
• Biden Regime RESCINDS Deportation of Illegal Alien Who Killed 19-Year-Old Girl in New Program to Reduce Removals.

The Epoch Times:

• Fauci Knew About Virus Lab Origin From Secret Teleconference, Pushed Alternate Narrative: Jeff Carlson and Hans Mahncke.

Twitter: 

• @ProtestNews_EN - All Canadians want their freedom. (video) #Truckers #Ottawa #FreedomConvoy #Canada. The vibe in Canada is just amazing! Nice message to Australia as well! (video)
  
• @TheChiefNerd - Johns Hopkins Professor Dr. Marty Makary on new data showing the superiority of natural immunity “The NIH controls the currency of academic medicine”. (video)
• @TomasMorales_iv - Gavin Newsom unmasked in a packed stadium while the state of CA still has emergency orders in place for Covid-19. (pic)
  

OpenVAERS:

• VAERS US COVID Vaccine Adverse Event Reports. 739,999 Reports(+7,117 from prior week) Through January 21, 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 +1.5% on average.

• Asia Ex-Japan Investment Grade CDS Index 91.0 unch. 

• China Sovereign CDS 50.0 unch.
  

• Bloomberg Emerging Markets Currency Index 54.49 -.02%. 
• Bloomberg Global Risk-On/Risk Off Index 3,375.0 +39.0 points.
• Volatility Index(VIX) futures 23.7 -.9%.
• Euro Stoxx 50 futures +.75%.

• S&P 500 futures +.45%.

• NASDAQ 100 futures +.95%. 

Morning Preview Links

Earnings of Note 
Company/Estimate 

 

Before the Open: 

• (ABBV)/3.28
• (ABC)/2.58
• (AVY)/2.12
• (BSX)/.44
• (EAT)/.51
• (CHRW)/1.86
• (DHI)/2.80
• (EMR)/1.01
• (HUM)/1.16
• (IDXX)/1.72
• (JCI)/.53
• (ODFL)/2.27
• (SAIA)/2.58
• (TMO)/5.27

After the Close:

• (AFL)/1.26
• (ALGN)/2.73
• (ALL)/2.77
• (AVB)/2.25
• (CTSH)/1.04
• (KLIC)/1.90
• (MXL)/.84
• (MCK)/5.42
• (FB)/3.83
• (MET)/1.46
• (QCOM)/3.00
• (RRR)/.51
• (YELL)/-.13
  

Economic Releases

8:15 am EST

• The ADP Employment Change for January is estimated to fall to 184K versus 807K in Dec.
  

10:30 am EST

• Bloomberg consensus estimates call for a weekly crude oil inventory  gain of +1,055,890 barrels versus a +2,377,000 barrel gain the prior week. Gasoline supplies are estimated to rise by +1,895,220 barrels versus a +1,297,000 barrel gain the prior week. Distillate inventories are estimated to fall by -1,237,000 barrels versus a -2,798,000 barrel decline the prior week. Finally, Refinery Utilization is estimated to rise by +.01% versus a -.4% decline prior.

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Eurozone PPI report and the weekly MBA Mortgage Applications report could also impact global trading today.

US Equity Market Hours

• 9:30 am - 4:00 pm EST
  

BOTTOM LINE: Asian indices are higher, boosted by commodity and technology shares in the region. I expect US stocks to open modestly higher and to maintain gains into the afternoon. The Portfolio is 100% net long heading into the day.