Stocks Falling Substantially into Afternoon on US Policy-Induced Stagflation Fears, Fed "Behind the Curve" Worries, China Bubble-Bursting Concerns, Tech/Energy Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line:  Substantially Lower
  

• Sector Performance:  Most Sectors Declining
  

• Volume:  Around Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 23.6 +11.4%
• Bloomberg Global Risk On/Risk Off Index 4,350.0 -122.0 points

• Euro/Yen Carry Return Index 140.66 +1.1%

• Emerging Markets Currency Volatility(VXY) 11.1 unch.

• CBOE S&P 500 Implied Correlation Index 39.8 +10.0% 

• ISE Sentiment Index 77.0 -20.0 points
  

• Total Put/Call .99 +1.0%

• NYSE Arms .64 +10.3%

Credit Investor Angst:

• North American Investment Grade CDS Index 72.53 +3.3%
  

• US Energy High-Yield OAS 354.93 +1.2%

• European Financial Sector CDS Index 88.40 +.45%

• Italian/German 10Y Yld Spread 165.0 -4.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 106.38 +3.4%
  

• Emerging Market CDS Index 248.59 +3.2%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 29.4 -.79%
• Russia Sovereign Debt Credit Default Swap 10,262.20 -10.6%
  

• 2-Year Swap Spread 25.25 +.25 basis point
  

• TED Spread 33.0 +1.5 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -22.75 -.25 basis point
  
• MBS  5/10 Treasury Spread  121.0 +7.0 basis points
  
• iShares CMBS ETF 48.99 -.24%
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 53.29 -.21%
• 3-Month T-Bill Yield .69% unch.
  

• Yield Curve 28.0 +7.5 basis points
  

• China Iron Ore Spot 150.90 USD/Metric Tonne -.3%

• Citi US Economic Surprise Index 57.0 +.1 point

• Citi Eurozone Economic Surprise Index 29.9 -1.1 points
  

• Citi Emerging Markets Economic Surprise Index 31.0 +2.4 points

• 10-Year TIPS Spread 2.92 +3.0 basis points
  
• 0.0%(unch.) chance of no change at June 15th FOMC meeting, 0.0%(unch.) chance of no change at July 27th meeting

US Covid-19:

• 70 new infections/100K people(last 7 days total). 4.0%(unch.) of 1/14 peak +6/100K people from prior report.
  
• New Covid-19 patient hospital admissions per 100K population -93.8%(-.3 percentage point) from peak 7-day avg. of 1/9/21 - 1/15/22
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +59 open in Japan 
• China A50 Futures: Indicating -2 open in China

• DAX Futures: Indicating -38 open in Germany

Portfolio:

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

• Disclosed Trades:  Added to my (IWM)/(QQQ) hedges
  

• Market Exposure:  Moved to 25% Net Long
  

Bear Radar

Style Underperformer:

• Large-Cap Growth -1.9%

Sector Underperformers:

• 1) Oil Service -2.9% 2) Energy -2.8% 3) Software -2.2%

Stocks Falling on Unusual Volume: 

• BSTZ, BEPC, SNDX, ERII, NARI, ARVN, SSP, CRF, APA, HGTY, COIN, WING, AMD, MTCH, RARE, SIL,, CLM, ESTE, FPI, LAND, PMVP, CUTR, CSTL, NVDA, FLNC, BPT, IPI, UCTT, STER, RLAY, EGLE, AMRC, IONQ, ZNTL, LXU, FULC, FULC, PCRX and NRGV
  

Stocks With Unusual Put Option Activity:

• 1) IHI 2) KMX 3) OIH 4) BCRX 5) EWT
  

Stocks With Most Negative News Mentions:

• 1) BCYC 2) AMRC 3) NAVI 4) AXP 5) NVDA
  

Charts:

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

Bull Radar

Style Outperformer:

• Mid-Cap Value -.4%

Sector Outperformers:

• 1) Airlines +1.6% 2) Homebuilding +1.5% 3) Retail +1.0%

Stocks Rising on Unusual Volume:

• VERU, SAIL, MSP, T, PLAB, OWL and HLF
  

Stocks With Unusual Call Option Activity:

• 1) HEAR 2) WY 3) KMX 4) NEO 5) WMB

Stocks With Most Positive News Mentions:

• 1) VERU 2) HOTH 3) SAIL 4) ZYXI 5) BILI
  

Charts:

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

Mid-Day Market Internals

NYSE Composite Index:

• Volume Running +.6% Above 100-Day Average 
• 2 Sectors Rising, 8 Sectors Declining
• 36.8% of Issues Advancing, 61.0% Declining
• 46 New 52-Week Highs, 225 New Lows
• 39.8% of Issues Above 200-day Moving Average
• Average 14-Day RSI 45.2% 
• Bloomberg Global Risk-On/Risk-Off Index 4,330.0 -142.0 points
• Russell 1000: Growth/Value 15,933 -1.3%
  
• Vix 23.6 +11.4%
• Total Put/Call 1.09 +11.2%
• TRIN/Arms .76 +31.0%

Monday Watch

Today's Headlines

Bloomberg:            

• Austrian Leader Nehammer to Meet Putin in Moscow After Kyiv Trip.
• Ukraine Economy to Fall 45% in 2022, Russia 11%, World Bank Says.
• Ukraine Update: Zelenskiy Says He Expects New War Front in East.
• Marine Le Pen Calls on the French to Unite Against Macron.
• 2022 French Election Live Results.   
• Euro’s Advance Signal Relief at French Vote Though Risk Remains.
• Stocks Set for Steady Open; Euro Up on French Vote: Markets Wrap.
• Oil Slips as China’s Worsening Outbreak Raises Demand Concerns.  
• Amazon’s Drone Delivery Program Is Hit by Crashes and Safety Concerns.  
• Apple Sets the Date for Another Virtual WWDC — Here’s What to Expect.  
• Fed’s Mester Sees U.S. Inflation Rate at More Than 2% Into 2023.

Wall Street Journal:

• Social Media Offers a Trove of Information for Medical Researchers.
• Ukraine, Russia Gear Up for Biggest Battles of Conflict.
• Latest Updates on the War.
• How Hospitals Are Using AI to Save Lives.
• Driving Into Danger, Ukrainian Truckers Deliver Food, Cargo and Aid.
• Fleeing Putin, Thousands of Educated Russians Move Abroad.
• Europe Debates How to Cut Purchases of Russian Oil.
• High Gas Prices Fuel Fight at FedEx, Uber Over Who Will Pay.
• Recession Risk Is Rising, Economists Say.
• School Reopening Mess Drives Frustrated Parents Toward GOP.
• Bank Deposits Could Drop for First Time Since World War II.
• Six Reasons Why Stocks Are Rallying.
• In Austin, Texas, Battle Looms Over What Police Did During Protests.

Fox News:   

• President Biden expected to make big move on guns as pressure grows to crack down on violent crime.
• NBC panel predicts how Dems' 'culture wars' messaging will backfire.

CNBC:

• War crime charges won’t deter Putin, as evidence of Russian atrocities mounts.
• Ukraine tells U.S. bureaucracy is no excuse for failing to give weapons, ammunition.
• How Amazon plans to fix its massive returns problem.
• JetBlue is cutting its summer schedule to avoid further flight disruptions.
• Top Wall Street analysts say these stocks are the best for long-term growth.

Zero Hedge:

• Baby Formula Shortage Hits Walgreens As Rationing Begins.
  
• Hedge Fund CIO: "We Have Never Experienced An Economic Cycle That Looks Anything Like This".
• California's High Power Prices Could Derail Liberal EV Dream.
• The Fed Can't Fix The Economy, But It Can Break It.
• The Commodity-Currency Revolution Begins...
• Bonds: Are We There Yet?
• Robert Malone Says He Will Sue New York Times Unless It Corrects 'Defamatory' Article.
• Canada Will Soon Be Offering Doctor-Assisted Death For People Who Are Mentally Ill.
• Longtime Disney Cast Member Speaks Out: 'We Are Ashamed To Work For This Company'.
• Euro Opens Stronger After French Election 1st Round Signals Macron Leading Le Pen Into Runoff.
• 'Brushing Teeth With The Boss' - Shanghai Workers Describe Weeks Spent Living At The Office.
• Long-Term Oil Prices Beginning To Reflect The Coming Oil Shortage, Part 2.
• Ron Paul Is Not A Fan Of Joe Biden's New World Order Aspiration.
• Growing Number Of States Changing How They Report COVID-19 Hospitalizations.
• "We Are Starving To Death": Shanghai Residents Under Lockdown Shout At Visiting Vice Premier.
•   Elon Musk Is Officially Trolling Twitter.
• Goldman: "Is The Recession Signal Once Again Hiding In Plain Sight?".
• French Head To Polls As Macron On Shaky Ground, But Reports Of Lower Than Expected Turnout.
• Biden's Regressive Inflation Tax & The Money Illusion.
• Pfizer Hired 600 Employees Due To 'Large Increase Of Adverse Event Reports': Document.
• Shocking Estimates Show Ukraine's Crop Harvest Could Be Halved .
• Microplastics Found In Lung Tissue Of Living Humans For First Time: Study.
• The Anatomy Of Big Pharma's Political Reach.
• American Airlines To Offer Bus Service In Place Of Connecting Flights Due To Soaring Gas Prices, Pilot Shortage.
• JPMorgan Predicts That Global Commodities Prices May Rise By 40%... Or More.

MarketWatch.com:         

• U.S. banks are facing body blows from Ukraine war and a slump in investment banking activity.  
• Watch what happens when police pull over a driverless car in San Francisco.

NewsMax:

• Russia Has Forcibly Evacuated 674,000 Ukrainians. 
• Russia: Will Sue If Forced Into Sovereign Debt Default.
• 8 Mile Convoy Suggests Russian Offensive on Kharkiv.
• S&P Downgrade Indicates Russia Headed for Historic Default.

TheGatewayPundit.com:

• GOP Sen Says Lib Media Using Watergate Tactic with Hunter’s Biden’s Laptop to Hide Real ‘Corruption’. 
• Miami-Dade Mayor Declares State of Emergency Over Housing Affordability Due to Unprecedented Rent Increases.
• Chinese Citizens Are Starving, Jumping From Balconies To Their Deaths After Weeks Of ‘COVID Zero’ Lockdown.
• Exclusive: Jack Posobiec Speaks Out – Claims Current Suspension From Twitter is Retaliation for Exposing Disney Employee Group.
• Surprise! Soros Is Reportedly Bankrolling Defund the Police Candidates for 2022 Election.
• “I Went There for You My Son” – J6 Political Prisoner Chris Quaglin Was Brutally Beaten in Jail and Denied Celiac-Safe Food – Here Is His Heartfelt Letter to His Son on His First Birthday — Please Donate.
• Trans Non-Binary Teacher Says It’s Appropriate to Teach Children at 3-Years-Old about Sex.
• Rudy Giuliani on a List of Americans Sanctioned by Iran – Meanwhile Biden Working to Remove Iranian Guard from US Sanctions List.
• Biden’s Homeland Security Secretary Mayorkas Allows Millions of Illegals Into the US Then Claims Domestic Terrorists Are Greatest Threat.
• New Jersey Schools to Teach First and Second Graders About “Gender Identity” and “Climate Change” in Fall.
• Disturbing Video: China Is Taking Cats for Extermination Due to COVID — Dogs Too.
• South Carolina Senate Passes Legislation that Bans Covid-19 Vaccine Requirements.
• Voting in France is on Sunday: NO Mail-in Ballots, NO Dirty Voting Machines, Only Paper Ballots and EVERYONE Must Show a Voter ID.

The Epoch Times:

• China Insiders Steal Billions From US Investors. The US government, beholden to big banks, fails to protect small American investors.
• China’s Lockdowns May Be Partly a Ploy to Tamper With Supply Chains, Highlight US Dependence: Expert.

OpenVAERS:

• VAERS US COVID Vaccine Adverse Event Reports. 803,168 Reports(+3,437 from prior week) Through April 1st, 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 -.5% to +.25% on average.
• Asia Ex-Japan Investment Grade CDS Index 102.75 +.25 basis point.
• China Sovereign CDS 64.25 +1.5 basis points.
• Bloomberg Emerging Markets Currency Index 53.16 -.46%.
• Bloomberg Global Risk-On/Risk Off Index 4,437.0 -37.0 points.
• Volatility Index(VIX) futures 24.95 +.81%. 
• Euro Stoxx 50 futures -.48%.
• S&P 500 futures -.29%.
• NASDAQ 100 futures -.41%.

Morning Preview Links

Earnings of Note

Company/Estimate

Before the Open:

• None of note
  

After the Close:

• None of note
  

Economic Releases

• None of note

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Fed's Bowman speaking, UK Industrial Production report, 2Y T-Note auction and the Needham Healthcare Conference could also impact trading today.

US Equity Market Hours

• 9:30 am - 4:00 pm EST

BOTTOM LINE: Asian indices are mostly lower, weighed down by financial and consumer 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 week.

Today's Headlines

Bloomberg:            

• Russia’s First Default in a Century Looks All But Inevitable Now.   
• Russia Cut to Selective Default by S&P After Ruble Payments.
• U.K.’s Unemployed Face Biggest Drop in Benefits in 50 Years.
• Australian Leader Scott Morrison Set to Call National Election.  
• Threat of President Le Pen Sends French Bond Yields to 2015 High.
• NATO Considering Permanent Presence in the East, Telegraph Says.
• Ukraine Update: Johnson Meets Zelenskiy in Kyiv to Offer Support.
  
• Half of Harvests in Crop Giant Ukraine Could Be Wiped Out by War.
• Homebuyers Get Desperate in Overheated U.S. Spring Sales Season.
• With Bonds in a ‘Coma,’ Buy Commodities: Bridgewater’s Patterson.
• U.S. Mortgage Rates Rise for a Fifth Week to Land at 4.72%.   
• Musk Asks ‘Is Twitter Dying?’ as He Cites Bieber’s Quiet Account.  
• In This Part of the U.S. Bond Market, 0% Is High and Alarming.  
• Charting Global Economy: Soaring Food Costs Risk Destabilization.
  
• ECB Grapples With War Gloom in Shadow of Knight: Eco Week Ahead.

Wall Street Journal:

• Latest Updates From the War in Ukraine.
• China Accelerates Nuclear Buildup.
• Biden’s Financial Policy Stymied by Confirmation Battles.
• AT&T Boss Sees Room to Raise Prices, Cut Costs.
• Ukraine Urges Citizens to Flee Ahead of Expected Russian Assault in East.
• Inflation Hurts. Better Get Used to It.
• Supply-Chain Chaos Is Great for Warehouse Stocks.

Barron's:

• Had bullish commentary on (MOS), (NTR), (MO) and (WFC).

Fox News:

• Video directly contradicts White House claim as COVID cases rise around Biden.
• SEE PICS: No sign of scandal-ridden Hunter as wife enjoys ritzy restaurant.

CNBC:

• The Fed raising interest rates can help ease inflation, but it could fail.
• War crime charges won’t deter Putin, as evidence of Russian atrocities mounts.
• Should cars drive like humans or robots? Tesla forces the question.

Zero Hedge:

• Shanghai Reports 7th Day Of Record Cases As Viral Video Of Fatal Dog Beating Provokes Outrage.
• Where Will The Food Riots Start?
• The Commodity-Currency Revolution Begins...
• Psaki Calls Abbott's Plan To Bus Illegal Aliens To DC A "Publicity Stunt".
• "Unique Atmospheric Sight" Over Alaska Ignites Wild Social Media Speculation.
• Biden Signs Bill Downgrading Russia's Trade Status, Paving Way For Tariffs.
• Calm Before The Storm? Transpacific Sea-Freight Rates Fall Amid China COVID Lockdowns.
• German Defense Minister: No More Bundeswehr Weapons For Ukraine.
• TME's Saturday Energy update.
• The Global Fertilizer Shortage Means That Far Less Food Will Be Grown All Over The Planet In 2022.
• These Are The American Cities With The Highest (And Lowest) Rents.
• Escobar: Sit Back & Watch Europe Commit Suicide.
• NATO Agrees To Provide 'New & Heavier' Weapons To Ukraine After Czech Tanks Arrive.
• It Was The Lockdowns, Not The Pandemic That Created The Havoc.
• These Are The Cheapest & Most Expensive Cities To Drink A Beer.
• Cracks Appear In Housing Market As Sellers Begin To Lower Asking Prices.
• Is Today's Energy Shortage Worse Than The 1970s Oil Crisis?
• Rickards: "They've Secretly Raised Your Taxes".
• US Now Appears Willing To Overlook Turkey’s S-400 Transgression With F-16 Sale.
• Not everything is S(zzzz)PX.
• Palm Springs Moves Forward With Measure To Provide Universal Basic Income To Low-Income Trans, Nonbinary Residents.
• "We Are On A Fast Track To Disaster" - Green Radicals Claim Humanity Has Only 3 Years Left To Stop 'Climate Apocalypse'.
• Why The Digital Dollar Will Destroy Free Speech.
• US Treasury Sanctions Largest Russian Diamond Miner Producing Third Of World's Supply.

NewsMax:

• Israel Remains Neutral on Russian Invasion, Atrocities.
• Biden Won’t Remove Iran from Terror List, Deal May Collapse.  
• Boris Johnson Makes 'Surprise' Visit to Kyiv to Meet Zelenskyy, Announce More Aid.

TheGatewayPundit.com:  

• Creepy George Soros is Predicting Internet Blackouts – What Does He Know that We Don’t?
• There’s More to Yesterday’s Verdicts in the Michigan Whitmer Kidnapping Case – Much More…
• Fruits of the Left: 101 Police Officers Shot in Line of Duty So Far This Year, a 43% increase in One Year.
• Tucker Carlson: “Deeply Disturbing” Pornographic Content Being Pushed on Schoolchildren (VIDEO).
• MASSIVE Protests Against Communist President as Inflation Surges and Food Shortages Hit Peru — Protesters Hurl Rocks at Police Buses, Loot Milk Truck.
• Biden’s America: Crime Up 44% in NY City, Up 36% in Chicago in 2022 — One in Six Americans or Family Members a Victim of Crime.
• GOOD NEWS: Georgia Judge Orders Fulton County to “Provide Additional Layer of Security” for 2020 Election Records in Senator Perdue Case.

The Epoch Times:

• ‘When You Think ESG, You Should Be Thinking CCP’: Peter Thiel.

OpenVAERS:

• VAERS US COVID Vaccine Adverse Event Reports. 803,168 Reports(+3,437 from prior week) Through April 1st, 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).