Monday Watch

Night Trading

• Asian indices are +.25% to +1.0% on average.
• Asia Ex-Japan Investment Grade CDS Index 129.25 -3.75 basis points.
• China Sovereign CDS 82.5 -3.25 basis points.
• Bloomberg Emerging Markets Currency Index 51.72 -.04%.
• Bloomberg Global Risk-On/Risk Off Index 4,122.0 +45.0 points.
• Volatility Index(VIX) futures 29.3 -.43%. 
• Euro Stoxx 50 futures +.24%.
• S&P 500 futures -.04%.
• NASDAQ 100 futures +.20%.

Morning Preview Links

Earnings of Note

Company/Estimate

Before the Open:

• (TSEM)/.51
• (WRBY)/-.04
  

After the Close:

• (SSYS)/-.04
• (TTWO)/1.03
  

Economic Releases

8:30 am EST

• Empire Manufacturing for May is estimated to fall to 15.0 versus 24.6 in April.
  

4:00 pm EST

• Net Long-Term TIC Flows.

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The German Wholesale Price report, Needham Tech/Media Conference, the (DDD) investor day and the JPMorgan Homebuilding/Building Products Conference could also impact trading today.

US Equity Market Hours

• 9:30 am - 4:00 pm EST

BOTTOM LINE: Asian indices are modestly higher, boosted by industrial and technology 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.

Evening Headlines

Bloomberg:

• From Sneakers to Teslas, China Lockdowns Upend Global Supply Chains.
  
• Ukraine Latest: Biden Encourages Sweden, Finland on NATO in Call.
• Aluminum Rises on Tight Supply Signs at End of Fear-Filled Week.
• Apple Bounce Can’t Shake Off Chilling Signal for Stock Market.
  
• Crazy Markets Are Shredding Wall Street Stock and Bond Forecasts.  
• Home Renovations Turn Painful as Inflation, Shortages and Delays Add Up.  
• Texas Calls for Power Conservation After Six Generators Fail.  
• Tech Companies Coddled Their Employees. Now They're Firing Them.  
• MicroStrategy Bitcoin Binge Hasn’t Blown Up, But Pressure Rises.

Wall Street Journal:

• A Boy’s War Diary Tells of Grief in Ukraine: ‘I Cannot Imagine My Life Without Parents.’
• Does Biden Want Higher Gas Prices? The Administration cancels offshore oil lease sales, despite surging global prices.
• Biden’s Baby Formula Shortage. A Michigan plant has been closed for months, despite no evidence it caused infant illness. 
• More Than $1 Trillion of Crypto Vanished in Just Six Months. 
• Stablecoin Price Crash Explained.
• Airfare Is Worse Than You Think.
• Baby Formula Shortage Leaves Parents Scouring Country.
• China’s Covid Lockdowns Drive Middle-Class Citizens to Go Abroad.

Fox News:

• Biden's 'Great MAGA King' slam backfires, as Trump posts 'Lord of the Rings' meme.
• Journalists skeptical of Biden's 'ultra-MAGA' label for GOP, sparks comparison to 'Putin's Price Hike'.
• Russian official says European nation next up for 'denazification' after Ukraine.

CNBC:

• Salesforce dumped rest of its Snowflake shares during first-quarter market plunge.
• Zebra CEO says freight costs have moderated, component shortages still a headwind.
• Nasdaq pops 3%, Dow jumps 400 points in comeback rally following steep losses earlier in the week.
• Turkey says it opposes Sweden and Finland NATO membership; Zelenskyy says Kremlin defeat is obvious.
• Strategist says stock market may become a ‘meat-grinder of forlorn hope’ for dip-buyers.

Zero Hedge:

• Food Riots In Sri Lanka Turn Deadly As Protesters Beat Up Police, Burn Down Politicians' Houses.
• Midland, Texas Residents Suffer From Scorching 10% Inflation. 
• "You've Been Flagged As A Threat": Predictive AI Technology Puts A Target On Your Back.
• Days After Federal Mask Mandate Lifted, In-Air Unruly Passenger Incidents Plunge.
• Growing Number Of COVID-19 Deaths Among Vaccinated People: Federal Data.
• Wheat Farmland Under Threat Worldwide As USDA Reveals Dismal Grain Outlook.
• Rivian Collapse, Potential Brownouts, Highlight The Danger Of Illinois Lawmakers Picking Winners And Losers.
• Diesel Rationing Could Hit East Coast This Summer, Refinery Owner Says.
• Twitter CEO "Expects Deal To Close" After Musk Chaos.
• Newsquawk US Market Wrap: Stocks rally but fail to snap 6-week loss streak.
• Big Bottle: Breaking Down The Baby Formula Nightmare.
• "Terrible Week" Ends With Strong Dead Cat Bounce As Bear Market Marches On.

MarketWatch.com:     

• Opinion: Elon Musk is likely trying to get a lower price for Twitter with ‘deal on hold’ move.
  
• Dow suffers longest losing streak since 2001 as stocks benchmarks extend weekly losses despite closing sharply higher Friday.
  
• Netflix tells employees, ‘You may need to work on titles you perceive to be harmful’  
• Stock market’s ‘ultimate lows’ are still ahead as investors have not yet capitulated, says B. of A.

NewsMax:

• Trump: Baby Formula Shortage 'National Disgrace'.
• Rep. Cammack: Biden Puts 'America Last' With Baby Formula at Border.

TheGatewayPundit.com: 

• Biden Is in the Process of Handing US Sovereignty Over Healthcare Decisions During Emergencies to the WHO and China.
• REGIME UPDATE: Partisan Hack Lisa Monaco who Was in on Sham Trump-Russia Hoax Is Threatening to Indict Top Republicans Including Trump in Sham Jan. 6 Probe.
• BREAKING: Louisiana Supreme Court Sides with Pastor Tony Spell – Agrees that COVID Orders Violated His Freedom of Religion – All Charges Dropped (VIDEO).
• Will This Democrat-Capitulator, Big Pharma Funded, Establishment RINO Be Oregon’s Republican Governor Nominee?
• Reuters Director of Data Science Fired After Reporting Accurate Statistics on Police Shootings and Race.
• Dr. Fauci on Covid: “Yeah, What I Can Say, It’s a Good Thing I Have Flip-Flopped” (VIDEO).
• Pence Turns on Trump — Will Campaign with Dirtbag Gov. Brian Kemp in Georgia Before Primary.
• Biden’s Poll Numbers in the Tank – More Than 80% of Registered Voters Think Biden Is on the Wrong Track.
• DESPICABLE.

The Epoch Times:

• Top US Scientist Tried to Help Wuhan Lab Counter Virus Leak Concerns. Efforts coincide with push to deepen collaboration with China.
• ‘Bidenflation’, Border Crisis Drawing Hispanic Voters to GOP in South Texas Midterms: Analysts.

OpenVAERS:

• VAERS US COVID Vaccine Adverse Event Reports. 813,020 Reports(+2,850 from prior week) Through April 29th, 2022. 

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).

Stocks Sharply Higher into Final Hour on US Economic "Soft Landing" Hopes, China Peak Virus Lockdown Expectations, Short-Covering, Alt Energy/Gambling Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Higher
  

• Sector Performance:  Almost Every Sector Rising
  

• Volume:  Above Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 30.0 -5.6%
• Bloomberg Global Risk On/Risk Off Index 3,970.0 +416.0 points

• Euro/Yen Carry Return Index 138.5 +1.0%

• Emerging Markets Currency Volatility(VXY) 12.8 +.6%

• CBOE S&P 500 Implied Correlation Index 48.9 +1.9% 

• ISE Sentiment Index 108.0 +115.0 points
  

• Total Put/Call .95 -24.6%

• NYSE Arms .44 -33.3%

Credit Investor Angst:

• North American Investment Grade CDS Index 86.0 -1.6%
  

• US Energy High-Yield OAS 429.54 -.89%

• European Financial Sector CDS Index 102.50 -2.4%

• Italian/German 10Y Yld Spread 190.0 basis points -1.0 basis point
  

• Asia Ex-Japan Investment Grade CDS Index 130.75 -1.2%
  

• Emerging Market CDS Index 293.99 -.92%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 28.64 -.57%
• Russia Sovereign Debt Credit Default Swap 5,280.66 -2.3%
  

• 2-Year Swap Spread 28.75 basis points +.5 basis point
  

• TED Spread 46.0 basis points -5.25 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -21.5 basis points -3.75 basis points
  
• MBS  5/10 Treasury Spread  125.0 +2.0 basis points
  
• iShares CMBS ETF 48.46 -.41%
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 51.74 unch.
• 3-Month T-Bill Yield .96% +8.0 basis points
  

• Yield Curve 33.25 basis points (2s/10s) +5.0 basis points
  

• China Iron Ore Spot 128.35 USD/Metric Tonne -1.09%

• Citi US Economic Surprise Index 12.8 +8.3 points

• Citi Eurozone Economic Surprise Index 26.8 -1.5 points
  

• Citi Emerging Markets Economic Surprise Index 33.6 -4.9 points

• 10-Year TIPS Spread 2.73 +1.0 basis point
  
• 0.0%(unch.) chance of no change at July 27th FOMC meeting, 0.0%(unch.) chance of no change at September 21st meeting

US Covid-19:

• 191 new infections/100K people(last 7 days total). 11.0%(+1.0 percentage point) of 1/14 peak +27/100K people from prior report.
  
• New Covid-19 patient hospital admissions per 100K population -87.7%(+.2 percentage point) from peak 7-day avg. of 1/9/21 - 1/15/22
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +178 open in Japan 
• China A50 Futures: Indicating +5 open in China

• DAX Futures: Indicating -7 open in Germany

Portfolio:

• Higher: On gains in my tech/consumer discretionary/medical/commodity/industrial sector longs
  

• Disclosed Trades:  Covered some of my (IWM)/(QQQ) hedges, then added them back
  

• Market Exposure:  50% Net Long
  

Morning Market Internals

NYSE Composite Index:

• Volume Running +22.6% Above 100-Day Average 
• 0 Sectors Declining, 11 Sectors Rising
• 78.9% of Issues Advancing, 16.6% Declining
• 8 New 52-Week Highs, 92 New Lows
• 22.6% of Issues Above 200-day Moving Average
• Average 14-Day RSI 34.2% 
• Bloomberg Global Risk-On/Risk-Off Index 4,001.0 +442.0 points
• Russell 1000: Growth/Value 15,021.0 +1.48%
  
• Vix 29.5 -7.3%
• Total Put/Call .95 -24.6%
• TRIN/Arms .40 -39.4%

Friday Watch

Night Trading 

• Asian equity indices are +.75% to +1.5% on average.

• Asia Ex-Japan Investment Grade CDS Index 133.0 +3.25 basis points. 

• China Sovereign CDS  85.75 +2.5 basis points.
  

• Bloomberg Emerging Markets Currency Index 51.7 unch. 
• Bloomberg Global Risk-On/Risk Off Index 3,643.0 +85.0  points.
• Volatility Index(VIX) futures 30.9 -1.3%.
• Euro Stoxx 50 futures +.92%.

• S&P 500 futures +.71%.

• NASDAQ 100 futures +1.03%. 

Morning Preview Links

Earnings of Note 
Company/Estimate 

 

Before the Open: 

• None of note
  

After the Close:

• None of Note
  

Economic Releases

8:30 am EST

• The Import Price Index MoM for April is estimated to rise +.6% versus a +2.6% gain in March.
• The Import Price Index Ex-Petrol MoM for April is estimated to rise +.8% versus a +1.1% gain in March.
• The Export Price Index MoM for April is estimated to rise +.7% versus a +4.5% gain in March.
  

9:00 am EST

• Bloomberg May US Economic Survey.

10:00 am EST

• The Univ. of Mich. Consumer Sentiment for May is estimated to fall to 64.0 versus 65.2 in April.
• The Univ. of Mich. 1Y Inflation Expectations Index is estimated to rise to +5.5% versus expectations of a +5.4% gain in April.

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Fed's Kashkari speaking and the Eurozone Industrial Production report could also impact global trading today.

US Equity Market Hours

• 9:30 am - 4:00 pm EST
  

BOTTOM LINE: Asian indices are modestly higher, boosted by technology and consumer shares in the region. I expect US stocks to open modestly higher and to weaken into the afternoon, finishing mixed. The Portfolio is 50% net long heading into the day.

Bear Radar

Style Underperformer:

• Large-Cap Growth -1.8%

Sector Underperformers:

• 1) Gold & Silver -6.2% 2) Airlines -3.3% 3) Banks -2.7%

Stocks Falling on Unusual Volume: 

• LECO, BSTZ, ENTA, PFLT, FBRT, ACRE, GBDC, GOF, MSTR, EPR, MCW, PTLO, SGRY, EIX, CSQ, LNC, RYI, AAPL, MASS, SBNY, VST, HTGC, CLAR, GM, ZEN, LAND, JXN, RA, ABC, ECC, SI, FLYW and BROS
  

Stocks With Unusual Put Option Activity:

• 1) CIM 2) REI 3) INVH 4) PACB 5) TPR
  

Stocks With Most Negative News Mentions:

• 1) BROS 2) BA 3) ABC 4) MSTR 5) ASND
  

Charts:

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