Morning Market Internals

NYSE Composite Index:

• Volume Running -8.9% Below 100-Day Average 
• 5 Sectors Declining, 6 Sector Rising
• 60.0% of Issues Advancing, 36.1% Declining
• 34 New 52-Week Highs, 29 New Lows
• 31.9% of Issues Above 200-day Moving Average
• Average 14-Day RSI 47.6% 
• Bloomberg Global Risk-On/Risk-Off Index 4,638.0 +81.0 points
• Russell 1000: Growth/Value 15,081.0 +1.1%
  
• Vix 24.9 -3.0%
• Total Put/Call .96 -5.9%
• TRIN/Arms .68 -47.3%

Thursday Watch

Evening Headlines

Bloomberg:              

• Europe, Asian Factories Under Pressure on China, War in Ukraine.
• Putin Thinks His Biggest Ally in Ukraine Is Time.
• UK Food Prices Surging Most In a Decade Signals More Pain Ahead.
• Biden Sees No Quick Fix on Gas Costs, Weighs Russian Crude Price Cap.  
• Mexico Central Bank Cuts Growth Forecast to 2.2% for 2022.
  
• Asia Stocks, Futures Drop on Hawkish Rate Comments: Markets Wrap.
• Fed Hawks and Doves Stay the Course on Rate Hikes to Cool Prices.
  
• Mark Zuckerberg Is Blowing Up Instagram to Try and Catch TikTok.
• US Economy Shows Signs of Downshifting as Rates, Inflation Bite.
• US to Cancel $5.8 Billion Student Debt From College That Harris Once Sued.  
• Amazon Workers Close In on Trial to Recoup Work-at-Home Expenses.  
• Supreme Court Faces Historic Case Backlog as Fractious Term Comes to an End.  
• HPE Cuts Full-Year Profit Forecast on Currency, Supply Chain and Russia.

Wall Street Journal:

• Documents Reveal Hundreds of Russian Troops Broke Ranks Over Ukraine Orders. 
• When Progressives Fail, Inflation Edition. Why the public has lost confidence in claims to authority.
• Russian Oil Producers Stay One Step Ahead of Sanctions.
• Latest: Russia Aimed to Spark Food Crisis by Blocking Grain Exports, Ukraine Says.
• Dimon Says Consumers Have Six to Nine Months of Spending Power.
• Pfizer Asks FDA to Authorize Its Covid-19 Vaccine for Children Under 5.
• Formula Shortage Worsens, Hitting Low-Income Families Hardest.

Fox News:

• Multiple people killed during shooting at Oklahoma medical building, police say shooter is also dead.

CNBC.com:

• Jamie Dimon says ‘brace yourself’ for an economic hurricane caused by the Fed and Ukraine war.
• Facebook parent Meta COO Sheryl Sandberg is stepping down.
• Biden administration will cancel student debt for half a million students from Corinthian Colleges.
• Mortgage rates rise sharply after three weeks of easing.
• Elon Musk tells Tesla workers to return to the office full time or resign.
• Tough new sanctions on Russia could hit world oil supply and change the OPEC+ dynamic.

 

MarketWatch:             

• Fed to begin quantitative tightening: What that means for financial markets.
  
• GameStop narrows quarterly losses, keeps inventories higher to sidestep supply-chain snags. 
• C3.ai stock plunges 20% after disappointing forecast.
  
• Chewy stock soars 25% following surprise profit.  
• Investors sell off bonds and stocks as chances grow for another half-point rate hike by Fed in September.  
• Exclusive: Central banker Bostic cautions against interpreting prospective pause in rate hikes as a ‘Fed put’.

Zero Hedge: 

• "This Feels Like A Slow-Motion Train Wreck".
• Crackhead MILF And Incest Porn: Hunter Biden Search History Revealed; Texted Pornhub Link To 'Dad'. 
• Auto-Armageddon: May Sales Data Shows Dramatic Slowdown In US New Car Sales.
• "Catastrophic": Multiple People Shot At Tulsa Medical Building.
• New York Governor To Raise Age Limit For Semi-Automatic Rifle Purchases, Ban Body Armor.
• AI Expert Says Parents Will Choose "Digital Babies" In The Metaverse Over Real Ones Within 50 Years.
• US Nat Gas Prices Have Exploded Thanks To Soaring LNG Exports To Europe.
• "Worst 5-Month Loss Since 1970": Here Are The Best And Worst Performing Assets In May And YTD.
• Newsquawk Asia-Pac Market Open - Stocks and treasuries declined amid a firmer dollar and yields.
• Biden's "Incredible Transition": High Gas Prices, Supply Shortages Part Of Plan To Unleash Green Economy.
• "The Nightmare Has Ended": Shanghai Reopens After Two-Month COVID Lockdown.
• Watch: Uvalde ISD Police Chief Breaks Silence.
• CDC Director Issues Alert On Pfizer's COVID-19 Pill.
• WTI Holds At Day's Low After Crude Inventory Draw.
• Newsquawk US Market Wrap: Yields and Dollar surge on strong ISM and BoC hike, weighing on stocks.
• Looming Price-Hikes On Food Set To Hit Americans Even Harder This Fall.
• Stocks, Bonds, & Bitcoin Dumped As Dimon Doubles-Down On Dour Outlook.

AP News:

• Cyber agency: Voting software vulnerable in some states. Electronic voting machines from a leading vendor used in at least 16 states have software vulnerabilities that leave them susceptible to hacking if unaddressed, the nation’s leading cybersecurity agency says in an advisory sent to state election officials. The U.S. Cybersecurity and Infrastructure Agency, or CISA, said there is no evidence the flaws in the Dominion Voting Systems’ equipment have been exploited to alter election results.
  

Newsmax:

• Gasoline Prices Top $4 in All 50 States, in Historic and Unsettling First.

Rebel News:

• Introducing The Reset: The Great Reset Docuseries. (video)

TheGatewayPundit.com: 

• NYC Mayor Eric Adams Pushes Subway Gun Detecting Technolgy As Shootings Surges In Gun-Controlled City.
• EXCLUSIVE: The Majority of the 51 Intel Experts Who Claimed the Hunter Biden Laptop Was Russian Disinformation Have Connections to George Bush Sr.
• Government Officials Blame Biden For Inflationary Surge Hurting Most Americans.
• Biden Family Values: Hunter Biden Shared Pornhub Link with Father Joe Biden.
• “No Easy Questions Today, Huh?” – Karine Jean-Pierre Struggles to Answer if Joe Biden Was Wrong About Inflation (VIDEO).
• Dr. Kelli Ward: Mitch McConnell, John Cornyn, Lindsey Graham, Adam Kinzinger, Mitt Romney, Liz Cheney… Are Trying to Destroy the Republican Party (VIDEO).
• Insanity: California State Senate Passes Bill that Ends Mandatory Reporting of Threats Made by Students.

OpenVAERS:

• VAERS US COVID Vaccine Adverse Event Reports. 817,537 Reports(+4,517 from prior week) Through May 13th, 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).

Night Trading 

• Asian equity indices are -1.0% to -.5% on average.

• Asia Ex-Japan Investment Grade CDS Index 111.25 +1.5 basis points. 

• China Sovereign CDS  71.25 +.75 basis point.
  

• Bloomberg Emerging Markets Currency Index 52.04 -.03%.  
• Bloomberg Global Risk-On/Risk Off Index 4,533.0 -33.0 points.
• Volatility Index(VIX) futures 27.6 +.1%.
• Euro Stoxx 50 futures +.13%.

• S&P 500 futures -.02%.

• NASDAQ 100 futures -.06%. 

Morning Preview Links

Earnings of Note 
Company/Estimate 

 

Before the Open: 

• (CIEN)/.54
• (HRL)/.47
• (TTC)/1.22
• (SPTN)/.64
  

After the Close:

• (ASAN)/-.36
• (COO)/3.43
• (CRWD)/.23
• (LULU)/1.43
• (OKTA)/-.34
• (PD)/-.08
• (RH)/5.33
• (ZUMZ)/.07
  

Economic Releases

7:30 am EST

• Challenger Job Cuts YoY for May.
  

8:15 am EST

• ADP Employment Change for May is estimated to rise to 300K versus 237K in April.

8:30 am EST

• Initial Jobless Claims for last week is estimated at 210K versus 210K the prior week.
• Continuing Claims are estimated to fall to 1340K versus 1346K prior. 
  

10:00 am EST

• Factory Orders for April is estimated to rise +.7% versus a +2.2% gain in March.

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Eurozone PPI report, weekly EIA natural gas inventory report and the Loop Tech/Media/Telecom Conference could also impact global trading today.

US Equity Market Hours

• 9:30 am - 4:00 pm EST
  

BOTTOM LINE: Asian indices are modestly lower, weighed down by commodity 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 day.

Stocks Reversing Lower into Afternoon on US Policy-Induced Stagflation Fears, Fed "Behind the Curve" Worries, US Dollar Strength, Alt Energy/Medical Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Lower
  

• Sector Performance:  Most Sectors Declining
  

• Volume:  Around Average

• Market Leading Stocks: Underperforming
  

Equity Investor Angst:

• Volatility(VIX) 26.6 -1.6%
• Bloomberg Global Risk On/Risk Off Index 4,496.0 +52.0 points

• Euro/Yen Carry Return Index 142.66 +.4%

• Emerging Markets Currency Volatility(VXY) 12.1 +.2%

• CBOE S&P 500 Implied Correlation Index 45.4 +.8% 

• ISE Sentiment Index 81.0 -10.0 points
  

• Total Put/Call 1.04 +9.5%

• NYSE Arms 1.05 -31.8%

Credit Investor Angst:

• North American Investment Grade CDS Index 80.39 +1.1%
  

• US Energy High-Yield OAS 368.39 -2.4%
• Bloomberg TRACE # Distressed Bonds Traded 336.0 -15.0
  

• European Financial Sector CDS Index 98.66 +1.5%

• Italian/German 10Y Yld Spread 202.0 basis points +2.0 basis point
  

• Asia Ex-Japan Investment Grade CDS Index 110.31 -.49%
  

• Emerging Market CDS Index 272.97 +.5%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 28.60 -.31%
  
• Russia Sovereign Debt Credit Default Swap 10,195.4 +5.7%
  

• 2-Year Swap Spread 34.75 basis points +.75 basis point
  

• TED Spread 46.75 basis points -8.0 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -14.75 basis points +.75 basis point
  
• MBS  5/10 Treasury Spread  120.0 +3.0 basis points
  
• iShares CMBS ETF 48.25 -.7%
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 52.08 -.35%
• 3-Month T-Bill Yield 1.12% +8.0 basis points
  

• Yield Curve 27.0 basis points (2s/10s) -2.0 basis points
  

• China Iron Ore Spot 136.65 USD/Metric Tonne +2.6%

• Citi US Economic Surprise Index -37.8 unch.

• Citi Eurozone Economic Surprise Index 21.1 +1.5 points
  

• Citi Emerging Markets Economic Surprise Index 20.6 +7.4 points

• 10-Year TIPS Spread 2.67 -3.0 basis points
  
• 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:

• 220 new infections/100K people(last 7 days total). 13.0%(unch.) of 1/14 peak +1/100K people from prior report.
  
• New Covid-19 patient hospital admissions per 100K population -83.8%(-.1 percentage point) from peak 7-day avg. of 1/9/21 - 1/15/22
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -37 open in Japan 
• China A50 Futures: Indicating -131 open in China

• DAX Futures: Indicating +35 open in Germany

Portfolio:

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

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

• Market Exposure:  Moved to 25% Net Long
  

Bear Radar

Style Underperformer:

• Mid-Cap Growth -1.7%

Sector Underperformers:

• 1) Airlines -5.0% 2) Alt Energy -3.5% 3) Medical Equipment -3.3%

Stocks Falling on Unusual Volume: 

• TSLA, FOX, LCII, HHC, DVA, BCO, FIVE, ILMN, LUNG, FIVE, ILMN, LUNG, SPGI, ABC, SLG, AMBA, OPCH, GFS, NATI, UDMY, CHPT, PINS, DNB, CAKE, NVST, ULTA, CLDX, U, ENFN, MCO, ABNB, JLL, CERT, DAL, BIG, TOST, PEN, ADM, TPX, CNMD, QS, IPI, GSHD, PARA, SNCY, DASH, VRT, CVNA, AMC, INBX, ALB, MSTR, CONN, SGFY, SAVA, LAW, COIN, CLAR, AFRM, LTHM, PLL and APPS
  

Stocks With Unusual Put Option Activity:

• 1) PCG 2) GKOS 3) MAT 4) JEF 5) CRM
  

Stocks With Most Negative News Mentions:

• 1) DOGZ 2) ENOB 3) CNCE 4) APPS 5) GME
  

Charts:

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

Bull Radar

Style Outperformer:

• Small-Cap Value -1.3%

Sector Outperformers:

• 1) Oil Service +2.1% 2) Shipping +2.0% 3) Energy +1.4%

Stocks Rising on Unusual Volume:

• LPI, SIGA, CRM, SAGE, VSCO, NE and CGEM
  

Stocks With Unusual Call Option Activity:

• 1) KHC 2) CRM 3) BKLN 4) APPS 5) MULN

Stocks With Most Positive News Mentions:

• 1) DOGZ 2) COIN 3) APPS 4) YY 5) CNCE
  

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running -6.8% Below 100-Day Average 
• 10 Sectors Declining, 1 Sector Rising
• 26.4% of Issues Advancing, 70.0% Declining
• 25 New 52-Week Highs, 30 New Lows
• 33.5% of Issues Above 200-day Moving Average
• Average 14-Day RSI 49.8% 
• Bloomberg Global Risk-On/Risk-Off Index 4,471.0 +30.0 points
• Russell 1000: Growth/Value 15,034.0 +.7%
  
• Vix 26.8 +2.%
• Total Put/Call 1.02 +7.4%
• TRIN/Arms 1.20 -22.1%