Today's Headlines

Bloomberg:

• Lessons Learned From an Analyst’s Journey Into Covid-Zero China.
• Ukraine Latest: Russia, Ukraine Make First Swap of Dead Soldiers.  
• Treasury Yields Staring Down 3% Threshold Await CPI for Next Cue.
• Carmakers Feel Chip Crisis Easing as Global Growth Slows.
• For Intangible-Asset Craze, It’s Midnight in the Stock Market.
  
• Musk’s Office Mandate, Recession Fears Complicate New Work Era.
• ‘No Longer Sure Bets’: Tech Giants Are Dropping Bad News Daily.
• Black Swan Investor Is Watching for ‘Greatest Credit Bubble’ to Pop.
• Lockstep Stock Market Is Forcing Everyone to Be a Macro Trader.
• ECB Is Ready to Tighten Just as Global Peers Speed Up: Eco Week.   
• Lunatics See Meager Gains Since Relaunch of Failed Crypto Token.  
• Hedge Fund D1 Sinks Nearly 23% This Year on Public, Private Bets.  
• SEC ‘Investomania’ Satire on Memes, Crypto Sparks Outrage Online.
• Charting the Global Economy: Inflation Hits a Record in Europe.

Wall Street Journal:

• Housing Boom Fails to Lift All Homes to Previous Peak.
• In China, New Evidence That Surgeons Became Executioners. Clinical reports recount scores of cases in which organ donors were alive when operations began.
• Rivian’s Great EV Expectations Meet the Harsh Reality of Manufacturing.
• Poor Police Radio Reception Caused Confusion in Texas School Shooting Response, Says Official.
• Gay Travelers Gather at Disney World to Vacation and Make a Statement.
• Russians Get Conflicting News on the Ukraine War as Telegram Turns Into an Information Battlefield.
• Baby-Formula Shortage Expected to Persist for Weeks.
• Chevron CEO Sees Russian Oil Output Falling After West’s Exit.
• How AI Could Predict Sports Injuries, Improve Performance.

Barron's:

• Had bullish commentary on (JWN), (AVB), (EQR), (TGT), (ETN), (PHO), (CPE), (SBOW) and (MUR).

Fox News:

• Prince Harry, Meghan Markle booed at Platinum Jubilee event while Prince William, Middleton cheered.

CNBC:

• Here’s the email Elon Musk sent all Tesla employees about 10% head count reduction.
• Union claims Starbucks is illegally closing cafe to retaliate, Bloomberg reports.
• White House postpones Biden trips to Saudi Arabia and Israel.
• Lawmakers are racing to pass tech antitrust reforms before midterms.

Zero Hedge:

• The Top 10 Creepiest & Most Dystopian Things Pushed By The World Economic Forum.
• Russia Threatens To 'Strike The West' If US-Supplied Rockets Hit Its Territory.
• Expect A Deep Recession To Start This Quarter Or Early Third Quarter.
• Restaurants Adding Inflation Fees Amid Razor Thin Margins.
• Our Rulers Have Lost Their Minds.
• Yellen Throws Biden Under The Bus On Runaway Inflation: She "Wanted" $1.9 Trillion Stimulus Cut By A Third.
• The "Net Zero" Agenda Has Devastating Consequences... Here's What You Need To Know.
• "Major Turning Point" - US Housing Inventory Rises For First Time Since 2019 .
• Recession, Prices, & The Final Crack-Up Boom.
• Policymaker Push Against Fossil Fuels Means "Will Never Be Another Refinery Built In US"; Chevron CEO Says.
• Soaring Cost Of Living Causes Spike In Abandoned And Surrendered Pets.
• It ain't over...
• How Quantitative Tightening Ends.
• Trump-Backed Dr. Oz Wins Pennsylvania GOP US Senate Primary, McCormick Concedes.
• Western Backers Of Ukraine Must Persist For 'Long Haul War Of Attrition': NATO Chief.
• Potential Dockworker Strike Could Unleash "Super Meltdown" At German Port Of Hamburg. 
• Hartnett: The Market's Summer From Hell Begins, And Just One Thing Can Stop It.
• China Demands US Halt Trade Talks With Taiwan, Requests Meeting With Pentagon Chief.
• Baltimore City Mayor Sues Polymer80 For "Public Health Crisis," Ignores Decades Of Failed Liberal Policies .
• Americans Will Never Forget The Historic Economic Collapse During Joe Biden's Presidency.
• Lumber Prices Crash 50% As Fed Tightens.
• White House Disinformation About Kids And COVID. 
• The 2022 Bilderberg Agenda: Disinformation, Deglobalization, & Disruption Of The Global Financial System. 
• Peer-Reviewed Studies Confirm Vaccine/Mask Mandates Did Not Stop COVID Spread In Schools & Universities.
• The Handbook For Debt-Soaked Nations: Lie, Print, Inflate, & Finger-Point.  
• Newsquawk US Market Wrap: Stocks end on a 'bad feeling' after strong NFP sees Dollar and yields jump.
• Oil Pops, Stocks Drop As Hawks & 'Hurricanes' Killed The Dead-Cat-Bounce.

MarketWatch.com:  

• ‘You only live once, man. I think it’s time to really embrace what we have’: Americans get ready for a summer of red-hot inflation.
  
• Opinion: Stock-market timers have been too quick to leap into the rally — and that’s a risky sign.
  
• Opinion: The Federal Reserve is shrinking its balance sheet under duress, which makes a soft landing nearly impossible.  
• Why a surging dollar could sink stocks, but help the Fed.   
• Small-cap growth stocks are the cheapest they’ve been in at least 24 years. Here’s how one manager is playing it.

NewsMax:

• Steve Forbes: Far Left 'Going for Broke' With Regulations.  
• Rep. Buddy Carter: Biden 'Tone-Deaf' on Guns, School Safety.
• Russia May Be in Ukraine to Stay After 100 Days of War.

TheGatewayPundit.com: 

• Gov. Noem Says She Will Sue if Biden Cuts Funding to States That Don’t Allow Biological Males to Play on Girls Sports Teams.
• BREAKING: Hero Sheriff Dar Leaf Sues Lawless MI AG Nessel, Dishonest MI SOS Benson For Interfering, Obstructing and Covering Up Crimes In Election Fraud Investigations, Including Machine Voting, Ballot Harvesting and Trafficking.
• It’s Official: Gas Prices Have More Than Doubled Since Joe Biden Took Office.
• Bidenomics in Action: Midwest Braces for Rotating Power Blackouts This Summer.
• Fox News Dominates Cable News Ratings In May – Despite Banning Any Mention of “2000 Mules”.
• Pizza Hut Features Book About “Drag Kids” Aimed at Children in Pre-Kindergarten.

The Epoch Times:

• China’s Normalization of COVID-19 Testing Draws Wide Criticism.

OpenVAERS:

• VAERS US COVID Vaccine Adverse Event Reports. 825,453 Reports(+4,666 from prior week) Through May 27th, 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 Falling Substantially into Afternoon on US Policy-Induced Stagflation Fears, Fed "Behind the Curve" Worries, Technical Selling, Tech/Alt Energy Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Lower
  

• Sector Performance:  Almost Every Sector Declining
  

• Volume:  Below Average

• Market Leading Stocks: Underperforming
  

Equity Investor Angst:

• Volatility(VIX) 25.3 +2.2%
• Bloomberg Global Risk On/Risk Off Index 4,771.0 +62.0 points

• Euro/Yen Carry Return Index 144.45 +.5%

• Emerging Markets Currency Volatility(VXY) 12.0 -.33%

• CBOE S&P 500 Implied Correlation Index 44.3 +1.5% 

• ISE Sentiment Index 73.0 +5.0 points
  

• Total Put/Call 1.0 +12.0%

• NYSE Arms 1.03 +49.3%

Credit Investor Angst:

• North American Investment Grade CDS Index 81.3 +1.9%
  

• US Energy High-Yield OAS 369.20 +.07%
• Bloomberg TRACE # Distressed Bonds Traded 292.0 -44.0
  

• European Financial Sector CDS Index 98.32 +.11%

• Italian/German 10Y Yld Spread 213.0 basis points +11.0 basis point
  

• Asia Ex-Japan Investment Grade CDS Index 111.59 +.03%
  

• Emerging Market CDS Index 271.42 +.57%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 28.75 unch.
  
• Russia Sovereign Debt Credit Default Swap 10,195.4 n/a
  

• 2-Year Swap Spread 37.75 basis points +3.0 basis points
  

• TED Spread 48.5 basis points +1.75 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -15.0 basis points -.25 basis point
  
• MBS  5/10 Treasury Spread  111.0 -9.0 basis points
  
• iShares CMBS ETF 48.32 -.16%
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 52.15 -.09%
• 3-Month T-Bill Yield 1.15% +3.0 basis points
  

• Yield Curve 29.5 basis points (2s/10s) +2.5 basis points
  

• China Iron Ore Spot 144.30 USD/Metric Tonne +2.1%

• Citi US Economic Surprise Index -45.6 -7.8 points

• Citi Eurozone Economic Surprise Index 14.9 -6.2 points
  

• Citi Emerging Markets Economic Surprise Index 18.3 -2.3 points

• 10-Year TIPS Spread 2.75 +8.0 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 +0/100K people from prior report.
  
• New Covid-19 patient hospital admissions per 100K population -82.4%(+1.4 percentage points) from peak 7-day avg. of 1/9/21 - 1/15/22
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -201 open in Japan 
• China A50 Futures: Indicating +21 open in China

• DAX Futures: Indicating +7 open in Germany

Portfolio:

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

• Disclosed Trades:  Added to my (IWM)/(QQQ) hedges and my emerging market shorts
  

• Market Exposure:  Moved to Market Neutral
  

Bear Radar

Style Underperformer:

• Large-Cap Growth -2.0%

Sector Underperformers:

• 1) Semis -2.6% 2) Alt Energy -2.3% 3) Internet -2.3%

Stocks Falling on Unusual Volume: 

• NVDA, VRDN, VSTO, CNMD, LTHM, FORM, CIEN, DDOG, PD, VRT, ICPT, ECOM, FRG, SNCY, MDB, TNDM, APPS, ZUMZ, CRWD, KREF, W, AAL, MU, COIN, KD, LE, TSLA, ROKU, RBLX, DKNG, CVNA, ASAN, SIGA, CSTL, HCP and NVAX
  

Stocks With Unusual Put Option Activity:

• 1) MPW 2) NCR 3) NVAX 4) RH 5) JNK
  

Stocks With Most Negative News Mentions:

• 1) NVAX 2) JOAN 3) COIN 4) MU 5) TSLA
  

Charts:

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

Bull Radar

Style Outperformer:

• Small-Cap Value -.8%

Sector Outperformers:

• 1) Oil Service +1.5% 2) Energy +1.1% 3) Biotech +.2%

Stocks Rising on Unusual Volume:

• TPTX, AMLX, RETA, AI, MRTX, OKTA, DBX, NAPA and REPL
  

Stocks With Unusual Call Option Activity:

• 1) DBX 2) ACAD 3) BOX 4) UCO 5) AMT

Stocks With Most Positive News Mentions:

• 1) DBX 2) AMT 3) REV 4) OKTA 5) ALK
  

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running -24.1% Below 100-Day Average 
• 10 Sectors Declining, 1 Sector Rising
• 17.8% of Issues Advancing, 78.9% Declining
• 34 New 52-Week Highs, 17 New Lows
• 31.2% of Issues Above 200-day Moving Average
• Average 14-Day RSI 47.6% 
• Bloomberg Global Risk-On/Risk-Off Index 4,726.0 +23.0 points
• Russell 1000: Growth/Value 14,933.0 -1.6%
  
• Vix 25.7 +4.0%
• Total Put/Call 1.0 +10.9%
• TRIN/Arms 1.09 +53.5%

Friday Watch

Night Trading 

• Asian equity indices are +.25% to +.75% on average.

• Asia Ex-Japan Investment Grade CDS Index 112.25 +1.0 basis point. 

• China Sovereign CDS  71.0 -.25 basis point.
  

• Bloomberg Emerging Markets Currency Index 52.21 +.01%.  
• Bloomberg Global Risk-On/Risk Off Index 4,555.0 -115.0 points.
• Volatility Index(VIX) futures 27.0 -.3%.
• Euro Stoxx 50 futures n/a.

• S&P 500 futures +.12%.

• NASDAQ 100 futures +.29%. 

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 Change in Non-Farm Payrolls for May is estimated to fall to 320K versus 428K in April.
• The Unemployment Rate for May is estimated to fall to 3.5% versus 3.6% in April.
• Average Hourly Earnings MoM for May is estimated to rise +.4% versus a +.3% gain in April. 
  

10:00 am EST

• The ISM Services Index for May is estimated to fall to 56.5 versus 57.1 in April.

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Fed's Brainard speaking, Eurozone Services PMI report, (CI) investor day, (R) investor day and the ASCO annual meeting 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 commodity and technology 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.