Stocks Finish Slightly Higher on Diminished China Bubble-Bursting Fears, Short-Covering, Technical Buying, Consumer Discretionary/Industrial Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Around Even
  

• Sector Performance:  Mixed
  

• Volume:  Below Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 25.4 +2.5%
• Bloomberg Global Risk On/Risk Off Index 4,914.0 +154.0 points

• Euro/Yen Carry Return Index 145.10 +.48%

• Emerging Markets Currency Volatility(VXY) 12.0 unch.

• CBOE S&P 500 Implied Correlation Index 44.3 +1.7% 

• ISE Sentiment Index 103.0 +20.0 points
  

• Total Put/Call .95 -9.5%

• NYSE Arms .93 -33.0%

Credit Investor Angst:

• North American Investment Grade CDS Index 82.0 +.89%
  

• US Energy High-Yield OAS 365.98 -1.43%
• Bloomberg TRACE # Distressed Bonds Traded 277.0 -15.0
  

• European Financial Sector CDS Index 97.33 -.98%

• Italian/German 10Y Yld Spread 209.0 basis points -4.0 basis point
  

• Asia Ex-Japan Investment Grade CDS Index 108.11 -3.35%
  

• Emerging Market CDS Index 277.43 +2.3%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 28.8 +.37%
  
• Russia Sovereign Debt Credit Default Swap 10,195.4 n/a
  

• 2-Year Swap Spread 37.5 basis points -.5 basis point
  

• TED Spread 49.5 basis points +1.0 basis point
  

• 3-Month EUR/USD Cross-Currency Basis Swap -15.0 basis points -.25 basis point
  
• MBS  5/10 Treasury Spread  121.0 +10.0 basis points
  
• iShares CMBS ETF 48.0 -.68%
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 52.15 -.12%
• 3-Month T-Bill Yield 1.18% +3.0 basis points
  

• Yield Curve 30.5 basis points (2s/10s) +1.0 basis point
  

• China Iron Ore Spot 144.55 USD/Metric Tonne +.5%

• Citi US Economic Surprise Index -44.2 +1.4 points

• Citi Eurozone Economic Surprise Index 16.5 +1.6 points
  

• Citi Emerging Markets Economic Surprise Index 14.0 -4.3 points

• 10-Year TIPS Spread 2.78 +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:

• 227 new infections/100K people(last 7 days total). 13.0%(unch.) of 1/14 peak +7/100K people from prior report.
  
• New Covid-19 patient hospital admissions per 100K population -82.9%(-.5 percentage point) from peak 7-day avg. of 1/9/21 - 1/15/22
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +115 open in Japan 
• China A50 Futures: Indicating -115 open in China

• DAX Futures: Indicating -45 open in Germany

Portfolio:

• Slightly Higher:  On gains in my industrial/commodity sector longs
  

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

• Market Exposure:  Moved to 25% Net Long
  

Bear Radar

Style Underperformer:

• Small-Cap Growth -.2%

Sector Underperformers:

• 1) Biotech -2.1% 2) Gold & Silver -1.6% 3) Software -.5%

Stocks Falling on Unusual Volume: 

• RC, ZUMZ, MRTX, VSAT, CRGY, AI, OKTA, FSLR, NGM, MUSA, KNBE, IVR, REGN, KD, AFRM, SG, RCKT, UDMY, FROG, LE, ESMT, SSYS, IOT, FATE, FNA, GBT, EWCZ, CXM, SIGA, PRCT, ICPT, RELY, AMEH, RLAY, QTWO, NRGV and FRGE
  

Stocks With Unusual Put Option Activity:

• 1) COUP 2) AMZN 3) ZEN 4) FSLR 5) LPX
  

Stocks With Most Negative News Mentions:

• 1) GEVO 2) UPST 3) LICY 4) OKTA 5) AFRM
  

Charts:

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

Bull Radar

Style Outperformer:

• Mid-Cap Growth +.3%

Sector Outperformers:

• 1) Electric Vehicles +1.7% 2) Gambling +1.4% 3) Airlines +1.3%

Stocks Rising on Unusual Volume:

• ARRY, ASPN, SHC, SWAV, CODI, ACET, LTHM, IRWD, RUN, ON, KDP, ARIS, VICI and NSIT
  

Stocks With Unusual Call Option Activity:

• 1) BNO 2) K 3) AMZN 4) GEVO 5) VICI

Stocks With Most Positive News Mentions:

• 1) AERC 2) CISO 3) SHC 4) LI 5) ENPH
  

Charts:

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

Mid-Day Market Internals

NYSE Composite Index:

• Volume Running -7.5% Below 100-Day Average 
• 3 Sectors Declining, 8 Sectors Rising
• 54.3% of Issues Advancing, 41.9% Declining
• 74 New 52-Week Highs, 30 New Lows
• 31.8% of Issues Above 200-day Moving Average
• Average 14-Day RSI 47.4% 
• Bloomberg Global Risk-On/Risk-Off Index 4,912.0 +149.0 points
• Russell 1000: Growth/Value 14,986.0 +.20%
  
• Vix 25.4 +2.3%
• Total Put/Call .94 -10.5%
• TRIN/Arms .90 -35.3%

Monday Watch

Today's Headlines

Bloomberg:           

• Hard-Landing Dread Eclipses Brief Rally in Emerging Stocks.   
• Australia Inflation Accelerated Further From 5.1%, Chalmers Says.   
• How China Is Reviving Tools for Hedging Credit Risk.
• US May Allow More Iran Oil to Flow Even Without Deal, Says Vitol.  
• Russia Hits Kyiv With Missiles; Putin Warns West on Arms.
• Lifting Tariffs on Goods May Make Sense, US Commerce Chief Says.
• Bitcoin Miners Are Selling Tokens as Prices Linger Near Lows.

Wall Street Journal:

• Progressive Prosecutor Movement Tested by Rising Crime and Angry Voters.
• ‘Friend-Shoring’ Might Be Bad for Global Growth, Inflation.
• Macy’s, Gap and Other Stores Are Stuck With the Wrong Stuff.
• A Rise in Suicides by Young Children Leaves Families Searching for Answers.
• The Uvalde Police Scandal. Students inside were calling 911 and begging for help. The officers stayed outside for almost an hour during the mass shooting.
• Gun Reform Legislation Makes Progress in Senate.
• Which Stocks Do Best During High Inflation?

Fox News: 

• Elon Musk asks a question millions want answered about Epstein and the DOJ.

CNBC:

• Top Wall Street analysts are gaining more confidence in these stocks.
• Investors set their sights on inflation report as bear market rally falters.
• Fed’s Mester says inflation hasn’t peaked, half-point rate hikes needed.
• Beijing to allow indoor dining, further easing Covid curbs.
• Why the global soil shortage threatens food, medicine and the climate.

Zero Hedge:

• The Top 10 Creepiest & Most Dystopian Things Pushed By The World Economic Forum. 
• Elon Musk Wonders Why DOJ Hasn't Leaked Epstein Client List - And Media Doesn't Care.
• The Great Robo-placement? Workplace Robot Orders Jump 40% In First Quarter.
• Diesel Once Again Racing Higher Than Prices For Crude Oil, Gasoline. 
• Anti-Green Blowback: ESG Funds Suffer Biggest Monthly Outflows On Record. 
• There's No Immediate Cure For Sky-High Gasoline Prices.
• Israel Warns It Will Use "Right To Self-Defense" To Keep Nukes Out Of Iran.
• Goldman: June Op-Ex Is "A Literally Massive, Repeat Massive" $3.2 Trillion.
• Former Judge Killed In "Targeted" Attack Against Judicial System, Officials Say.
• The 'Absurd Market' Hypothesis.
• Cost Of Getting Hammered In UK Soars 70% Since 2008.
• Escobar: Bilderberg Does China, Realizes "The Chessboard Sucks".
• Red Flag Gun Laws Set The Stage For Selective Disarmament Of Conservatives.
• Watch: An Enraged Peter Navarro Describes Being Arrested And Shackled Over Misdemeanor J6 Indictment.
• Watch: Tucker Carlson Warns "Disarming You Is The Point" Of Biden Gun Control Push.
• The Hamptons Summer Rental Market Is Collapsing.
• "The Options Are Looking Pretty Bleak": California Gas Prices Sprint Past $6 Per Gallon As Mendocino Station Approaches Double Digits.

NewsMax:     

• Biden Mulls Lifting Trump China Tariffs to Fight Inflation.  
• Russian Missiles Strike Kyiv, Shattering Sense of Calm.
• Putin's Russian Pundit: 'Nuclear War Is Coming'.  
• Dershowitz to Newsmax: Navarro's Arrest 'Dangerous to Democracy'.

TheGatewayPundit.com:

• Pizza Hut Goes ‘Full Woke,’ Recommending Drag Queen Books For Kids As Young As Five. 
• UPDATE: Investigation Reopened into Mysterious Death Of Clinton Advisor Linked To Jeffrey Epstein – Was Found HANGING FROM TREE WITH SHOTGUN BLAST TO CHEST. 
• Watch: Woke England Team Booed by 35,000 Hungarian Fans Mostly Children For Taking the Knee Before Saturday’s Defeat. 
• Obama Judge Amy Totenberg Sealed Halderman Report Showing Material Voting Machine Issues in Georgia – This Week CISA Released Junk Rebuttal to Report Still Not Released.
• Russia Threatens Direct Attacks on Western Cities for Providing Long-Range Missiles to Ukraine.
• 74 PERCENT of Baby Formula Products Are OUT OF STOCK – Babies Are Starving – While Joe Biden Hits the Beach.
• The Democratic Friendly New York Times Changes It’s Tune On The Nation’s Crime Surge.
• BIDEN ENERGY CRISIS: Sunday Gas Prices SURGE TO $4.85 per Gallon – Another New Record! – Up Nearly 4¢ Overnight.
• Another Mass Shooting in a Big ‘Progressive’ City Leaves 3 Dead and 11 Others Wounded.
• Missouri Secretary of State John R. Ashcroft Issues Statement on Vulnerabilities of Dominion Voting Systems.
• REPORT: John Deere Moving Part Of Production From Iowa To Mexico.
• Teen Who Mowed Down Mom and Infant Sentenced to “Juvenile Probation Camp” Thanks to Marxist Los Angeles DA George Gascon.
• Children Invited on Stage to Perform with Drag Queens in 21+ Gay Bar in Dallas (VIDEO).
• Kyle Rittenhouse to Potentially Sue Facebook’s Zuckerberg and ‘At Least 10’ Other Prominent Figures and Companies.

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). 
• COVID Money Tracker. Tracking the Covid response.
  

Morning Preview Links

Earnings of Note

Company/Estimate

Before the Open:

• (SAIC)/1.77
  

After the Close:

• (COUP)/.05
  

Economic Releases

• None of note

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The China Services PMI report, Annual ASCO meeting, (AAPL) WWDC, William Blair Growth Stock Conference, KBW Keefe Bruyette Woods Regional Bank Conference, Goldman Travel/Leisure Conference and the Baird Consumer Tech/Services Conference could also impact trading today.

US Equity Market Hours

• 9:30 am - 4:00 pm EST

BOTTOM LINE: 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:

• 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).