Tuesday Watch

Night Trading 

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

• Asia Ex-Japan Investment Grade CDS Index 107.75 -.5 basis point. 

• China Sovereign CDS  69.0 -1.0 basis point.
  

• Bloomberg Emerging Markets Currency Index 52.08 -.13%.  
• Bloomberg Global Risk-On/Risk Off Index 4,959.0 +15.0 points.
• Volatility Index(VIX) futures 27.2 +.66%.
• Euro Stoxx 50 futures -.55%.

• S&P 500 futures -.21%.

• NASDAQ 100 futures -.35%. 

Morning Preview Links

Earnings of Note 
Company/Estimate 

 

Before the Open: 

• (ASO)/1.41
• (CBRL)/1.31
• (PLAY)/1.14
• (GIII)/.58
• (SJM)/1.89
• (UNFI)/.98
  

After the Close:

• (CASY)/1.57
• (VRNT)/.47
  

Economic Releases

8:30 am EST

• The Trade Balance for April is estimated at -$89.5B versus -$109.8B in March. 
  

3:00 pm EST

• Consumer Credit for April is estimated at $35.0B versus $52.435B in March.

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The German Factory Orders report, US weekly retail sales reports, 3Y T-Note auction, BofA Tech Conference, RBC Energy/Power/Infra Conference, UBS Industrials/Transport Conference, Needham Auto Tech Conference and the JPMorgan Auto 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 25% net long heading into the day.

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.