Morning Market Internals

NYSE Composite Index:

• Volume Running -13.4% Below 100-Day Average 
• 8 Sectors Declining, 3 Sectors Rising
• 33.7% of Issues Advancing, 62.6% Declining
• 71 New 52-Week Highs, 18 New Lows
• 33.2% of Issues Above 200-day Moving Average
• Average 14-Day RSI 48.1% 
• Bloomberg Global Risk-On/Risk-Off Index 5,120.0 +159.0 points
• Russell 1000: Growth/Value 15,051.0 +.57%
  
• Vix 24.0 +.1%
• Total Put/Call .83 -15.3%
• TRIN/Arms .49 -46.7%

Wednesday Watch

Evening Headlines

Bloomberg:            

• Stagflation Danger Spurs World Bank to Cut Global Growth Outlook.
• China Export Boom Fades as Spending Shifts, Cheaper Rivals Gain.
• South Korea Truckers Go on Strike at Ports as Fuel Costs Soar.
• Japan’s Economy Contracts Less Than Expected as Recovery Begins.
• Asia Stocks Rise After Yields Retreat; Yen Falls: Markets Wrap.  
• Refiners Pay Soaring Premiums for Diesel-Rich Oil from Nigeria.
• The Dire Warnings on Inflation-Busting Are Coming True.  
• Funding Squeeze at Buy-Now-Pay-Later Pioneer Affirm Flashes Warning Sign for Industry.  
• US Consumer Credit Surges Again as Loans, Card Spending Jump.  
• Janet Yellen Warns Inflation Is Likely to Stay High.  
• Elon Musk’s Twitter Deal Draws Investor Suit Over Spam Account Claims.  
• Citadel Securities, Virtu Build Crypto Plan With Brokerages.  
• Solar-Panel Makers Scorn 'Pittance' of Aid in Biden Relief Plan.

 Wall Street Journal:

• Yellen, World Bank Expect Elevated Inflation to Persist.
• Want to Fly This Summer? Good Luck Traveling to a Small City.
• Commercial Real Estate Shows Signs of Cooling.
• In Russia’s Battle for East Ukraine, Both Sides Have Higher Stakes at Play.

Fox News:

• Voters to decide fate of San Francisco's DA as primaries underway in 7 states.

CNBC.com:

• World Bank slashes global growth forecast to 2.9%, warns of 1970s-style stagflation.
• Fed GDP tracker shows the economy could be on the brink of a recession.
• Apple is turning your iPhone into a fintech service taking on PayPal, Affirm and more.
• Lyft plans to build a hybrid network of autonomous and driver vehicles, co-founder says.
• Target expects squeezed profits from aggressive plan to get rid of unwanted inventory.  
  

MarketWatch:               

• Short sellers raise bets against GameStop and AMC to highest level in a year as Wall Street sees more pain ahead.
  
• Americans have not felt this gloomy about their finances since the Great Recession: ‘I walk every day just to get (the worrying) out of my head.’.
  
• Bipartisan crypto legislation would have CFTC oversee bitcoin, ether and most other digital assets.  
• Here’s why the stock market gets ‘squirrelly’ when bond yields rise above 3%.

Zero Hedge: 

• Shocking Consumer Credit Numbers: Everyone Maxing Out Their Credit Card Ahead Of The Recession. 
• Family Of Latest Clinton-Linked Suicide Blocks Release Of Shotgun Death Details.
• "Somebody's On Path To Destruct America," Warns US Oil Billionaire.
• Hunter's Hooker Scored $20,000 PPP Loan As Joe Biden Entered White House.
• US Import Demand Is Dropping Off A Cliff.
• Leading Dems Issue Letter Urging Biden To Distance US From 'Unreformed' Saudi Crown Prince .
• "We're Closely Monitoring" - Did Yellen Just Signal Gold-Grab Over Russian Sanctions Loophole?
• 10 Under-Reported Revelations From Trial Of Former Clinton Lawyer.
• Unstoppable bull (in some stuff)...?
• As White House Continues To Push Jabs For Kids, FL Surgeon General Questions Safety.
• How Brazil Is Saving The World From A Catastrophic Food Crisis.
• Newsquawk Asia-Pac Market Open - US stocks shrugged off early caution and corporate guidance cuts to finish in the green.
• Atlanta Fed Slashes Q2 GDP Again, Now Just 0.9% Away From Official Recession.
• WTI Dips After Unexpected Crude Build, Gasoline Stocks Up Most Since Jan.
• Uranium Stocks Soar On Report US Seeking Billions To End Reliance On Russian Enriched Uranium.
• Newsquawk US Market Wrap: Stocks shake off Co. warnings while Treasury curve flattens ahead of key risk events.
• Stocks & Bonds Spike As Growth/Stagflation Scares Soar.

Newsmax:

• Peter Navarro to Newsmax: Jan. 6 Panel's 'Kangaroo' Tactics Aimed at Derailing a Trump 2024 Run.
• Report: 40K Ukrainian Civilians Killed or Wounded to Date.

TheGatewayPundit.com: 

• “How Can You be Confident That Government Spending is Not the Cause of Inflation?” – Yellen Ignores Reporters as Her Staff Runs Interference (VIDEO).
• Seattle School Principal Refused to Cooperate With Police as Deranged Intruder Was Terrorizing a Class of Fifth Grade Students, Allowing Him to Exit School Lockdown And Immediately Commit Multiple Assaults Before His Arrest.
• Just in: FDA Advisers Recommend Authorizing Novavax Covid Vaccine Despite Risks of Myocarditis.
• Janet Yellen: US Faces “Unacceptable Levels of Inflation” (VIDEO).
• Michigan Democrat Sen. Debbie Stabenow Brags That She Passed “Every Single Gas Station” in Her Brand New Electric Vehicle and ‘It Didn’t Matter How High Gas Was’ (VIDEO).
• CNN Admits GOP In Best Position For Midterms “In Over 80 Years”.
• DHS Releases Bulletin Citing Concerns of ‘Heightened Threats,’ and Violent Months Ahead with Supreme Court Ruling and Midterms Approaching.
• NYC Violence Leaves Residents Anxious, Fearing They Will Become a Victim of a Shooting, Stabbing or Other Violent Act.
• Out-Of-Control Gas Prices on Track To Reach $5 Per Gallon By Week’s End.

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).

Night Trading 

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

• Asia Ex-Japan Investment Grade CDS Index 108.0 -.25 basis point. 

• China Sovereign CDS  68.25 -.75 basis point.
  

• Bloomberg Emerging Markets Currency Index 51.86 -.04%.  
• Bloomberg Global Risk-On/Risk Off Index 5,015.0 +55.0 points.
• Volatility Index(VIX) futures 26.5 +.6%.
• Euro Stoxx 50 futures +.39%.

• S&P 500 futures -.20%.

• NASDAQ 100 futures -.26%. 

Morning Preview Links

Earnings of Note 
Company/Estimate 

 

Before the Open: 

• (BF/B)/.26
• (CPB)/.61
• (OLLI)/.31
• (THO)/4.79
• (VRA)/-.16
  

After the Close:

• (ABM)/.84
• (FIVE)/.58
• (OXM)/2.76
  

Economic Releases

10:00 am EST

• Wholesale Trade Sales MoM for April.  
  

10:30 am EST

• Bloomberg consensus estimates call for a weekly crude oil inventory decline of -2,328,570 barrels versus a -5,068,000 barrel decline the prior week. Gasoline supplies are estimated to rise by +1,000,000 barrels versus a -711,000 barrel decline the prior week. Distillate inventories are estimated to rise by +750,000 barrels versus a -529,000 barrel decline the prior week. Finally, Refinery Utilization is estimated to rise by +.42% versus a -.6% decline prior.

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Treasury Secretary Yellen's testimony to House, Eurozone GDP report, 10Y T-Note auction, weekly MBA Mortgage Applications report, Jefferies Healthcare Conference, (SHW) financial community presentation and the Deutsche Bank Basic Materials Conference 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 industrial 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 Higher into Final Hour on Lower Long-Term Rates, Short-Covering, Technical Buying, Energy/Biotech Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Higher
  

• Sector Performance:  Most Sectors Rising
  

• Volume:  Below Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 24.2 -3.4%
• Bloomberg Global Risk On/Risk Off Index 4,963.0 +17.0 points

• Euro/Yen Carry Return Index 145.93 +.56%

• Emerging Markets Currency Volatility(VXY) 12.1 +1.9%

• CBOE S&P 500 Implied Correlation Index 43.9 +1.0% 

• ISE Sentiment Index 129.0 +35.0 points
  

• Total Put/Call 1.03 unch.

• NYSE Arms .89 +17.1%

Credit Investor Angst:

• North American Investment Grade CDS Index 81.7 unch.
  

• US Energy High-Yield OAS 376.58 +2.6%
• Bloomberg TRACE # Distressed Bonds Traded 291.0 +14.0
  

• European Financial Sector CDS Index 98.21 +.83%

• Italian/German 10Y Yld Spread 200.0 basis points -9.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 107.66 -.46%
  

• Emerging Market CDS Index 278.4 +.43%
  

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

• 2-Year Swap Spread 36.0 basis points -1.5 basis points
  

• TED Spread 39.0 basis points -10.5 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -14.75 basis points -.25 basis point
  
• MBS  5/10 Treasury Spread  114.0 -8.0 basis points
  
• iShares CMBS ETF 48.22 +.34%
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 51.93 -.42%
• 3-Month T-Bill Yield 1.23% +5.0 basis points
  

• Yield Curve 23.5 basis points (2s/10s) -7.0 basis points
  

• China Iron Ore Spot 144.95 USD/Metric Tonne +.5%

• Citi US Economic Surprise Index -43.4 +.8 point

• Citi Eurozone Economic Surprise Index 16.5 +1.6 points
  

• Citi Emerging Markets Economic Surprise Index 14.8 +.8 point

• 10-Year TIPS Spread 2.74 -4.0 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:

• 260 new infections/100K people(last 7 days total). 15.0%(+2.0 percentage points) of 1/14 peak +33/100K people from prior report.
  
• New Covid-19 patient hospital admissions per 100K population -81.4%(+1.5 percentage point) from peak 7-day avg. of 1/9/21 - 1/15/22
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +217 open in Japan 
• China A50 Futures: Indicating +54 open in China

• DAX Futures: Indicating +13 open in Germany

Portfolio:

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

• Disclosed Trades:  Covered some of my (IWM)/(QQQ) hedges
  

• Market Exposure:  Moved to 50% Net Long
  

Bear Radar

Style Underperformer:

• Large-Cap Growth +.2%

Sector Underperformers:

• 1) Homebuilders -1.2% 2) Alt Energy -.8% 3) Electric Vehicles -.8%

Stocks Falling on Unusual Volume: 

• SPTN, FYBR, ENVX, ARCB, VIRT, OWL, VSCO, ARIS, VICI, PRM, FRSH, ESAB, FBRT, CODI, UNFI, MTZ, LESL, EHC, CBRL, RELY, PRCT, UDMY, ENFN, DFH, PACK, MNTK and REVG
  

Stocks With Unusual Put Option Activity:

• 1) CPB 2) ASHR 3) COUP 4) AMZN 5) SAVE
  

Stocks With Most Negative News Mentions:

• 1) NGL 2) TGT 3) MULN 4) GT 5) SNCR
  

Charts:

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

Bull Radar

Style Outperformer:

• Small-Cap Growth +.7%

Sector Outperformers:

• 1) Oil Service +2.5% 2) Energy +2.1% 3) Biotech +1.9%

Stocks Rising on Unusual Volume:

• MRTX, GTLB, METC, SIGA, PARR, AMPH, FRG, KSS, ACET and HCP
  

Stocks With Unusual Call Option Activity:

• 1) DRE 2) ASHR 3) COUP 4) METC 5) PLAY

Stocks With Most Positive News Mentions:

• 1) GTLB 2) METC 3) KSS 4) HCC 5) MRTX
  

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running -15.8% Below 100-Day Average 
• 7 Sectors Declining, 4 Sectors Rising
• 46.9% of Issues Advancing, 48.6% Declining
• 56 New 52-Week Highs, 46 New Lows
• 31.8% of Issues Above 200-day Moving Average
• Average 14-Day RSI 47.4% 
• Bloomberg Global Risk-On/Risk-Off Index 4,888.0 -59.0 points
• Russell 1000: Growth/Value 14,970.0 -.05%
  
• Vix 25.1 unch.
• Total Put/Call .96 -5.9%
• TRIN/Arms .92 +22.4%