Morning Market Internals

NYSE Composite Index:

• Volume Running -14.9% Below 100-Day Average 
• 10 Sectors Declining, 1 Sector Rising
• 21.8% of Issues Advancing, 74.6% Declining
• 7 New 52-Week Highs, 54 New Lows
• 34.8% of Issues Above 200-day Moving Average
• Average 14-Day RSI 50.0% 
• Bloomberg Global Risk-On/Risk-Off Index 5,211.0 +80.0 points
• Russell 1000: Growth/Value 15,154.0 +.77%
  
• Vix 24.5 +2.2%
• Total Put/Call .94 +2.2%
• TRIN/Arms 1.73 +73.0%

Thursday Watch

Evening Headlines

Bloomberg:                

• US Sees Path to More Sway in Asia as Xi’s Efforts Stall.  
• Yen Is a Whisker Away From Sliding to the Lowest in About 24 Years.
• Investors Scrutinize Builder China South City’s State Links.  
• Goldman Analysts Point to ‘Oily’ Emerging Market Currencies to Bet on.
• Stocks Sapped by Inflation Worries Amid Higher Oil: Markets Wrap.
  
• Oil Holds Near Three-Month High as US Stockpiles Tighten Further.
• Don’t Be Fooled by Daily Drama. The Stock Market Is in a Rut.  
• SEC Chief Takes Aim at Payment-for-Order Flow in Sweeping Plans for Stock Markets.  
• Americans Swarm Golden Visa Programs as Political Tensions Boil.  
• Congress’s Big Tech Crackdown Quickens With Rare Show of Unity.  
• Apple Will Handle Lending Itself With New Pay Later Service.  
• Hedge Fund D1 Borrowed Billions for a Hot Bet That Now Faces Reckoning.  
• Lumber Price Gets Chopped in Half Amid Chill in Housing Markets.

Wall Street Journal:

• Why Energy Companies Won’t Produce. They expect the war on fossil fuels to resume when the current crisis ends.
• Abbott Was Warned About Formula Plant Earlier Than Previously Known.
• House Passes Democrats’ Gun Measures as Senate Talks Continue.
• SEC’s Revamp of Trading Rules Faces Criticism From Wall Street.
• Hospitals Face Penalties for First Time for Failing to Make Prices Public.
• U.S. Considering Reducing Tariffs on China to Ease Inflation, Yellen Says.

Fox News:

• Alleged attempt to kill Kavanaugh follows months of heated rhetoric from Democrats.
• Pro-life group says Kavanaugh's alleged would-be assassin 'acted' on Schumer's words.
• Voters weigh in on the economy, guns, Biden's approval rating.

CNBC.com:

• Volkswagen is ‘actively’ looking to build new EV and battery facilities in the U.S., exec says.
• Mortgage demand falls to the lowest level in 22 years amid rising rates and slowing home sales.
• The market is worried that oil’s continued rise may cause a recession, Cramer says.

MarketWatch:                

• Oil prices could go ‘parabolic,’ putting global economy in a ‘critical situation,’ says Trafigura chief .
  
• This hedge fund manager called inflation early. He now says consumer prices will finish 2022 at a level that ‘screams failure by the Fed’.
  
• Inflation is coming for middle-class households as higher prices hit big-box stores.  
• Why Ray Dalio’s Bridgewater started betting against U.S. and European corporate bonds.

Zero Hedge

• Suspect Arrested Near Kavanaugh House Charged With Attempted Murder.
• "The Summer Of Starvation": Soaring Fertilizer Prices Unleash Chaos, Hunger Worldwide.
• Even If Ukraine's Ports Open Up Tomorrow, It Will Take "Months" To Demine Them: UN.
• Tennessee Governor Signs Executive Order To Enhance School Safety, Calls For 'Single Point Of Entry'.
• Judge Rejects GOP Challenge To Mail-In Voting In Arizona.
• Massive Migrant Caravan Targeting Texas Could Be Biggest One Yet. 
• Texas LNG Export Terminal Shuttered For Three Weeks After Explosion.
• Chinese Passenger Car Sales Down 17% Year Over Year.
• It's Open Season On Chicago Police: Shootings At Cops Up Fourfold In 2020, 2021.
  
• Hedge Fund Billionaire Warns Biden's Green Policies Could Spark "Train Wreck" For Natural Gas.
• US stocks declined as higher yields and looming risk events spur caution - Newsquawk Asia-Pac Market Open.
• FBI Investigates Retired 4-Star & Brookings President At Center Of Illegal Qatar Lobbying Scandal.
• Biden’s Move To Force Gender Ideology By Cutting Off School Lunch Funding Criticized By DeSantis.
  
• Inflation Is The Top Financial Concern For Americans; New Poll Finds.
• Lethargic risk appetite into ECB; Freeport LNG explosion latest global thorn - Newsquawk US Market Wrap.
• There's No Stopping A Recessionary Reckoning.
• Henry Hub Hammered As Texas Tea Rips; Gold Pops, Bitcoin & Bonds Drop.

Newsmax:

• More Bodies Found in Mariupol's 'Endless Caravan of Death'.

TheGatewayPundit.com: 

• BIDEN ECONOMY: Home Mortgage Applications Drop to Lowest Level in 22 Years.
• Healthy Young People Are Dying Suddenly and Unexpectedly from Mysterious Syndrome in Australia – Doctors Baffled and Seek Answers.
• Protest Planned at Home of Supreme Court Justice Kavanaugh Tonight in Wake of Assassination Attempt.
• Attorney General Garland Speaks on Attempted Assassination of Justice Kavanaugh After Biden Says Nothing to Reporters (VIDEO).
• Biden Sends Dark Signal on Attempted Assassination of Justice Brett Kavanaugh; Says Nothing to Reporters, Issues No Official Statement, Instead Deputy Press Secretary Emails a Couple Journos.
• Group that Doxxed and Led Protests at Brett Kavanaugh’s Home Issued Call to “Eject” Justice from Court, “Witness One Elite White Man Punished and Discarded for His Crimes” at Exact Time Would be Assassin Was on Scene Near Kavanaugh’s House.
• BIDEN KILLS THE MIDDLE CLASS: Gas Prices Soar to New All-Time High at $4.95/ Gallon — Closing in on $5/Gallon.
• Jim Jordan Alleges The FBI Is Purging Agents With Conservative Views Related To January 6.

The Epoch Times:  

• Biden Accelerating Obama’s Push for a ‘Woke’ Military, Undermining Combat Readiness, Analysts Say.
• ‘Pawns’ for Beijing: CCP Pressures US Officials to Tilt Policies in China’s Favor.

Twitter: 

• @FreightAlley - The Inbound Ocean TEU Volume Index (IOTI), that shows a drop in containers currently on the water bound for US ports comes from ocean bookings platforms that forwarders use, not customs data. Customs data has too long of a lag to be useful for forward projections. (graph)

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 -.5% to unch. on average.

• Asia Ex-Japan Investment Grade CDS Index 108.0 unch. 

• China Sovereign CDS  69.5 +1.25 basis points.
  

• Bloomberg Emerging Markets Currency Index 51.59 -.1%.  
• Bloomberg Global Risk-On/Risk Off Index 5,155.0 +21.0 points.
• Volatility Index(VIX) futures 26.3 +.24%.
• Euro Stoxx 50 futures -.5%.

• S&P 500 futures -.01%.

• NASDAQ 100 futures -.04%. 

Morning Preview Links

Earnings of Note 
Company/Estimate 

 

Before the Open: 

• (NIO)/-1.03
• (SIG)/2.38
  

After the Close:

• (CMTL)/0.00
• (DOCU)/.46
• (SFIX)/-.56
• (MTN)/9.01
  

Economic Releases

8:30 am EST

• Initial Jobless Claims for last week are estimated to rise to 207K versus 200K the prior week.
• Continuing Claims are estimated to fall to 1305K versus 1309K prior.  
  

12:00 pm EST

• 1Q Household Change in Net Worth.

Upcoming Splits

• (DXCM) 4-for-1
  

Other Potential Market Movers

• The ECB rate decision, China Trade Balance report, 30Y T-Note auction, Bloomberg June US Economic Survey, weekly EIA natural gas inventory report, (PPL) investor day, (WEN) investor day and the (AMD) financial analysts day 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 Falling into Final Hour on US Policy-Induced Stagflation Fears, Fed "Behind the Curve" Worries, European/Emerging Markets/US High-Yield Debt Angst, Transport/Financial Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Lower
  

• Sector Performance:  Most Sectors Declining
  

• Volume:  Below Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 24.4 +1.8%
• Bloomberg Global Risk On/Risk Off Index 5,042.0 +81.0 points

• Euro/Yen Carry Return Index 147.93 +1.27%

• Emerging Markets Currency Volatility(VXY) 12.4 +2.2%

• CBOE S&P 500 Implied Correlation Index 44.5 +2.4% 

• ISE Sentiment Index 144.0 +35.0 points
  

• Total Put/Call .88 -10.2%

• NYSE Arms .67 -27.2%

Credit Investor Angst:

• North American Investment Grade CDS Index 83.6 +2.7%
  

• US Energy High-Yield OAS 373.04 -.27%
• Bloomberg TRACE # Distressed Bonds Traded 311.0 +19.0
  

• European Financial Sector CDS Index 100.08 +1.9%

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

• Asia Ex-Japan Investment Grade CDS Index 107.53 -.25%
  

• Emerging Market CDS Index 286.68 +3.1%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 28.8 unch.
  
• Russia Sovereign Debt Credit Default Swap 4,265.2 +10.6%
  

• 2-Year Swap Spread 35.5 basis points -.5 basis point
  

• TED Spread 40.75 basis points +1.75 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -14.75 basis points unch.
  
• MBS  5/10 Treasury Spread  117.0 +3.0 basis points
  
• iShares CMBS ETF 48.23 -.25%
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 51.66 -.42%
• 3-Month T-Bill Yield 1.24% +1.0 basis point
  

• Yield Curve 26.0 basis points (2s/10s) +2.5 basis points
  

• China Iron Ore Spot 145.5 USD/Metric Tonne +.3%

• Citi US Economic Surprise Index -42.8 +.6 point

• Citi Eurozone Economic Surprise Index 27.4 +10.9 points
  

• Citi Emerging Markets Economic Surprise Index 13.3 -1.3 points

• 10-Year TIPS Spread 2.77 +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:

• 233 new infections/100K people(last 7 days total). 14.0%(-1.0 percentage point) of 1/14 peak -27/100K 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 -104 open in Japan 
• China A50 Futures: Indicating -57 open in China

• DAX Futures: Indicating -81 open in Germany

Portfolio:

• Slightly Higher:  On gains in my index hedges
  

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

• Market Exposure:  Moved to 25% Net Long
  

Bear Radar

Style Underperformer:

• Small-Cap Value -1.6%

Sector Underperformers:

• 1) Road & Rail -3.1% 2) Shipping -3.1% 3) Steel -3.0%

Stocks Falling on Unusual Volume: 

• CGNX, KTB, CRL, WTFC, VIRT, ATGE, CASY, NEX, RCL, PMVP, CCL, WCC, INTC, IVR, LRN, STT, CUK, VRNT, BROS, VTNR, CLAR, AFRM, MO, ZEN, SMAR, SIGA, MATX, GNK, SMG, EGLE, LOVE and HCP
  

Stocks With Unusual Put Option Activity:

• 1) VNQ 2) FIVE 3) ZEN 4) FXI 5) DOCU
  

Stocks With Most Negative News Mentions:

• 1) OMER 2) SMG 3) MO 4) ZEN 5) AFRM
  

Charts:

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

Bull Radar

Style Outperformer:

• Large-Cap Growth unch.

Sector Outperformers:

• 1) Biotech +1.4% 2) Gambling +1.2% 3) Retail +1.2%

Stocks Rising on Unusual Volume:

• RDBX, ROKU, ALLO, REVG, MRTX, LEU, HDSN, NOG, XMTR, PBT, OLLI, WFRD, KDNY, RVMD, PARR and THO
  

Stocks With Unusual Call Option Activity:

• 1) CRK 2) PARR 3) FIVE 4) URA 5) CPB

Stocks With Most Positive News Mentions:

• 1) ROKU 2) OCFT 3) RDBX 4) JFIN 5) PDD
  

Charts:

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

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%