Stocks Lower into Afternoon on China Virus Lockdown/Bubble Bursting Fears, US Dollar Strength, Technical Selling, Alt Energy/Consumer Discretionary 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) 24.7 -5.2%
• DJIA Intraday % Swing .57% -73.2%
  
• Bloomberg Global Risk On/Risk Off Index 4,289.0 -351.0 points

• Euro/Yen Carry Return Index 142.26 -.22%

• Emerging Markets Currency Volatility(VXY) 12.3 +1.7%

• CBOE S&P 500 Implied Correlation Index 46.8 +1.9% 

• ISE Sentiment Index 108.0 +4.0 points
  

• Total Put/Call .85 -9.6%

• NYSE Arms 1.92 +24.7%

Credit Investor Angst:

• North American Investment Grade CDS Index 90.96 +.09%
  

• US Energy High-Yield OAS 514.95 +1.5%
• Bloomberg TRACE # Distressed Bonds Traded 459.0 -35.0
  

• European Financial Sector CDS Index 128.76 +.43%

• Italian/German 10Y Yld Spread 197.0 basis points +3.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 149.0 -.35%
  

• Emerging Market CDS Index 355.03 +3.2%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 26.71 -.11%
  
• Ukraine Sovereign Debt Credit Default Swap 11,525.4 -10.6%
  

• 2-Year Swap Spread 26.5 basis points -2.5 basis points
  

• TED Spread 54.0 basis points -1.75 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -17.0 basis points -.25 basis point
  
• MBS  5/10 Treasury Spread  139.0 -1.75 basis points
  
• iShares CMBS ETF 47.92 +.31%
• Avg. Auto ABS OAS .97 -1.0 basis point
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 48.62 -.87%
• 3-Month T-Bill Yield 1.99% +10.0 basis points
  

• Yield Curve -7.5 basis points (2s/10s) -5.0 basis points
  

• China Iron Ore Spot 108.05 USD/Metric Tonne -1.8%

• Citi US Economic Surprise Index -56.0 +.7 point

• Citi Eurozone Economic Surprise Index -42.6 -2.3 points
  

• Citi Emerging Markets Economic Surprise Index 25.4 -4.6 points

• 10-Year TIPS Spread 2.33 -6.0 basis points
  
• Highest target rate probability for September 21st FOMC meeting: 65.1%(-1.8 percentage points) chance of 2.75%-3.0%. Highest target rate probability for November 2nd meeting: 47.6%(-1.5 percentage points) chance of 3.25%-3.5%.
  

US Covid-19:

• 231 new infections/100K people(last 7 days total). 13.0%(-1.0 percentage point) of 1/14 peak +0/100K people from prior report.
  
• New Covid-19 patient hospital admissions per 100K population -75.3%(+.5 percentage point) from peak 7-day avg. of 1/9/21 - 1/15/22
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -87 open in Japan 
• China A50 Futures: Indicating -90 open in China

• DAX Futures: Indicating +61 open in Germany

Portfolio:

• Slightly Lower:  On losses in my tech/medical/commodity sector longs
  

• Disclosed Trades:  None
  

• Market Exposure:  50% Net Long
  

Bear Radar

Style Underperformer:

• Small-Cap Growth -2.3%

Sector Underperformers:

• 1) Alt Energy -5.8% 2) Gambling -5.3% 3) Social Media -5.0%

Stocks Falling on Unusual Volume: 

• PCTY, SNDX, WING, AGCO, SLRC, EVOP, FCX, SEAS, SBOW, PRVA, GBX, EVH, LYFT, RCKT, TSLA, LVS, HELE, WYNN, ZM, OI, RBLX, TWTR, NVAX, CHPT, UPWK, CVNA, CDLX, DUOL, FSLY and DOCN
  

Stocks With Unusual Put Option Activity:

• 1) TWTR 2) LVS 3) THO 4) DBX 5) PEP
  

Stocks With Most Negative News Mentions:

• 1) FSLY 2) TWTR 3) NIO 4) BABA 5) WYNN
  

Charts:

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

Bull Radar

Style Outperformer:

• Large-Cap Value -.8%

Sector Outperformers:

• 1) Pharma +.2%% 2) Homebuilding +.1% 3) Utilities unch.

Stocks Rising on Unusual Volume:

• PLRX and DWAC
  

Stocks With Unusual Call Option Activity:

• 1) SRG 2) CTRA 3) VUZI 4) VTGN 5) KWEB

Stocks With Most Positive News Mentions:

• 1) PLRX 2) ITRM 3) TBLT 4) DWS 5) CODX
  

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running -22.7% Below 100-Day Average 
• 11 Sectors Declining, 0 Sectors Rising
• 26.1% of Issues Advancing, 70.5% Declining
• 2 New 52-Week Highs, 88 New Lows
• 18.2% of Issues Above 200-day Moving Average
• Average 14-Day RSI 41.8% 
• Bloomberg Global Risk-On/Risk-Off Index 4,216.0 -424.0 points
• Russell 1000: Growth/Value 15,496.0 -.46%
  
• Vix 26.1 +5.9%
• Total Put/Call .76 -19.2%
• TRIN/Arms 1.95 +26.6%

Monday Watch

Today's Headlines

Bloomberg:              

• French Minister Says Russian Gas Cutoff Most Likely Scenario. 
• Almost 4.5 Million UK Families are in Serious Financial Trouble.  
• Europe’s Rush to Buy Africa’s Natural Gas Draws Cries of Hypocrisy.  
• China Stimulus Unlikely to Reverse Global Metals Meltdown.  
• China’s Bumper Data Week Will Set Tone for Economic Stimulus.  
• Chinese Bank Depositors Face Police in Angry Protest.
• Biden’s Quest for Saudi Oil Faces Reality-Check of Slim Capacity.
• Biden-Xi Call Likely to Take Place in Coming Weeks, Blinken Says.  
• Blinken Blasts China’s Support for Russia, Calls Out Xi.  
• Rice Faces Squeeze on Higher Fertilizer Costs and Booming Demand.
  
• Canada Will Return Sanctioned Nord Stream Turbine to Germany.
  
• Japan Ruling Bloc Easily Wins Vote Held Days After Abe’s Murder.
  
• Biden Says No Decision Made on Rolling Back China Import Tariffs.  
• US Futures, Oil Dip; Stocks Set for Cautious Open: Markets Wrap.  
• Oil Dips at Start of Week as Economic Slowdown Hangs Over Market.
• Is a Recession Coming? Investors Turn to Earnings for Clues. 
• Bitcoin Is More Likely to Hit $10,000 Than $30,000, Survey Finds.   
• Five Things You Need to Know to Start Your Day.

Wall Street Journal:

• For the Fed, Easing Too Soon Risks Repeat of Stop-and-Go 1970s. While markets have rallied on expectations central bank will respond to recession risk, that might not be enough if inflation is stubborn.
• Sri Lankan President to Resign as Protesters Storm Residence.
• Sri Lanka Crisis Flashes Warning for Other Indebted Economies.
• Stocks Face Test as Inflation Looms Over Earnings Season.
• Tech’s Red-Hot Hiring Spree Shows Signs of Cooling.
• Manufacturers Brace for Nord Stream Repairs, Fearing Pipeline Won’t Reopen.
• Fed Up With China, One Boss Tries Removing It From the Supply Chain.
• Freight Rates Are Starting to Fall as Shipping Demand Wavers.
• Reddit Traders Haven't Given Up On GameStop. Neither Have Short Sellers.
• Abe’s Goal of Revising Japan Constitution Moves Closer After Party’s Election Victory.
• Congress to Juggle China Bill, Democrats’ Climate and Drug-Pricing Ambitions.

Fox News:

• WATCH: Biden voters regret backing the President as inflation surges, 'Marxist' policies take toll.
• Biden 'surrendered energy independence on day one' and made US more vulnerable, says former Home Depot CEO.
• Hundreds of state workers resign over return-to-office policy. 
• Economist issues ominous warning to Americans about upcoming inflation numbers.
• New poll shows inflation ranks as biggest concern to Americans over abortion, guns.

CNBC:

• How much money it takes to be ‘financially comfortable’ in 12 major U.S. cities.
• Another hot inflation report and the start of earnings season make for a challenging week ahead.
• Top Wall Street analysts say these stocks have the best long-term value.
• Sri Lanka opposition hopes to install new government amid turmoil. 
• ‘Thor: Love and Thunder’ pulls in $143 million in domestic opening.
• Biden says he’s mulling health emergency for abortion access.

Zero Hedge:

• Chinese Bank Run Turns Violent After Angry Crowd Storms Bank of China Branch Over Frozen Deposits.
• French, German Leaders Warn Populations "Prepare For Total Cut-Off Of Russian Gas" As Social Unrest Looms.
• Red States Chart Faster Economic Recovery Than Blue States.
• Housing Crisis Worsens As Affordability Reaches Record Low.
• Biden’s Selling Of Oil From Reserve To Hunter Biden-Tied Chinese Firm 'Impeachable': Republicans. 
• Tyranny On Autopilot: LA County Set To Resume Mask Mandate.
• Knives Out: WaPo, NYT Go For Biden Blood In Scathing Moment Of Honesty.
• The Façade Of California's Economy Is About To Crumble.
• Army General Suspended Over Tweet To Jill Biden: "Glad You Finally Know What A Woman Is".
• Explosion Rocks Oklahoma Natural Gas Plant.
• 'Rationality Itself Is Under Attack': CEO Of The Babylon Bee.
• Morgan Stanley: Soaring Dollar Will Crush Earnings Growth And Snuff The Rally In Stocks.
• "Your Gas Guzzler Kills" - Radical Climate Group Deflates Bay Area SUV Tires.
• Now An Outbreak Of The Marburg Virus Has Begun.
• Europe's Big And Expensive Energy Mistake.
• New Survey Reveals Significant Doubts About Masks And Vaccines.
• US Senators Meet With Ukrainian President, Discuss Designating Russia As "State Sponsor Of Terrorism"
• Former Federal 'Informant' Warned Of Antifa, BLM Infiltrators At Capitol On Jan. 6.
• Shinzo Abe's Murder Suspect Claims Motive Of His Attack.
• Goldman Trading Desk End-Of-Week Summary: Massive CTA Demand Coming In.

MarketWatch.com:              

• These companies hopped on the crypto train when times were booming. Which are exposed in a downturn?

NewsMax:    

• Ben Carson: Learn Lessons From Past COVID Mandates.
• Ukraine: 15 Dead in Rocket Attack on Apartment Building. 
• Texas AG Demands Biden Apologize Over Mounted Border Agents Controversy.

TheGatewayPundit.com:

• DC Antifa Group Offering Reward for Locations of Conservative Supreme Court Justices.
• While NATO Maps Out It’s Plans for World War III — Russian State Space Corporation Releases Coordinates of Western Targets and Mock Joe Biden.
• Biden’s Claim Of 10-Year-Old Who Had To Cross State Lines For Abortion Is Called Into Question By Fact-Checkers.
• Zelenskyy Consolidates Ukrainian TV Outlets Into One State Channel After Abolishing Opposition Party and Seizing Its Assets.
• Short Video Clips from President Trump’s Record-Setting Rally in Anchorage, Alaska.
• MUST WATCH: Dr. Discusses New Study That Shows Pfizer’s Covid mRNA Vaccines Can MODIFY DNA in the Human Genome (VIDEO).
• Can’t Make This Up: Pfizer Asks Court to Dismiss Whistleblower Lawsuit. 
• BREAKING: TRUMP WAIVES EXECUTIVE PRIVILEGE — Steve Bannon Willing to Testify Before Sham Jan. 6 Committee of “Thugs and Hacks” — IT’S ABOUT TO GET REAL!
• WATCH: Mom Throws Herself on Hood of Car After Carjacker Steals It With Her Children Inside.
• Sen. Ron Johnson: The FBI Had Hunter Biden’s Computer Since Dec. 2019 – They Havent “Done Squat With It” (VIDEO).
• SHOCKING VIDEO: San Francisco Children Get Off Bus in Open Air Drug Market Filled With Homeless Addicts to Get Home From School.

The Epoch Times:

• China’s COVID Lockdowns Inflict ‘Psychological Scars’ and ‘Endless Humiliation’: Shanghai Resident.
• China Is More Likely to Attack India Than Taiwan in Near Future: Author.

OpenVAERS:

• VAERS US COVID Vaccine Adverse Event Reports. 835,062 Reports(+2,129 from prior week) Through June 24th, 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.
  

Night Trading

• Asian indices are -.25% to +.75% on average.
• Asia Ex-Japan Investment Grade CDS Index 148.75 -2.75 basis points.
• China Sovereign CDS 80.0 -1.75 basis points.
• Bloomberg Emerging Markets Currency Index 49.0 -.02%.
• Bloomberg Global Risk-On/Risk Off Index 4,741.0 +101.0 points.
• Volatility Index(VIX) futures 27.6 +.6%. 
• Euro Stoxx 50 futures n/a.
• S&P 500 futures -.28%.
• NASDAQ 100 futures -.44%.

Morning Preview Links

Earnings of Note

Company/Estimate

Before the Open:

• (AZZ)/1.01
• (GBX)/.59
  

After the Close:

• (PEP)/1.74
• (PSMT)/.82
  

Economic Releases

• None of note

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Japan PPI report and the 3Y T-Note auction could also impact trading today.

US Equity Market Hours

• 9:30 am - 4:00 pm EST

BOTTOM LINE: Asian indices are mostly higher, boosted by industrial and consumer 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 week.

Today's Headlines

Bloomberg:

• Putin Is Set to Halt Gas and Germany Fears It’s Not Coming Back.
• Germans Face ‘Enormous Wave’ of Energy Price Hikes, Uniper Says.  
• Blinken Blasts China’s Support for Russia, Calls Out Xi Jinping.
  
• Macau Shuts All Casinos as City’s Worst Outbreak Widens.  
• Japanese Voters Head to Polls After Ex-Premier Abe’s Murder.
• ECB’s Holzmann Foresees Steep Rate Hikes to Stem Fast Inflation.
  
• China’s Consumer Inflation Hits Two-Year High on Pork Rally. 
• Legacy of Abenomics to Live Beyond Its Tragically Shot Architect.
• Social Media Buzz: Musk’s Non-Surprise, Sunak, Holocaust Bill.  
• Charting the Global Economy: US Jobs Signal Another Big Fed Hike.  
• Big-Sounding Job Titles Are Feeding Egos in Tight Labor Market.  
• US Crosses the Electric-Car Tipping Point for Mass Adoption.  
• Why Banks Face Billions in ‘Hung Debt’ as Deals Cool.   
• Rand’s Resilience Tested as US Recession Fears Move to Forefront. 
• Musk Effort to Kill Deal Leaves Twitter With Only Bad Options. 
• Crypto Exchange CoinFlex Now Seeking to Recover $84 Million.
• Wall Street Banks to Report Results in Harbinger of Bond Sales.
• Fed Braces as Another Big US Inflation Number Looms: Eco Week.

Wall Street Journal:

• Build a Charter School, Get Sued by the Teachers Union.
• Musk’s Move to End Twitter Deal Clouds Company’s Future.
• The $1,000 Car-Loan Payment: Higher Prices, Interest Rates Boost Monthly Costs.
• Starlink Satellite-Internet Service Battles Dish Over Airwaves.
• Suspect in Shooting of Japan’s Abe Thought to Have Trained in Rifle Use.
• Sri Lanka President Gotabaya Rajapaksato to Resign Next Week as Protesters Storm Residence.

Barron's:

• Had bullish commentary on (JNJ), (CL) and (WSO).

Fox News:  

• 'Birthing parent' or 'mother'? Moms weigh in on teachers union proposal.
• Army punishes retired three-star general over message to Jill Biden after abortion ruling.
• Defense Department reverses rule, allows HIV-positive members to serve.  
• Army cuts pay, benefits from 57,000 unvaccinated National Guard, Reserves.
• Biden admin agencies refuse to answer, 'What is a woman?'

CNBC:

• Auto dealerships are facing a shortage of technicians to fix cars. Here’s why.
• I talked to 70 parents who raised highly successful adults—here are 4 things they refuse to do.
• Amazon Prime Day is coming up: Here’s why deal experts say you might want to skip it this year
• Japanese mourn ex-PM Shinzo Abe a day after his assassination.
• Sri Lanka PM offers resignation after protesters storm president’s house.
• Economic worries further older Americans’ pandemic-era plans to delay retirement, survey finds.

Zero Hedge:

• America Has Been Flirting With Leftist Disaster – It’s Time To Stop Compromising.
• "Social Peace Is In Great Danger": Germany Is Quietly Shutting Down As Energy Crunch Paralyzes Economy.
• Peter Hambro: BIS, Central Banks Are Rigging Gold Market Using Bullion Banks' Paper Gold.
• Sri Lanka President To Quit After Palace Stormed By Angry Protesters.
• Taibbi: The Financial Bubble Era Comes Full Circle.
• White House Says Tesla Supercharger Network To Allow Other EVs .
• Chinese Communist Party Threat Is "Massive": FBI & MI5 Directors.
• TME Saturday: Sentiment, Recession and Inflation.
• Unpacking Three New Washington Energy Policy Missteps.
• There's Still Over $40BN In Cargo On Container Ships Waiting Offshore.
• UK Military Begins Training 10,000 Ukrainians On British Soil Amid Calls For "Insurgency".
• One Overlooked Democratic Plan That Could Have Catastrophic Consequences Before Mid-Terms.
• Why Nations Fail.
• US Retaliates Against Hungary For Obstructing 15% Global Minimum Tax.
• The Big Lie Of Woke Capitalism.
• Sir Lanka Protesters Storm President's House Amid Economic Meltdown.
• Drivers' Group Urges UK Government Not To Impose Speed-Limiter Technology.
• Russia Says It Will Increase Gas To Europe Under One Condition.
• Left-Wing German Minister Wants To Confiscate Guns Owned By Members Of Right-Wing AfD.
• China Holds War Drills Around Taiwan "Directed" At US Senator's Visit To Island.
• Justin Trudeau Offers Canadians Incentives To Distract Them From Inflation Caused By Carbon Taxes.
• Vegas Mulls Curfew For Under-21s After Recent Shootings.
• US State Department Offers $10 Million Reward for Info On Foreign Election Interference.

MarketWatch.com:        

• ‘Peak inflation is not here yet’: Rents continue to rise, putting pressure on would-be homebuyers. That’s bad news for the Fed.  
• Summer vacations are back for Wall Street and Silicon Valley. It could be their last before a recession.

NewsMax:

• Putin Advises Ukraine to Submit, Says Russian Military Ready for Assault on Kyiv.
• Dems' Soft-on-Crime Policies Behind US ‘Deadly Wave of Lawlessness': Trump.
• Trump Lays Out Platform to Make America Safe Again.

TheGatewayPundit.com:

• Parents Resist: Only 1.3% Of Eligible Kids Under 5 Have Gotten COVID Vaccine.
• MORE VIDEO of Abe Getting Shot – First Shot Missed – Second Didn’t – Efforts to Stop Shooter by Security Guards Are Questioned.
• Former Disney Employees File Lawsuit Claiming Company Violated Their Religious Beliefs By Firing Them for Refusing Masks and Vaccines.
• The Biden Administration Hid A $177 Million No-Bid Contract To House Immigrants Violating Federal Regulation To Downplay Border Crisis.
• Activist Group Paying Tipsters For Locations Of Conservative SCOTUS Justices To Harass Them In Public.
• New Study Contradicts ‘Experts’ – Shows Unvaccinated Adults Found “No increase in Myocarditis and Pericarditis” Following COVID Infection.
• Biden Family Values: Hunter Biden Blasts Stepmom Jill Biden’s Teaching Skills, Calls Her a “Vindictive Moron” and an “Entitled C*nt” in Texts.
• These Doctors Risked It All To Saves Lives During The COVID ‘Plandemic’, Now They Are Demanding A ‘Cease Fire’ (VIDEOS).
• Surprise! Shady Communist China Firm Financially Involved in Biden’s Luxury Camp for Illegal Alien Children in North Carolina; Chinese Took Over School’s Board in 2019.
• Footage Shows Sri Lankan President Rajapakse Fleeing Country on a Ship with a Suitcase Full of Belongings — After He Declares Country Bankrupt. 
• Trust In Mainstream Media Collapses – Even Dems Don’t Trust Them.

The Epoch Times:

• Biden’s Selling of Oil From Reserve to Hunter Biden-Tied Chinese Firm ‘Impeachable’: Republicans.
• US Intelligence Warns State and Local Leaders to Be Wary of China’s Influence Activities.

OpenVAERS:

• VAERS US COVID Vaccine Adverse Event Reports. 835,062 Reports(+2,129 from prior week) Through June 24th, 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).