Morning Market Internals

NYSE Composite Index:

• Volume Running -17.7% Below 100-Day Average 
• 0 Sectors Declining, 11 Sectors Rising
• 82.5% of Issues Advancing, 14.2% Declining
• 10 New 52-Week Highs, 15 New Lows
• 16.8% of Issues Above 200-day Moving Average
• Average 14-Day RSI 41.9% 
• Bloomberg Global Risk-On/Risk-Off Index 4,525.0 +156.0 points
• Russell 1000: Growth/Value 15,417.0 -.05%
  
• Vix 24.4 -3.4%
• Total Put/Call 1.01 -1.9%
• TRIN/Arms .78 +1.3%

Tuesday Watch

Evening Headlines

Bloomberg:

• Food May Be the Ultimate Weapon in the 21st Century.  
• China’s Cyber Isolationism Has Severe Security Implications.  
• From Property to Lockdowns, What to Watch in China’s Second Half.
• Biden Wants Chipmakers Getting US Aid to Curb China Investments.
• BOJ’s Kuroda Determined to Maintain Stimulus as World Tightens.
• Oil Holds Above $100 as Traders Weigh Tight Market, OPEC+ Plans.
• Apple Joins Fellow Tech Giants in Putting a Lid on Hiring.  
• Earlier: US Layoffs, Hiring Freezes Are Tip of Labor Market Slowdown.
  
• Goldman Sachs Plans to Slow Hiring, Bring Back Annual Performance Reviews.  
• Starbucks CEO Says More Stores to Close for Security Reasons.  
• Amazon Warehouse Sites Probed for Potential Workplace Hazards.  
• Democrats’ Tax-Hike Plans Are Imperiled — With or Without Joe Manchin.  
• The Next Generation of Abortion Doctors Train in California.  
• Morgan Stanley, Goldman Say Stocks Have Yet to Find a Bottom.
  
• How the Brazilian Butt Lift Became One of the Deadliest Cosmetic Surgeries.  
• Scaramucci Halts Withdrawals in a Fund After Stock, Crypto Swoon.  
• US Pulls Plug on Fertilizer Trade War as Food Inflation Bites.

Wall Street Journal:     

• Biden’s Saudi Arabia Visit Was Worse Than an Embarrassment. The president’s 24 hours in Jeddah were dominated by photos of his fist bump with Mohammed bin Salman. Things went downhill from there.
• Volatile Markets Boost Goldman’s Trading Revenue.
• Why Air Travel Is Broken.
• Europe Fears Economic Fallout if Russian Gas Outage Drags On.
• Diverging Jobs Data Raise Questions About Labor Market Health.

Fox News:

• Winsome Sears to Biden: 'Stop gaslighting' Americans on gas prices, 'begging' Saudis for oil.
• Condition of economy 'terrible' as inflation hits fresh 40-year high: Investment expert.
• MSNBC host wonders out loud if she’s doing ‘more harm than good’.
• Major city sees disturbing sex crime trend as police hunt serial assailants.

CNBC.com:

• Homebuilder sentiment takes historic plunge in July as buyers pull back.
• IBM shares slide after company trims cash forecast.
• Harris, Newsom engage with donors as possible 2024 bids loom if Biden doesn’t run.
• Goldman Sachs is looking at reinstating year-end job cuts as economic outlook dims. 
  

MarketWatch:               

• Why this ugly S&P 500 streak cautions against chasing bear-market bounces. 
• The IRS just made it easier for families to pass millions of dollars to their children and others.

Zero Hedge:

• Risk appetite soured with Apple (AAPL) cooling its hiring - Newsquawk Asia-Pac Market Open.
• San Francisco's New DA Goes On Firing Spree After Voters Recall Soros-Backed Predecessor. 
• Hong Kong Government To Track Citizens With Next-Level CCP-Type COVID Smartphone App.
• Congress Grants Pentagon $58 Billion More Than Requested: DOD Report.
• US Retailers Boost Security Personnel To Combat Soaring Thefts And Violent Crime.
• June Southwest Border Apprehensions: Record High.
• Solar Panels Subsidized By California Are Winding Up In Landfills, Contaminating Groundwater With Toxic Metals.
• 'Science' - Dem Rep. Says It's Not Only Women That Can Have Babies.
• Twitter Filing Dismisses Musk's "Irrelevant Sideshow" Ahead Of Hearing-By-Zoom After Judge Catches COVID.
• A Humiliated Goldman Sachs Has Quietly Lost $2.6 Billion Investing In Stocks In The Past Four Quarters.
• Natural Immunity From Omicron Strong Against Virus Subvariants: Study.
• Biden's Economic Approval Rating Lower Than Trump's Worst: Poll.
• IBM Slides After Slashing Full Year Cash Flow Forecast.
• Canadian Energy Firm Declares Force Majeure On Keystone Pipeline After Power Outage.
• China Angrily Demands US Cancel 5th Proposed Arms Package To Taiwan.
• Risk assets tumble as AAPL preps for hiring halt - Newsquawk US Market Wrap.
• "We're All Dutch Farmers Now!".
• Gender Activists Urge Anthropologists To Stop Labeling Human Remains 'Male' Or 'Female'.
• China Has Dumped Over $100 Billion Of US Treasuries In The Last 6 Months.
• Brent, Bitcoin, And Bonds Bounce As Rotten Apple Wrecks Tech.

TheGatewayPundit.com:  

• NBC Reporter’s Video of Saudi Gas Station Shows Just How Little You Pay When Your Country Drills.
• MASSIVE PROTESTS in Panama Over Skyrocketing Inflation, Demonstrators Block Roads.
• “Our Country Has a History of Claiming Ownership Over Human Bodies” – Kamala Harris Suggests Being Pro-Life is the Same Thing as Supporting Slavery (VIDEO).
• SICK: Biden’s Transgender Assistant Secretary of Health Dr. Levine Says We Need to “Empower” Children to go On Puberty Blockers (VIDEO).
• Damning Report On Uvalde School Massacre, ‘Nearly 400 Good Guys… They Couldn’t Stop One Bad Guy’.
• John Kerry Says It’s Time to Go Into Overdrive and “Accelerate” the Transition to Green Energy (VIDEO).
• EXCLUSIVE: How China’s Military Colonized U.S. Research Programs and Siphoned Off U.S. Taxpayer Funding.

The Epoch Times:  

• Chinese Military Using US Semiconductors to Train Combat AI: Report.
• Hunter and Joe Biden Often Met After Son Traveled Abroad: Report.

OpenVAERS:

• VAERS US COVID Vaccine Adverse Event Reports. 842,573 Reports(+3,276 from prior week) Through July 8th, 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 +.25% on average.

• Asia Ex-Japan Investment Grade CDS Index 169.25 +6.0 basis points. 

• China Sovereign CDS 86.75 +1.75 basis points.
  

• Bloomberg Emerging Markets Currency Index 49.06 +.05%.  
• Bloomberg Global Risk-On/Risk Off Index 4,434.0 +76.0 points.
• Volatility Index(VIX) futures 27.3 -.54%.
• Euro Stoxx 50 futures -.63%.

• S&P 500 futures +.18%.

• NASDAQ 100 futures +.21%. 

Morning Preview Links

Earnings of Note 
Company/Estimate 

 

Before the Open: 

• (ALLY)/1.87
• (HAL)/.45
• (HAS)/.94
• (HTLD)/.25
• (JNJ)/2.55
• (LMT)/4.67
• (MAN)/2.32
• (NVS)/1.50
• (TFC)/1.15

After the Close:

• (CALM)/1.96
• (IBKR)/.90
• (JBHT)/2.35
• (NFLX)/2.95
• (OMC)/1.56
• (PNFP)/1.67
  

Economic Releases

8:30 am EST:

• Housing Starts for June is estimated to rise to 1580K versus 1549K in May.
• Building Permits for June is estimated to fall to 1650K versus 1695K in May.
  

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Fed's Brainard speaking, RBA Minutes and the weekly US retail sales reports could also impact global trading today.

US Equity Market Hours

• 9:30 am - 4:00 pm EST
  

BOTTOM LINE: Asian indices are mostly lower, weighed down by healthcare 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 Reversing Lower into Afternoon on US Policy-Induced Stagflation Fears, Earnings Outlook Jitters, US High-Yield Debt Angst, Biotech/Utility Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Higher
  

• Sector Performance:  Mixed
  

• Volume:  Below Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 25.1 +3.7%
• DJIA Intraday % Swing .75% -55.4%
  
• Bloomberg Global Risk On/Risk Off Index 4,359.0 +157.0 points

• Euro/Yen Carry Return Index 144.12 +.26%

• Emerging Markets Currency Volatility(VXY) 12.5 -.32%

• CBOE S&P 500 Implied Correlation Index 45.8 +1.4% 

• ISE Sentiment Index 83.0 -18.0 points
  

• Total Put/Call .93 +3.33%

• NYSE Arms .61 +15.1%

Credit Investor Angst:

• North American Investment Grade CDS Index 90.0 -1.2%
  

• US Energy High-Yield OAS 516.46 -2.3%
• Bloomberg TRACE # Distressed Bonds Traded 529.0 -18.0
  

• European Financial Sector CDS Index 131.52 -2.2%

• Italian/German 10Y Yld Spread 207.0 basis points -7.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 169.05 -1.6%
  

• Emerging Market CDS Index 373.21 -.45%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 26.4 -.02%
  
• Ukraine Sovereign Debt Credit Default Swap 9,867.80 -9.5%
  

• 2-Year Swap Spread 24.25 basis points -3.75 basis points
  

• TED Spread 45.0 basis points +23.25 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -20.0 basis points +.5 basis point
  
• MBS  5/10 Treasury Spread  139.0 -3.0 basis points
  
• iShares CMBS ETF 47.87 -.46%
• Avg. Auto ABS OAS 1.0 -1.0 basis point
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 49.08 +.14%
• 3-Month T-Bill Yield 2.31% +3.0 basis points
  

• Yield Curve -20.0 basis points (2s/10s) +1.25 basis points
  

• China Iron Ore Spot 102.4 USD/Metric Tonne +1.7%

• Citi US Economic Surprise Index -53.7 -2.4 points

• Citi Eurozone Economic Surprise Index -52.60 -4.6 points
  

• Citi Emerging Markets Economic Surprise Index 17.9 -2.1 points

• 10-Year TIPS Spread 2.38 unch.
  
• Highest target rate probability for September 21st FOMC meeting: 50.8%(+1.6 percentage points) chance of 3.0%-3.25%. Highest target rate probability for November 2nd meeting: 43.4%(-.2 percentage point) chance of 3.25%-3.5%.
  

US Covid-19:

• 273 new infections/100K people(last 7 days total). 15.7%(+.4 percentage point) of 1/14/22 peak(1,740) +7/100K people from prior report.
  
• New Covid-19 patient hospital admissions per 100K population -73.7%(-1.2 percentage points) from peak 7-day avg. of 1/9/22 - 1/15/22
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +261 open in Japan 
• China A50 Futures: Indicating -67 open in China

• DAX Futures: Indicating -73 open in Germany

Portfolio:

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

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

• Market Exposure:  Moved to 25% Net Long
  

Bear Radar

Style Underperformer:

• Large-Cap Growth +.2%

Sector Underperformers:

• 1) Biotech -1.4% 2) Utilities -.7% 3) Healthcare Providers -.6%

Stocks Falling on Unusual Volume: 

• ISEE, EFC, EVOP, TH, LEGN, MFA, SGEN, MRCY, SIGA, BIGC, BL, CLAR, AVXL, BMEA and COWN
  

Stocks With Unusual Put Option Activity:

• 1) GS 2) SIX 3) COF 4) WDAY 5) GOOG
  

Stocks With Most Negative News Mentions:

• 1) BL 2) DYAI 3) GOOG 4) CDNA 5) PARA
  

Charts:

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

Bull Radar

Style Outperformer:

• Mid-Cap Growth +1.1%

Sector Outperformers:

• 1) Oil Service +4.4% 2) Alt Energy +4.1% 3) Shipping +3.9%

Stocks Rising on Unusual Volume:

• MARA, EXFY, CCRN, VERV, RYTM and VRRM
  

Stocks With Unusual Call Option Activity:

• 1) WEN 2) FEZ 3) SESN 4) GOOG 5) AXL

Stocks With Most Positive News Mentions:

• 1) MARA 2) TANH 3) QD 4) ODP 5) ETON
  

Charts:

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

Mid-Day Market Internals

NYSE Composite Index:

• Volume Running -10.0% Below 100-Day Average 
• 5 Sectors Declining, 6 Sectors Rising
• 70.0% of Issues Advancing, 26.3% Declining
• 14 New 52-Week Highs, 36 New Lows
• 16.8% of Issues Above 200-day Moving Average
• Average 14-Day RSI 41.9% 
• Bloomberg Global Risk-On/Risk-Off Index 4,374.0 +168.0 points
• Russell 1000: Growth/Value 15,552.0 +.35%
  
• Vix 24.7 +1.9%
• Total Put/Call .89 -1.1%
• TRIN/Arms .53 unch.