Stocks Higher into Afternoon on Russia/Ukraine War Hopes, US Dollar Weakness, Short-Covering, Consumer Discretionary/Energy Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Higher
  

• Sector Performance: Almost Every Sector Rising
  

• Volume:  Below Average

• Market Leading Stocks: Underperforming
  

Equity Investor Angst:

• Volatility(VIX) 23.7 +3.8%
• DJIA Intraday % Swing 1.06%
  
• Bloomberg Global Risk On/Risk Off Index 46.2 -1.8%

• Euro/Yen Carry Return Index 148.52 +.6%

• Emerging Markets Currency Volatility(VXY) 11.1 -1.2%

• CBOE S&P 500 Implied Correlation Index 45.4 +1.3% 

• ISE Sentiment Index 92.0 -12.0 points
  

• Total Put/Call .99 +6.5%

• NYSE Arms .79 +64.6%

Credit Investor Angst:

• North American Investment Grade CDS Index 79.66 -2.2%
  

• US Energy High-Yield OAS 392.29 -1.1%
• Bloomberg TRACE # Distressed Bonds Traded 349.0 -17.0
  

• European Financial Sector CDS Index 111.91 -4.0%

• Italian/German 10Y Yld Spread 231.0 basis points -1.0 basis point
  

• Asia Ex-Japan Investment Grade CDS Index 124.85 -2.6%
  

• Emerging Market CDS Index 286.88 -.54%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 26.61 unch.

• 2-Year Swap Spread 32.5 basis points -1.5 basis points
  

• TED Spread 23.75 basis points +2.75 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -19.75 basis points -1.75 basis points
  
• MBS  5/10 Treasury Spread  144.0 +1.0 basis point
  
• iShares CMBS ETF 47.17 -.27%
• Avg. Auto ABS OAS .69 -2.0 basis points
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 48.84 +.31%
• 3-Month T-Bill Yield 3.05% +3.0 basis points
  

• Yield Curve -25.0 basis points (2s/10s) -4.25 basis points
  

• China Iron Ore Spot 102.7 USD/Metric Tonne -.3%
• Dutch TTF Nat Gas(European benchmark) 191.0 euros/megawatt-hour -7.8%

• Citi US Economic Surprise Index -9.6 +4.3 points

• Citi Eurozone Economic Surprise Index -12.9 +4.1 points
  

• Citi Emerging Markets Economic Surprise Index -4.1 -5.2 points
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 237.48 +.03:  Growth Rate +15.8% unch., P/E 17.3 +.2
  
• Bloomberg US Financial Conditions Index -.25 +2.0 basis points
  
• US Atlanta Fed GDPNow Forecast +1.30% unch.
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +4.62% unch.: CPI YoY +8.24% unch.
  
• 10-Year TIPS Spread 2.42 unch.
  
• Highest target rate probability for November 2nd FOMC meeting: 79.2%(-2.3 percentage points) chance of 3.5%-3.75%. Highest target rate probability for December 14th meeting: 69.0%(-1.9 percentage points) chance of 3.75%-4.0%.
  

US Covid-19:

• 133 new infections/100K people(last 7 days total). 7.6%(-.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 -79.4%(-.9 percentage point) from peak 7-day avg. of 1/9/22 - 1/15/22
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -187 open in Japan 
• China A50 Futures: Indicating +2 open in China

• DAX Futures: Indicating -6 open in Germany

Portfolio:

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

• Disclosed Trades:  None
  

• Market Exposure:  75% Net Long
  

Bear Radar

Style Underperformer:

• Mid-Cap Growth +.2%

Sector Underperformers:

• 1) Agriculture -1.2% 2) Alt Energy -.6% 3) Semis -.6%

Stocks Falling on Unusual Volume: 

• NEOG, LXU, HIBB, PLL, STEM, BMRN, PETQ, AMGN, CF, MSTR, ADM, X, GPRE, ALNY, PRCT, LTHM, ABM, MOS, AEHR, IPI, MIRM, GSHD and DICE
  

Stocks With Unusual Put Option Activity:

• 1) BKLN 2) MOS 3) ORCL 4) EBAY 5) FXI
  

Stocks With Most Negative News Mentions:

• 1) AZRE 2) LFST 3) SMFR 4) NLTX 5) NKLA
  

Charts:

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

Bull Radar

Style Outperformer:

• Small-Cap Value +.8%

Sector Outperformers:

• 1) Gold & Silver +2.2% 2) Energy +2.0% 3) Computer Hardware +1.1%

Stocks Rising on Unusual Volume:

• VTYX, IDYA, EWTX, MNTK, ASAN, NTCT, CRS, POSH, SWTX, BMY, ASTS, ENOV, SIL, GILD, CMP, DGII, HOG, ACLX and ZBH
  

Stocks With Unusual Call Option Activity:

• 1) WEN 2) BKLN 3) SPPI 4) IGT 5) CLX

Stocks With Most Positive News Mentions:

• 1) VTYX 2) NIO 3) CLVS 4) PNT 5) OXY
  

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running -7.9% Below 100-Day Average 
• 0 Sectors Declining, 11 Sectors Rising
• 80.6% of Issues Advancing, 15.7% Declining
• 35 New 52-Week Highs, 16 New Lows
• 30.4% of Issues Above 200-day Moving Average
• Average 14-Day RSI 45.0% 
• Bloomberg Global Risk-On/Risk-Off Index 46.6 -.9%
  
• Russell 1000: Growth/Value 15,554.3 +.02%
  
• Vix 23.5 +3.1%
• Total Put/Call .86 -7.5%
• TRIN/Arms .74 +54.2% 

Monday Watch

Today's Headlines

Bloomberg:           

• Key German Lawmaker Raises Prospect of Gas Price Curbs.  
• UK Bond Market Braces for More Losses After Truss’s Energy Plan.
• More Clear ECB Steps Needed If Inflation Lingers, Nagel Says.
• The World’s Hottest Housing Markets Are Facing a Painful Reset.
• An $83 Billion Investor Stampede Shows Scale of Europe’s Woes. 
• French Power Operator Makes $60 Million Trading Error.
• Ukraine Grabs More Territory as Russian Troops in Rapid Retreat.
  
• Ukraine Latest: Russia Cedes Ground in Kharkiv Counteroffensive.  
• Asia Set to Join Risk Rally as Dollar Weakens: Markets Wrap.
• Oil Declines With Shaky Demand and US Price-Cap Plan in Focus.
• Railroads, Unions Work to Avoid Strike and Supply Woes.  
• Biden Vows ‘Vigilance’ Against New Threats in Speech on 9/11.
• US Inflation Will Guide Fed Readying Next Hike.
• Yellen Says No Strong Labor Market in Long Run If Inflation High.    
• Mortgage Rates in US Jump to 5.89%, Highest Level Since 2008.  
• San Francisco Home Prices Slide in Stark Turn for Costly City.  
• Homes Sell Below List Price in US for First Time Since March 2021.
• Tech Rally Haunted by ‘Palpable Fear’ of Chip Industry Weakness.
• Your Sunday Briefing: From Inflation and the NFL to the Emmys.

Wall Street Journal:

• Ukraine Claims Fresh Gains Against Russian Forces.
• A Strong Dollar Is Front and Center for Wall Street. 
• Inflation and the Scariest Economics Paper of 2022. To bring price increases down to 2%, we may need to tolerate unemployment of 6.5% for two years.
• 9/11 Ceremonies Honor Victims 21 Years After Terrorist Attacks.
• Nikola Founder Faces Trial Over Promises About Electric Trucks.
• Deere Invests Billions in Self-Driving Tractors, Smart Crop Sprayers.
• Apple’s iPhone Satellite Service Kicks Off Smartphone Space Race.
• Canada’s Conservatives Pick ‘Freedom Convoy’ Sympathizer as Leader.
• European Manufacturers Reel From Russian Gas Shutoff.
• Europe’s Latest Carbon Fiasco. Its emissions-trading system raises energy costs for no reason.  
• CBO Rebuts the White House on Student Loans. The budget gnomes explain why student loans aren’t ‘paid for.’

Fox News:

• NRA slams credit card companies over gun sales decision.
• 9/11 family member 'reminds' politicians behind 'border' no one cared about 'gender, race': 'We were united'. 
• Another Biden official expresses interest in state's gas car ban.

CNBC:

• Your friends want you to call them more, new study finds.
• Where Walmart, Amazon and Target are spending billions in a slowing economy.
• Wall Street’s top analysts are bullish on these stocks amid an uncertain economy.
• ESG on the edge: Controversy weighs on sustainable ETFs.

Zero Hedge:

• Europe Is Facing Energy Disaster And It's Going To Bleed Over Into The US.
• Swiss Social Media Abuzz Over 'Rat Out Your Neighbor' Energy Use Posters.
• Ukraine's 2nd Largest City Plunged Into Total Darkness As Russia Strikes Key Infrastructure.
• The Credit Cycle Is Deteriorating Quickly.
• Viral TikTok 'Kia Challenge' Sparks Nationwide Rise In Car Thefts By USB-Wielding Kids.
• Copper Prices Are Trading Sideways, But Not For Long.
• Weekend News Round Up - Newsquawk Asia-Pac Market Open.
• Former Virginia Election Official Hit With Felony Charges Linked to 2020 Election.
• Average US Credit Card Rate Hits Highest On Record.
• The 'Never Let A Crisis Go To Waste' Crowd Strikes Again.
• Hedge Fund CIO: "Illiquidity Is The New Leverage And Flows Are More Important Than Fundamentals". Cash Handouts To Canadians Could Spark "Inflationary Fire," Economists Warn.
• Morgan Stanley Asks If China Can Stabilize Global Growth This Time.
• The US Is Creating A Shortage Of Dollars Just As Russia Is Creating A Shortage Of Oil, Gas And Grain.
• Satellite Image Reveals 'Agriculture Wasteland' Across California's Rice Capital.
• Is UPS' New Rule Change An Attack On Gun Industry?
• 'No Choice But Intervention': Belgium PM Fears "Severe Risk Of Social Unrest".
• Armstrong: Is The US Sacrificing Europe To Maintain Global Dominance?
• This Winter, Europe Plunges Into "The New Dark Ages".
• Jan. 6 Prisoners And Families Expose Brutal Truth About Jail Lockdown.
• Americans Love The NFL, But Change Is Looming.
• New Merchant Code Approved For Card Purchases Of Guns, Ammunition.
• Slava Raytheon: Zelensky To Headline Conference Of US Defense Companies.
• New Ivermectin Study Demonstrates 92% Reduction In COVID-19 Mortality Rate.
• "Nothing To Do With Man" - Astrophysicist Says Climate-Cultists "Are On A Gravy Train" To Make Money.
• China Creates 'Digital Twin' Of Americans: Former DoD Cybersecurity Expert.
• China Reveals Discovery Of New Lunar Mineral As Space Mining Race Accelerates.
• Florida Watchdog Groups Allege Mail-in Ballot And Voter Roll Violations In 2020, 2022.

MarketWatch.com:      

• ‘The emperor has no clothes’: Why China’s reputation for economic management is coming undone.

NewsMax:

• US Marks 21st Anniversary of 9/11 Terror Attacks.
• Rudy Giuliani to Newsmax: US 'in More Danger' Than Before 9/11.

TheGatewayPundit.com:

• IN STATE AFTER STATE… Democrats Are Running as Republicans to Get Into Office – They Even Have a Name for It – They Call it “Secret Sleepers”. 
• “Oh Yes, We Always Have Disney Employees” – Florida Sheriff Discloses Results of Latest Human Trafficking Sting that Includes Teachers and, of course, a Disney Employee.
• Dr. Oz Rushes into Crowd and Rescues Woman who Collapsed at His Rally – Stays with Her Until Medics Arrive.
• Flashback: Kamala Harris Compares 9-11 Terrorist Attacks to Jan. 6 Protest at US Capitol (VIDEO).
• Project Veritas: NYC Middle School Teacher Encourages Students to Engage in Political Violence, Throw Bricks at People with Opposing Views (VIDEO).
• The Largest Marine Evacuation in History – A Beautiful Reminder of the American Spirit As We Remember 9/11.
• UPDATE: Democrat Karen Bass Says Her Guns Were Stolen from Her Home — VOTED 100% of the Time Against Gun Rights and Gun Ownership.
• EXCLUSIVE: Clinton-Appointed Federal Judge Bars Arizona Officials From Enforcing New Law To Remove Dead Voters, Nonresidents, And Non-Citizens From Voter Rolls.
• 1100 Athletes Die From Sudden Death From 1966-2004, At Least 673 Have Died Since January 2021, Number Likely Higher.
• 17-Year-Old High School Football Player Dies in His Sleep. 
• Cádiz vs. Barcelona Game Temporarily Suspended After Fan Suffers Cardiac Arrest – At the Same Time Camera Operator Had a Seizure and Fainted.
• Here We Go: CDC Issues Health Alert to Pediatricians and Parents About Rare, Serious Respiratory Disease That Affects Children.
• Army Recommends Food Stamps For Struggling Soldiers. 
• INSANITY: Illinois Democrats Eliminate Cash Bail System on Felonies Including Second-Degree Murder, Aggravated Battery, Arson, Kidnapping, Drug-induced Homicide, and Looting — Lets Criminals Walk!

The Epoch Times:

• Many Left Starving Under CCP’s COVID Lockdowns During Mid-Autumn Festival.
• Tens of Millions in China Under New COVID-19 Lockdown Ahead of CCP Meeting.

OpenVAERS:

• VAERS US COVID Vaccine Adverse Event Reports. 861,237 Reports(+1,647 from prior week) Through August 26th, 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 128.25 -4.25 basis points.
• China Sovereign CDS 66.75 -3.0 basis points.
• Bloomberg Emerging Markets Currency Index 48.64 -.08%.
• Bloomberg Global Risk-On/Risk Off Index 47.9 +1.6%.
• Bloomberg US Financial Conditions Index -.25 +2.0 basis points 
  
• Volatility Index(VIX) futures 25.5 -.4%. 
• Euro Stoxx 50 futures n/a.
• S&P 500 futures +.10%.
• NASDAQ 100 futures +.15%.

Morning Preview Links

Earnings of Note

Company/Estimate

Before the Open:

• None of note
  

After the Close:

• (ORCL)/1.08
  

Economic Releases

• None of note

Upcoming Splits

• (PANW) 3-for-1
  

Other Potential Market Movers

• The UK Industrial Production report, 3Y/10Y T-Note auctions, Goldman Sachs Communacopia Conference, Barclays Financial Services Conference, Morgan Stanley Healthcare Conference and the HC Wainwright Investment Conference could also impact trading today.

US Equity Market Hours

• 9:30 am - 4:00 pm EST

BOTTOM LINE: Asian indices are higher, boosted by industrial and technology shares in the region. I expect US stocks to open modestly higher and to weaken into the afternoon, finishing mixed.  The Portfolio is 75% net long heading into the week.

Today's Headlines

Bloomberg:

• China Consumer Stock Rout Signals Darkening Economic Outlook.
• Scholz Says Germany Prepared for Russia Gas Halt Amid War.  
• ECB Vindicates Arch-Hawk Pondering Memories of 1970s Oil Crisis.
• EU Is Assessing If US Inflation Act in Breach of WTO Rules.
• Russia Confirms Flight of Troops From Ukraine’s Kharkiv Area.
• Ukraine Latest: Kharkiv-Area Offensive Gaining More Momentum.   
• European Powers Say They Doubt Iran’s Sincerity on Nuclear Deal.  
• Sky-High Airfares Hit Australia’s Labor Recovery, Minister Says.
  
• Stellantis Engine Parts Workers Go On Strike Amid Shift to EVs.    
• Fed Rush to Cool Inflation Set to Continue With Another Big Hike.  
• US Freight Railroads to Cut Services as Union Talks Fail, Report Says.  
  
• California's Green Dreams Mean Adding More EVs to a Rickety Grid.
• Credit Card Code to Track Gun Sales Approved by Standards Group.  
• MLB Agrees to Pitch Clock, Larger Bases in Bid to Energize Sport.    
• Biden Seeks Boost for US Biomanufacturing to Compete With China
• Your Saturday Briefing: From the Queen to California’s Challenge.
• Charting the Global Economy: ECB Joins Jumbo Rate-Hike Club.

Wall Street Journal:

• Take Joe Biden’s Speech Seriously. The MAGA attacks raise the issue of using state power to silence opponents.
• Outlook for Tech Stocks Darkens.
• Global Drought Saps Hydropower, Complicating Clean-Energy Push.
• In California Drought, the Latest Victims Are Rice Farms.
• How a CEO Rescued a Big Bet on Big Oil; ‘There Were a Lot of Doubters’.
• The Coming Global Crisis of Climate Policy. As central banks obsess over far-off dangers, a tsunami of energy-price bankruptcies approaches.

Barron's:

• Had bullish commentary on (POOL) and (EA).
• Had bearish commentary on (PSNY) and (FLOT).

Fox News: 

• Sex sting leads to more than 150 arrests including Disney employees, top cop.
• Harris reveals what’s to come if Dems win more Senate seats in midterms.

CNBC:

• I talked to 70 parents of highly successful adults—here are 5 things they always said to their kids.
• Space companies put up a mixed second quarter. Here’s who outperformed and who faltered.
• A shake-up on Cardinal Health’s board could pave the way for activist fund Elliott to create value.
• Student loan forgiveness means less for the millions of borrowers who never finished college.

Zero Hedge:

• 35 Trump Allies Served With Warrants, Subpoenas According To Steve Bannon.
• DoD To Boost Ammunition Production After Ukraine War Depletes US Stockpiles. 
• Rates To 4% "Come Hell Or High Water" - Fed Has Credibility Crisis & Powell Knows It.
• "Nothing To Do With Man" - Astrophysicist Says Climate-Cultists "Are On A Gravy Train" To Make Money.
• A List Of 33 Things We Know About The Coming Food Shortages. 
• Food Banks All Over The US Are "Overwhelmed" As Cost Of Living Pushes More Into Poverty.
• US Economic Freedom Index Collapses To Carter Admin Levels.
• 'No Deal': France, Germany & UK Berate Iran For Hardened Stance On Nuclear Talks.
• NPR Slams Biden For Meeting With Historians Because They Were All "White".
• Ben & Jerry's Slammed For Woke Activism After Posting "To-Do List" For New UK Home Secretary Including "Scrap The Rwanda Plan".
• Iran Hit With New US Sanctions After Massive Cyberattack On Albania.
• These Are The Most (Un)Popular Royals.
• Escobar: Germany's Energy Suicide - An Autopsy.
• An Asian Bretton Woods?
• Expert Warns US Descending Into 'Anarchy' Amid Heightened Distrust Of DOJ, Law Enforcement.
• Is A US Civil War On The Horizon?
• Law-Abiding Gun Owners Ignored By Media, Maligned By Politicians.
• Zoo In China Says Endangered Species Are Starving Amidst Lockdowns, Pleads Local Authorities For Food.
• Sub-Million-Dollar Manhattan Condo Sales Slump Below Pre-COVID Trend As Affordability Crisis Rages.
• Snyder: What In The World Is Wrong With This Country?

MarketWatch.com:              

• The wild card that could sink stocks: What investors need to know as the Fed unwinds liquidity that had helped fuel market gains.
  
• ‘The emperor has no clothes.’ Why China’s reputation for economic management is coming undone.
  
• Opinion: Americans are feeling poorer for good reason: Household wealth was shredded by inflation and Fed tightening.

NewsMax:

• DOJ, Trump Team Name Special Master Nominees.
• Rep. Dusty Johnson: TikTok 'a National Security Threat'.

TheGatewayPundit.com:

• Ecoterrorists: Climate Change Activists Disrupt Dairy Supply Across UK by Disabling all Milk Trucks at Processing Plants (VIDEO).
• Tucker: Hispanic Voters Are Moving To The GOP — And Democrats Are In Denial.
• 21-Year-Old Tourist Raped on NYC Subway Platform.
• Canadian Reporter Breaks Down in Tears on Live TV As She Announces Colleagues’ Sudden Death.
• Doctors, Scientists and Professionals from More than 34 Countries Declare “International Medical Crisis”. 
• CORRUPTION? Dem Governor Gave COVID Test Contract To Donor — Who Charged State Double.
• Steve Bannon Speaks Truth to Power.
• Major Companies Remove Facebook Login Option Over Privacy Concerns.
• Georgia Elections: System Vulnerabilities Expert Jeff Lenberg Debunks Mainstream Media Hit Pieces.
• WATCH: State Senators And Frontline Doctor Have All The EVIDENCE TO INDICT CDC Officals For VIOLATING FEDERAL LAW And File Unprecedented GRAND JURY PETITION.
• Another Hate Hoax: BYU Says No Evidence to Corroborate Claims Fan Shouted N-Word at Black Duke Volleyball Player.

OpenVAERS:

• VAERS US COVID Vaccine Adverse Event Reports. 861,237 Reports(+1,647 from prior week) Through August 26th, 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).