Mid-Day Market Internals

NYSE Composite Index:

• Volume Running +50.0% Above 100-Day Average 
• 4 Sectors Declining, 7 Sectors Rising
• 74.4% of Issues Advancing, 23.0% Declining
• 166 New 52-Week Highs, 3 New Low
• 66.9%(+7.0%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 65.0 +5.0
  
• Bloomberg Global Risk-On/Risk-Off Index 56.1 -5.5%
  
• Russell 1000: Growth/Value 14,910.2 +1.3%
  
• Vix 17.7 -.8%
• Total Put/Call .75 -15.7%
• TRIN/Arms 1.14 -14.9%
  

Thursday Watch

Evening Headlines

Bloomberg:                   

• BOE Poised for 10th Straight Hike and May Signal More Persistent Inflation.
• BOJ’s Policy Path Hinges on Japan’s Complex Wage Dynamics.  
• Adani in Crisis as Bonds Hit Distressed Levels, Stock Sale Axed.
• Stocks Extend Fed-Fueled Rise in Asia; Dollar Dips: Markets Wrap.  
• Oil Advances as Traders Weigh China’s Outlook, Weaker Dollar.
  
• Fed Traders See Pivot From Rate Hikes to Rate Cuts in Second Half.  
• Wall Street Is Making Same Fed Bet That’s Burned It Repeatedly.
• The More Powell Spoke, the More Stock and Bond Markets Rallied.  
• US Job Openings Surge Past 11 Million as Fed Zeros In on Labor.
  
• Merck Covid Drug Linked to New Virus Mutations, Study Says.  
• Pinterest Cuts About 150 Jobs, Joining Flurry of Tech Layoffs.  
• Palantir’s CEO Says Silicon Valley Products Have ‘Obviously Failed’ to Improve World.

Wall Street Journal:

• Central bank signals another increase is likely next month
• Beneath the Surface, Fed Sees No Letup in Inflation Pressure
• December Job Openings Jump.
• The Democrats Deepen the Washington Swamp. Joe Biden’s State of the Union speech will say it’s all good in Washington. That’s true, if you believe in the tooth fairy. 
• Bed Bath & Beyond Misses Interest Payments, as Chapter 11 Looms.
• Tiger Global Cuts Fundraising Target as Startup Market Cools.
• Staff Report Urges RNC to Intensify Focus on Election Integrity.
• U.K. Hit by Biggest Strikes in a Decade.

Fox News:

• McCarthy sees opportunity to come to an agreement with Biden over America's 'greatest threat'.
• Government workers could be in for rude awakening after post-pandemic vote.

CNBC.com:

• The Fed raised rates. Chair Powell says it’s ‘premature’ to declare victory against inflation.
• Bond king Jeffrey Gundlach says he expects one more Fed rate hike.
• Fed raises rates a quarter point, expects ‘ongoing’ increases.
• Gautam Adani calls off $2.5 billion equity sale as regulatory concerns grow.
• FedEx is laying off 10% of its officers and directors amid cooling demand.
• Electric truck maker Rivian to lay off 6% of its workforce as EV price war concerns grow.

MarketWatch:                     

• Wall Street to Jerome Powell: We don’t believe you.
  
• ChatGPT to charge $20 a month for premium subscriptions, as chatbot grows faster than TikTok.
  
• Ron DeSantis pushes permanent ban on Florida sales tax on gas stoves.  
• Amazon, Apple, Microsoft set records with their spending on Washington lobbying.

Zero Hedge:

• Pfizer CEO Made 'Misleading' Statements On Vaccinating Children Against COVID-19: UK Watchdog.
• Bonds, Big-Tech, Bitcoin, & Bullion Blast Off As Dovish Powell Pussys Out.
• "Objectivity Has Got To Go": News Leaders Call For End Of Objective Journalism.
• The End Of Monetary Hedonism.
• India Set To Crank Up Coal Power To Meet Soaring Demand.
• Poll Shows More Americans Believe 'Too Much' Aid Going To Ukraine.
• Tennessee Population Grows As Residents Leave More Liberal States.
• Orange Juice Futures Hit New Record High Amid Supply Squeeze.
• Massive Peer-Reviewed Mask Study Shows 'Little To No Difference' In Preventing COVID, Flu Infection.
• The Brave New World Of Artificial Intelligence.
• US stocks gained and the dollar fell after the Fed slowed the pace of rate hikes and Powell. provided something for both hawks and doves - Newsquawk Asia-Pac Market Open.
• 'Missing' Ex-ABC News Producer Hit With Child Porn Charge.
• Meta Explodes 18% Higher On Solid Beat, Massive $40 Billion Buyback Boost.
• The panic to buy.
• Stocks and bonds rip after Powell lays dovish escape route - Newsquawk US Market Wrap.
• Wall Street Reacts To Powell's Surprising Dovish Presser.
• Billionaire Zelensky-Backer & Ex-Minister Among Ukrainian Officials Targeted In More Anti-Corruption Raids.

Newsmax:

• Ted Cruz, Key Senators Demand DirecTV Answer for Newsmax Deplatforming.  
• RNC's McDaniel: Newsmax ‘Censored,’ DirecTV Had 'Clear Bias'.
• Rep. Babin: Defunding AT&T Could Be in Play.

TheGatewayPundit.com:

• What Could Go Wrong? New Bill In Tennessee Aims To Create Digital Driver License.
• Hunter Biden’s Metabiota tied to Peter Daszak’s EcoHealth Alliance and Shi Zhengli of the Wuhan Institue of Virology.
• 18-Year-Old Athlete on Life Support After Suffering from Cardiac Arrest During Basketball Game.
• 19-Year-Old TikToker Arrested For Scamming Hundreds of GoFundMe Donors Out of $37,000 with Fake Cancer Diagnosis.
• “It May Necessitate New Elections” – Texas Gov. Abbott After It’s Revealed Harris County Election Day Ballot Paper Shortage Far Bigger Than Estimated.
• Missouri US Senator Eric Schmitt Announces He’s Backing President Trump in 2024.
• Liberal Columbia Journalism Review Issues Scathing Indictment of NYT and Fake News Media Over Years of Fake Russiagate Coverage.
• VoterGA Sues to Prevent All Georgians’ Voter Information from Being Shared with Third Parties Outside of the State.
• Alaskans for Honest Elections Now Collecting Signatures to Rid State of Ranked-Choice Voting.
• After Lifting COVID Vaccine Mandate – Radical West Point Leadership Imposes Travel Restrictions on Unvaxxed.
• Under the Radar Economic Indicators Are Flashing Warning Signs Not Seen Since 2008 and Before.

The Epoch Times:

• Chinese Aircraft, Warship Incursions Put Taiwan Military on Alert.
• Blinken and Yellen Must Address CCP Crimes on China Trip: GOP Letter.
• Bipartisan Lawmakers Introduce Bill to Ban China from Buying US Farmland.

Twitter: 

• @zerohedge - Bill Gates Addresses Jeffrey Epstein Connection In Uncomfortable New Interview. (video)
  
• @Project_Veritas - We rented an LED truck and parked it outside of @pfizer world headquarters in Manhattan today. Stay tuned… (video)
• @JackPosobiec - Omg this tweet has it all. @NikkiHaley - Jul 17, 2020 - Russia is trying to steal our coronavirus vaccine research. The goal is the outright theft of cutting-edge research on a coronavirus cure. These same hackers are behind some of the 2016 election meddling, among other silent attacks on America and our allies. 
• @CitizenFreePres - Dr. Peter McCullough: “The Vaccines have backfired… We’ve gotten to a situation where the more Vaccines taken, the worst the countries do.” (video)
• @bennyjohnson - Tucker exposes what national egg shortage is REALLY about… (video)
  
• @KLVeritas - President Biden “Food shortages will be real”. WEF remain optimistic, offering dietary solutions like plant-based meat alternatives, insects, and “meat cultivated directly from animal cells.”
• @charliekirk11 - Mitch McConnell just booted Senators Mike Lee and Rick Scott from the Senate Commerce Committee. These are two of the best senators in the country. Their crime? Challenging Mitch McConnell. The DC swamp strikes again.
• @gatewaypundit - Hunter Biden’s Metabiota Labs Received Tens of Millions of Dollars in DOD Contracts – Experimented with Bat Viruses in at least One Biolab.

OpenVAERS:

• VAERS US COVID Vaccine Adverse Event Reports. 922,020 Reports(+3,512 from prior week) Through January 6th, 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 +.5% on average.

• Asia Ex-Japan Investment Grade CDS Index 101.5 -5.0 basis points. 

• China Sovereign CDS 49.5 -4.25 basis points. 
• China Iron Ore Spot 125.9 USD/Metric Tonne -.04%.

• Bloomberg Emerging Markets Currency Index 48.8 +.11%.
• Bloomberg Global Risk-On/Risk Off Index  59.3 +.04%. 
• Bloomberg US Financial Conditions Index .36 +2.0 basis points.
  
• Volatility Index(VIX) futures 19.9 -.28%.
• Euro Stoxx 50 futures +.69%.

• S&P 500 futures +.23%.

• NASDAQ 100 futures +.84%.  

Morning Preview Links

Earnings of Note 
Company/Estimate 

 

Before the Open: 

• (ABB)/.42
• (APD)/2.70
• (ATI)/.52
• (APTV)/1.18
• (AVY)/2.05
• (BDX)/2.68
• (BMY)/1.73
• (GOOS)/1.60
• (CAH)/1.14
• (CNHI)/.35
• (COP)/2.90
• (LLY)/1.85
• (EL)/1.29
• (HBI)/.08
• (HOG)/.07
• (HSY)/1.77
• (HON)/2.51
• (ITW)/2.53
• (ICE)/1.26
• (LEA)/2.58
• (MRK)/1.54
• (PH)/4.46
• (DGX)/1.90
• (SIRI)/.08
• (SNA)/4.21
• (SWK)/-.34
• (UAA)/.09
  

After the Close:

• (GOOG)/1.20
• (AMZN)/.17
• (AAPL)/1.95
• (BZH)/.74
• (BYD)/1.49
• (CRUS)/1.99
• (CLX)/.66
• (COLM)/2.28
• (DECK)/9.54
• (F)/.62
• (GILD)/1.51
• (MCHP)/1.54
• (MSTR)/.98
• (POST)/.62
• (QCOM)/2.35
• (SKX)/.37
• (SKYW)/.10
• (SBUX)/.77
• (SYNA)/2.34
• (X)/.63
• (WWE)/.58
  

Economic Releases

7:30 am EST

• The Challenger Job Cuts YoY for Jan.
  

8:30 am EST

• 4Q Unit Labor Costs are estimated to rise +1.5% versus a +2.4% gain in 3Q.
• 4Q Non-Farm Productivity is estimated to rise +2.4% versus a +.8% gain in 3Q.
• Initial Jobless Claims are estimated to rise to 195K versus 186K the prior week.
• Continuing Claims is estimated to rise to 1684K versus 1675K prior.
  

10:00 am EST

• Factory Orders for Dec. is estimated to rise +2.3% versus a -1.8% decline in Nov.
• Factory Orders Ex Transports for Dec. is estimated to rise +.2% versus a -.8% decline in Nov.
• Final readings on Durable Goods Orders.
  

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The ECB decision, BofE decision, German trade data report and the weekly EIA natural gas inventory report 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 technology and consumer shares in the region. I expect US stocks to open modestly higher and to maintain gains into the afternoon.  The Portfolio is 75% net long heading into the day.

Stocks Falling into Afternoon on Stagflationary US Economic Data, Earnings Outlook Fears, Profit-Taking, Energy/Biotech Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Lower
  

• Sector Performance: Most Sectors Declining
  

• Volume:  Around Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 19.9 +2.7%
• DJIA Intraday % Swing 1.0%
  
• Bloomberg Global Risk On/Risk Off Index 58.1 -1.1%

• Euro/Yen Carry Return Index 146.4 -.22%

• Emerging Markets Currency Volatility(VXY) 10.3 unch.

• CBOE S&P 500 Implied Correlation Index 35.3 +4.5% 

• ISE Sentiment Index 104.0 +11.0 point
  

• Total Put/Call .86 -3.4%

• NYSE Arms 1.32 +153.8%

Credit Investor Angst:

• North American Investment Grade CDS Index 71.9 +.17%
  

• US Energy High-Yield OAS 361.36 +1.0%
• Bloomberg TRACE # Distressed Bonds Traded 317.0 +21.0
  

• European Financial Sector CDS Index 87.4 -1.3% 
• Credit Suisse Subordinated 5Y Credit Default Swap 355.67 -.4%
  

• Italian/German 10Y Yld Spread 201.0 basis points +14.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 105.6 -.8%
  

• Emerging Market CDS Index 223.33 +.58%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 27.98 +.43%

• 2-Year Swap Spread 27.75 basis points -.5 basis point
  

• TED Spread 15.0 basis points -6.25 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -11.5 +2.25 basis points
  
• MBS  5/10 Treasury Spread  130.0 -1.0 basis point
  
• Bloomberg US Agg CMBS Avg OAS 107.0 unch.
  
• Avg. Auto ABS OAS .71 unch.
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 48.6 +.25%
• 3-Month T-Bill Yield 4.65% +5.0 basis points
  

• China Iron Ore Spot 125.3 USD/Metric Tonne -.6%
• Dutch TTF Nat Gas(European benchmark) 59.5 euros/megawatt-hour +3.8%

• Citi US Economic Surprise Index -10.8 -4.7 points

• Citi Eurozone Economic Surprise Index 101.3 +4.1 points
  

• Citi Emerging Markets Economic Surprise Index 2.7 -5.6 points
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 225.01 -1.81:  Growth Rate +.9% -9.0 percentage points, P/E 18.1 +.2
• S&P 500 Current Year Estimated Profit Margin 12.28% unch.
  
• Bloomberg US Financial Conditions Index .32 +2.0 basis points
  
• Yield Curve -73.5 basis points (2s/10s) -4.5 basis points
• US Atlanta Fed 1Q GDPNow Forecast +.67% unch.
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +4.30% unch.: CPI YoY +6.44% unch.
  
• 10-Year TIPS Spread 2.23 -3.0 basis points
  
• Highest target rate probability for March 22nd FOMC meeting: 84.2%(+1.8 percentage points) chance of 4.75%-5.0%. Highest target rate probability for May 3rd meeting: 54.3%(-.5 percentage point) chance of 4.75%-5.0%.
  

US Covid-19:

• 91 new infections/100K people(last 7 days total). 5.2%(-0.0 percentage points) of 1/14/22 peak(1,740) -0/100K people from prior report.
  
• New Covid-19 patient hospital admissions per 100K population -81.7%(+.2 percentage points) from peak 7-day avg. of 1/9/22 - 1/15/22
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -160 open in Japan 
• China A50 Futures: Indicating +11 open in China

• DAX Futures: Indicating +9 open in Germany

Portfolio:

• Slightly Higher:  On gains in my tech/medical sector longs and index hedges
  

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

• Market Exposure: Moved to 25% Net Long
  

Bear Radar

Style Underperformer:

• Mid-Cap Value -.7%
  

Sector Underperformers:

• 1) Energy -3.5% 2) Oil Service -3.5% 3) Airlines -2.1%

Stocks Falling on Unusual Volume: 

• HLI, TTWO, COF, AZN, NVS, RIVN, MMYT, HESM, WDS, GBX, TS, WDC, CHRD, EAT, BSM, AMGN, KNTK, SPT, CB, IEX, VET, LAC, HES, SYF, JCI, APPS, TRP, MTCH, BFH, EA, HA, VREX and WRK
  

Stocks With Unusual Put Option Activity:

• 1) SKX 2) APLS 3) KNX 4) RL 5) XLB
  

Stocks With Most Negative News Mentions:

• 1) SNAP 2) MTCH 3) SYF 4) WDC 5) CB
  

Charts:

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

Bull Radar

Style Outperformer:

• Mid-Cap Growth -.4%

Sector Outperformers:

• Semis +1.8% 2) Electric Vehicles +1.6% 3) Road & Rail +1.1%

Stocks Rising on Unusual Volume:

• RPD, LPSN, PTON, SLAB, MRCY, DT, TGTX, DOMO, ATKR, LPG, OI, XM, TENB, SAIA, AI and MO
  

Stocks With Unusual Call Option Activity:

• 1) APLS 2) EA 3) MAT 4) MVIS 5) THC

Stocks With Most Positive News Mentions:

• 1) MRCY 2) ODFL 3) SYK 4) EBET 5) RNAZ
  

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running -1.3% Below 100-Day Average 
• 11 Sectors Declining, 0 Sectors Rising
• 40.6% of Issues Advancing, 55.9% Declining
• 86 New 52-Week Highs, 1 New Low
• 60.6%(+1.8%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 60.0 +1.0
  
• Bloomberg Global Risk-On/Risk-Off Index 58.6 -.3%
  
• Russell 1000: Growth/Value 14,541.2 -.03%
  
• Vix 19.9 +2.7%
• Total Put/Call .87 -2.3%
• TRIN/Arms 1.29 +144.2%