Stocks Slightly Lower into Afternoon on US Policy-Induced Stagflation Fears, Rising Fed Rate-Hike Odds, Escalating China/Taiwan Tensions, Tech/Biotech Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: About Even
  

• Sector Performance: Mixed
  

• Volume: Below Average

• Market Leading Stocks: Outperforming
  

Equity Investor Angst:

• Volatility(VIX) 19.2 +4.1%
• DJIA Intraday % Swing .60%
  
• Bloomberg Global Risk On/Risk Off Index 53.1 +1.1%

• Euro/Yen Carry Return Index 151.4 +.6%

• Emerging Markets Currency Volatility(VXY) 11.6 -.26%

• CBOE S&P 500 Implied Correlation Index 33.2 -.75% 

• ISE Sentiment Index 99.0 -6.0 points
  

• Total Put/Call .93 -7.0%

• NYSE Arms .97 +1.0%

Credit Investor Angst:

• North American Investment Grade CDS Index 78.4 +.02%
  

• US Energy High-Yield OAS 379.4 -3.3%
• Bloomberg TRACE # Distressed Bonds Traded 425.0 -15
  

• European Financial Sector CDS Index 104.66 +.13% 
• Deutsche Bank Subordinated 5Y Credit Default Swap 413.8 +.01%
  

• Italian/German 10Y Yld Spread 185.0 basis basis points unch.
  

• Asia Ex-Japan Investment Grade CDS Index 132.5 +.11%
  

• Emerging Market CDS Index 242.67 +.21%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 26.8 -.32%

• 2-Year Swap Spread 33.25 basis points +.25 basis point
  

• TED Spread 44.5 basis points -3.5 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -19.25 unch.
  
• MBS  5/10 Treasury Spread 165.0 +7.0 basis points
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 689.0 +2.0 basis points
  
• Avg. Auto ABS OAS 93.0 unch.
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 47.55 -.31%
• 3-Month T-Bill Yield 4.97% +19.0 basis points
  

• China Iron Ore Spot 116.8 USD/Metric Tonne -.6%
• Dutch TTF Nat Gas(European benchmark) 43.1 euros/megawatt-hour unch.

• Citi US Economic Surprise Index 30.3 -1.1 points

• Citi Eurozone Economic Surprise Index 52.3 -4.2 points
  

• Citi Emerging Markets Economic Surprise Index 25.5 -.2 point
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 226.05 -.01:  Growth Rate +1.6% unch., P/E 18.2 +.1
  
• S&P 500 Current Year Estimated Profit Margin 12.29% unch.
  
• Bloomberg US Financial Conditions Index -.07 +23.0 basis points
• Bloomberg Euro-Zone Financial Conditions Index -4.07 +1.0 basis point
  
• US Yield Curve -59.25 basis points (2s/10s) -6.0 basis points
• US Atlanta Fed 1Q GDPNow Forecast +2.17% +70.0 basis points
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +4.60% unch.: CPI YoY +5.22% unch.
  
• 10-Year TIPS Spread 2.28 +3.0 basis points
  
• Highest target rate probability for June 14th FOMC meeting: 68.7%(-1.0 percentage point) chance of 5.0%-5.25%. Highest target rate probability for July 26th meeting: 44.5%(-4.1 percentage points) chance of 4.75%-5.0%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +232 open in Japan 
• China A50 Futures: Indicating +20 open in China

• DAX Futures: Indicating +134 open in Germany

Portfolio:

• Higher:  On gains in my industrial/tech sector longs and emerging market shorts
  

• Disclosed Trades:  Covered some of my (IWM)/(QQQ) hedges
  

• Market Exposure: Moved to 75% Net Long
  

Bear Radar

Style Underperformer:

• Large-Cap Growth -.5%
  

Sector Underperformers:

• 1) Social Media -2.1% 2) Gold & Silver -1.5% 3) Biotech -.9%

Stocks Falling on Unusual Volume: 

• CYTK, PERI, TPVG, OR, NAAS, CLDX, AI, EFC, LEGN, KRYS, BXMT, DEI, ABR, IGMS and IVR
  

Stocks With Unusual Put Option Activity:

• 1) BUD 2) ACRE 3) SAVE 4) PHM 5) KNX
  

Stocks With Most Negative News Mentions:

• 1) TUP 2) AUDC 3) PEAR 4) WDFC 5) TAL
  

Charts:

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

Bull Radar

Style Outperformer:

• Small-Cap Growth +.1%
  

Sector Outperformers:

• Disk Drives +3.1% 2) Oil Service +1.4% 3) Defense +1.0%

Stocks Rising on Unusual Volume:

• TGTX, EBIX, EBS, WDC, MU, GBX, NUVL, MCS, PXD, HLIT and SCLX
  

Stocks With Unusual Call Option Activity:

• 1) SVM 2) EBIX 3) EQX 4) HPQ 5) SPLK

Stocks With Most Positive News Mentions:

• 1) LVO 2) EBS 3) PXD 4) WDC 5) MU
  

Charts:

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

Tomorrow's Earnings/Economic Releases of Note; Market Movers

Earnings of Note 
Company/Estimate 

Before the Open: 

• (ACI)/.68
• (KMX)/.24
  

After the Close: 

• None of note
  

Economic Releases

6:00 am EST

• The NFIB Small Business Optimism Index for March is estimated to fall to 89.7 versus 90.9 in Feb.
  

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Fed's Kashkari speaking, Fed's Goolsbee speaking, China CPI report, 3Y T-Note auction, weekly US retail sales reports, (SAIC) investor day and the (MRNA) vaccines day could also impact global trading on Monday.

US Equity Market Hours

• 9:30 am - 4:00 pm EST

Morning Market Internals

NYSE Composite Index:

• Volume Running -26.1% Below 100-Day Average 
• Nasdaq/NYSE Volume Ratio 9.2 +.6
  
• 8 Sectors Declining, 3 Sectors Rising
• 56.5% of Issues Advancing, 39.8% Declining
• 19 New 52-Week Highs, 21 New Lows
• 42.6%(+.6%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 55.0 unch.
  
• Bloomberg Global Risk-On/Risk-Off Index 53.3 +1.5%
  
• Russell 1000: Growth/Value 15,791.5 -.91%
  
• Vix 19.5 +5.8%
• Total Put/Call .84 -16.0%
• TRIN/Arms .98 +2.1%
  

Monday Watch

Today's Headlines

Bloomberg:

• Seoul Dismisses Report of US Spying on Allies, Says Ties Strong.
• Ueda Kicks Off BOJ Governorship in First Transition in a Decade.
• Currencies in Tight Ranges, US Futures Edge Up: Markets Wrap.
• Oil Pushes Higher at Week’s Open With Supply Challenges in Focus.
• OPEC+ Shock Revives Oil Bulls Even as Demand Warnings Flash.
• End May Be in Sight for Global Rate-Hike Cycle as Fed Nears Peak.
• FTX Failure Rooted in ‘Hubris,’ ‘Greed,’ Debtors Report Says.
• Twitter Reverses NPR Label, Tweaks to ‘Government Funded Media’.
• Five Things You Need to Know to Start Your Day.

Wall Street Journal:

• Intelligence Leak Circulated for Weeks Before Raising Alarm.
• Saudi Arabia-Led Oil Cuts Run Into Burst of Alternative Supply.
• WSJ Reporter’s Detention Puts Authoritarian Trend in Spotlight.
• A Biologist Explains Why Sex Is Binary. In an effort to confuse the issue, gender ideologues cite rare ambiguous ‘intersex’ cases.
• Corporate Earnings Season Seen as Next Test for Stocks.
• Private Equity’s Food Binge Goes Sour.
• China Warns Taiwan, With an Eye on Rest of the World.

Fox News:

• Former Trump AG issues chilling warning about the impact for the left's agenda..
• Local paper laments homeless crisis, high taxes, violence driving citizens to other states.

CNBC:

• Tesla to open a new Megafactory in Shanghai, China, company says.
• Top Wall Street analysts expect these five stocks to fetch attractive returns.
• China begins second day of military drills; Taiwan say it’s monitoring missiles.

Zero Hedge: 

• SFSU Responds To Alleged Assault On Riley Gaines... By Praising The Protesters.
• Macron Says Europe Should Reduce Dependence On US Dollar, Seek 'Strategic Autonomy'.
• Why Do Mainstream Democrats Hate Matt Taibbi?
• Embattled Soros-Backed St. Louis Prosecutor Sanctioned By Judge Amid New Complaints.
• Biden Admin Asks Supreme Court To Restore Bump Stock Ban.
• Are 'Woke' Companies Sponsoring Golf Pros That Fly Around In Private Jets?
• "Recession Probabilities Are Going Up At This Point": Larry Summers.
• TME Weekend: go away in May?
• Ports Of Los Angeles And Long Beach Close Due To Widespread Worker Shortages During Contract Talks.
• Don't Let Them Memory-Hole This.
• Weekend News Round Up - Newsquawk Asia-Pac Market Open.
• CDC Partners With 'Social And Behavior Change' Initiative To Silence Vaccine Hesitancy.
• Meet The "Woke" Rating Score Prompting Brands Like Nike And Bud To Hire Trans Influencers For Ads.
• Biden Invites Expelled Tennessee Democrats To Visit White House.
• Led By "Fat Activists", New York Considering Bill To Ban Weight Discrimination.
• Davy Jones And The Six.
• Where's The Manifesto?
• Israel Strikes Syria After Rare Rocket Attack On Golan Heights.
• Texas Senate Passes Bills Banning Child Gender Modification And Drag Shows For Kids.
• Half Of America's Top-Selling Beers Have Gone 'Woke'.
• CNN Admits Less Than One Third Of Voters Want Another Joe Biden Term.
• US Deploys Guided-Missile Sub To Gulf Region Amid Iran Tensions, Heightened Russia Presence.
• Welcome To NATOstan (Formerly Known As Europe).
• Anticipated Ukrainian Counter-Offensive Potentially Marred By Plans Leak: Reports.
• Polish MP Proposes "Anti-Bug Law" To Require Labels On Insect-Containing Foods.
• NATO To Hold Its Largest-Ever Air Exercises In June.
• Oil - "real" buyers wanted.
• Eating Meat Is The Norm Almost Everywhere.
• Escobar: Iran And Saudi Arabia - A Chinese Win-Win.
• Taiwan's Thinly Woven Diplomatic Web.
• G7 Nations To Emphasize The Importance Of Nuclear Power In Upcoming Announcement.
• Jan. 6 Rioters Fight To Await Trial At Home.

MarketWatch.com: 

• Recession threat may mean stock-market investors no longer see bad news on economy as good news.
• 4 things could shield stocks as Goldman warns of worst earnings season since pandemic.
• Cruise recalls 300 self-driving cars after one rear-ends San Francisco bus.
• With $200 million opening, ‘Super Mario Bros.’ is a box-office smash.
• Student loan ‘train wreck’: As return of regular payments loom, servicers have less staff to field expected deluge of calls.

NewsMax:

• Biden Seeks to Back Drugstores, Big Pharma in Promoting Abortion Pills.
• Gordon Chang: China's 'Utter Disrespect' for Biden 'Really Serious'. 
• Trump Rips 'Biden Disinformation Administration' on Afghanistan Blame.
• Riley Gaines: Will Sue Attackers for 'Extortion,' 'Kidnapping'.

TheGatewayPundit.com: 

• SF Death Trap: Cycling Champ Mowed Down by Car as Liberal City Compared to 3rd World Country.
• Biden’s Digital Reelection Strategy: Deploy ‘Army of Influencers’ Who Will Have Their Own Briefing Room at White House.
• Budweiser Has New Ad with Dylan Mulvaney Since the Last One Did So Well (VIDEO).
• NYC Police Search for Anti-Semitic Teens Involved in Several Passover Attacks.
• Los Angeles LGBT Center to Host Drag Queen March with Honey Davenport on Easter Sunday.
  
• French President Macron: Europe Must Reduce Its Dependence on United States.
• REVEALED: “Transgender” Who Wanted to Blow Up Colorado Middle School Planned More School Attacks (VIDEO).
• This Easter Please Remember The Jan 6ers Who Suffer in the DC Gulag.
• Andrew Cuomo Facing New Lawsuit Over Nursing Home Deaths During COVID.
• Cafe in San Francisco That Inspired Bob’s Burgers Closing Due to Inflation.
• Parents Are Turning to Easter Potatoes Due to High Egg Prices.
• It Happened Again: Former Top SF Firefighter Suffers Brain Injury in Brutal Attack Outside Front Door.
• Mother Whose Son Was Murdered in New York Unloads on Soros-Backed DA Bragg, Pledges Support for President Trump.

The Epoch Times:

• Canadian Politicians Sign Letter to CCP Official Pledging to Promote Beijing’s Image in Fighting COVID-19: Report
• Massive Number of Waste PV Panels in China Raising Concerns Over High-Cost of Recycling, Environmental Pollution
• Big Four Accounting Firms Out of Favor in China: Deloitte’s Beijing Office Penalized

Twitter:

• @DavidRozado - Mentions of terms signifying ethnic prejudice in Western news media (including Russia).
• @theinformantofc - President #Trump walks in #UFC287 to #KidRock and the crowd goes wild!! (video)
• @gatewaypundit - Merchandiser Claims No One is Buying Anheuser-Busch Products (VIDEO).
• @steve_hanke - The French continue to pack the streets in protest of Pres. Macron's government. Macron is toast. (video)
• @michaelpsenger -  Taiwan is on high alert after Chinese warships completely encircled the country today under the pretext of a planned “military exercise.” (map)
• @songpinganq - JUST IN - The payroll of all civil servants and the employees of all state-owned enterprises in China's Suzhou city will be paid with CBDC from April 2023. (video)
• @The_Real_Fly - CHINA MILITARY SAYS CARRIED OUT SIMULATED PRECISION STRIKES ON KEY TARGETS ON TAIWAN ISLAND, SURROUNDING WATERS: STATE MEDIA.
• @Breaking911 - WATCH: UFC fighter praises Trump, who is in attendance at Miami fight tonight. (video)
• @aginnt - According to this study, the cost of eliminating a single COVID infection from the past lockdowns was $28,000.
• @JanJekielek - "It is as clear a case of chemical warfare as you will find…In one year, America lost 70,000 people." #Fentanyl from #China killed more in 1 year than Vietnam killed in 12, says @NewshamGrant, author of "When China Attacks". (video)
• @BarbarianCap - Great look at the relationship between electricity consumption per capita and GDP per capita. (graph)
  

OpenVAERS:

• VAERS US COVID Vaccine Adverse Event Reports. 947,487 Reports(+1,667 from prior week) Through March 24th, 2023.
  

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.

Night Trading

• Asian indices are unch. to +.5% on average.
• Asia Ex-Japan Investment Grade CDS Index 132.25 unch.
• China Sovereign CDS 73.75 -.75 basis point.
• China Iron Ore Spot 118.4 USD/Metric Tonne +2.1%
  
• Bloomberg Emerging Markets Currency Index 47.7 -.03%.
• Bloomberg Global Risk-On/Risk Off Index 53.6 +1.8%.
• Bloomberg US Financial Conditions Index -.28 +1.0 basis point. 
  
• Volatility Index(VIX) futures 21.5 -.13%. 
• Euro Stoxx 50 futures n/a.
• S&P 500 futures +.02%.
• NASDAQ 100 futures -.20%.

Morning Preview Links

BOTTOM LINE: Asian indices are mostly higher, boosted by technology and industrial shares in the region. I expect US stocks to open mixed and to rally into the afternoon, finishing modestly higher.  The Portfolio is 50% net long heading into the week.