Stocks Reversing Lower into Afternoon on US Policy-Induced Stagflation Fears, Rising Rate-Hike Odds, Regional Bank Contagion Worries, Regional Bank/Tech 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) 17.9 +.5%
• DJIA Intraday % Swing 1.01%
  
• Bloomberg Global Risk On/Risk Off Index 57.4 +4.1%

• Euro/Yen Carry Return Index 153.5 +.30%

• Emerging Markets Currency Volatility(VXY) 11.2 +.09%

• CBOE S&P 500 Implied Correlation Index 33.0 +2.7% 

• ISE Sentiment Index 92.0 +4.0 points
  

• Total Put/Call .83 -5.7%

• NYSE Arms .82 -10.9%

Credit Investor Angst:

• North American Investment Grade CDS Index 74.2 -1.7%
  

• US Energy High-Yield OAS 359.9 -1.2%
• Bloomberg TRACE # Distressed Bonds Traded 367.0 +11
  

• European Financial Sector CDS Index 94.7 -1.7% 
• Deutsche Bank Subordinated 5Y Credit Default Swap 363.4 -4.5%
  

• Italian/German 10Y Yld Spread 186.0 basis basis points +1.0 basis point
  

• Asia Ex-Japan Investment Grade CDS Index 124.5 -.8%
  

• Emerging Market CDS Index 231.7 +.76%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 26.95 -.27%

• 2-Year Swap Spread 30.0 basis points -1.5 basis points
  

• TED Spread 24.75 basis points -9.25 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -16.5 +1.5 basis points
  
• MBS  5/10 Treasury Spread 162.0 +7.0 basis points
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 694.0 +1.0 basis point
  
• Avg. Auto ABS OAS 95.0 -1.0 basis point
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 47.9 -.23%
• 3-Month T-Bill Yield 5.0% +6.0 basis points
  

• China Iron Ore Spot 114.5 USD/Metric Tonne -1.7%
• Dutch TTF Nat Gas(European benchmark) 41.1 euros/megawatt-hour -2.2%

• Citi US Economic Surprise Index 31.0 +1.6 points

• Citi Eurozone Economic Surprise Index 48.40 -1.2 points
  

• Citi Emerging Markets Economic Surprise Index 27.8 -2.9 points
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 225.83 -.08:  Growth Rate +1.5% -.1 percentage point, P/E 18.4 +.3
  
• S&P 500 Current Year Estimated Profit Margin 12.26% -1.0 basis point
  
• Bloomberg US Financial Conditions Index .17 +14.0 basis points
• Bloomberg Euro-Zone Financial Conditions Index -3.96 +15.0 basis points
  
• US Yield Curve -57.75 basis points (2s/10s) -5.0 basis points
• US Atlanta Fed 1Q GDPNow Forecast +2.17% unch.
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +4.58% unch.: CPI YoY +5.12% unch.
  
• 10-Year TIPS Spread 2.31 +3.0 basis points
  
• Highest target rate probability for June 14th FOMC meeting: 63.9%(-.7 percentage point) chance of 5.0%-5.25%. Highest target rate probability for July 26th meeting: 47.7%(+17.3 percentage points) chance of 5.0%-5.25%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -100 open in Japan 
• China A50 Futures: Indicating -42 open in China

• DAX Futures: Indicating +108 open in Germany

Portfolio:

• Slightly Higher:  On gains in my index hedges and emerging market shorts
  

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

• Market Exposure: Moved to 25% Net Long
  

Bear Radar

Style Underperformer:

• Small-Cap Value -1.5%
  

Sector Underperformers:

• 1) Alt Energy -2.4% 2) Regional Banks -1.9% 3) REITs -1.6%

Stocks Falling on Unusual Volume: 

• SMTC, IGMS, PSA, AGI, SSL, GTLB, WWD, NGG, JHKY, MAG, SIL, GFI, HIG, MANU, MARA, ASAI, MSTR, PAAS, RIOT, CLDX, ENVX, NOW, BA, CARG, RLAY, OEC, TPIC, PRVA, MLTX, RIVN, ARQT, QNST, EVER, SPR and CTLT
  

Stocks With Unusual Put Option Activity:

• 1) NKLA 2) GFI 3) HON 4) BA 5) UNH
  

Stocks With Most Negative News Mentions:

• 1) CTLT 2) ALVO 3) SPR 4) BA 5) LCID
  

Charts:

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

Bull Radar

 Style Outperformer:

• Large-Cap Value -.6%
  

Sector Outperformers:

• Banks +.8% 2) Shipping +.5% 3) Electric Vehicles +.4%

Stocks Rising on Unusual Volume:

• NRIX, JPM and QDEL
  

Stocks With Unusual Call Option Activity:

• 1) SPR 2) DBRG 3) SCPH 4) DUST 5) SO

Stocks With Most Positive News Mentions:

• 1) PTPI 2) CXAI 3) MRAI 4) PRPL 5) QDEL
  

Charts:

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

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

Earnings of Note 
Company/Estimate 

Before the Open: 

• (SCHW)/.90
• (MTB)/3.96
• (STT)/1.64
  

After the Close: 

• (JBHT)/2.03
• (PNFP)/1.71
  

Economic Releases

8:30 am EST

• Empire Manufacturing for April is estimated to rise to -18.0 versus -24.6 for March.
  

10:00 am EST

• The NAHB Housing Market Index for April is estimated to rise to 45 versus 44 in March.

4:00 pm EST

• Net Long-Term TIC Flows for February.
  

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Italy CPI report and the Needham Healthcare Conference could also impact global trading tomorrow.

US Equity Market Hours

• 9:30 am - 4:00 pm EST

Morning Market Internals

NYSE Composite Index:

• Volume Running -6.2% Below 100-Day Average 
• Nasdaq/NYSE Volume Ratio 9.9 +.4
  
• 10 Sectors Declining, 1 Sector Rising
• 32.1% of Issues Advancing, 64.7% Declining
• 34 New 52-Week Highs, 18 New Lows
• 48.5%(+3.0%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 61.0 +1.0
  
• Bloomberg Global Risk-On/Risk-Off Index 56.7 +3.6%
  
• Russell 1000: Growth/Value 15,804.4 -.39%
  
• Vix 17.8 unch.
• Total Put/Call .83 -5.7%
• TRIN/Arms .88 -4.4%
  

Friday Watch

Evening Headlines

Bloomberg:     

• China Junk Bonds in Worst Slide This Year on Restructuring Angst.
• Singapore Halts Policy Tightening After First-Quarter Slump.
• Taiwan's Semiconductor Success Is Fueling a Surge in Home Prices.
• Asia Equities Gain Following Advance in US Shares: Markets Wrap.
• US Urges Social Media to Not Share Leaked Docs in Damage Control.
• Leaked Secrets Spread Faster on Discord and Telegram.
• Former Chief of Texas Power Grid Calls State-Funded Plants ‘Dangerous’.
• Fed’s Emergency Loans to Banks Fall For Fourth Straight Week. 
• The Rush Into Money Funds Is Slowing, But They’re Still Growing.
• WeightWatchers Enters Weight Loss Drug Market With Acquisition.

Wall Street Journal:

• On Inflation, the Price Is Still Wrong. The consumer-price index has fallen from its peak, but ‘core’ prices remain sticky.
• ‘Net Zero’ Will Mean a Mining Boom. But political instability will make it difficult to obtain all the minerals electric cars will need.
• Gold Prices Near Record.
• Why Is America Still Flying the A-10 Warthog, a Cold War Relic?
• The Primary Breadwinner Is Disappearing From More Homes.
• Fast EV Chargers to Nearly Double on U.S. Highways Under Expansion Plan.
• DACA ‘Dreamers’ Would Be Eligible for Government Healthcare Under New Rule.

Fox News:

• Arrest of classified documents leak suspect met with outrage: 'Incompetence is stunning'

CNBC.com:

• Boeing warns of reduced 737 Max production and deliveries due to parts issue.
• Walmart sells Bonobos to WHP Global and Express in $75 million deal.
• Lucid first-quarter deliveries underwhelm as demand concerns plague the EV maker.
  

MarketWatch:

• Why the weakness in U.S. bank stocks since the collapse of SVB is a worrisome sign on eve of bank earnings.

Zero Hedge:

• Anheuser-Busch Loses $6BN In Six Days After Trans Ad Campaign That Top Execs Never Approved. 
• Washington Braces For Diplomatic Fallout Amid Fears Of Further Intel Leaks.
• Watch: 21-Year-Old Suspect Jack Teixeira Arrested In Pentagon Leak.
• Biden Admin Proposes Reducing Water Supply From Colorado River Basin Amid Drought.
• Brace For A Brutal Drop In Retail Sales.
• Kunstler: How's That War Going?
• Rat Czar: NYC's "Director Of Rodent Migration" To Be Paid $155,000 Per Year.
• North American Rail Volume Continues Decline Through Week 14: AAR.
• North Korea Test Fires New 'Harder-To-Detect' ICBM.
• Global Disinformation Index Withholds Information On Its Own Operations.
• SFSU Athletic Director: "Common Mistake" To Think Men Have Physical Advantages Over Women.
• US stocks rallied through the session Thursday, while the Dollar dipped close to YTD lows - Newsquawk Asia-Pac Market Open.
• Inverse panic kicking in.
• Fed Balance Sheet Shrinks For 3rd Straight Week, Bank Bailout Facility Usage Eases.
• Hersh: CIA Knows Zelensky & Top Generals Are Skimming Hundreds Of Millions In US Aid.
• SPX highest close since Feb and Dollar just shy of YTD low ahead of earnings - Newsquawk US Market Wrap.
• "Corporate Misery Is Building" - BofA Warns "Expect Big Cuts" To 2023 S&P Earnings.
• PPI Plunge Prompts Panic-Bid In Big-Tech, Bullion, & Bitcoin.

Newsmax:  

• Trump Vows to Fire 'Radical Marxist Prosecutors' Destroying US.
• Rep. Rick Allen: Audit U.S. Intelligence Community.

TheGatewayPundit.com:

• Boycotting Bud Light? Here Are All the Brands Owned by Beer’s Parent Company.
• JUST IN: Supreme Court Allows $6 Billion in Student Loan Debt Forgiveness.
• MAJOR NEWS: The Gateway Pundit Wins Historic First Amendment Lawsuit, Maricopa County Board of Supervisors Agrees to Settlement.
• Elon Musk Mocks Federal Reserve and Issues Warning on Biden Economy.
• Far-Left Protesters Flood Florida State Capitol, Throw Objects at Lawmakers as Legislature Votes to Ban Abortion After 6 Weeks (VIDEO).
• Maricopa County Releases Results of Independent 2022 Ballot Printer Investigation Following Election Day Disaster.
• Government Documents on Seized Assets of Anti-CCP Dissident Guo Wengui/Miles Guo Implodes Their Own Case Against Him.
• REVEALED: Billionaire LinkedIn Founder and Democrat Megadonor Secretly Funding E. Jean Carroll’s Rape Lawsuit Against Trump.
• PICTURED: Here is the Tech Exec Who Allegedly Killed Cash App Founder Bob Lee.
• Biden Increases US Deficit by $1 Trillion in First Six Months of Fiscal Year 2023.
• President Trump Announces Plan When Back in White House to Fire Radical Leftist Prosecutors Destroying America.
• Seymour Hersh Reports that Ukrainian Leader Zelensky Embezzled $400 Million from US Payments Allocated for Fuel.
• CHINA COUGHS UP THE DOCUMENTS: Releases Proof of MILLIONS OF DOLLARS of Payments from China Firm to Hunter Biden – And They’re Just Getting Started!
  

The Epoch Times:

• Chinese Tech Giants Tencent and Douyin New Partnership Possibly Facilitated by the CCP.

Twitter: 

• @VigilantFox - @TuckerCarlson: Nobody Seems to Want to Ask What Drugs the Louisville Shooter Was Taking "That's not a crazy question. What's crazy is ignoring the topic completely because you're taking huge money from big pharma, which peddles these drugs. That's what our media and political classes are doing right now. And it's shameful!" (video)
• @rawsalerts - Up to 10 explosive devices have been found in a car outside repair shop. 
• @elonmusk - Publicly funded PBS joins publicly funded NPR in leaving Twitter in a huff after being labeled “Publicly Funded”.
• @songpinganq - 30 million Chinese people got sent off to quarantine camps. If these people have guns, the govt would think twice before they did this. (video)
• @BorderReportcom - Dozens of migrants have entered the U.S. illegally and are amassing along the border wall in San Diego, but border agents say they don't have room at their stations to take them in.
• @betterworld_24 - The WEF's Yuval Noah Harari says the quiet part out loud. (video)
• @_Tweetiez - "UK's largest teacher's union demands schools support drag queen story time, set up LGBT spaces".
• @DefiyantlyFree - Government has been very, very good to Mitch McConnell.  
• @Barchart - CNN Stock Market Fear & Greed Index = 65 (Greed).

OpenVAERS:

• VAERS US COVID Vaccine Adverse Event Reports. 949,138 Reports(+1,651 from prior week) Through March 31st, 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 equity indices are -.25% to +.5% on average.

• Asia Ex-Japan Investment Grade CDS Index 124.0 -2.25 basis points. 

• China Sovereign CDS 67.75 -2.0 basis points. 
• China Iron Ore Spot 116.8 USD/Metric Tonne +.3%.

• Bloomberg Emerging Markets Currency Index 48.0 +.02%.
• Bloomberg Global Risk-On/Risk Off Index 56.0 +2.2%. 
• Bloomberg US Financial Conditions Index -.03 -5.0 basis points.
  
• Volatility Index(VIX) futures 20.5 +.07%.
• Euro Stoxx 50 futures +.35%.

• S&P 500 futures +.04%.

• NASDAQ 100 futures -.01%.  

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 weaken into the afternoon, finishing modestly lower.  The Portfolio is 50% net long heading into the day.