Morning Market Internals

NYSE Composite Index:

• NYSE Volume Running -2.4% Below 100-Day Average 
• Nasdaq/NYSE Volume Ratio 8.2 +.2
  
• 9 Sectors Declining, 2 Sectors Rising
• 20.2% of Issues Advancing, 76.6% Declining
• 13 New 52-Week Highs, 50 New Lows
• 40.9%(-.3%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 43.0 -4.0
  
• Bloomberg Global Risk-On/Risk-Off Index 54.0 -.6%
  
• Russell 1000: Growth/Value 16,619.2 +.7%
• 1-Day Vix 9.7 -16.9%
  
• Vix 17.8 +3.9% 
  
• Total Put/Call .91 -4.2%
• TRIN/Arms .92 +21.0%
  

Tuesday Watch

Evening Headlines

Bloomberg:

• Germany Urges China to Shut Secret Police Outposts in Berlin.
• The High Cost of Eating Is Crushing Europe.
• Turkey Set for Runoff as Erdogan Falls Just Short of Victory.
• Asian Stocks Rise; Topix Set for Three-Decade High: Markets Wrap.
• Oil Edges Higher With US Seeking Crude for Strategic Reserves.
• Fed Officials Signal Rate Caution on Credit and Price Pressures.
• SVB’s Ex-CEO Says Fed, Social Media Contributed to Collapse.
• Fed’s Barr Wants More Oversight of Bank Executives’ Pay After SVB Collapse.
• US Households Show Signs of Stress as New Delinquencies Rise.
• JPMorgan’s Kolanovic Sees Stock Selloff as US Debt Talks Drag On.
• Drug Companies Are Minting Billions on Unproven Treatments With FDA Shortcut.
• Chicago’s Empty Office Towers Threaten Its Future as a Major Financial Hub.
• Banks Face Regulatory Scrutiny Over Interest-Rate Risks.
• Google Billionaire Sergey Brin Gifts $600 Million in Surging Shares.
• Regional Banks’ Problem: They’re Too Small to Succeed.
• Why the US Housing Market Is Still Broken After Fed Hikes, in Charts.

Zero Hedge:

• "The American Public Was Scammed": Trump Responds After Bomshell Durham Report 'Exonerates'.
• America’s Powerful Intellectual Class Finds 'Joy In Making Us Obey And Be Compliant,' Warns Scholar.
• Average Age Of American Cars Hits Record High.
• Fired Teachers Who Refused COVID Vaccine To Get Full Reinstatement And Back Pay.
• Netflix Race-Swapped Cleopatra Show Receives Lowest Rating In Rotten Tomatoes History.
• Babson's Warning.
• Can we please move?
• Watch: Meleé Erupts At Minneapolis Dems' Nominating Convention.
• US stocks gained alongside a short squeeze in regional banks - Newsquawk Asia-Pac Market Open.
• Kunstler: The Elites Are The Useful Idiots Of The Security State.
• China Suddenly Buys TSYs Amid March US Banking Crisis, Gold Reserves Hit Record High.
• Farewell Questions For Rochelle Walensky.
• Stocks rise with regional banks while Dollar dips on weak survey data - Newsquawk US Market Wrap.
• "Could Be Days" - Yellen Reiterates Warning Of June 1st 'X-Date' For Debt-Ceiling.
• US "Plans" To Buy 3 Million Barrels For SPR Days After It Drained 2.9 Million In One Week.
• Banks & Bond Yields Jump On Goolsbee, Gensler, Biden, Bostic, & Bad Data.
• The Devastating Treasury Basis Trade Is Back And Hitting Record Levels... Just As Liquidity Collapses To All Time Low.
• Tudor Jones Warns "Bitcoin Has A Real Problem" In The US As DeSantis Bans CBDCs.
• The Energy Transition Has A Metals Problem.

Wall Street Journal:

• CEO Pay Packages Decline for First Time in a Decade.
• Air-Bag Recall Demand Came After Eight-Year Probe.
• The Disappearing White-Collar Job.
• Virginia Rep. Connolly’s Staffers Attacked With Bat.
• Biden’s Bleak Story About Race in America Is False. His warnings of ‘white supremacy’ would suit 1960 Alabama. In 2023 they’re merely demagogic.
• Macron Calls for a Green ‘Pause’. Even Europeans are getting fed up with costly regulations. 

CNBC.com:

• Consumer debt passes $17 trillion for the first time despite slide in mortgage demand.
• U.S. Virgin Islands issued subpoena to Elon Musk in Jeffrey Epstein lawsuit.
• Federal agency will start testing universal flu vaccine based on mRNA technology
• More than 140 Democrats defend CFPB in case before Supreme Court that threatens agency’s existence.

MarketWatch:  

• Credit-card debt failed to decline in first quarter — for first time in over 20 years, New York Fed says.
• 14 million mortgages were refinanced during ‘pandemic boom.’ That makes life very difficult for home buyers.
• Warren Buffett’s Berkshire Hathaway switched stakes in two banks, and the stocks head in opposite directions.
• David Tepper’s Appaloosa reveals new Tesla, Nvidia, FedEx positions.
• Ex-CEO of Silicon Valley Bank says no bank could have survived a run ‘of that velocity and magnitude’.
• A stock-market milestone: Apple is now worth more than the companies in the Russell 2000 index combined.

Newsmax:

• Devin Nunes: Durham Should 'Scare the Living Hell Out of Everyone'.
• Rep. Chris Smith: Biden Doesn't Care About Border.

Fox News:

• Trump reacts after bombshell Durham report revelations on DOJ, FBI
• READ THE FULL DURHAM REPORT HERE
• Durham findings could cause lasting damage to intel community: Former prosecutor.

TheGatewayPundit.com:

• Durham Report: Plan by Hillary Clinton to Link Trump to Russia Was Briefed by John Brennan to Obama and Biden in August 2016!
• JUST IN: John Durham Releases Final Report Concluding FBI Had No Verified Intel When it Opened Crossfire Hurricane Investigation Into Trump.
• Biden’s Open Borders Invasion: Illegal Alien Tracking Map Shows Movement of the Masses of Illegals Across the US – 71% End Up in Republican Districts.
• MAJOR FRAUD EXPOSED: Democrats Caught Committing Massive Finance Crimes and Donations Harvesting in Indiana – Exclusive Video.
• PROTESTERS LINE THE STREETS to Greet Serial Liar and Megalomaniac Dr. Tony Fauci to His Commencement Speech at Wash U Medical School in St. Louis.
• Donald Trump Announces He Will Release ALL of the JFK Assassination Files if Re-Elected President.
• SMOKING GUN: “This Election Was RIGGED” – Kari Lake Attorneys Say “Clear Misconduct and Intent” Caused 260 of 446 Tabulators to Fail on Election Day – FILING INCLUDED.
• Kentucky Democrat Lawmaker Dead at 45 After Suffering ‘Significant Medical Emergency’.
• Far-Left Vice Media Files For Chapter 11 Bankruptcy to Enable Sale to Soros.
• Ahead of Swearing In of Radical Progressive Chicago Mayor Johnson, 49 Shootings on Mother’s Day Weekend.
• Biden’s DHS Is Offering Concierge Service for Illegal Aliens – Government Employees will Pick Up Their Tagged Bags at the Border for Them (Video).

The Epoch Times:

• Fired ByteDance Exec Claims in Lawsuit That China Has Open Access to US User Data
• Communist China One of World’s ‘Worst Abusers of Human Rights and Religious Freedom’: State Department Report.

Twitter: 

• @acemaxx - The burst of optimism that #Fed ’s hiking cycle has reached its peak looks premature after Americans’ 5y #inflation expectations jumped to a 12y high, chart
  @GarfieldR1966. (graph)
• @WallStCynic - For those that remember, this has early-2007 ABX vibes. BBB- CMBX is down over 10% since October. (graph)
•  @Rifleman4WVU - "South Shore, Chicago voted for Joe Biden in 2020 by a whopping 97%. This is how residents are reacting to 250-500 migrants coming to their area:" (video)
• @Mayhem4Markets - The Fed's pivot isn't always well received by the market Source: Goldman Sachs. (graph)

OpenVAERS:

• VAERS US COVID Vaccine Adverse Event Reports. 959,637 Reports(+1,684 from prior week) Through May 5th, 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 130.0 -.25 basis point. 

• China Sovereign CDS 72.0 +.25 basis point.
  
• China Iron Ore Spot 105.5 USD/Metric Tonne +.4%.

• Bloomberg Emerging Markets Currency Index 47.6 unch.
• Bloomberg Global Risk-On/Risk Off Index 55.4 +1.9%. 
• Bloomberg US Financial Conditions Index -.12 -8.0 basis points.
  
• Volatility Index(VIX) futures 20.2 +.8%.
• Euro Stoxx 50 futures +.14%.

• S&P 500 futures -.11%.

• NASDAQ 100 futures -.06%.  

Morning Preview Links

BOTTOM LINE: Asian indices are mostly higher, boosted by financial and tech 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.

Stocks Slightly Higher into Final Hour on US Economic "Soft-Landing" Hopes, Diminished Regional Bank Contagion Fears, Dollar Weakness, Tech/Financial Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Higher
  

• Sector Performance: Most Sectors Rising
  

• Volume: Below Average

• Market Leading Stocks: Outperforming
  

Equity Investor Angst:

• Volatility(VIX) 17.2 +1.0%
• DJIA Intraday % Swing .72%
  
• Bloomberg Global Risk On/Risk Off Index 54.5 +3.3%

• Euro/Yen Carry Return Index 154.9 +.38%

• Emerging Markets Currency Volatility(VXY) 9.4 -5.0%

• CBOE S&P 500 Implied Correlation Index 31.5 -4.5% 

• ISE Sentiment Index 103.0 -2.0 points
  

• Total Put/Call .89 unch.

• NYSE Arms .78 -29.1%

Credit Investor Angst:

• North American Investment Grade CDS Index 80.9 +.05%
  

• US Energy High-Yield OAS 415.83 -.77%
• Bloomberg TRACE # Distressed Bonds Traded 420.0 -17.0
  

• European Financial Sector CDS Index 101.07 -.42% 
• Deutsche Bank Subordinated 5Y Credit Default Swap 382.64 -.26%
  

• Italian/German 10Y Yld Spread 188.0 basis points -3.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 129.73 -.49%
  

• Emerging Market CDS Index 257.39 +3.3%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 26.22 -.46%

• 2-Year Swap Spread 20.75 basis points -.5 basis point
  

• TED Spread 16.75 basis points +1.0 basis point
  

• 3-Month EUR/USD Cross-Currency Basis Swap -19.75 +.75 basis point
  
• MBS  5/10 Treasury Spread 174.0 +2.0 basis points
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 711.0 +3.0 basis points
  
• Avg. Auto ABS OAS 93.0 -2.0 basis points
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 47.6 -.10%
• 3-Month T-Bill Yield 5.14% -2.0 basis points
  

• China Iron Ore Spot 104.55 USD/Metric Tonne -.46%
• Dutch TTF Nat Gas(European benchmark) 32.3 euros/megawatt-hour -1.4%

• Citi US Economic Surprise Index -2.9 -8.9 points

• Citi Eurozone Economic Surprise Index -24.7 -3.6 points
  

• Citi Emerging Markets Economic Surprise Index 31.3 unch.
• S&P 500 Current Quarter EPS Growth Rate YoY(457 of 500 reporting) -3.2% +.7 percentage point
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 228.09 +.14:  Growth Rate +2.2% -.2 percentage point, P/E 18.1 unch.
  
• S&P 500 Current Year Estimated Profit Margin 12.24% +1.0 basis point
  
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(8 of 10 reporting) -2.1% unch.
  
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 198.85 +.33: Growth Rate +28.4% +.2 percentage point, P/E 32.2 +.2
  
• Bloomberg US Financial Conditions Index -.03 -2.0 basis points
• Bloomberg Euro-Zone Financial Conditions Index -4.55 -1.0 basis point
  
• US Yield Curve -49.75 basis points (2s/10s) +3.0 basis points
• US Atlanta Fed 2Q GDPNow Forecast +2.75% unch.
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +4.65% unch.: CPI YoY +4.14% unch.
  
• 10-Year TIPS Spread 2.20 unch.
  
• Highest target rate probability for July 26th FOMC meeting: 57.7%(-2.8 percentage points) chance of 5.0%-5.25%. Highest target rate probability for Sept. 20th meeting: 44.5%(-3.6 percentage points) chance of 4.75%-5.0%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +259 open in Japan 
• China A50 Futures: Indicating +42 open in China

• DAX Futures: Indicating +71 open in Germany

Portfolio:

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

• Disclosed Trades:  None
  

• Market Exposure: 50% Net Long
  

Bear Radar

Style Underperformer:

• Large-Cap Growth unch.
  

Sector Underperformers:

• 1) Utilities -1.7% 2) Pharma -.6% 3) Foods -.5%

Stocks Falling on Unusual Volume: 

• AEE, SFM, YPF, NNOX, PLAY, AMRK, TRUKP, PANW, HROW, SWAV, SILK, OKE and BLBD
  

Stocks With Unusual Put Option Activity:

• 1) SAVE 2) IYR 3) GPS 4) ONON 5) SHAK
  

Stocks With Most Negative News Mentions:

• 1) ATNX 2) LLAP 3) SOFI 4) HRB 5) HSAI

Charts:

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

Bull Radar

Style Outperformer:

• Small-Cap Value +1.5%
  

Sector Outperformers:

• Regional Banks +3.5% 2) Disk Drives +3.5% 3) Social Media +3.3%

Stocks Rising on Unusual Volume:

• UPST, AI, TPIC, MMP, PNT, TSE, WDC, SRPT, SHAK, SD, HEI, CEQP, NS, MODG, PAA, PAGP and HRZN
  

Stocks With Unusual Call Option Activity:

• 1) SAVE 2) OKE 3) MAR 4) GT 5) DBX

Stocks With Most Positive News Mentions:

• 1) SRPT 2) SHAK 3) MNDY 4) SPCB 5) AWLY
  

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:

• (BIDU)/12.79
• (HD)/3.81
• (ONON)/.10
• (SE)/.73
• (SSYS)/-.06
• (TME)/.80
• (TUP)/.11
  

After the Close: 

• (AGYS)/.22
• (DOCS)/.17
• (KEYS)/1.95
• (NXGN)/.29
  

Economic Releases

8:30 am EST

• Retail Sales Advance MoM for April is estimated to rise +.8% versus a -1.0% decline in March.
• Retail Sales Ex Autos MoM for April is estimated to rise +.5% versus a -.8% decline in March.
• Retail Sales Ex Autos and Gas for April is estimated to rise +.2% versus a -.3% decline in March.
• NY Fed Services Business Activity for May.
  

9:15 am EST

• Industrial Production MoM for April is estimated unch. versus a +.4% gain in March.
• Capacity Utilization for April is estimated to fall to 79.7 versus 79.8% in March.
• Manufacturing Production for April is estimated to rise +.1% versus a -.5% decline in March.
  

10:00 am EST

• Business Inventories for March is estimated unch. versus a +.2% gain in Feb.
• The NAHB Housing Market Index for May is estimated at 45.0 versus 45.0 in April.
  

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Fed's Barr testimony to House, China Retail Sales report, US weekly retail sales report, RBC Healthcare Conference, Needham Tech/Media Conference, Goldman Sachs Staples Forum, JPMorgan Homebuilding/Building Products Conference, (CRS) investor day, (SAP) Financial Analyst Conference and the American Society of Gene/Cell Therapy could also impact global trading tomorrow.

US Equity Market Hours

• 9:30 am - 4:00 pm EST