Bear Radar

Style Underperformer:

• Large-Cap Growth -.8%
  

Sector Underperformers:

• 1) Semis -2.3% 2) Internet -2.0% 3) Networking -1.8%

Stocks Falling on Unusual Volume: 

• BEKE, TSEM, SSL, GTLB, TSLA, INTC, CRWD, U, EXAS, ERJ, LMND, RIVN, ASAN, PLTR, WKC, RBLX, SYM, CYRX, ZI, LITE, VYGR, MSGE, COHR, TRUP, TRUP and QURE
  

Stocks With Unusual Put Option Activity:

• 1) EWU 2) CPNG 3) UNP 4) FDX 5) GT
  

Stocks With Most Negative News Mentions:

• 1) COHR 2) PTON 3) CUTR 4) FDX 5) IEP
  

Charts:

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

Bull Radar

Style Outperformer:

• Mid-Cap Value +.1%
  

Sector Outperformers:

• Oil Service +1.7% 2) Energy +1.6% 3) Defense +1.1%

Stocks Rising on Unusual Volume:

• PDCO, INOD, KTOS, MARA, ABR, TDW, MSTR, RIOT, VTLE, DLTR, GNRC and ELF
  

Stocks With Unusual Call Option Activity:

• 1) SPOT 2) PAAS 3) UCAR 4) SGML 5) LOGI

Stocks With Most Positive News Mentions:

• 1) KTOS 2) INOD 3) PCT 4) PDCO 5) OCEA
  

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:

• (ACN)/3.01
• (CMC)/1.84
• (DRI)/2.54
• (FDS)/3.61
  

After the Close: 

• (SWBI)/.29
  

Economic Releases   

8:30 am EST

• The Chicago Fed National Activity Index for May is estimated to fall to -.1 versus +.07 in April.
• The Current Account Balance for 1Q is estimated at -$217.1B versus -$206.8B in 4Q.
• Initial Jobless Claims for last week are estimated to fall to 258K versus 262K the prior week.
• Continuing Claims are estimated to rise to 1785K versus 1775K prior.

10:00 am EST

• Existing Home Sales for May is estimated to fall to 4.25M versus 4.28M in April.
• The Leading Index for May is estimated to fall -.8% versus a -.6% decline in April.

11:00 am EST

• The Kansas City Fed Manufacturing Activity  Index for June is estimated to fall to -5.0 versus -1.0 in May.

Upcoming Splits 

• None of note
  

Other Potential Market Movers

• The Fed's Powell testifying to Senate, Fed's Mester speaking, BofE rate decision, Australia GDP report, weekly EIA natural gas inventory report and the (AI) investor day could also impact global trading tomorrow.

US Equity Market Hours

• 9:30 am - 4:00 pm EST

Morning Market Internals

NYSE Composite Index:

• NYSE Volume Running -10.3% Below 100-Day Average 
• Nasdaq/NYSE Volume Ratio 11.7 +2.0
  
• 4 Sectors Declining, 7 Sectors Rising
• 46.2% of Issues Advancing, 50.5% Declining
• 72 New 52-Week Highs, 20 New Lows
• 50.2%(-.7%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 59.0 unch.
  
• Bloomberg Global Risk-On/Risk-Off Index 62.5 +.9%
  
• Russell 1000: Growth/Value 17,339.6 -.96%
• 1-Day Vix 9.5 -14.4%
  
• Vix 14.4 -3.2% 
  
• Total Put/Call .91 +5.8%
• TRIN/Arms 1.25 -24.7%
  

Wednesday Watch

Evening Headlines

Bloomberg:

• How an F1 Tiremaker Became the Test Case for Italy's Effort to Pivot From China
• Asia Stocks Set to Open Lower in Wake of US Losses: Markets Wrap.
• Oil Drops With China Demand Outlook and Powell Remarks in Focus.
• An Aggressive Supreme Court Reshapes the US as Its Standing Erodes.
• Supreme Court Leaves Politically Fraught Cases for Last.
• Titanic Explorer Says Two Likely Disaster Causes Are Survivable. One Is Not.
• FedEx’s Forecast Falls Short of Estimates Amid Weak Demand.
• A 20,000% Surge in Hedging Costs Is Punishing Private Equity Firms.
• Are Profit Margins Driving Inflation?
• More Americans Are Getting Auto Loans That Exceed the Worth of Their Cars.
• Private Credit’s Quiet, Unstoppable Rise Comes With Unknown Risk. 
• Fed Picks Pledge to Cool Inflation in Senate Nomination Hearing. 
• Morgan Stanley Says Stock Bulls Face Rude Awakening.

Zero Hedge:

• Pentagon Says It Made $6 Billion "Accounting Error" Clearing More Aid For Ukraine
• Tucker Carlson Savages Bidens Over Hunter's 'Slap On The Wrist' For Tax, Gun Crimes
• NH Democratic Party Freaks Out As RFK Jr To Speak At Libertarian Festival.
• Body Mass Index Is 'Racist,' Says American Medical Association.
• Tropical Storm Bret Could Become Hurricane, Threatening Eastern Caribbean.
• "Election Interference!": Trump Rages, Comer Condemns Hunter Biden's "Slap On The Wrist" Misdemeanor Deal.
• Qatar Ready To Ink New 27-Year Gas Deal With China.
• US Business Logistics Costs Soared In 2022 By An "Astounding" 20% To A Record $2.3 Trillion.
• Too much too fast.
• Negative Equity Surges: More Consumers Find Themselves In Underwater Auto Loans.
• US stocks finished lower with price action choppy on return from the holiday weekend - Newsquawk Asia-Pac Market Open.
• Hamburger Prices Near Record High As Grilling Season Kicks Off.
• Tech Momo Darlings, Crypto Pump As VIX, Rest Of Market Dump.
• Stocks chop and bonds surge as desks warn of early month-end flows in quiet trade - Newsquawk US Market Wrap.
• 'I Can Go Into Anyone’s House At Any Time’: Judiciary Committee Investigates IRS Agent Threatening Taxpayer.
• Morningstar Says 'Anti-ESG' Fund Hype Might Be Over. But Is It?

Wall Street Journal:

• Beijing Plans New Military Training Facility in Cuba.
• Inside the Feud at One of Wall Street’s Biggest Hedge Funds.
• The Blue State Budget Blues. The fiscal crash arrives following years of profligate spending.
• Why Tesla’s Stock Rally Doesn’t Make Sense—in Eight Charts.
• Rescue Crews Race to Locate Titanic Sub.
• Wall Street Sours on America’s Downtowns.
• U.S.-Funded Scientist in Wuhan Fell Ill Amid Early Covid Outbreak.
• Stock-Market Rally Costs Bears $120 Billion.

CNBC.com:

• Top tech execs get ready to meet Modi as China’s economy falters
• It’s official: Student loan payments will restart in October, Education Department says
• DOJ launches cyber unit with national security focus as China, Russia threats mount.
• Mature content comes to Roblox for users aged 17 and up.

MarketWatch:

• How AI is disrupting one profession: ‘A lot of people will lose their jobs’.
• Stock-market investors now ‘clearly overweight’ U.S. equities. Should bulls worry?
• San Francisco isn’t the worst city, yet, for problem office loans
• Leveraged loan defaults hit $25 billion, head for third worst year in history, says Goldman

Newsmax:

• US Attorney Insists the Hunter Biden Case Is Not Closed.
• Trump Predicted Hunter Charged With 'Something Small'.

TheGatewayPundit.com:

• AMERICAN JUSTICE: 69-Year-Old Grandma with Cancer Given More Prison Time for Walking Inside US Capitol than Hunter Biden for Sharing Classified Documents with Foreign Regimes and Multi-Million Dollar Bribery Schemes.
• O’Keefe Drops Biggest Story Yet: BlackRock Recruiter Spills Info on Company’s World Impact – “You Got $10K? You Can Buy a Senator” (VIDEO).
• Obama-Appointed Judge Strikes Down Arkansas’ Ban on Gender Transition Procedures For Minors.
• Tucker Carlson Goes Off on Hunter Biden in Episode 5: As in Most of the Developing World, It’s Safer to be the President’s Son Than His Opponent (VIDEO).
• TWO-TIERED JUSTICE: TRUMP WAS RIGHT – DOJ Gave Hunter Biden a Slap on the Wrist After Committing Major International Financial Crimes – Trump Gets 100 Years for Bogus Document Charges.
• REVEALED: Biden Regime Heavily Funding “Subversive” Midwest Group Scheming to Transition Innocent Children Without Their Parents’ Consent.
• Legendary Australian Cricketer Shane Warne’s Sudden Death Likely Precipitated by Covid mRNA Vaccine, Leading Doctors Conclude.
• Publisher Gannett Sues Google, Alleges ‘Deceptive Scheme’ to Gain Online Ad Monopoly.
• Chinese Influence Growing, Polls Suggest Taiwan May Already Be Lost.
• CHINESE TROOPS COMING TO AMERICA’S DOORSTEP: Communist China Working to Establish Military Training Facility in Cuba – Just 90 Miles South of Florida.

The Epoch Times:

• 1st US Law Countering Beijing’s Forced Organ Harvesting Enacted in Texas.
• Blinken’s Message Could Embolden China to Make a Move Against Taiwan: Expert.

Twitter: 

• @TPostMIllenial - BREAKING: Pentagon "accounting error" leads to $6.2 billion EXTRA for Ukraine.
• @Breaking911 - MCCARTHY: "If you are the President's leading political opponent, the DOJ tries to literally put you in jail & give you prison time. If you are the President's son, you get a sweetheart deal." (video)
• @wesyang - “The U.S. sex reassignment surgery market size was valued at USD 1.9 billion in 2021 and is expected to expand at a compound annual growth rate (CAGR) of 11.23% from 2022 to 2030.”

OpenVAERS:

• VAERS US COVID Vaccine Adverse Event Reports. 964,389 Reports(+1,106 from prior week) Through June 2nd, 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 -.5% to unch. on average.

• Asia Ex-Japan Investment Grade CDS Index 113.0 +.25 basis point. 

• China Sovereign CDS 59.25 +.5 basis point.
  
• China Iron Ore Spot 111.5 USD/Metric Tonne -1.3%.

• Bloomberg Emerging Markets Currency Index 45.2 +.01%.
• Bloomberg Global Risk-On/Risk Off Index 62.5 +.8%. 
• Bloomberg US Financial Conditions Index .20 -4.0 basis points.
  
• Volatility Index(VIX) futures 16.5 -.15%.
• Euro Stoxx 50 futures +.23%.

• S&P 500 futures +.06%.

• NASDAQ 100 futures +.08%.  

Morning Preview Links

BOTTOM LINE: Asian indices are modestly lower, weighed down by commodity and technology 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 Lower into Afternoon on US Policy-Induced Stagflation Fears, China Economic "Hard-Landing" Worries, Technical Selling, Commodity/Tech Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Lower
  

• Sector Performance: Almost Every Sector Declining
  

• Volume: Around Average

• Market Leading Stocks: Underperforming
  

Equity Investor Angst:

• Volatility(VIX) 14.1 -.4%
• DJIA Intraday % Swing .85%
  
• Bloomberg Global Risk On/Risk Off Index 61.9 -3.0%

• Euro/Yen Carry Return Index 162.2 -.53%

• Emerging Markets Currency Volatility(VXY) 8. -.34%

• CBOE S&P 500 Implied Correlation Index 20.8 +6.4% 

• ISE Sentiment Index 113.0 -6.0 points
  

• Total Put/Call .83 -28.5%

• NYSE Arms 1.54 +71.1%

Credit Investor Angst:

• North American Investment Grade CDS Index 69.6 +.27%
  

• US Energy High-Yield OAS 374.4 +1.2%
• Bloomberg TRACE # Distressed Bonds Traded 396.0 -7.0
  

• European Financial Sector CDS Index 89.2 +.93% 
• Deutsche Bank Subordinated 5Y Credit Default Swap 291.9 +.45%
  

• Italian/German 10Y Yld Spread 163.0 basis points unch.
  

• Asia Ex-Japan Investment Grade CDS Index 112.7 +.13%
  

• Emerging Market CDS Index 217.5 +1.2%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 26.4 -.64%

• 2-Year Swap Spread 21.5 basis points unch.
  

• TED Spread 29.25 basis points -3.5 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -17.5 +1.0 basis point
  
• MBS  5/10 Treasury Spread 159.0 +2.0 basis points
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 726.0 -1.0 basis point
  
• Avg. Auto ABS OAS 81.0 -2.0 basis points
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 45.2 -.16%
• 3-Month T-Bill Yield 5.22% +2.0 basis points
  

• China Iron Ore Spot 111.1 USD/Metric Tonne -1.7%
• Dutch TTF Nat Gas(European benchmark) 38.7 euros/megawatt-hour  +10.9%

• Citi US Economic Surprise Index 30.2 +8.3 points

• Citi Eurozone Economic Surprise Index -93.1 -.8 point

• Citi Emerging Markets Economic Surprise Index 5.4 +1.8 points
• S&P 500 Current Quarter EPS Growth Rate YoY(3 of 500 reporting) +2.7% n/a
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 231.10 n/a:  Growth Rate +3.4% n/a, P/E 18.9 n/a
  
• S&P 500 Current Year Estimated Profit Margin 12.23% unch.
  
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(0 of 10 reporting) n/a
  
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 208.75 n/a: Growth Rate +37.2% n/a, P/E 36.9 n/a
  
• Bloomberg US Financial Conditions Index .22 -1.0 basis point
• Bloomberg Euro-Zone Financial Conditions Index -4.17 -13.0 basis points
  
• US Yield Curve -97.0 basis points (2s/10s) -1.5 basis points
• US Atlanta Fed 2Q GDPNow Forecast +1.77% unch.
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +4.70% unch.: CPI YoY +3.22% unch.
  
• 10-Year TIPS Spread 2.22 unch.
  
• Highest target rate probability for Sept. 20th FOMC meeting: 66.6%(-1.9 percentage points) chance of 5.25%-5.5%. Highest target rate probability for  Nov. 1st meeting: 66.6%(-.7 percentage point) chance of 5.25%-5.5%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -208 open in Japan 
• China A50 Futures: Indicating -104 open in China

• DAX Futures: Indicating +159 open in Germany

Portfolio:

• Higher:  On gains in my medical sector longs, index hedges and emerging market shorts
  

• Disclosed Trades: Added to my (IWM)/(QQQ) hedges and to my emerging market shorts
  

• Market Exposure: Moved to 25% Net Long