Morning Market Internals

NYSE Composite Index:

• NYSE Volume Running -.9% Below 100-Day Average 
• Nasdaq/NYSE Volume Ratio 15.6 +6.7
  
• 11 Sectors Declining, 0 Sectors Rising
• 6.9% of Issues Advancing, 91.4% Declining
• 12 New 52-Week Highs, 19 New Lows
• 48.6%(-4.4%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 49.0 -12.0
  
• Bloomberg Global Risk-On/Risk-Off Index 64.2 -.3%
  
• Russell 1000: Growth/Value 17,558.5 +.57%
• 1-Day Vix 10.8 +7.4%
  
• Vix 16.7 +17.8% 
  
• Total Put/Call .82 -12.8%
• TRIN/Arms 1.95 +134.9%
  

Thursday Watch

Evening Headlines

Bloomberg:

• China Has Ample Tools Even in ‘Panic’ Yuan Drop, PBOC Paper Says.
• Emerging Asia Bonds, Currencies Have Lost Their Traditional Link.
• Companies Play Catch-up as Cybersecurity Attacks Rise in Digital India.
• Asian Equities Slide as Fed Minutes Show Hike Bias: Markets Wrap.
• CFTC Investigators Conclude Crypto Lender Celsius, Ex-CEO Broke Rules.
• Fed Minutes Reveal Divisions Over Decision to Pause in June.
• Instagram Unveils Threads App, a Threat to Musk’s Twitter. 
• Rivian CEO Eyes Production Ramp, New Partners After Supply Woes. 
• Exxon Sees $4 Billion Earnings Hit from Gas Prices, Refining.
• SVB Financial Approved to Sell Investment Bank Back to Founder for $100 Million.
• Biden to Announce $60 Million Enphase Energy Investment. 
• Five Things You Need to Know to Start Your Day.

Zero Hedge:

• Secret Service Confirms Cocaine Was Found In West Wing Phone Cubby Hours After Hunter Biden Visit.
• Instead Of Hot Chicks In Bikinis, Bud Light Goes With 'Grunting Men' In Rehab Fail.
• Ban On Recording Without Consent Is Unconstitutional, US Court Rules.
• Congratulations To Washington State For Topping California On Nation's Highest Gasoline Prices.
• US Gun Demand Drops To Four-Year Low.
• Online Marketplace For Companies Supporting Conservative Values To Go Public.
• How The World Goes Online.
• Actress Allison Mack Released From Prison After Sentencing For Role In NXIVM Sex Cult.
• The Fatal Error Of Sheep.
• Last Friday Was The Busiest Day In US Aviation History.
• Weak data and rising yields contributed to a post-Independence Day hangover for stocks - Newsquawk Asia-Pac Market Open.
• As AG Landry Takes Victory Lap, Matt Taibbi Taunts "Orwellian Ministry Of Truth": Take That, Internet Censors!
• Teflon tech defies rates.
• Rickards: Globalist Elites Fear You.
• More Than 105 Million Working-Age Americans Do Not Have A Job Right Now.
• These Are The Best And Worst Performers Of June, Q2 And The First Half.
• Stocks and bonds fall on Independence Day hangover ahead of key data - Newsquawk US Market Wrap.
• July 4th Hangover & Hawkish Fed Hits Bonds, Bitcoin, & Bullion; Cyclical Stocks Sink.

Wall Street Journal:  

• How China Came to Dominate the World’s Largest Nickel Source for Electric Cars.
• The Biden-Big Tech Collusion Case. A judge rules that illegal White House pressure led to social-media censorship, especially on Covid-19.
• Los Angeles Mayor Karen Bass Is Trying to Get Homeless People Off the Street Fast.
• Some Fed Officials Supported Raising Rates in June.
• Markets Ignore the Looming Debt Peril.
• America’s Retirees Are Investing More Like 30-Year-Olds.
• Taiwan’s Impossible Choice: Be Ukraine or Hong Kong.
• U.S. New-Vehicle Sales Rise an Estimated 13% in First Half of Year.
• Rebound in Rates Puts Pressure on Banks.
• UPS, Teamsters Hit Roadblock in Labor Talks.
• Some Hospitals That Spent Big on Nurses Are Now Short on Cash.
• Elite Colleges Will Still Seek Diversity After Affirmative Action.

CNBC.com:

• Fed sees more rate hikes ahead, but at slower pace, meeting minutes show.
• Bill Ackman stuns Wall Street by amplifying RFK Jr.’s vaccine skepticism.
• A global commodities rout is fueling fears of a bleak economic future.
• Biden administration gives student loan borrowers some leeway when payments restart.
• ChatGPT app downloads are slowing down, BofA finds.
• 30% of Americans say ‘tipping culture is out of control’ — even some businesses agree.
• Trump fundraising haul surged in second quarter as he battled indictments.
• These are the 10 highest-paid CEOs in the U.S.—some pull in over $200 million a year.

MarketWatch:

• Bed Bath & Beyond investors have spent $200 million trading ‘worthless’ shares — will this holding company help them?

Newsmax:

• Echelon Poll: Trump Is Holding 7-Point Lead Over Biden in Critical Swing States.

Fox News:

• White House gives terse reply when asked if President Biden acknowledges Hunter's daughter.
• BlackRock CEO Larry Fink on why he won't mention ESG anymore.
• CDC issues controversial guidance on how biological males can 'chestfeed' newborn babies.

 TheGatewayPundit.com:

• ‘Does Biden Acknowledge This Little Girl as His Granddaughter?’ – Reporter Confronts Karine Jean-Pierre About Biden’s Refusal to Acknowledge Hunter’s Lovechild (VIDEO).
• France Has Fallen: After 1,000 Buildings Burnt, 5,600 Vehicles Destroyed, 3,300 Arrests, Government Vows to Crack Down – On Free Speech
• Joe Biden Laughs Off Questions About Cocaine Found in White House (VIDEO).
• Bat-Wielding Youths Club Mothers Outside School in Wealthy San Francisco Neighborhood – Woke Local Politician Commits Self-Own While Excusing the Violent Behavior (VIDEO).
• REPORT: Tayler Hansen Reveals Precisely How Chinese-Run Tiktok is Letting Mexican Drug Cartels Target Americans for Human Smuggling Jobs (VIDEO).
• Radioactive Material Reported Missing Near Southern U.S. Border — U.S. Officials Remained Silent While Mexican Officials Issued Alert.
• Joe Rogan Discusses How Corporate Media, Big Tech and the FBI Rigged the Election Against Donald Trump (VIDEO).
• Vietnam Bans “Barbie” Movie As Hollywood Kowtows to China Using Map that Favors China’s South China Sea Claims.
• Ben & Jerry’s to Bud Light, ‘Hold My Beer’ – Overpriced Ice Cream Company Trashes US on Independence Day.

The Epoch Times:

• Hong Kong Authorities Vow to Pursue Pro-Democracy Activists ‘For Life’.
• Hong Kong Police Issue Arrest Warrants for 8 Overseas Pro-Democracy Activists, Including Canadian Man.

Twitter: 

• @gatewaypundit - REPORT: The United Nations is Trying to Seize ‘Global Emergency’ Powers With Support From Biden.
• @songpinganq - By law, if Chinese citizens' social credit scores are too low, their kids are banned from the exclusive/top schools. Here is one exclusive school in Chengdu city, China. (video)
• @theinformantofc - #France, #Marseilles burns for an 8th night. (video)
• @RobinBrooksIIF - It's really quite shocking how bad the Euro zone manufacturing PMIs are now. They have fallen below their 2022 lows in Germany (top left), Italy (top right), Austria (bottom left) and the Netherlands (bottom right). There is no demand-driven inflation. Recession is coming... (graphs) 
• @nowvideonetwork - Military armored personnel carriers arrive in Marseille, France, forces armed with heavy weapons as Macron faces calls to impose ‘state of emergency’. The rioters are armed with automatic rifles, shotguns, IEDs, and molotov cocktails. (video)

OpenVAERS:

• VAERS US COVID Vaccine Adverse Event Reports. 966,895 Reports(+1,278 from prior week) Through June 16th, 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 -.75% to -.25% on average.

• Asia Ex-Japan Investment Grade CDS Index 115.0 +1.5 basis points. 

• China Sovereign CDS 62.0 -2.25 basis points.
  
• China Iron Ore Spot 110.0 USD/Metric Tonne +.34%.

• Bloomberg Emerging Markets Currency Index 43.4 +.02%.
• Bloomberg Global Risk-On/Risk Off Index 64.1 -.4%. 
• Bloomberg US Financial Conditions Index .31 -6.0 basis points.
  
• Volatility Index(VIX) futures 16.6 +.6%.
• Euro Stoxx 50 futures -.16%.

• S&P 500 futures -.14%.

• NASDAQ 100 futures -.15%.  

Morning Preview Links

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

Stocks Slightly Lower into Final Hour on US Policy-Induced Stagflation Fears, Escalating US/China Trade Tensions, Less Dovish FOMC Commentary, Metals & Mining/Gambling Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Lower
  

• Sector Performance: Most Sectors Declining
  

• Volume: Below Average

• Market Leading Stocks: Underperforming
  

Equity Investor Angst:

• Volatility(VIX) 14.1 +3.1%
• DJIA Intraday % Swing .43%
  
• Bloomberg Global Risk On/Risk Off Index 64.5 +1.2%

• Euro/Yen Carry Return Index 165.4 -.07%

• Emerging Markets Currency Volatility(VXY) 8.7 +.12%

• CBOE S&P 500 Implied Correlation Index 19.7 +3.2% 

• ISE Sentiment Index 131.0 -5.0 points
  

• Total Put/Call .83 -32.5%

• NYSE Arms .76 unch.

Credit Investor Angst:

• North American Investment Grade CDS Index 68.4 +2.7%
  

• US Energy High-Yield OAS 351.9 +.39%
• Bloomberg TRACE # Distressed Bonds Traded 384.0 -1.0
  

• European Financial Sector CDS Index 85.5 +1.6% 
• Deutsche Bank Subordinated 5Y Credit Default Swap 276.85 +.9%
  

• Italian/German 10Y Yld Spread 169.0 basis points -1.0 basis point
  

• Asia Ex-Japan Investment Grade CDS Index 114.2 +.6%
  

• Emerging Market CDS Index 219.27 +2.1%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 25.9 -.56%

• 2-Year Swap Spread 20.75 basis points unch.
  

• TED Spread 18.5 basis points -8.25 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -12.75 +.25 basis point
  
• MBS  5/10 Treasury Spread 173.0 +10.0 basis points
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 713.0 unch.
  
• Avg. Auto ABS OAS 77.0 -1.0 basis point
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 43.4 -.34%
• 3-Month T-Bill Yield 5.35% +7.0 basis points
  

• China Iron Ore Spot 109.8 USD/Metric Tonne +.1%
• Dutch TTF Nat Gas(European benchmark) 34.4 euros/megawatt-hour  -2.9%

• Citi US Economic Surprise Index 52.9 -4.1 points

• Citi Eurozone Economic Surprise Index -146.0 +.5 point

• Citi Emerging Markets Economic Surprise Index -3.2 -1.2 points
• S&P 500 Current Quarter EPS Growth Rate YoY(16 of 500 reporting) -20.6% unch.
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 231.44 +.13:  Growth Rate +3.6% +.1 percentage point, P/E 19.2 unch.
  
• S&P 500 Current Year Estimated Profit Margin 12.21% unch.
  
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(0 of 10 reporting) n/a
  
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 214.55 +.62: Growth Rate +42.2% +.5 percentage point, P/E 36.4 +.1
  
• Bloomberg US Financial Conditions Index .36 -1.0 basis point
• Bloomberg Euro-Zone Financial Conditions Index -4.17 -6.0 basis points
  
• US Yield Curve -101.25 basis points (2s/10s) +7.5 basis points
  
• US Atlanta Fed 2Q GDPNow Forecast +1.94% unch.
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +4.35% unch.: CPI YoY +3.22% unch.
  
• 10-Year TIPS Spread 2.26 unch.
  
• Highest target rate probability for Sept. 20th FOMC meeting: 71.6%(+2.5 percentage points) chance of 5.25%-5.5%. Highest target rate probability for  Nov. 1st meeting: 56.5%(+1.6 percentage points) chance of 5.25%-5.5%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -188 open in Japan 
• China A50 Futures: Indicating -158 open in China

• DAX Futures: Indicating +84 open in Germany

Portfolio:

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

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

• Market Exposure: Moved to 50% Net Long
  

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

Earnings of Note 
Company/Estimate 

Before the Open:

• None of note
  

After the Close: 

• (LEVI)/.03
  

Economic Releases  

7:30 am EST

• Challenger Job Cuts report for June.

8:15 am EST

• The ADP Employment Change for June is estimated to fall to 225K versus 278K in May.
  

8:30 am EST

• The Trade Balance for May is estimated at -$69.0B versus -$74.6B in April.
• Initial Jobless Claims for last week is estimated to rise to 245K versus 239K the prior week.
• Continuing Claims is estimated to fall to 1740K versus 1742K prior.

10:00 am EST

• JOLTS Job Openings for May is estimated to fall to 9900K versus 10103K in April.
• ISM Services Index for June is estimated to rise to 51.3 versus 50.3 in May.
  

Upcoming Splits 

• None of note
  

Other Potential Market Movers

• The Eurozone retail sales reports, weekly MBA Mortgage Applications report and the EIA natural gas inventory report could also impact global trading tomorrow.

US Equity Market Hours

• 9:30 am - 4:00 pm EST

Afternoon Market Internals

NYSE Composite Index:

• NYSE Volume Running -14.7% Below 100-Day Average 
• Nasdaq/NYSE Volume Ratio 10.9 +1.0
  
• 8 Sectors Declining, 3 Sectors Rising
• 34.5% of Issues Advancing, 62.6% Declining
• 41 New 52-Week Highs, 11 New Lows
• 51.2%(-3.3%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 61.0 -5.0
  
• Bloomberg Global Risk-On/Risk-Off Index 64.4 +.9%
  
• Russell 1000: Growth/Value 17,448.4 +.57%
• 1-Day Vix 9.4 -5.4%
  
• Vix 14.1 +3.1% 
  
• Total Put/Call .82 -33.3%
• TRIN/Arms .79 +3.95%
  

Wednesday Watch

Evening Headlines

Bloomberg:

• Xi’s Metal Curbs Risk Backfiring as G-7 Seeks China Alternative.
• China’s Chip-Metals Producers Surge on Export Restrictions.
• Hong Kong’s Reopening Brings Scant Gains for Financial Hub.
• Asian Stocks Poised to Decline; Currencies Steady: Markets Wrap.
• Oil Rallies After Saudi Arabia and Russia Announce Supply Curbs.
• Biden Administration Ordered to Limit Social Media Contacts.
• Suspicious Powder Found at White House While Biden Was Away Was Cocaine, AP Says.
• Mackenzie Equity Chief Says It’s Time to Buy Bonds After Tech-Fueled Rally. 
• US Stock Positioning Shows Pullback Risk, Citi’s Montagu Says.

Zero Hedge:

• Ukraine 'Preparing For Nuclear Explosion' As Russia Reduces Zaporizhzhia Plant Presence
• Censorship Wounds Worse Than Words.
• Secret Service Investigating How Cocaine Got In The White House
• Watch: Woke Demonstrators Protest Supreme Court Rulings With Bizarre Ritual.
• Bidenomics: Big Government, Industrial Policy And Centralized Control.
• Judge Blocks "Egregious" Biden Officials, Academic Watchdogs From Manipulating Social Media Narratives.
• Watchdog Group: Biden Administration Pushing To Make A.I. Inherently Left-Wing.
• Independence Day News Round Up - Newsquawk Asia-Pac Market Open.
• Bidenomics Means The Most Expensive Independence Day Cookout Ever.
• It's like déjà vu all over again.
• The Criminalization Of Dissent (Revisited).
• UK COVID Inquiry Reveals Just How Vast International Communist Conspiracy May Be
• Goldman: Six Months Into The New Year, And It Has Not Delivered What Markets Expected.
• Watch: RFK Jr Pushes Back When Accused Of Being A Candidate Who "Traffics Routinely In Conspiracies".
• Louisiana Gov. Vetoes Bill Meant To Shield Children From Transgender Procedures.
• Rangebound trade on US Independence Day, RBA kept rates on hold - Newsquawk Europe Market Open.
• As "Suburb Plan" Fails, France's Social Divide Widens.
• Philly Mass Shooting Suspect Identified As 40 Year Old Black Lives Matter Supporter.
• US Military Can’t Afford To Fool Around With Feel Good Green Initiatives.
• China Hits Back At Biden With Curbs On Exports Of High-Tech Metals Before Yellen Visit.
• Civil Rights Groups Challenge Harvard Legacy Admissions Said To Favor Whites.
• The Numbers Don't Lie: Corporations Are Realising Going Woke Kills Business.
• Two Charts For Cash-Strapped Consumers Preparing For Backyard Barbecues.

Wall Street Journal:  

• Facebook Faces Fresh Threat to Sending Personalized Ads in EU.
• U.S. Looks to Curb China’s Access to Cloud Computing.
• Meet the CEOs Who Pull In More Than $100 Million a Year.
• The Richcession Keeps Rolling.
• Remote Work Sticks for All Kinds of Jobs.
• The U.S. Funds Shadow Police Units All Over the World.
• The French Riots and the Broader European Underclass. A culture of dependency and macho criminality is also thriving elsewhere in Western Europe.
• Here’s When We Hit Our Physical and Mental Peaks.
• Higher-for-Longer Rates Are a Debt Threat. Investors Don’t Want to Hear It Yet.
• Japan Discharge of Fukushima Radioactive Water Into Pacific Gets Green Light.

CNBC.com:

• Airlines struggled ahead of July Fourth weekend. Their stocks didn’t
• The 2023 movie box office will need a strong second half after an inconsistent first six months
• Canadian West Coast ports negotiation reaches impasse as port owners say ‘course change’ required.
• China’s Xi says countries share responsibility to promote growth, opposes decoupling.

MarketWatch:

• Yahoo CEO says the company plans a return to the public markets
• Apple scaling back targets on Vision Pro headsets: report
• Spain says masks in hospitals and pharmacies are no longer needed as government declares COVID health crisis over

Newsmax:

• Dick Morris: Biden Delay on JFK Docs ‘Outrageous’.
• Kari Lake: 'You Don't Solve Racism by Adding More Racism'.

Fox News:

• Judge unleashes on Biden for potentially biggest 'attack' on freedom in United States history.
• Largest teachers union wants kids to read book describing oral sex and masturbation.
• Disney dealt another major blow after culture backlash: 'A losing trade'.
• US housing market defying crash expectations as prices soar.
• Armed worker stopped likely mass shooter in his tracks but got little attention, expert says.

 TheGatewayPundit.com:

• Secret Service CONFIRMS Gateway Pundit’s Report of Cocaine Being Found On White House Grounds.
• Zelensky Admits He Has Good Relationship with CIA and Intel Talks with Them Often – Suggests War Will Continue Until Ukraine Retake Crimea (VIDEO).
• EXCLUSIVE: Replacing July 4 Firework Displays with Drone Shows is “Sacrilege” — Chairman of Colliers International Brandon Fugal Sounds Off in Defense of American Tradition.
• Joe Biden Ignores Reporters After Cocaine Found in White House (VIDEO).
• SMASH AND GRAB: Thieves Crash Car into California Jewelry Store in Broad Daylight, Viciously Assault Owner, and Dash off with HUNDREDS OF THOUSANDS of Dollars Worth of Merchandise (VIDEO).
• Update: Trump-Appointed Judge Accuses Biden Regime of Violating First Amendment in Blistering Opinion: “Orwellian” Censorship of Conservatives – Full Memo Included.
• Left Wing Group PETA is Using Artificial Intelligence ChatGPT to Rewrite The Bible – Aims to Eliminate Animal Cruelty and Veganism to Younger Generations.
• LOOK: America’s Oldest Beer Company Deals Bud Light a “Vicious Blow” With Its Choice of Influencer – Also Sends Out Patriotic Fourth of July Tweet (PHOTOS).
• U.S. State Department Advises Americans to “Reconsider Travel” to China Over Risk of Wrongful Detention.
• Gunman Behind Philly Massacre is BLM Supporter…. and Transgender?

The Epoch Times: 

• Yellen Holds ‘Frank’ Discussion With Chinese Envoy as Beijing Curbs Metal Exports.
• Chinese Regime’s Fertility Campaign Targets Girls as Young as 15 for Childbearing.
• China’s $3 Trillion in ‘Shadow Reserves’ Threatens Global Economy: Former US Treasury Official.

Twitter: 

• @DrLoupis - Why are so many companies going woke - to go broke? (video)
• @charliebilello - The US Bond Market has now been in a drawdown for 35 months, by far the longest in history. (table)

OpenVAERS:

• VAERS US COVID Vaccine Adverse Event Reports. 966,895 Reports(+1,278 from prior week) Through June 16th, 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 113.5 -2.0 basis points. 

• China Sovereign CDS 59.75 -.5 basis point.
  
• China Iron Ore Spot 108.8 USD/Metric Tonne -.06%.

• Bloomberg Emerging Markets Currency Index 43.6 +.01%.
• Bloomberg Global Risk-On/Risk Off Index 64.4 +.9%. 
• Bloomberg US Financial Conditions Index .32 -5.0 basis points.
  
• Volatility Index(VIX) futures 16.4 +.3%.
• Euro Stoxx 50 futures -.11%.

• S&P 500 futures -.03%.

• NASDAQ 100 futures -.15%.  

Morning Preview Links

BOTTOM LINE: Asian indices are modestly lower, weighed down by financial and industrial shares in the region. I expect US stocks to open modestly lower and to rally into the afternoon, finishing mixed.  The Portfolio is 75% net long heading into the day.