Morning Market Internals

NYSE Composite Index:

• Volume Running +14.6% Above 100-Day Average 
• 1 Sector Declining, 10 Sectors Rising
• 79.5% of Issues Advancing, 17.4% Declining
• 17 New 52-Week Highs, 10 New Lows
• 27.7% of Issues Above 200-day Moving Average
• Average 14-Day RSI 43.4% 
• Bloomberg Global Risk-On/Risk-Off Index 3,988.0 -40.0 points
• Russell 1000: Growth/Value 14,801.0 +.9%
  
• Vix 26.9 -2.3%
• Total Put/Call .91 unch.
• TRIN/Arms .83 unch.

Friday Watch

Evening Headlines

Bloomberg:              

• Blinken Aims at Xi in Speech Vowing to Shape the Global Order.
• Beijing Adds More Cases as Anxiety Over China Economy Swells.  
• Japan Steel Giant Warns More Hikes Coming for Cars to Appliances.
  
• Russia Faces Biggest Debt Test Yet as US Payment Ban Clouds Path.
  
• Ukraine Latest: Putin Ties Grain Exports to Dropping Sanctions.
• Asia Stocks Buoyed After US Rally; Dollar Declines: Markets Wrap.
• Oil Rises With Broader Rally as US Fuel Stockpiles Tighten.
  
• Dell’s Sales Top Estimates on Strong Office PC Growth.
  
• Delta Is Cutting Flights to ‘Relieve Pressure’ on Operations.
• A Compromise on Gun Safety Is Brewing in the Senate, Democrats Say.  
• A New Prediction Market Lets Investors Bet Big on Almost Anything.

 Wall Street Journal:

• Texas Parents Angered Over Police Response to Shooting.
• Gunman walked into school unobstructed after firing shots outside for 12 minutes.
• Beto O’Rourke Goes for Broke. The Texas Democrat makes a show of politicizing the mass shooting in Uvalde.
• As Russian Forces Retreated, Mock Executions and Beatings Increased.
• Latest Updates on the War.
• Natural-Gas Prices Surge as Cooling Season Switches On.
• FDA Chief Urges U.S. Baby-Formula Stockpile.
• Fed Official Says Digital Dollar Could Coexist With Stablecoins.

CNBC.com:

• Home listings jump as sellers worry they may miss out on the red-hot housing market.
• 3 takeaways from Dollar General, Dollar Tree earnings that sent stocks soaring.
• Gap shares fall 13% after retailer slashes profit guidance for the year.
• Microsoft exec tells employees in Windows and Office groups to be more cautious in hiring.  
  

MarketWatch:            

• ‘Not the decoupling we wanted,’ crypto investor says as bitcoin slumps, stocks rise. Can digital assets make a comeback in 2022?  
• Costco sales top estimates by $1 billion, but retailer misses on same-store sales.  
• Twitter shareholders sue Elon Musk, accusing him of manipulating stock.  
• Airlines face severe pilot shortage as summer travel season nears.

Zero Hedge: 

• "People Are Not In A Good Place" - Mom-And-Pop Investors Panic As Fed Abandons Them.
• "Too Slow": FDA Admits Delayed Response To Complaints About US Baby Formula Plant.
• Uvalde Shooter Fired Gun For 12 Minutes Outside School Before Entering.
• Cost Of EV Batteries May Increase 15% Amid Supply-Chain Disruptions: Report.
• Rising Rates Are Squeezing Landlord Profits.
• "This Is A Crucible Moment" - Sequoia's Ominous Warning To Companies On How To "Avoid The Death Spiral".
• Thank Retail Investors The S&P Is Not In A Bear Market, And For All Those Last Hour Ramps.
• East Coast Diesel Inventories Tighter Again; Other Numbers Offer Buyers Hope.
• Newsquawk Asia-Pac Market Open - US stocks gain as risk returns amid month-end flows.
• Oil Spikes Near Post-Putin Highs, Gasoline's At Record-Highs Ahead Of Driving Season.
• Rash Of Parts-Thefts Is Leaving Freightliner Trucks Inoperable.
• Newsquawk US Market Wrap: Stocks and commodities prosper as Dollar stumbles further into major month-end flows.
• Biden Repeats False Claim About The Second Amendment.
• Massive Short-Squeeze Sends Stocks Soaring As Macro Massacre Continues.

 Newsmax: 

• Police Face Questions Over Delays in Storming Texas School.
• US, Ukraine Talk Escalation Risks as New Arms Extend Kyiv's Reach.
• Ukraine Says War in East at 'Maximum Intensity'.

Rebel News:

• Introducing The Reset: The Great Reset Docuseries. (video)

TheGatewayPundit.com: 

• World Health Organization Temporarily Withdraws Biden’s ‘Public Health Emegency’ Amendments.
• Georgia Democrat Stacey Abrams Laughs as Show Host Makes Fun of Joe Biden’s “Alzheimer’s” (VIDEO).
• Uvalde Mother Placed in Handcuffs by Federal Marshals For Attempting to Enter School to Save Her Child While Salvador Ramos Went on Killing Spree.
• Biden’s Secretary of State Tony Blinken, with Family Ties to Soros, Backtracks From Recent State Dept. Declaration and Says the US Does Not Support Taiwan Independence.
• Klaus Schwab, Pfizer CEO Trash ‘Conspiracy People’ At World Health Assembly: ‘There Is A Very Fanatic Group Of Anti-Vaxxers That Will Go After Us No Matter What’.
• ‘Goodfellas’ Star Ray Liotta Dies in His Sleep at 67.
• Witness: Police Stood Outside the School While Mass Murderer Salvador Ramos Went on Killing Spree – Armed Police Pinned One Man to the Ground (VIDEO).
• “With Regards to Brad [Raffensperger] I Don’t Think Anyone Believes Down Here That He Actually Won” – VoterGA’s Garland Favorito on Georgia GOP Primary.

The Epoch Times:

• Musk Warns About Declining US Birth Rate: ‘We Just Need to Celebrate Having Kids’.

OpenVAERS:

• VAERS US COVID Vaccine Adverse Event Reports. 817,537 Reports(+4,517 from prior week) Through May 13th, 2022.
  

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.

Covid-19(Data, Maps, Graphs):

• Our World in Data:  New Global Covid-19 Cases(7-day rolling average graphs). New US Covid Hospital Admissions/ICU Admissions/Deaths
  
• FT.com:  Fully Vaccinated by Country(graph). Global Lockdown Stringency Index(map).
• Bloomberg.com:  International Travel Restrictions.  Case Graphs by State.
  
• NYTimes.com:  County Trends and Clusters. Local ICU Occupancy.
  
• Brown School of Public Health:  Covid Severity by State/County(map).  US Hospital Capacity(region).
  
• CovidActNow:  Covid Severity/Infection Rate by Metro Area.
  
• KFF:  US Vaccinations by Race/Ethnicity.
  
• Carnegie Mellon: Covid-Like Symptoms in Community. Covid Symptom Searches on Google. Covid-Related Dr.Visits.  Restaurant Visits. Wearing Masks. (graphs)
  
• Safegraph.com:  Commerce Patterns(graphs).

Night Trading 

• Asian equity indices are +.5% to +1.0% on average.

• Asia Ex-Japan Investment Grade CDS Index 117.0 -3.25 basis points. 

• China Sovereign CDS  71.0 -2.75 basis points.
  

• Bloomberg Emerging Markets Currency Index 52.06 +.06%.  
• Bloomberg Global Risk-On/Risk Off Index 3,994.0 -33.0 points.
• Volatility Index(VIX) futures 28.2 +.31%.
• Euro Stoxx 50 futures +.08%.

• S&P 500 futures +.02%.

• NASDAQ 100 futures +.03%. 

Morning Preview Links

Earnings of Note 
Company/Estimate 

 

Before the Open: 

• (BIG)/.94
• (HIBB)/3.15
• (SAFM)/7.42
  

After the Close:

• None of note
  

Economic Releases

8:30 am EST

• Advance Goods Trade Balance for April is estimated at -$114.8B versus -$125.3B in March.
• Wholesale Inventories MoM for April is estimated to rise +2.0% versus a +2.3% gain in March.
• Personal Income for April is estimated to rise +.5% versus a +.5% gain in March.
• Personal Spending for April is estimated to rise +.7% versus a +1.1% gain in March.
• Retail Inventories MoM for April is estimated to rise +2.0% versus a +2.0% gain in March. 
• The PCE Core MoM for April is estimated to rise +.3% versus a +.3% gain in March.
  

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Fed's Bullard speaking and the Eurozone Money Supply report could also impact global trading today.

US Equity Market Hours

• 9:30 am - 4:00 pm EST
  

BOTTOM LINE: Asian indices are modestly higher, boosted by consumer 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 Substantially Higher into Final Hour on Less Hawkish Fed Hopes, US Dollar Weakness, Short-Covering, Consumer Discretionary/Alt Energy Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Higher
  

• Sector Performance:  Almost Every Sector Rising
  

• Volume:  Around Average

• Market Leading Stocks: Outperforming
  

Equity Investor Angst:

• Volatility(VIX) 27.2 -4.1%
• Bloomberg Global Risk On/Risk Off Index 4,060.0 +181.0 points

• Euro/Yen Carry Return Index 140.27 +.27%

• Emerging Markets Currency Volatility(VXY) 12.4 +1.8%

• CBOE S&P 500 Implied Correlation Index 47.8 +1.5% 

• ISE Sentiment Index 129.0 +14.0 points
  

• Total Put/Call .93 +4.5%

• NYSE Arms .94 +10.5%

Credit Investor Angst:

• North American Investment Grade CDS Index 80.45 -3.4%
  

• US Energy High-Yield OAS 406.13 -4.8%

• European Financial Sector CDS Index 98.78 -5.8%

• Italian/German 10Y Yld Spread 190.0 basis points -10.0 basis point
  

• Asia Ex-Japan Investment Grade CDS Index 118.23 -4.1%
  

• Emerging Market CDS Index 270.07 -1.7%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 28.8 +.44%
  
• Russia Sovereign Debt Credit Default Swap 13,030.20 +2.0%
  

• 2-Year Swap Spread 31.0 basis points +2.5 basis points
  

• TED Spread 49.75 basis points +2.0 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -17.5 basis points +.75 basis point
  
• MBS  5/10 Treasury Spread  116.0 -2.0 basis points
  
• iShares CMBS ETF 48.72 -.2%
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 52.0 -.16%
• 3-Month T-Bill Yield 1.03% -2.0 basis points
  

• Yield Curve 27.5 basis points (2s/10s) +3.25 basis points
  

• China Iron Ore Spot 131.75 USD/Metric Tonne +1.65%

• Citi US Economic Surprise Index -41.2 -1.6 points

• Citi Eurozone Economic Surprise Index 10.4 +2.3 points
  

• Citi Emerging Markets Economic Surprise Index 14.5 +2.4 points

• 10-Year TIPS Spread 2.63 +5.0 basis points
  
• 0.0%(unch.) chance of no change at July 27th FOMC meeting, 0.0%(unch.) chance of no change at September 21st meeting

US Covid-19:

• 219 new infections/100K people(last 7 days total). 13.0%(unch.) of 1/14 peak +2/100K people from prior report.
  
• New Covid-19 patient hospital admissions per 100K population -83.2%(+.1 point) from peak 7-day avg. of 1/9/21 - 1/15/22
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +371 open in Japan 
• China A50 Futures: Indicating +110 open in China

• DAX Futures: Indicating +21 open in Germany

Portfolio:

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

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

• Market Exposure:  Moved to 75% Net Long
  

Morning Market Internals

NYSE Composite Index:

• Volume Running +.2% Above 100-Day Average 
• 0 Sectors Declining, 11 Sectors Rising
• 86.0% of Issues Advancing, 11.2% Declining
• 64 New 52-Week Highs, 20 New Lows
• 26.2% of Issues Above 200-day Moving Average
• Average 14-Day RSI 41.5% 
• Bloomberg Global Risk-On/Risk-Off Index 3,997.0 +119.0 points
• Russell 1000: Growth/Value 14,555.0 +.36%
  
• Vix 27.6 -2.8%
• Total Put/Call .90 +1.1%
• TRIN/Arms .68 -9.2%

Thursday Watch

Night Trading 

• Asian equity indices are +.25% to +.75% on average.

• Asia Ex-Japan Investment Grade CDS Index 120.25 -7.5 basis points. 

• China Sovereign CDS  73.75 -6.75 basis points.
  

• Bloomberg Emerging Markets Currency Index 52.16 +.13%.  
• Bloomberg Global Risk-On/Risk Off Index 3,894.0 +17.0 points.
• Volatility Index(VIX) futures 28.3 -.8%.
• Euro Stoxx 50 futures +.35%.

• S&P 500 futures +.15%.

• NASDAQ 100 futures +.07%. 

Morning Preview Links

Earnings of Note 
Company/Estimate 

 

Before the Open: 

• (BABA)/7.17
• (AMWD)/1.34
• (BIDU)/5.58
• (BURL)/.63
• (DG)/2.32
• (DLTR)/1.98
• (JACK)/1.37
• (M)/.83
• (MDT)/1.56
• (SAFM)/7.42
• (TITN)/.53
• (TD)/1.93
  

After the Close:

• (AEO)/.25
• (ADSK)/1.34
• (COST)/3.02
• (DELL)/1.39
• (GPS)/-.13
• (MRVL)/.51
• (OLLI)/.31
• (RRGB)/-.73
• (ULTA)/4.49
• (VMW)/1.56
• (WDAY)/.85
• (ZS)/.11
  

Economic Releases

8:30 am EST

• Initial Jobless Claims for last week are estimated to fall to 215K versus 218K the prior week.
• Continuing Claims are estimated to fall to 1310K versus 1317K prior.
  

10:00 am EST

• Pending Home Sales MoM for April is estimated to fall -2.0% versus a -1.2% decline in March.

11:00 am EST

• The Kansas City Fed Manufacturing Activity Index for May is estimated to fall to 18.0 versus 25.0 in April.
  

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Japan CPI report, 7Y T-Note auction, weekly EIA natural gas inventory report and the (DE) analyst day could also impact global trading today.

US Equity Market Hours

• 9:30 am - 4:00 pm EST
  

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

Stocks Higher into Final Hour on Stable Long-Term Rates, Technical Buying, Short-Covering, Consumer Discretionary/Tech Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Higher
  

• Sector Performance:  Almost Every Sector Rising
  

• Volume:  Around Average

• Market Leading Stocks: Outperforming
  

Equity Investor Angst:

• Volatility(VIX) 28.5 -3.3%
• Bloomberg Global Risk On/Risk Off Index 3,859.0 +168.0 points

• Euro/Yen Carry Return Index 140.05 -.06%

• Emerging Markets Currency Volatility(VXY) 12.3 +.5%

• CBOE S&P 500 Implied Correlation Index 47.0 -1.5% 

• ISE Sentiment Index 115.0 -2.0 points
  

• Total Put/Call .87 -13.0%

• NYSE Arms .72 -48.2%

Credit Investor Angst:

• North American Investment Grade CDS Index 82.73 -5.1%
  

• US Energy High-Yield OAS 428.77 -3.8%

• European Financial Sector CDS Index 104.76 -2.9%

• Italian/German 10Y Yld Spread 200.0 basis points -1.0 basis point
  

• Asia Ex-Japan Investment Grade CDS Index 123.57 -3.4%
  

• Emerging Market CDS Index 274.90 -4.9%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 28.9 -.28%
  
• Russia Sovereign Debt Credit Default Swap 12,780.40 +26.8%
  

• 2-Year Swap Spread 28.5 basis points -2.5 basis points
  

• TED Spread 47.75 basis points +1.5 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -18.25 basis points +.5 basis point
  
• MBS  5/10 Treasury Spread  118.0 -2.0 basis points
  
• iShares CMBS ETF 48.83 +.58%
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 52.14 -.91%
• 3-Month T-Bill Yield 1.05% unch.
  

• Yield Curve 24.25 basis points (2s/10s) -3.0 basis points
  

• China Iron Ore Spot 130.4 USD/Metric Tonne -.1%

• Citi US Economic Surprise Index -39.6 -2.3 points

• Citi Eurozone Economic Surprise Index 8.1 -2.0 points
  

• Citi Emerging Markets Economic Surprise Index 12.1 +.3 point

• 10-Year TIPS Spread 2.58 unch.
  
• 0.0%(unch.) chance of no change at July 27th FOMC meeting, 0.0%(unch.) chance of no change at September 21st meeting

US Covid-19:

• 217 new infections/100K people(last 7 days total). 13.0%(unch.) of 1/14 peak -1/100K people from prior report.
  
• New Covid-19 patient hospital admissions per 100K population -83.3%(+1.7 points) from peak 7-day avg. of 1/9/21 - 1/15/22
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +183 open in Japan 
• China A50 Futures: Indicating -7 open in China

• DAX Futures: Indicating +64 open in Germany

Portfolio:

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

• Disclosed Trades:  Covered some of my (IWM)/(QQQ) hedges, then added them back
  

• Market Exposure:  50% Net Long