Today's Headlines

Bloomberg:

• Kim Jong Un Pledges Nuclear Buildup to Take On US, South Korea.
• Canada Says Arrivals From China, HK Must Test Covid Negative.
• European Bond Markets Were Roiled This Year In Ways Few Imagined.
• South Korea Exports Extend Drop as Risks to Economy Escalate.
  
• 2023 Will Be the Year of the Electric SUV.
• Revelers Throng to New Year's Parties After Covid Hiatus.
• Cathie Wood’s Grim 2022 Is Over. Next Year Also Looks Bad.  
• Prominent Texas Family Has $29 Million Embezzled by Bookkeeper.  
• Treasuries Post Biggest Annual Loss Ever as Inflation Takes Toll.  
• Sam Bankman-Fried to Plead Not Guilty to Fraud at Jan. 3 Hearing.

Wall Street Journal: 

• Alameda’s Troubles Began Well Before Crypto Crash.
• The U.S. Government’s Woke Training. Read instructions from the Army, NASA, the VA, and more, obtained via open-records law.
• Democracy Dies in California. To impose a new burden on fast-food restaurants, the state plans to ignore the constitution’s right of voters to review laws.
• Jonathan Haidt on the ‘National Crisis’ of Gen Z. Warped by social media and a victimhood culture, today’s young people will imperil American culture and capitalism, the social psychologist warns.
• Your Co-Workers Are Less Ambitious; Bosses Adjust to New Order.
• Europe Goes on Blackout Watch as Winter Descends.
• Congress Boosts Funding to Stockpile Key Metals, Battery Ingredients.

Barron's:

• Had bullish commentary on (WMB), (KMI), (EPD), (ET), (AMLP), (JPM), (PNC), (C), (USB), (ON), (FLEX), (TEL), (TTWO) and (FWONK).

Fox News: 

• Authorities used crime scene DNA to track Idaho murder suspect and his vehicle, source says.
• Internet sensation dead at 27 after open heart surgery complications.

CNBC:

• Stocks fall to end Wall Street’s worst year since 2008, S&P 500 finishes 2022 down nearly 20%.
• China December manufacturing contracts at sharpest pace in almost 3 years.
• A highly immune evasive omicron variant is quickly becoming dominant in U.S. as it doubles weekly.
• Southwest Airlines says holiday meltdown will ‘certainly’ hit fourth-quarter results.

Zero Hedge:

• 2022 Greatest Hits: The Most Popular Articles Of The Past Year And A Look Ahead.
• 12 Questions For The End Of The Year.
• UK Announces COVID-19 Restrictions On China Arrivals.
• China Conducts Military Maneuvers Near US Bases At Guam, Okinawa.
• Laid-Off Silicon Valley Workers Panic Sell Start-Up Shares As Valuations Crash.
• Crypto 2022: A Disastrous Year That Saw Few Winners Among A Sea Of Losers. 
• Elon Musk Calls Out "Corporate Journalism" Over Twisted Coverage Of His 'Twitter Files'. 
• Here's A List Of Biden Tax Hikes Which Take Effect Jan. 1. 
• Home Depot Co-Founder Rails Against Socialism And "Woke People," Warns 'Capitalism In Dire Straits'. 
• 2022 Same Shit, Different Year: 55 Years Of Failed Eco-pocalyptic Predictions.
• 9 Controversial California Laws Taking Effect On Jan. 1.
• Former Pope Benedict, 1st Pontiff In 600 Years To Resign, Dies At 95.
• One Great Big Nasty Prediction For 2023.
• 2022's Danger Signs: From Totalitarian Paranoia To Authoritarian Madness.
• Suicide Among The Most Common Causes Of Death In The US. 
• Are You A "Thought Criminal"?
• The Twitter Files Have Confirmed (Again) That Conspiracy Theorists Are Not Crazy.
  
• 'I Also Orchestrated It': Uncharged J6 Witness Ray Epps Transcript Released.
• How Did EVs Handle America's Arctic Blast?
• Bovard: Liberals Learned Nothing In 2022.
• Researcher Reveals Google Home Speakers Could've Been Hijacked And Turned Into Wiretaps.
• Biden Family Disowns Hunter's 4-Year-Old Daughter, Remains "Estranged From The Child".
• 2022: The Year ESG Fell To Earth.
• Jim Quinn: It's Not A Lie If You Believe It.
• Pledging Deepened Military Ties With Putin, Xi To Visit Russia In Spring Against Backdrop Of War.
• Housing Supply Jumps Most On Record As Market Freezes.
• 'Worst Year Ever' For Stocks & Bonds - Global Inflation Fight Bursts 'Everything Bubble'.

MarketWatch.com:       

• These 20 stocks were the biggest losers of 2022.  
• Opinion: 11 predictions for money, technology, stocks and crypto for 2023.  
• Stock-market investors face 3 recession scenarios in 2023.   
• An interest rate shock wrecked stocks in 2022. Here’s what the pros say will drive the market in 2023.  
• Best stock picks for 2023: Here are Wall Street analysts’ most heavily favored choices.

NewsMax: 

• Rep. Van Drew: Biden, Democrats Purposefully Trying to Harm US. 

TheGatewayPundit.com:

• Here Are the First 12 Actions the GOP Should Take Once Taking Control of the US House.
• Court Finds Florida’s Transgender Bathroom Policies Are Not Discriminatory. 
• Sellin: Government-Weaponized Public Health: Disease Is Used to Control Populations Like Tear Gas Is Used to Control Crowds. 
• NC State Football Announcer Gary Hahn Suspended Indefinitely After Saying “Illegal Aliens” During Bowl Game. 
• Corrupt Actors in the Government, in Universities, and at the EIC Worked with Big Tech to Censor Americans. 
• Scotland Police Face Backlash After Report Renaming Pedophiles as ‘Minor-Attracted People’. 
• Family Doctor Who Faced Backlash for Vaccinating Children and Causing Adverse Reactions Dies Suddenly.
• Second ABC News Producer Dies Suddenly by Undisclosed Causes. 
• POLL: Voters Want Republicans To Release Tax Returns Of Democrats Who Voted To Release Trump’s. 
• HUGE: Wisconsin Township Votes to Process Votes in Polling Place Where Voter Resides – Denies Elites Opportunity to Manufacture Votes at Central Count Voting Center.
• Joe Biden Cheers Historic Year: Record Crime, Record Inflation, Record Illegal Immigration, Record Gas Prices, Worst Stock/Bond/Equity Losses Since 1871.
• 24-Year-Old Flight Attendant at Air Albania Collapses and Dies Suddenly from Heart Attack Shortly After Landing in London.
• HUGE: House Republicans Find Text and Email Evidence that Pelosi Staffers Secretly DECREASED Security at US Capitol for Jan 6 – While at Same Time Pelosi Was Organizing Film Crew that Day.
• WEIRD? Ray Epps J6 Committee Testimony Released: Admitted “I Was in the Front … I Also Orchestrated It” – Is Still a Free Man and Was Ignored in Final Report.
• Arizona House Member-Elect Casts Aside Her Own Race For Election Truth.
• “You Have Turned the Government Against the People, and I Think it’s Disgusting.” Christina Bobb to the “Inquisition” in Her Jan 6 Interview.
• Singer M.I.A. Says She Received ‘Biggest Backlash’ of Her Career For Saying ‘Jesus is Real’.
• BREAKING: President Trump Rips Democrats and Supreme Court Following the Release of his Personal Tax Returns – Warns of Dire Repercussions.
• 30-Year-Old Chicago West Side Arts Organization Leader Dies Suddenly from Complications Due to Cardiac Arrest.
• Andrew Tate Releases First Comment Since Arrest: “The Matrix Sent Their Agents”.
• MUST READ: Maricopa County 2022 Corruption and How Runbeck Used Spanish-Speaking Employees and Quit Running Counts on Election Day Ballots.
• Equity Investment Executive Ed Dowd: 1.7 Million Americans Placed on Disability – Directly Related to COVID Vaccine (VIDEO).

The Epoch Times: 

• Putin and Xi Hold Talks Against Mounting Crisis in the Backdrop.
• ‘Mind Dominance’: The CCP’s Disinformation War on US Social Media.

Twitter:

• @dockaurG - Stanford Prof Ioannidis et al Covid pre-vaccination Infection Fatality Rate paper is now peer-reviewed & published. Conclusions all same. Catastrophic societal harms imposed d/t irrational fear & mass hysteria of a virus with IFR lower than influenza.

OpenVAERS:

• VAERS US COVID Vaccine Adverse Event Reports. 912,074 Reports(+6,021 from prior week) Through December 16th, 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).

Stocks Lower into Final Hour on Passage of Stagflationary Omnibus Spending Bill, China Hard-Landing Fears, Technical Selling, Transport/Restaurant Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Lower
  

• Sector Performance: Almost Every Sector Declining
  

• Volume:  Light

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 22.1 +3.3%
• DJIA Intraday % Swing .82%
  
• Bloomberg Global Risk On/Risk Off Index 56.5 +.2%

• Euro/Yen Carry Return Index 145.18 -1.13%

• Emerging Markets Currency Volatility(VXY) 10.9 -.3%

• CBOE S&P 500 Implied Correlation Index 45.3 +.96% 

• ISE Sentiment Index 98.0 +3.0 points
  

• Total Put/Call 1.18 -6.4%

• NYSE Arms 1.42 +208.7%

Credit Investor Angst:

• North American Investment Grade CDS Index 81.9 -.28%
  

• US Energy High-Yield OAS 394.5 -.54%
• Bloomberg TRACE # Distressed Bonds Traded 281.0 -18.0
  

• European Financial Sector CDS Index 98.55 -2.4% 
• Credit Suisse Subordinated 5Y Credit Default Swap 449.09 n/a
  

• Italian/German 10Y Yld Spread 214.0 basis points +5.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 131.77 -.59%
  

• Emerging Market CDS Index 238.61 +.31%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 26.93 -.50%

• 2-Year Swap Spread 30.0 basis points -.25 basis point
  

• TED Spread 41.0 basis points +12.5 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -18.0 basis points +1.5 basis points
  
• MBS  5/10 Treasury Spread  145.0 +5.0 basis points
  
• Bloomberg US Agg CMBS Avg OAS 118.0 unch.
  
• Avg. Auto ABS OAS .86 -2.0 basis points
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 47.6 +.11%
• 3-Month T-Bill Yield 4.34% -5.0 basis points
  

• China Iron Ore Spot 116.8 USD/Metric Tonne -.30%
• Dutch TTF Nat Gas(European benchmark) 76.3 euros/megawatt-hour -10.9%

• Citi US Economic Surprise Index -2.70 +1.5 points

• Citi Eurozone Economic Surprise Index 67.9 -.2 point
  

• Citi Emerging Markets Economic Surprise Index -20.6 -.4 point
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 229.75 +.02:  Growth Rate +10.9% +.1 percentage point, P/E 16.6 -.2
  
• Bloomberg US Financial Conditions Index -.37 -8.0 basis points
  
• Yield Curve -55.75 basis points (2s/10s) -1.75 basis points
• US Atlanta Fed GDPNow Forecast +3.66% unch.
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +4.52% unch.: CPI YoY +6.64% unch.
  
• 10-Year TIPS Spread 2.30 +1.0 basis point
  
• Highest target rate probability for March 22nd FOMC meeting: 61.7%(-.5 percentage point) chance of 4.75%-5.0%. Highest target rate probability for May 3rd meeting: 41.3%(-5.3 percentage points) chance of 4.75%-5.0%.
  

US Covid-19:

• 119 new infections/100K people(last 7 days total). 6.8%(-2.1 percentage points) of 1/14/22 peak(1,740) -35/100K people from prior report.
  
• New Covid-19 patient hospital admissions per 100K population -73.8%(+.3 percentage point) from peak 7-day avg. of 1/9/22 - 1/15/22
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -314 open in Japan 
• China A50 Futures: Indicating +2 open in China

• DAX Futures: Indicating -9 open in Germany

Portfolio:

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

• Disclosed Trades:  None
  

• Market Exposure: 50% Net Long
  

Morning Market Internals

NYSE Composite Index:

• Volume Running -45.7% Below 100-Day Average 
• 10 Sectors Declining, 1 Sector Rising
• 32.5% of Issues Advancing, 64.1% Declining
• 20 New 52-Week Highs, 37 New Lows
• 37.7%(-4.7%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 49.0 -1.0
  
• Bloomberg Global Risk-On/Risk-Off Index 56.8 +.6%
  
• Russell 1000: Growth/Value 14,065.6 -.49%
  
• Vix 21.8 +1.8%
• Total Put/Call 1.15 -8.7%
• TRIN/Arms .86 +87.0% 

Friday Watch

Evening Headlines

Bloomberg:             

• Chinese Jet Buzzed Air Force Plane From Just 20 Feet Away, US Says.
• Here Are the Places Imposing New Covid Rules for China Travelers.
• Asia Stocks to Rise as S&P 500 Jumps, Dollar Falls: Markets Wrap. 
• Oil Set for Yearly Gain as Investors Look Ahead to China Rebound.  
• Shale Bosses Worried About US Labor Shortages Going Into 2023.
• Wall Street’s Top Stars Got Blindsided by 2022 Market Rout.  
• The Great Liquidity Debate: Top Wall Street Traders Size Up the 2022 Fallout.   
• Bankman-Fried Met With White House Aides on Crypto Policy Before FTX Collapse.
• These Are the Stocks That Kept Investors Up at Night in 2022.  
• Retail Investors Took a Beating in 2022. Will It Continue in 2023?
• Nasdaq Back From Brink of Worst December Ever as Fed Angst Dims.

Wall Street Journal:

• When Will Academia Account for Its Covid Failures? We need universities to be robust centers of debate, not rigid enforcers of ideological conformity.
• The Shoplifting Tax Keeps Going Up. When Target loses $600 million, customers end up paying more.
• Apple iPhone Output in China Ramps Up Despite Covid Woes.
• Mortgage Rates Record Biggest Calendar-Year Increase in 2022.
• AmerisourceBergen Hit With Federal Lawsuit Over Opioid Crisis.
• FTX Customers Want Identities Redacted From Bankruptcy Filings.
• What’s in $1.65 Trillion Omnibus Spending Law, and What Isn’t.

Fox News:

• California Dem's fiery COVID messages to vet open floodgates of complaints: 'She has made staffers cry'.

CNBC.com:

• Amazon lost half its value this year as tech stocks got crushed and recession fears grew.
• Southwest Airlines says holiday meltdown will ‘certainly’ hit fourth-quarter results.
• Here’s why the U.S. electric grid isn’t running on 100% renewable energy yet.
• FTX diverted $200 million of customer money for two venture deals that caught the SEC’s attention.

MarketWatch:         

• Did 2022 break Wall Street’s ‘fear gauge’? Why the VIX no longer reflects the sorry state of the stock market.

Zero Hedge:

• SBF Was Meeting With Senior White House Officials Shortly Before FTX Collapse.
• California Lawmaker Introduces Bill To Legalize Magic Mushrooms, Other Psychedelics.
• Buttigieg Knew: State AGs Warned Transportation Agency Of Airline Debacle Months Ago.
• Gun Owners Of America Labels 18 Republican Senators "Turncoats".
• Biden Awkwardly Congratulates Most Extreme Right Government In Israel's History.
• Of Economic Crises & Pandemics: Facebook As Fact, Government As Truth, Big Pharma As God.
• Andurand Sees Oil Demand Soaring As Much As 4MM b/d In 2023.
• West Point Begins Removal, Alteration Of Confederate Memorials On Campus.
• Watch: Chinese Fighter Threatens US Spy Plane Over Regional Waters, Coming Within 20 Feet.
• WEF To Accelerate Push For 'Metaverse' Surveillance Network At Davos 2023.
• Less oversold.
• 'The Role Of Gold May Be Changing' - Central Banks Panic-Buy Precious Metals In 2022.
• Times Square Crowne Plaza Hotel Goes Bankrupt.
• The "Mega-Bubbles" Have Started To Burst, And That Could Mean Unprecedented Financial Chaos Is Ahead.
• Stocks, Bonds, Gold Rally Into Dismal Year-End.

Newsmax:

• Trump Foreshadowed Airport Travel Woes, Laments US in Decline.
• Home Depot Co-Founder Marcus: Nobody Works Anymore Because of Socialism.
• Stephen Moore: Debt Rise 'Recipe for National Bankruptcy'.

TheGatewayPundit.com:

• Wake Up America: The End Of Free Elections Is In Sight!
• JUST IN: Joe Biden Signs $1.7 Trillion Omnibus Bill – Gives Ukraine Another $45 Billion.
• Egg Prices Hit A Record High and Are Still Going Up.
• State Judge Announces Democrat Kris Mayes Beat Republican Abe Hamadeh by 280 Votes in Arizona’s Attorney General Race.
• Travel Hell: Southwest Cancels Another 2,300 Flights.
• U.S. Virgin Islands Sues JPMorgan Over Epstein Sex Trafficking Scandal.
• LIKE A DICTATOR: Brazilian Socialist Lula da Silva intends to Increase Gun Control in Brazil.

The Epoch Times:  

• China’s COVID Outbreak Linked to Worldwide Shortage of Over-the-Counter Drugs.
  
• EU Declining to Impose Curbs Amid China’s COVID Surge Is ‘Huge Gamble’: Expert.
  

Twitter: 

• @DrAseemMalhotra - BREAKING: Double vaxxed respected Norwegian clinical psychologist @Silje_Schevig calls for complete suspension of the covid mRNA jabs because of clear evidence of more harm than good. ‘We’ve all been fooled but we must show kindness to each other despite previous disagreements’. (video)
  

 OpenVAERS:

• VAERS US COVID Vaccine Adverse Event Reports. 906,543 Reports(+3,216 from prior week) Through December 2nd, 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 unch. to +.5% on average.

• Asia Ex-Japan Investment Grade CDS Index 132.0 +.5 basis point. 

• China Sovereign CDS 73.75 -4.5 basis points. 
• China Iron Ore Spot 115.7 USD/Metric Tonne +.5%.

• Bloomberg Emerging Markets Currency Index 47.6 +.01%.
• Bloomberg Global Risk-On/Risk Off Index  56.0 -.7%. 
• Bloomberg US Financial Conditions Index -.38 -9.0 basis points.
  
• Volatility Index(VIX) futures 23.3 +.2%.
• Euro Stoxx 50 futures -.21%.

• S&P 500 futures -.15%.

• NASDAQ 100 futures -.19%.  

Morning Preview Links

Earnings of Note 
Company/Estimate 

 

Before the Open: 

• None of note
  

After the Close:

• None of note
  

Economic Releases

9:45 am EST

• The MNI Chicago PMI report for Dec. is estimated to rise to 40.0 versus 37.2 in Nov.
  

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The UK home price 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 commodity and technology shares in the region. I expect US stocks to open mixed and to rally into the afternoon, finishing modestly higher. The Portfolio is 50% net long heading into the day.