Wednesday Watch

Evening Headlines

Bloomberg:           

• Goldman Sachs Lifts China’s Economic Growth Forecast.
• Traders Race Back Into Oil on Optimism Over China Reopening.   
• Lunar New Year Without China’s Covid Zero Policy to Put Airlines to the Test.
• China’s Fondness for Pork Wavers as Covid Surge Crushes Demand.
• Scholz Brushes Off Talk of Further Joint EU Borrowing — for Now.
  
• Germany Learned Its Lesson From Russia Gas Dependence, Chancellor Scholz Says.
  
• Five Key Takeaways From Chancellor Scholz’s Bloomberg Interview.  
• Stocks Mixed, Yen Weakens Ahead of BOJ Meeting: Markets Wrap.  
• Oil Pushes Higher on Bets Chinese Demand Will Surge This Year.
• Investors Seek to Pull $20 Billion From Core Real Estate Funds.
• Rogoff Says Housing Markets Certainly Face Further Drop of 10%.
• Adobe, Facing Blowback, Says Customer Data Not Used to Train AI.  
• Digital Currency Group Halts Dividend Payment to Conserve Cash.  
• Goldman and Morgan Stanley Fortunes Split as Strategies Diverge.  
• White House Says No Debt Bargaining as McCarthy Urges Talks.  
• The Winklevii Are the Latest Crypto Founders to Blame Everybody But Themselves.  
• Larry Fink Says ESG Narrative Has Become Ugly, Personal.

Wall Street Journal:

• FTX Discloses ‘Substantial Shortfall’ of Customer Assets.
• Disney Defends Board, Iger Against Peltz’s Criticisms.
• A Crypto Magnate Saw the Risks and Still Was Hammered.
• Water Is a Terrible Thing for California to Waste. The Golden State hasn’t built the storage to make use of winter rains.
• Justice Department Considered but Rejected Role in Biden Documents Search.
• Moscow Details Plan to Boost Military.
• At Davos, Mood Is Somber as Many CEOs Question Economic Outlook.
• Rising Rates Hit Landlords Who Can’t Afford Hedging Costs.

Fox News:

• Biden, Harris photo-op with Warriors team takes awkward turn.

CNBC.com:

• Goldman Sachs posts its worst earnings miss in a decade as revenue falls while expenses rise.
• Fed directs big banks to disclose how they are preparing for climate change risks.
• FTX says $415 million of crypto was hacked.

MarketWatch:         

• Wall Street’s ‘fear gauge’ flashes warning that stocks might be headed off a cliff.
  
• Stock-market rally looks ‘unsustainable’ as S&P 500 enters ‘new, lower valuation regime,’ warns Citi.
  
• Opinion: The 5 tech earnings to watch as holiday-season results start to flood in.
  
• SmileDirectClub stock rallies on cost cuts, workforce ‘realignment’.
  
• United Airlines swings to profit despite ‘worst’ winter storm, issues blue-sky guidance.  
• Why this analyst became the lone Microsoft bear on Wall Street.

Zero Hedge:

• Jes Staley 'Personally Observed' Sexual Abuse By Epstein, Victim Claims.
• Rethinking Japan. 
• The Freight Market Has Bottomed. 
• EV Rebates In Canada Are 153% Over Budget So Far.
• CNN Admits Ukraine War Is A 'Weapons Lab' For Western Arms.
• Swiss MP At Davos: Change Living Environments To Force The Public To Follow Climate Goals.
• Jim Grant Warns "Japan Is Perhaps The Most Important Risk In The World".
• Elon Musk Mocks WEF As Global Elite Gather In Davos.
• Sucked in.
• Mike Wilson Doubles Down On Fire And Brimstone, Sees S&P Earnings Falling Even More.
• US stocks were mostly lower after weak earnings and BoJ risk offset the initial ECB-related dovishness - Newsquawk Asia-Pac Market Open.
• Trump Reacts To Lack Of Visitor Logs For Biden's House Where Classified Documents Were Found.
• Vice Premier Touts China 'Reopening To The World' In Davos Investment Pitch.
• Technocratic Dystopia Is Impossible.
• BoJ, Beijing, & Brussels Leave Banks, Bonds, Big-Tech, Bitcoin, & Bullion 'Mixed' After Long-Weekend.
• BOJ Is Less Than A Year Away From Running Out Of Bonds To Buy.
• The Beginning Of The End Of The Credit Cycle.
• Hedge Funds Steamrolled By Massive, 98%-ile Short Squeeze: What Is Causing It And How Long Will It Last?

Newsmax:

• Sen. Ron Johnson: Biden Docs 'Massive Diversionary Operation?'
• Rep.Jackson: Corruption Drives False COVID Stats.
• McCarthy: Document Probe Will Ensure Law Is 'Applied Equally'.

TheGatewayPundit.com:

• COVER UP: DOJ Decided Against Having FBI Agents Monitor Search by Biden’s Personal Lawyers For Classified Documents.
• Project Veritas: “Evil Salesman” Admits to Violating Georgia State Law, Sells Critical Race Theory Curriculum to Schools (VIDEO).
• IT WAS ALL A LIE: CNN Political Hack Finally Admits the US Has Been Vastly Overcounting COVID Deaths and Hospitalizations.
• Leo Hohmann’s Special Report: Medical Profession Implements WHO Digital Diagnosis Code for the Unvaxxed.
• Biden’s DOJ Fights to Reinstate Mask Mandate For Air Travel.
• Trump On His Continuous Battles: “I’m Fighting The Deep State And Winning”.
• Dirty RINO Speaker Robin Vos Pulls Resolution to Prohibit Private Resources to Run Elections in Wisconsin.
• Report: High-Priced Prostitutes Descend On Davos For “High-Powered” Leaders At World Economic Forum.
• WORLD ECONOMIC FORUM UPDATE: John Kerry Claims to Be Part of a “Select Group of Human Beings”.
• “They’re Trying to Get Rid of Him” – Joe Rogan Says Biden’s Own Staff Wants to Take Him Down with Classified Documents Scandal (VIDEO).
• “Covid 3 Times After the Vaccine – I Should Be Happy, Haven’t Had a Stroke Yet” – Pro Golfer Hank Haney Discusses the Covid Vaccine and His Continued Illness.
• WORLD ECONOMIC FORUM UPDATE: John Kerry Says to Stop Climate Change We Need “Money, Money, Money, Money, Money, Money, Money”.

The Epoch Times: 

• Xi Jinping’s Concessions to Recent Protests May Signal Coming Regime Collapse.
• Officials Report China’s First Annual Population Fall in Decades, Economic Crisis Accompanied by COVID-19.

OpenVAERS:

• VAERS US COVID Vaccine Adverse Event Reports. 918,508 Reports(+3,097 from prior week) Through December 30th, 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 +.25% on average.

• Asia Ex-Japan Investment Grade CDS Index 106.5 +.25 basis point. 

• China Sovereign CDS 53.0 -.5 basis point. 
• China Iron Ore Spot 121.4 USD/Metric Tonne +.6%.

• Bloomberg Emerging Markets Currency Index 48.4 -.06%.
• Bloomberg Global Risk-On/Risk Off Index  56.2 +.54%. 
• Bloomberg US Financial Conditions Index .20 +3.0 basis points.
  
• Volatility Index(VIX) futures 21.1 +.6%.
• Euro Stoxx 50 futures unch.

• S&P 500 futures -.24%.

• NASDAQ 100 futures -.25%.  

Morning Preview Links

Earnings of Note 
Company/Estimate 

 

Before the Open: 

• (SCHW)/1.09
• (PNC)/3.96
• (PLD)/1.21
  

After the Close:

• (AA)/-.58
• (DFS)/3.71
• (FHN)/.48
• (FUL)/1.24
• (KMI)/.30
• (WTFC)/2.58
  

Economic Releases

8:30 am EST

• NY Fed Services Business Activity for Jan.
• Retail Sales Advance MoM for Dec. is estimated to fall -.9% versus a -.6% decline in Nov.
• Retail Sales Ex Autos MoM for Dec. is estimated to fall -.5% versus a -.2% decline in Nov.
• Retail Sales Ex Autos and Gas for Dec. is estimated to fall -.1% versus a +.3% gain in Nov.
• PPI Final Demand MoM for Dec. is estimated to fall -.1% versus a +.3% gain in Nov.
• PPI Ex Food and Energy MoM for Dec. is estimated to rise +.1% versus a +.4% gain in Nov.
• PPI Final Demand YoY for Dec. is estimated to rise +6.7% versus a +7.4% gain in Nov.
  

9:15 am EST

• Industrial Production MoM for Dec. is estimated to fall -.1% versus a -.2% decline in Nov.
• Capacity Utilization for Dec. is estimated to fall to 79.5% versus 79.7% in Nov.
• Manufacturing Production for Dec. is estimated to fall -.3% versus a -.6% decline in Nov.
  

10:00 am EST

• Business Inventories for Nov. is estimated to rise +.4% versus a +.3% gain in Oct.
• The NAHB Housing Market Index for Jan. is estimated at 31.0 versus 31.0 in Dec.

2:00 pm EST

• Fed's Beige Book release.

4:00 pm EST

• Net Long-Term TIC Flows for Nov.

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The UK CPI report, 20Y T-Bond auction, weekly US retail sales reports, weekly MBA Mortgage Applications report, B. Riley Oncology Conference and the (FFIV) solution day could also impact global trading today.

US Equity Market Hours

• 9:30 am - 4:00 pm EST
  

BOTTOM LINE: Asian indices are mostly higher, boosted by energy 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.