Wednesday Watch

Night Trading 

• Asian equity indices are -1.5% to -.5% on average.

• Asia Ex-Japan Investment Grade CDS Index 82.0 +6.75 basis points.

• China Sovereign CDS 38.0 +1.75 basis points.

• Bloomberg Emerging Markets Currency Index 60.97 +.03%.
• Bloomberg Global Risk-On/Risk Off Index 3,064.0 +3.0 points.
• Volatility Index(VIX) futures 21.20 +.7%.
• FTSE 100 futures n/a.

• S&P 500 futures -.12%.

• NASDAQ 100 futures -.38%.

Morning Preview Links

Earnings of Note 
Company/Estimate 

 

Before the Open: 

• (ANTM)/6.44
• (ASML)/2.59
• (HAL)/.17
• (KNX)/.72
• (NVR)/65.83
• (VZ)/1.28
  

After the Close:

• (BXS)/.63
• (CP)/4.48
• (CMG)/4.79
• (CCI)/1.47
• (DFS)/2.60
• (KMI)/.24
• (LRCX)/6.59
• (LSTR)/1.63
• (LVS)/-.22
• (RHI)/.78
• (SLG)/1.59
• (SAVE)/-2.56 
• (VMI)/2.12
• (WHR)/5.04
  

Economic Releases

10:30 am EST

• Bloomberg consensus estimates call for a weekly crude oil inventory decline of -3,265,5000 barrels versus a -5,890,000 barrel decline the prior week. Gasoline supplies are estimated to rise by +947,000 barrels versus a +309,000 barrel gain the prior week. Distillate inventories are estimated to fall by -1,278,000 barrels versus a -2,083,000 barrel decline the prior week. Finally, Refinery Utilization is estimated to rise by +.59% versus a +1.0% gain prior.

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The UK inflation data, weekly MBA Mortgage Applications report, $24B 20Y T-Bond auction and the (AAPL)/(GOOG) testimony to Senate on App Store could also impact global trading today.

US Equity Market Hours

• 9:30 am - 4:00 pm EST
  

BOTTOM LINE: Asian indices are mostly lower, weighed down by technology and industrial 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 Virus Variant Worries, Earnings Jitters, Oil Decline, Energy/Financial Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Lower
  

• Sector Performance: Almost Every Sector Declining
  

• Volume: Below Average

• Market Leading Stocks: Underperforming
  

Equity Investor Angst:

• Volatility(VIX) 18.9 +9.3%
• Bloomberg Global Risk On/Risk Off Index 3,061.0 -210.0 points

• Euro/Yen Carry Return Index 134.4 -.1%

• Emerging Markets Currency Volatility(VXY) 9.9 -.2%

• S&P 500 Implied Correlation 50.5 +5.2%

• ISE Sentiment Index 88.0 +7.0 points
  

• Total Put/Call .81 -10.0%

• NYSE Arms 1.17 +54.0%

Credit Investor Angst:

• North American Investment Grade CDS Index 51.64 +1.84%
  

• US Energy High-Yield OAS 455.77 +1.56%

• European Financial Sector CDS Index 59.59 +2.6%

• Italian/German 10Y Yld Spread 104.0 +3.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 80.40 +6.49%
  

• Emerging Market CDS Index 167.75 +2.94%
  

• China Corp. High-Yield Bond USD ETF 39.08 unch.

• 2-Year Swap Spread 11.75 +.25 basis point

• TED Spread 16.75 -1.0 basis point
  

• 3-Month EUR/USD Cross-Currency Basis Swap -3.25 unch.
  
• MBS  5/10 Treasury Spread  66.5 +.25 basis point
  
• IHS Markit CMBX BBB- 6 72.25 unch.
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 60.97 -.15%
• 3-Month T-Bill Yield .02% unch.
  

• Yield Curve 145.0 +4.0 basis points
  

• China Iron Ore Spot 181.0 USD/Metric Tonne +2.1%

• Citi US Economic Surprise Index 31.60 -3.9 points

• Citi Eurozone Economic Surprise Index 134.0 -2.2 points
  

• Citi Emerging Markets Economic Surprise Index 33.9 -1.4 points

• 10-Year TIPS Spread 2.32 -4.0 basis points
• 90.1% chance of no change at June 16th meeting, 90.1% chance of no change at Sept. 22nd meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating -490 open in Japan 
• China A50 Futures: Indicating -202 open in China

• DAX Futures: Indicating +51 open in Germany

Portfolio:

• Slightly Lower: On losses in my tech/industrial/energy sector longs
  

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

• Market Exposure: Moved to 50% Net Long
  

Morning Market Internals

NYSE Composite Index:

• Volume Running -10.8% Below 100-Day Average 
• 4 Sectors Rising, 7 Sector Declining
• 25.5% of Issues Advancing, 71.1% Declining
• 156 New 52-Week Highs, 32 New Lows
• 88.8% of Issues Above 200-day Moving Average
• Average 14-Day RSI 53.5%
  
• Bloomberg Global Risk-On/Risk-Off Index 3,053.0 -223.0 points
• Vix 19.0 +10.0%
• Total Put/Call .81 -10.0%
• TRIN/Arms 1.36 +79.0%

Tuesday Watch

Night Trading 

• Asian equity indices are -1.25% to -.25% on average.

• Asia Ex-Japan Investment Grade CDS Index 75.25 -3.5 basis points.

• China Sovereign CDS 36.25 -1.75 basis points.

• Bloomberg Emerging Markets Currency Index 61.07 unch.
• Bloomberg Global Risk-On/Risk Off Index 3,265.0 -6.0 points.
• Volatility Index(VIX) futures 20.55 -.73%.
• FTSE 100 futures -.08%.

• S&P 500 futures +.18%.

• NASDAQ 100 futures +.18%.

Morning Preview Links

Earnings of Note 
Company/Estimate 

 

Before the Open: 

• (ABT)/1.27
• (AN)/1.82
• (BMI)/.42
• (CMA)/1.38
• (FITB)/.68
• (HTLD)/.21
• (JNJ)/2.33
• (KEY)/.47
• (LMT)/6.32
• (MAN)/.67
• (NTRS)/1.49
• (OMC)/1.12
• (PM)/1.40
• (PG)/1.20
• (TRV)/3.01
  

After the Close:

• (CSX)/.98
• (EW)/.48
• (IBKR)/.75
• (ISRG)/2.66
• (NFLX)/2.94
• (THC)/.69

Economic Releases

• None of note
  

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The China rate decision, German GFK Consumer Confidence report weekly US retail sales reports, (AAPL) special event and the (AAP) analyst update could also impact global trading today.

US Equity Market Hours

• 9:30 am - 4:00 pm EST
  

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

Stocks Lower into Final Hour on Virus Variant Worries, Escalating Russia/Ukraine Tensions, Valuation Concerns Tech/Alt Energy Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Lower
  

• Sector Performance: Almost Every Sector Declining
  

• Volume: Below Average

• Market Leading Stocks: Underperforming
  

Equity Investor Angst:

• Volatility(VIX) 167.9 +10.2%
• Bloomberg Global Risk On/Risk Off Index 3,235.0 -68.0 points

• Euro/Yen Carry Return Index 134.51 -.2%

• Emerging Markets Currency Volatility(VXY) 9.92 -.3%

• S&P 500 Implied Correlation 48.7 -2.0%

• ISE Sentiment Index 81.0 -25.0 points
  

• Total Put/Call .87 +10.1%

• NYSE Arms .82 +39.0%

Credit Investor Angst:

• North American Investment Grade CDS Index 50.72 +.93%
  

• US Energy High-Yield OAS 449.0 -.01%

• European Financial Sector CDS Index 58.10 +1.0%

• Italian/German 10Y Yld Spread 101.0 unch.
  

• Asia Ex-Japan Investment Grade CDS Index 75.5 -8.3%
  

• Emerging Market CDS Index 163.47 +1.3%
  

• China Corp. High-Yield Bond USD ETF 39.08 unch.

• 2-Year Swap Spread 11.5 -.25 basis point

• TED Spread 17.75 -.25 basis point
  

• 3-Month EUR/USD Cross-Currency Basis Swap -3.25 unch.
  
• MBS  5/10 Treasury Spread  66.25 +.5 basis point
  
• IHS Markit CMBX BBB- 6 72.25 unch.
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 61.07 +.05%
• 3-Month T-Bill Yield .02% +1.0 basis point
  

• Yield Curve 141.0 -1.0 basis point
  

• China Iron Ore Spot 178.25 USD/Metric Tonne +3.7%

• Citi US Economic Surprise Index 35.50 -5.7 points

• Citi Eurozone Economic Surprise Index 136.20 -5.5 points
  

• Citi Emerging Markets Economic Surprise Index 35.3 -1.5 points

• 10-Year TIPS Spread 2.36 -1.0 basis point
• 90.1% chance of no change at June 16th meeting, 90.1% chance of no change at Sept. 22nd meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating -345 open in Japan 
• China A50 Futures: Indicating -183 open in China

• DAX Futures: Indicating +20 open in Germany

Portfolio:

• Slightly Lower: On losses in my tech/biotech/industrial sector longs
  

• Disclosed Trades: None
  

• Market Exposure: 75% Net Long
  

Bear Radar

 Style Underperformer:

• Small-Cap Growth -2.4%

Sector Underperformers:

• 1) Alt Energy -4.4% 2) Semis -3.0% 3) Disk Drives -2.2%

Stocks Falling on Unusual Volume: 

• PAR, LSCC, WBS, VCEL, PGNY, CLM, OPEN, CRF, UCTT, HRZN, TTCF, SKLZ, PTON, PLBY, EBS, MLHR, INTZ and HAE
  

Stocks With Unusual Put Option Activity:

• 1) CDEV 2) XLY 3) DISCK 4) HOG 5) ABT
  

Stocks With Most Negative News Mentions:

• 1) PTON 2) RIDE 3) EH 4) DDD 5) CAN
  

Charts:

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

Bull Radar

Style Outperformer:

• Large-Cap Value -.5%

Sector Outperformers:

• 1) Shipping +2.8% 2) Paper +.5% 3) Pharma +.3%

Stocks Rising on Unusual Volume:

• KNL, CRCT, HOG, PETQ, HONE, CLNE, GNK, LTHM, STL, EVLO, TPGY, VVV, AEO, VMW and RAD
  

Stocks With Unusual Call Option Activity:

• 1) FLEX 2) DISCK 3) DRI 4) CLNE 5) GT

Stocks With Most Positive News Mentions:

• 1) HOG 2) CLNE 3) KNL 4) ALB 5) LTHM
  

Charts:

• ETFs Rising on Unusual Volume
• Stocks Rising on Unusual Volume

Morning Market Internals

NYSE Composite Index:

• Volume Running -23.7% Below 100-Day Average 
• 3 Sectors Rising, 8 Sector Declining
• 28.3% of Issues Advancing, 67.7% Declining
• 188 New 52-Week Highs, 24 New Lows
• 89.7% of Issues Above 200-day Moving Average
• Average 14-Day RSI 55.5%
  
• Bloomberg Global Risk-On/Risk-Off Index 3,248.0 -55.0 points
• Vix 17.7 +8.8%
• Total Put/Call .82 +3.8%
• TRIN/Arms .95 +61.0%

Monday Watch

Today's Headlines

Bloomberg:      

• China Huarong Bond Panic Eases After Government Breaks Silence.    
• Rebound of China’s Yuan Is Facing a $68 Billion Roadblock.  
• Won Poised for Rally as Economic Optimism Eclipses Virus Concern.
• China Says It Has No Desire to Replace Dollar With Digital Yuan.  
• U.K. House Prices Hit a Record in Buying Frenzy, Rightmove Says.  
• Mexico Plans Tree Planting, Regional Migration Pitch to Biden.
• Oxford Starts First Study to Reinfect Recovered Covid Patients.  
• Asia Stocks Set to Rise, U.S. Equity Futures Dip: Markets Wrap.
• Five Things You Need to Know to Start Your Day.  
• Historic Oil Glut Amassed During the Pandemic Has Almost Gone.
• Covid Economic Scars, Digital Yuan-Dollar, Debt Crunch: Eco Day.  
• U.S. Passes Vaccine Milestone; Aid Goes to Ontario: Virus Update.
• Coinbase Hangover Rattles Crypto Assets With Bitcoin Falling.
• Banks Face Growing Pressure to Phase Out Fossil-Fuel Lending.  
• Facebook to Soon Announce Social Audio Products, Recode Says.

Wall Street Journal:

• WeWork’s New Stock-Listing Plan Has Echoes of Past.
• If Democrats Pack the Court.
• Investment Options for the Unwoke.
• Landmen Who Once Staked Claims for Oil and Gas Now Hunt Wind and Sun.
• Ohio Politics Is Changing Rapidly Beneath a Stable Surface.
• Fatal Tesla Crash in Texas Believed to Be Driverless.
• Cornyn Says Senate GOP Could Be Open to Smaller Infrastructure Bill.
• Stock Rally Broadens in Encouraging Sign for Bull Market.
• Fauci Predicts J&J Vaccine Returning Friday.
• Drugmakers Go on Trial Over Opioid Epidemic.
  

Fox News:

• WATCH: County officials ignore mother pleading for school reopening.

CNBC:  

• White House warns Russia will face consequences if Putin critic Alexei Navalny dies in prison.
• Bitcoin tumbles from recent high as cryptocurrencies take weekend hit.

Zero Hedge: 

• The State Of The 'Third Wave' In Europe. 
• "Stunning Divergence": Latest Bank Data Reveals Something Is Terminally Broken In The Financial System.
• Biden Blames Russia For The Exact Same "Interference" That US Corporate Media Is Guilty Of. 
• “It’s Totally Insane. Someone Made A Million On Dogecoin With His Stimulus Check".
• Hedge Funds Are Getting The Hell Out Of New York In Favor Of Florida.
• Obama's Chief Energy Scientist Disputes The Climate-Change Propaganda-Peddlers. 
• Navalny's Team Claims He 'Could Die At Any Moment' As US Warns Russia Of "Consequences".
• In San Francisco, Drug Overdoses Claimed Twice As Many Lives As COVID-19.
• Biden Finally Admits There's A "Crisis" At The Border.
• 'Get More Confrontational': Maxine Waters Crosses State Lines To Incite BLM Protesters.
• Bitcoin Crashes As Much As 15% Amid Unsubstantiated Report Of Money Laundering Crackdown.
• Yet Another Ridiculous Stock Market Bubble... In Three Charts.
• Ever Fewer People Need Ever More Money... Said Nobody, Ever (Except The Federal Reserve).
• Bitcoin puke, Fed's BS and risk.
• The Political Economy Of Fear.
• Canadian Cops Refuse To Enforce Ontario's New 'Police State' COVID-Lockdown Laws.
• "Fentanyl Is Here:" Las Vegas Suffers 200% Surge In Overdose Deaths.
• The Plutocrats Of Wall Street And Silicon Valley Are Scamming America.
• Taco Bell Opens "Digital-Only" Location In Times Square That Serves Alcohol.
• Black Lives Matter Activist Charged With Anti-Asian Hate Crime.

MarketWatch.com:   

• These stocks let you tap into the hot housing market.
  

NewsMax:     

• Ex-DNI Ratcliffe: US Rivals 'Testing, Taking Advantage of' Biden.
• Biden, China Agree to Cooperate on Climate Crisis.
• Poll: Only 38 Percent Back Packing Supreme Court.
  

TheGatewayPundit.com:

• WATCH: Rep. Maxine Waters Protests Past Curfew in Brooklyn Center, Calls for BLM to Get ‘More Confrontational’ if Chauvin is Acquitted.
• CNN Host Chris Cuomo Says White People’s Kids Need to ‘Start Getting Killed’ to Prompt Police Reform.
• HUGE: Non-profit EcoHealth Alliance, Received More than $1 Million in US Grants While Its Head Promoted the Made-Up Wuhan Wet-Market Conspiracy.
• NBA Ratings In Free Fall Since Going Woke Left – Down 45 Percent Since 2012.
• “You’ll Get F**king Clapped, Delgado!” – Peaceful Leftist Protesters Threaten to Murder NYC Police Officer at Protest-Riot (VIDEO).
• Arizona Senate Is Ready for Audit of Maricopa County’s 2020 Election Results to Begin – The Democrats Are In a Panic.
• Pompous Fauci Attacks Jim Jordan, Says Mask Mandates, Endless Lockdowns and Vaccine Passports Have Nothing to do with Restricting Civil Liberties (VIDEO).
• Minnesota National Guard Targeted in Drive By Shooting Hours After Rep. Maxine Waters Told BLM To Be ‘More Confrontational’.
• Biden’s Anti-American UN Ambassador Doubles Down, Compares US’ Founding Fathers to How the Chinese Treat the Uyghurs (VIDEO).

The Epoch Times:

• Beijing-Backed Officials and Media Threaten to Shut Down Hong Kong’s ‘Apple Daily’ Newspaper. 
• US, China Agree to Cooperate on Climate, Beijing’s Actions Are Key.

Digital Blackboard:

• Daily New Cases by Region.

Worldometer:

• New Cases/Deaths by state.

Rt Covid-19:

• How fast virus is growing by state.

KFF:

• State Data(Tests/Hospitalizations).

Night Trading

• Asian indices are -.25% to +.5% on average.
• Asia Ex-Japan Investment Grade CDS Index 78.75 -7.75 basis points.
• China Sovereign CDS 38.0 +.25 basis point.
• Bloomberg Emerging Markets Currency Index 61.01 -.04%.
• Bloomberg Global Risk-On/Risk Off Index 3,300.0 -2.0 points.
• Volatility Index(VIX) futures 20.15 +.98%. 
• Euro Stoxx 50 futures -.06%.
• S&P 500 futures -.33%.
• NASDAQ 100 futures -.29%

Morning Preview Links

Earnings of Note

Company/Estimate

Before the Open:

• (KO)/.50
• (MTB)/2.96
• (ONB)/.41

After the Close:

• (CCK)/1.39
• (IBM)/1.62
• (STLD)/1.99
• (UAL)/-6.82
• (ZION)/1.16
  

Economic Releases

• None of note
  

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The RBA minutes could also impact trading today.

US Equity Market Hours

• 9:30 am - 4:00 pm EST

BOTTOM LINE: Asian indices are mostly higher, boosted by technology and commodity 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 week.