Wednesday Watch

Evening Headlines

Bloomberg:       

• North Korea Fires Ballistic Missiles as Biden Wraps Up Asia Tour.
• Soros Warns ‘Civilization May Not Survive’ Putin’s War.  
• ECB Battle Lines Shift With Lagarde Urged to Speed Up Rate Hikes.
  
• Korea Poised to Raise Rates, Cut Growth View: Decision Guide.
  
• Asia Stocks Seen Pressured as Growth Fears Mount: Markets Wrap.
• Excess Weight in Early to Mid-Adulthood Linked to Poorer Cancer Survival.  
• Pandemic Housing Boom Hits a Wall With US Buyers Priced Out.  
• Tesla Resumes Plunge as Fears of Slow Production Weigh.  
• ‘Cash Cows’ Are Feasting in the Inflation-Tormented Stock Market.  
• Sector ETFs Are Drained at Record Pace With ‘No Door Out’.
• Retailer Selloff Leaves Covid Slump in the Dust as Rout Widens.  
• Rupture in the Stock-Bond Relationship Shows Recession Angst Rising Fast.

 Wall Street Journal:

• Georgia GOP Primaries Are in Spotlight as State Polls Close.
• Fed Searches for Magic Number to Cool a Red-Hot Housing Market.
• Inflation, Rising Rates Curb Global Economic Growth.
• Between Front Lines, Ukrainian Reconnaissance Teams Hunt Russian Targets.
• Latest Updates on the War.
• Covid-19 Vaccine and Drug Sales, Once Booming, Plateau.

Fox News:

• At least 18 children and 2 adults killed in shooting at elementary school, Biden will address nation soon.
• LIVE UPDATES:Biden speaks with Texas Gov. Abbott to offer assistance in Uvalde shooting.

CNBC.com:

• Snap’s warning sends shock across digital advertising as investors flee social media stocks.
• Bill Ackman says a more aggressive Fed or market collapse are the only ways to stop this inflation.
• Nordstrom raises full-year outlook as first-quarter sales top expectations.
• U.S. bars Russia from paying bondholders through American banks, increasing default risk.
• Bitcoin falls, SEC’s Hester Peirce talks regulation and Tether withdrawals soar: CNBC Crypto World.
• Stellantis CEO warns of electric vehicle battery shortage, followed by lack of raw materials. 
  

MarketWatch:          

• Wendy’s stock rallies 15% as Nelson Peltz’s hedge fund Trian discloses plans for possible sale.
  
• ‘Real wealth destruction’: This Deutsche Bank chart shows what could happen to assets in a repeat of the stagflationary 1970s.  
• Lyft cutting hiring, costs as its stock nears all-time low.
  
• Opinion: Inflation will be higher for longer — and you’re not going to like what comes next.
  
• Dow, S&P 500 head for worst start to a year since 1970 — for tech it’s the worst in history.

Zero Hedge: 

• 14 Students, One Teacher Killed After Texas Elementary School Shooting; Shooter Dead.
• Stunning Images Show Potash Train Derailed In Canada Amid Fertilizer Crunch.
• 60,000 Migrants Waiting In Mexico Across Border From El Paso, Texas.
• Cattle Supply And Demand Issues For 2022. 
• Baby Formula Airlift: Government "Fixing" A Problem Of Its Own Making.
• Banks Face Trouble As Credit Cycle Turns.
• Letter From A US Supplier Of Industrial Chemicals: "I Have Never Seen Anything Like The Current Supply Problems".
• Newsquawk Asia-Pac Market Open - US stocks mostly declined after disappointing data stoked economic concerns.
• Bidenflation Watch: Campbell's Tomato Soup Prices Keep Escalating.
• Jets Scrambled In Response To Rare Joint Russian-Chinese Patrol Over Pacific As Biden Visits Tokyo.
• Watch: Davos Elites Warn "Painful Global Transition" Should Not Be Resisted By Nation-States.
• Dalio: "Cash Is Still Trash... But Equities Are Trashier", Prefers Gold & Bitcoin.
• 22 House Republicans Demand Accountability On Biden's $40b War Spending.
• Newsquawk US Market Wrap: Snap, PMIs, pop market recovery as US exceptionalism tested.
• WTI Bounces After Small Crude Build, Big Gasoline Draw.
• National Teachers' Guide Advises Against Use Of "Parent", "Male", "Female", "Mother", & "Father".
• Big-Tech & Bond Yields Plunge As US Macro 'Snaps', Gold Gains.

TheGatewayPundit.com: 

• 18-Year-Old Salvador Romas Posted Photos on Instagram Before Mass Shooting at Texas School.
• Failed WHO Chief and China Puppet Tedros Re-elected to Second 5-Year Term.
• CONFIRMED: Search Warrants Served at Arizona Nonprofit and for Employee’s Home in Connection with “2000 Mules” Ballot Trafficking Election Scandal.
• Experts Warn Of US “Grid Failure” In Hot Summer Months — Is It Time To Prepare?
• Shocker: State Farm Abandons Grooming Book Program for Kids in Florida After National Backlash.
• The Same FBI Agents that Knew Hillary Was Behind Trump-Russia Lie Were Members of Mueller Team Who Neglected to Include this Important Fact.
• Democrat Stacey Abrams Complains About Record Early Voting in Georgia Primary: “We Know That Increased Turnout Has Nothing to do with Suppression” (VIDEO).
• IGNORED BY FAKE NEWS MEDIA: Two Straight Weeks of Record High Gas Prices – 14 Days and 11 Record Highs.
• Turncoat Mike Pence Building Presidential Campaign with a Group of RINOs and NeverTrumpers – Good Luck.
• Tragic: 15-Year-Old Freshman Student Dies Reportedly of Cardiac Arrest During Lawrence North Track Practice.

Rebel News:

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

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 -.25% to +.25% on average.

• Asia Ex-Japan Investment Grade CDS Index 127.75 -.25 basis point. 

• China Sovereign CDS  80.0 +.75 basis point.
  

• Bloomberg Emerging Markets Currency Index 52.61 -.02%.  
• Bloomberg Global Risk-On/Risk Off Index 3,654.0 -36.0 points.
• Volatility Index(VIX) futures 29.1 -.29%.
• Euro Stoxx 50 futures n/a.

• S&P 500 futures +.41%.

• NASDAQ 100 futures +.66%. 

Morning Preview Links

Earnings of Note 
Company/Estimate 

 

Before the Open: 

• (BMO)/3.22
• (DKS)/2.53
• (DY)/.16
  

After the Close:

• ((ELF)/.06
• (GES)/.29
• (NVDA)/1.29
• (SNOW)/.00
• (SPLK)/-.75
• (VSAT)/.36
• (WSM)/2.87
  

Economic Releases

8:30 am EST

• Durable Goods Orders for April is estimated to fall to +.6% versus a +1.1% gain in March.
• Durables Ex Transports for April is estimated to rise +.5% versus a +1.4% gain in March.
• Cap Goods Orders Non-Defense Ex Air for April is estimated to rise +.5% versus a +1.3% gain in March.
  

10:30 am EST

• Bloomberg consensus estimates call  for a weekly crude oil inventory inventory decline of -1,850,890 barrels versus a -3,394,000 barrel decline the prior week. Gasoline supplies are estimated to fall by -1,293,440 barrels versus a -4,779,000 barrel decline the prior week. Distillate inventories are estimated to rise by +661,780 barrels versus a +1,235,000 barrel gain the prior week. Finally, Refinery Utilization is estimated to rise by +.66% versus a +1.8% gain prior.

2:00 pm EST

• FOMC Meeting Minutes for May 4.
  

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Fed's Brainard speaking, Eurozone GDP report, weekly MBA Mortgage Applications report, B.Riley Investor Conference, (RJF) investor day and the TD Securities Telecom/Media Conference 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 consumer and technology shares in the region. I expect US stocks to open modestly higher and to maintain gains into the afternoon. The Portfolio is 50% net long heading into the day.

Stocks Lower into Afternoon on US Policy-Induced Stagflation Fears, Earnings Outlook Jitters, Consumer Spending Worries, Tech/Consumer Discretionary Sector Weakness

 

 Broad Equity Market Tone:

• Advance/Decline Line: Substantially Lower
  

• Sector Performance:  Almost Every Sector Declining
  

• Volume:  Around Average

• Market Leading Stocks: Underperforming
  

Equity Investor Angst:

• Volatility(VIX) 30.3 +6.4%
• Bloomberg Global Risk On/Risk Off Index 3,609.0 -405.0 points

• Euro/Yen Carry Return Index 139.82 -.64%

• Emerging Markets Currency Volatility(VXY) 12.2 -.9%

• CBOE S&P 500 Implied Correlation Index 49.1 -1.0% 

• ISE Sentiment Index 93.0 -9.0 points
  

• Total Put/Call 1.0 +2.0%

• NYSE Arms 1.91 +162.0%

Credit Investor Angst:

• North American Investment Grade CDS Index 88.88 +.44%
  

• US Energy High-Yield OAS 439.41 +2.1%

• European Financial Sector CDS Index 108.12 +1.9%

• Italian/German 10Y Yld Spread 201.0 basis points -1.0 basis point
  

• Asia Ex-Japan Investment Grade CDS Index 127.87 -1.0%
  

• Emerging Market CDS Index 292.10 +1.4%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 28.9 -.09%
  
• Russia Sovereign Debt Credit Default Swap 10,076.40 -1.6%
  

• 2-Year Swap Spread 31.0 basis points +1.5 basis points
  

• TED Spread 46.25 basis points -3.5 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -18.75 basis points -.5 basis point
  
• MBS  5/10 Treasury Spread  120.0 unch.
  
• iShares CMBS ETF 48.74 +.89%
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 52.52 -.04%
• 3-Month T-Bill Yield 1.05% +5.0 basis points
  

• Yield Curve 27.25 basis points (2s/10s) +4.5 basis points
  

• China Iron Ore Spot 130.5 USD/Metric Tonne -1.3%

• Citi US Economic Surprise Index -37.3 -16.5 points

• Citi Eurozone Economic Surprise Index 10.1 -8.4 points
  

• Citi Emerging Markets Economic Surprise Index 11.8 -.2 point

• 10-Year TIPS Spread 2.58 -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:

• 218 new infections/100K people(last 7 days total). 13.0%(unch.) of 1/14 peak -6/100K people from prior report.
  
• New Covid-19 patient hospital admissions per 100K population -85.0%(unch.) from peak 7-day avg. of 1/9/21 - 1/15/22
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -83 open in Japan 
• China A50 Futures: Indicating -8 open in China

• DAX Futures: Indicating +54 open in Germany

Portfolio:

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

• Disclosed Trades:  Added to my (IWM)/(QQQ) hedges and to my emerging market shorts, then covered some
  

• Market Exposure:  Moved to 25% Net Long
  

Bear Radar

Style Underperformer:

• Mid-Cap Growth -3.6%

Sector Underperformers:

• 1) Social Media -7.7% 2) Gambling -6.7% 3) Airlines -5.3%

Stocks Falling on Unusual Volume: 

• RVNC, CDNA, HTGC, PLAB, HAYW, LIND, LWN, HBI, SIX, CRI, TGT, URBN, GOOG, DKS, IPG, OUT, DDS, YETI, BRKL, NXST, TNDM, EBS, FB, OMC, CAL, CZR, AEO, VSCO, PLCE, ZG, CCL, ASO, IHRT, DXCM, U, GES, CUTR, SKY, SWTX, APPS, LYFT, APP, PUBM, ROKU, SPT, TTD, PINS, ANF and SNAP
  

Stocks With Unusual Put Option Activity:

• 1) TOL 2) ANF 3) RL 4) SIG 5) BBY
  

Stocks With Most Negative News Mentions:

• 1) SNAP 2) ANF 3) INMB 4) PINS 5) TTD
  

Charts:

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

Bull Radar

Style Outperformer:

• Large-Cap Value -1.3%

Sector Outperformers:

• 1) Gold & Silver +.6% 2) Foods +.4% 3) Utilities +.2%

Stocks Rising on Unusual Volume:

• COLD, PODD, NOTV, ZM, SITC, WOOF, ACI, ORLY and AZO
  

Stocks With Unusual Call Option Activity:

• 1) EWC 2) IVR 3) BKR 4) EA 5) HTH

Stocks With Most Positive News Mentions:

• 1) ZM 2) SOTK 3) CRMT 4) DOCN 5) LINC
  

Charts:

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

Mid-Day Market Internals

NYSE Composite Index:

• Volume Running +8.1% Above 100-Day Average 
• 9 Sectors Declining, 2 Sectors Rising
• 28.0% of Issues Advancing, 68.5% Declining
• 12 New 52-Week Highs, 218 New Lows
• 24.2% of Issues Above 200-day Moving Average
• Average 14-Day RSI 39.4% 
• Bloomberg Global Risk-On/Risk-Off Index 3,631.0 -384.0 points
• Russell 1000: Growth/Value 14,460.0 -1.6%
  
• Vix 30.3 +6.3%
• Total Put/Call 1.0 +1.0%
• TRIN/Arms 1.67 +128.7%

Tuesday Watch

Evening Headlines

Bloomberg:      

• Biden’s Latest Taiwan Gaffe Hikes Suspicion, Tensions in Beijing.  
• Asia Manufacturers Say the Pandemic-Driven Trade Boom Is Fading.
• What Is the ‘Quad’ and Should China Fear It?
• US Futures Sink as Snap Warning Hits Social Firms: Markets Wrap.
• Oil Little Changed as EU Stalemate on Russian Embargo Deepens.
  
• Activision Union Gets Legal Recognition in Gaming First.
  
• Fed Rate-Hike Pause in September May ‘Make Sense,’ Bostic Says.  
• A Hot, Deadly Summer Is Coming With Frequent Blackouts.  
• California Governor Threatens Water Use Cuts Due to Drought.  
• Traffic at NYC-Area Bridges and Tunnels Hits Pre-Pandemic Levels.  
• Hedging in High Demand as Wall Street Questions S&P 500’s Bounce.  
• Farmers Still Seen Making Money Despite Soaring Fuel, Fertilizer.

Wall Street Journal:

• Ukraine’s Forces Sink Russian River Crossings, Inflicting Heavy Damage.
• Latest Updates: Russian Diplomat Resigns Over War.
• Broadcom Weighs Paying $60 Billion for VMware.
• Egypt’s Bread Crisis Awakens Old Fears of Political Unrest.
• The Pronoun Police Come for Middle Schoolers. A Wisconsin school district opened a Title IX sexual-harassment investigation against 8th graders for calling a student ‘her’ instead of ‘them.’ 
• The Top 50 Richest People Have Lost More Than Half a Trillion Dollars This Year.

Fox News:

• Details surrounding the mysterious deaths of 3 Americans at Bahamas resort reportedly determined.
• Socialist candidate calls for one million people to break into empty homes.

CNBC.com:

• Bitcoin could fall to $8,000, a more than 70% plunge, Guggenheim’s Minerd says.
• SpaceX president backs Elon Musk over sex misconduct claims: ‘I believe the allegations to be false’.
• Airbnb is closing its domestic business in China, sources say.  
  

MarketWatch:       

• Opinion: ‘I feel like I am reliving the summer of 2008.’ Strategist David Rosenberg sees bear market sinking the S&P 500 to 3,300.
  
• Zoom stock walks back initial surge following earnings beat, improved profit forecast.  
• U.S. earnings revisions could knock stocks down another 5% to 10%, warns Morgan Stanley.  
• The Great Resistance is here. Companies and employees are in a battle of wills over returning to the office.

Zero Hedge: 

• Posobiec Gives Details Of Davos Detention.
• What It Means That 'Hillary Clinton Did It'.
• NYC Parents Want In-Person Meeting With Mayor Over Toddler Mask Mandate: "Our Calls Have Gone Unanswered".
• US Army Mulls Letting Soldiers Switch Bases If Local Laws Discriminate Against Gender Identity.
• White House Press Secretary Says There’s No Timeline for When Baby Formula Shortage Ends.
• It's Not Just The USA: The Economic Instability Is Global.
• Bird Flu Outbreak Plunges US Egg Production To 7-Year-Low.
• CDC Now Recommends COVID Testing For All Domestic Air Travel, Including The Vaccinated.
• Newsquawk Asia-Pac Market Open - US stocks rebounded after the recent streak of weekly losses.
• Google And Facebook Targeted By Bipartisan Lawmakers Over Advertising Dominance.
• Monkeypox Outbreak Primarily Spreading Via Sexual Contact: WHO Officials.
• Snap Shares Crater After Company Unexpectedly Slashes Guidance.
• UN Food Head Warns Conditions "Worse" Than Arab Spring As Inflation Riots Spread.
• Zelensky Says If Ukraine Falls, American Lives Will Be At Risk.
• Newsquawk US Market Wrap: Stocks rally in wake of China commentary, Fed speak, M&A activity; hawkish Lagarde supports Euro.
• 'Dimon'-Hands Lift Stocks; Bonds, Bitcoin, & Dollar Dumped.

Newsmax:   

•  Report: Putin Arms Belarus With Nuke-Capable Missiles

TheGatewayPundit.com: 

• WOW! Joe Biden Admits It’s ALL On Purpose: “When It Comes to Gas Prices, We’re Going Through INCREDIBLE TRANSITION – God Willing, We’ll Be Less Reliant on Fossil Fuels” (VIDEO).
• Psychotherapist Who Conducts Transgender “Therapy” Encourages Teens to Distrust Their “Bigoted, Misinformed Parents” – Especially if They’re “Religious” (VIDEO).
• Mayor Eric Adams Declares NYC State of Emergency Over Infant Formula Shortage to Prevent Price Gouging.
• Male High School Teacher Writes About How Good it Feels to Wear Women’s Panties to School and Coming out as ‘Non-Binary’ to His Students.
• LIBERAL MEDIA FREAKOUT After President Trump Shares Response to El Salvador President’s Tweet on “Enemy from Within” Destroying America and Pushing Country to Civil War.
• Like a Creepy Neighbor: State Farm Donating Transgender Books for Kindergarteners to Schools in Florida.
• Georgia Governor Kemp and Secretary of State Raffensperger – Examples of Dereliction of Duty in Addressing Election Fraud to the Point of Being Complicit.
• Journalist and Twitter Star Jack Posobiec and Film Crew Detained by Armed Police in Davos.
• Gas Prices Reach 12th Straight All-Time Record High at $4.596/ Gallon on Monday — First Time in History of 12 Straight Days of Record Gas Prices.

The Epoch Times:

• Biden Says US Considering Removing Tariffs on China.
• Gen. Milley Warns West Point Graduates of Likelihood of War With Russia, China.

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 unch. on average.

• Asia Ex-Japan Investment Grade CDS Index 127.75 -4.25 basis points. 

• China Sovereign CDS  79.25 -5.0 basis points.
  

• Bloomberg Emerging Markets Currency Index 52.52 -.06%.  
• Bloomberg Global Risk-On/Risk Off Index 4,002.0 -6.0 points.
• Volatility Index(VIX) futures 29.7 +2.0%.
• Euro Stoxx 50 futures n/a.

• S&P 500 futures -.8%.

• NASDAQ 100 futures -1.4%. 

Morning Preview Links

Earnings of Note 
Company/Estimate 

 

Before the Open: 

• (ANF)/.09
• (AZO)/26.06
• (BBY)/1.56
• (FRO)/-.01
• (NTES)/7.03
• (WOOF)/.15
• (RL)/.41
  

After the Close:

• (A)/1.12
• (INTU)/7.58
• (JWN)/-.04
• (TOL)/1.63
• (URBN)/.42
  

Economic Releases

9:45 am EST

• The S&P Global US Manufacturing PMI for May is estimated to fall to 57.7 versus 59.2 in April.
• The S&P Global US Services PMI for May is estimated to fall to 55.2 versus 55.6 in April.

10:00 am EST

• The Richmond Fed Manufacturing Index for May is estimated to fall to 10 versus 14 in April.
• New Home Sales for April is estimated to fall to 750K versus 763K in March.
  

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Fed's Powell speaking, 2Y T-Note auction, Eurozone PMI report, weekly US retail sales reports, RBC Datacenter/Cloud/Broadband Infrastructure Conference, Wolfe Transport/Industrials Conference, (AVID) investor day and the (NVS) investor event could also impact global trading today.

US Equity Market Hours

• 9:30 am - 4:00 pm EST
  

BOTTOM LINE: Asian indices are modestly lower, weighed down by consumer and technology 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.