Wednesday Watch

Evening Headlines

Bloomberg:

• US Official Sees Curbs on Exports to Russia as Template for China.
• China Warns Taiwan Visit by Pelosi Would Have ‘Grave Impact’.  
• Rich Chinese Worth $48 Billion Want to Leave — But Will Xi Let Them?   
• UK Consumers Starting to Doubt Quality of Food at Supermarkets.
  
• Asian Steel Markets Hit by Inflows of Cheap Russian Metal.  
• Roaring Inflation, Weak Currencies to Spur Rate Hikes in Africa.
• SEC’s Gensler Says It’s Unclear If China Will Avoid Delistings.
• Stock Rally Set to Extend to Asia Amid Dollar Drop: Markets Wrap.
• Oil Edges Lower as Traders Assess Stockpiles, Outlook for Dollar.
  
• Retail Investors Pile into Currency Trading as Euro Slides to Parity With Dollar.
  
• Feasting Shorts Are Last Stock Faction to Be Dealt Comeuppance.
  
• Novogratz Says He Was ‘Darn Wrong’ on Crypto Leverage Risks.  
• Chipotle Workers File Complaint With NLRB After Store Closure.  
• The Big Tech Apples May Have Further to Fall.

Wall Street Journal:     

• Europe Fears a Long, Cold Winter if Russia Ends Supply of Natural Gas.
• One Hedge Fund Is Up 223% After Betting Against Tech.
• Cathie Wood’s ARK to Close Transparency ETF.

Fox News:

• Prince Harry's UN speech condemning America gets ripped to shreds.

CNBC.com:

• Russia is laying the groundwork to annex Ukrainian territory, White House says.
• Netflix loses fewer subscribers than expected and says cheaper ad tier is coming in early 2023.
• Google and Chevron invest in nuclear fusion startup that’s raised $1.2 billion.
• Google will once again test augmented reality glasses in public. 
  

MarketWatch:                 

• The typical S&P 500 CEO made 324 times more than the median-paid worker last year: report.

Zero Hedge:

• Stagflation stagnation? The latest on the twin evils of inflation & recession.
• Place Where Biden Face-Planted Off Bike Is Named 'Brandon Falls' On Google Maps.
• Mexican President Intervenes With Biden, Renews Asylum Offer For Julian Assange.
• Stellantis Ends Its Manufacturing Joint Venture In China.
• 81-Year-Old Fauci Responds To Reports On Him Leaving, Says He's "Not Going To Retire".
• NBC Journalist Laments: "People Don't Trust Us, They Don't Believe Us".
• Wave Of Profit Downgrades May Have Just Kicked Off.
• China Furious Over Reports Pelosi To Visit Taiwan In August.
• Seven Major Effects Of COVID-19 On Parents, Students, & Schools.
• GoFundMe For Suspected Gunman's Family Hits $20,000.
• US stocks notched firm gains amid Nord Stream optimism and a weaker buck - Newsquawk Asia-Pac Market Open.
• China's Fuel Exports Plunge.
• Former NYC Mayor Bill De Blasio Quits NY Congressional Race.
• One Year Ago, Biden Predicted Inflation Would Be 'Temporary'.
• Netflix Surges After Smaller Than Expected Subscriber Loss, Warns Soaring Dollar Is Hammering Results.
• WTI Leaks Lower After Crude, Gasoline Builds.
• NS1 optimism and ECB pivot helps the Dollar weaken and cyclicals prosper - Newsquawk US Market Wrap.
• Treasuries Trapped In 3% World Show Oodles Of Confidence In Fed.
• Biggest Wall Street Bear Turns Bullish After "Record Pessimism", "Full Investor Capitulation".
• Bitcoin, Brent, & Big-Tech Bid As Putin-Promises Trumped Piss-Poor Permits.

Newsmax:

• IMF Says Russian Gas Embargo Could Hit Central Europe Hard.
  
• Putin Visits Iran, Shoring Up Ties With Tehran. 
  
• Sen. Lankford: China Buying US Assets to 'Spy.'

TheGatewayPundit.com: 

• DEVELOPING: Washington State GOP Activists Organize Ballot Drop Box Surveillance Teams – DEMOCRATS SHRIEK IN HORROR at Thought of Traffickers Getting Caught on Video.
• Karine Jean-Pierre Says Governors Bussing Illegal Aliens to DC is “Shameful” Behavior (VIDEO).
• Maricopa County GOP Chair Refuses Requests To Appoint Signature Challengers on Early Ballots.
• Clown Show: Democrat Rep. Ilhan Omar Also Pretends to be Arrested in Front of Supreme Court (VIDEO).
• REPORT: Biden May Declare ‘National Climate Emergency’ THIS WEEK.
• Senator Warns: Fuel Prices Mean Farmers Can’t Harvest Crops — Analysts Say “Food Shortages” Are Coming.

 The Epoch Times:

• Nearly 60 Percent of Americans Want TikTok Removed From App Stores: Poll.
• Chinese Corn Mill Near US Air Force Base May Have ‘National Security Implications’: Senators.

Twitter: 

• @DiscloseTV - JUST IN - WEF to deepen cooperation with China on "addressing climate change, promoting industrial transformation and social equity," said Klaus Schwab to Chinese Premier Li Keqiang today.
• @PBSAmerica - Join @NovaPBS as they takes a tasty look at insect foods that could benefit our health and our warming planet. "Edible Insects" premieres tonight at 7.35pm.
  

 OpenVAERS:

• VAERS US COVID Vaccine Adverse Event Reports. 842,573 Reports(+3,276 from prior week) Through July 8th, 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 +.75% to +1.25% on average.

• Asia Ex-Japan Investment Grade CDS Index 170.75 +1.5 basis points. 

• China Sovereign CDS 84.25 -2.5 basis points.
  

• Bloomberg Emerging Markets Currency Index 49.27 +.03%.  
• Bloomberg Global Risk-On/Risk Off Index 4,683.0 +133.0 points.
• Volatility Index(VIX) futures 26.9 -.7%.
• Euro Stoxx 50 futures +.50%.

• S&P 500 futures +.34%.

• NASDAQ 100 futures +.46%. 

Morning Preview Links

Earnings of Note 
Company/Estimate 

 

Before the Open: 

• (ABT)/1.14
• (ASML)/3.53
• (BMI)/.52
• (BKR)/.22
• (BIIB)/4.14
• (CMA)/1.77
• (FHN)/.35
• (LAD)/12.14
• (MTB)/3.18
• (NDAQ)/1.92
• (NTRS)/1.93
  

After the Close:

• (AA)/2.63
• (CCK)/2.03
• (CCI)/1.91
• (CSX)/.47
• (DFS)/3.77
• (KMI)/.26
• (KNX)/1.35
• (LSTR)/3.27
• (LVS)/-.28
• (SLG)/1.70
• (STLD)/6.26
• (TSLA)/1.80
• (UAL)/1.88
• (VMI)/3.35
  

Economic Releases

10:00 am EST:

• Existing Home Sales for June is estimated to fall to 5.36M versus 5.41M in May.
  

10:30 am EST

• Bloomberg consensus estimates call for a weekly crude oil inventory gain of +748,000 barrels versus a +3,254,000 barrel gain the prior week. Gasoline supplies are estimated to rise by +961,290 barrels versus a +5,825,000 barrel gain the prior week. Distillate inventories are estimated to rise by +1,687,710 barrels versus a +2,668,000 barrel gain the prior week. Refinery Utilization is estimated to rise by +.34% versus a +.4% gain prior.

Upcoming Splits

• (GME) 4-for-1
  

Other Potential Market Movers

• The UK CPI report, 20Y T-Bond auction and the weekly MBA Mortgage Applications 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 modestly higher and to weaken into the afternoon, finishing mixed. The Portfolio is 50% net long heading into the day.

Stocks Closing Substantially Higher on US Economic Soft Landing Hopes, Short-Covering, Less European/Emerging Markets/US High-Yield Debt Angst, Consumer Discretionary/Transport Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Higher
  

• Sector Performance:  Almost Every Sector Rising
  

• Volume:  Below Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 24.7 -2.6%
• DJIA Intraday % Swing 2.0% +169.5%
  
• Bloomberg Global Risk On/Risk Off Index 4,569.0 +211.0 points

• Euro/Yen Carry Return Index 145.33 +.89%

• Emerging Markets Currency Volatility(VXY) 12.5 -.7%

• CBOE S&P 500 Implied Correlation Index 45.3 -.4% 

• ISE Sentiment Index 89.0 +15.0 points
  

• Total Put/Call .98 -6.8%

• NYSE Arms .52 -32.5%

Credit Investor Angst:

• North American Investment Grade CDS Index 86.46 -5.2%
  

• US Energy High-Yield OAS 505.65 -1.9%
• Bloomberg TRACE # Distressed Bonds Traded 536.0 +9.0
  

• European Financial Sector CDS Index 112.53 -6.0%

• Italian/German 10Y Yld Spread 205.0 basis points -2.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 172.59 +1.94%
  

• Emerging Market CDS Index 360.29 -4.4%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 26.3 -.30%
  
• Ukraine Sovereign Debt Credit Default Swap 12,203.90 +23.7%
  

• 2-Year Swap Spread 24.75 basis points +.5 basis point
  

• TED Spread 30.75 basis points -14.25 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -19.75 basis points +.25 basis point
  
• MBS  5/10 Treasury Spread  137.0 -2.0 basis points
  
• iShares CMBS ETF 48.04 +.10%
• Avg. Auto ABS OAS .96 -4.0 basis points
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 49.24 +.41%
• 3-Month T-Bill Yield 2.44% +13.0 basis points
  

• Yield Curve -22.25 basis points (2s/10s) -2.25 basis points
  

• China Iron Ore Spot 98.4 USD/Metric Tonne +1.1%

• Citi US Economic Surprise Index -52.0 +1.7 points

• Citi Eurozone Economic Surprise Index -55.30 +2.7 points
  

• Citi Emerging Markets Economic Surprise Index 19.6 +1.7 points

• 10-Year TIPS Spread 2.40 +2.0 basis points
  
• Highest target rate probability for September 21st FOMC meeting: 51.3%(+.5 percentage point) chance of 3.0%-3.25%. Highest target rate probability for November 2nd meeting: 42.2%(-1.2 percentage points) chance of 3.25%-3.5%.
  

US Covid-19:

• 273 new infections/100K people(last 7 days total). 15.7%(+.0 percentage point) of 1/14/22 peak(1,740) +0/100K people from prior report.
  
• New Covid-19 patient hospital admissions per 100K population -71.7%(-2.0 percentage points) from peak 7-day avg. of 1/9/22 - 1/15/22
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +423 open in Japan 
• China A50 Futures: Indicating +15 open in China

• DAX Futures: Indicating -11 open in Germany

Portfolio:

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

• Disclosed Trades:  Covered some of my (IWM)/(QQQ) hedges and some emerging market shorts, then added some back
  

• Market Exposure:  Moved to 50% Net Long
  

Bear Radar

Style Underperformer:

• Large-Cap Growth +2.5%

Sector Underperformers:

• 1) Computer Services -.9% 2) Electric Vehicles +.2% 3) Pharma +.5%

Stocks Falling on Unusual Volume: 

• ALLY, ELS, IBM, RYTM, SBNY, SQSP, FSLY and RARE
  

Stocks With Unusual Put Option Activity:

• 1) FEZ 2) IBM 3) NFLX 4) CSX 5) GOOG
  

Stocks With Most Negative News Mentions:

• 1) CRC 2) ALLY 3) SBNY 4) IBM 5) FSLY
  

Charts:

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

Bull Radar

Style Outperformer:

• Mid-Cap Growth +1.1%

Sector Outperformers:

• 1) Gaming +4.1% 2) Semis +4.0% 3) Disk Drives +3.8%

Stocks Rising on Unusual Volume:

• MARA, SI, APLS, MRTN, VERV, NCR, CNK, SHO, NGM, ISEE, CLAR and RYN
  

Stocks With Unusual Call Option Activity:

• 1) CLAR 2) SIRI 3) VSTO 4) AMT 5) IBM

Stocks With Most Positive News Mentions:

• 1) SIDU 2) MRTN 3) SI 4) NCR 5) MLI
  

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running -17.7% Below 100-Day Average 
• 0 Sectors Declining, 11 Sectors Rising
• 82.5% of Issues Advancing, 14.2% Declining
• 10 New 52-Week Highs, 15 New Lows
• 16.8% of Issues Above 200-day Moving Average
• Average 14-Day RSI 41.9% 
• Bloomberg Global Risk-On/Risk-Off Index 4,525.0 +156.0 points
• Russell 1000: Growth/Value 15,417.0 -.05%
  
• Vix 24.4 -3.4%
• Total Put/Call 1.01 -1.9%
• TRIN/Arms .78 +1.3%

Tuesday Watch

Evening Headlines

Bloomberg:

• Food May Be the Ultimate Weapon in the 21st Century.  
• China’s Cyber Isolationism Has Severe Security Implications.  
• From Property to Lockdowns, What to Watch in China’s Second Half.
• Biden Wants Chipmakers Getting US Aid to Curb China Investments.
• BOJ’s Kuroda Determined to Maintain Stimulus as World Tightens.
• Oil Holds Above $100 as Traders Weigh Tight Market, OPEC+ Plans.
• Apple Joins Fellow Tech Giants in Putting a Lid on Hiring.  
• Earlier: US Layoffs, Hiring Freezes Are Tip of Labor Market Slowdown.
  
• Goldman Sachs Plans to Slow Hiring, Bring Back Annual Performance Reviews.  
• Starbucks CEO Says More Stores to Close for Security Reasons.  
• Amazon Warehouse Sites Probed for Potential Workplace Hazards.  
• Democrats’ Tax-Hike Plans Are Imperiled — With or Without Joe Manchin.  
• The Next Generation of Abortion Doctors Train in California.  
• Morgan Stanley, Goldman Say Stocks Have Yet to Find a Bottom.
  
• How the Brazilian Butt Lift Became One of the Deadliest Cosmetic Surgeries.  
• Scaramucci Halts Withdrawals in a Fund After Stock, Crypto Swoon.  
• US Pulls Plug on Fertilizer Trade War as Food Inflation Bites.

Wall Street Journal:     

• Biden’s Saudi Arabia Visit Was Worse Than an Embarrassment. The president’s 24 hours in Jeddah were dominated by photos of his fist bump with Mohammed bin Salman. Things went downhill from there.
• Volatile Markets Boost Goldman’s Trading Revenue.
• Why Air Travel Is Broken.
• Europe Fears Economic Fallout if Russian Gas Outage Drags On.
• Diverging Jobs Data Raise Questions About Labor Market Health.

Fox News:

• Winsome Sears to Biden: 'Stop gaslighting' Americans on gas prices, 'begging' Saudis for oil.
• Condition of economy 'terrible' as inflation hits fresh 40-year high: Investment expert.
• MSNBC host wonders out loud if she’s doing ‘more harm than good’.
• Major city sees disturbing sex crime trend as police hunt serial assailants.

CNBC.com:

• Homebuilder sentiment takes historic plunge in July as buyers pull back.
• IBM shares slide after company trims cash forecast.
• Harris, Newsom engage with donors as possible 2024 bids loom if Biden doesn’t run.
• Goldman Sachs is looking at reinstating year-end job cuts as economic outlook dims. 
  

MarketWatch:               

• Why this ugly S&P 500 streak cautions against chasing bear-market bounces. 
• The IRS just made it easier for families to pass millions of dollars to their children and others.

Zero Hedge:

• Risk appetite soured with Apple (AAPL) cooling its hiring - Newsquawk Asia-Pac Market Open.
• San Francisco's New DA Goes On Firing Spree After Voters Recall Soros-Backed Predecessor. 
• Hong Kong Government To Track Citizens With Next-Level CCP-Type COVID Smartphone App.
• Congress Grants Pentagon $58 Billion More Than Requested: DOD Report.
• US Retailers Boost Security Personnel To Combat Soaring Thefts And Violent Crime.
• June Southwest Border Apprehensions: Record High.
• Solar Panels Subsidized By California Are Winding Up In Landfills, Contaminating Groundwater With Toxic Metals.
• 'Science' - Dem Rep. Says It's Not Only Women That Can Have Babies.
• Twitter Filing Dismisses Musk's "Irrelevant Sideshow" Ahead Of Hearing-By-Zoom After Judge Catches COVID.
• A Humiliated Goldman Sachs Has Quietly Lost $2.6 Billion Investing In Stocks In The Past Four Quarters.
• Natural Immunity From Omicron Strong Against Virus Subvariants: Study.
• Biden's Economic Approval Rating Lower Than Trump's Worst: Poll.
• IBM Slides After Slashing Full Year Cash Flow Forecast.
• Canadian Energy Firm Declares Force Majeure On Keystone Pipeline After Power Outage.
• China Angrily Demands US Cancel 5th Proposed Arms Package To Taiwan.
• Risk assets tumble as AAPL preps for hiring halt - Newsquawk US Market Wrap.
• "We're All Dutch Farmers Now!".
• Gender Activists Urge Anthropologists To Stop Labeling Human Remains 'Male' Or 'Female'.
• China Has Dumped Over $100 Billion Of US Treasuries In The Last 6 Months.
• Brent, Bitcoin, And Bonds Bounce As Rotten Apple Wrecks Tech.

TheGatewayPundit.com:  

• NBC Reporter’s Video of Saudi Gas Station Shows Just How Little You Pay When Your Country Drills.
• MASSIVE PROTESTS in Panama Over Skyrocketing Inflation, Demonstrators Block Roads.
• “Our Country Has a History of Claiming Ownership Over Human Bodies” – Kamala Harris Suggests Being Pro-Life is the Same Thing as Supporting Slavery (VIDEO).
• SICK: Biden’s Transgender Assistant Secretary of Health Dr. Levine Says We Need to “Empower” Children to go On Puberty Blockers (VIDEO).
• Damning Report On Uvalde School Massacre, ‘Nearly 400 Good Guys… They Couldn’t Stop One Bad Guy’.
• John Kerry Says It’s Time to Go Into Overdrive and “Accelerate” the Transition to Green Energy (VIDEO).
• EXCLUSIVE: How China’s Military Colonized U.S. Research Programs and Siphoned Off U.S. Taxpayer Funding.

The Epoch Times:  

• Chinese Military Using US Semiconductors to Train Combat AI: Report.
• Hunter and Joe Biden Often Met After Son Traveled Abroad: Report.

OpenVAERS:

• VAERS US COVID Vaccine Adverse Event Reports. 842,573 Reports(+3,276 from prior week) Through July 8th, 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 169.25 +6.0 basis points. 

• China Sovereign CDS 86.75 +1.75 basis points.
  

• Bloomberg Emerging Markets Currency Index 49.06 +.05%.  
• Bloomberg Global Risk-On/Risk Off Index 4,434.0 +76.0 points.
• Volatility Index(VIX) futures 27.3 -.54%.
• Euro Stoxx 50 futures -.63%.

• S&P 500 futures +.18%.

• NASDAQ 100 futures +.21%. 

Morning Preview Links

Earnings of Note 
Company/Estimate 

 

Before the Open: 

• (ALLY)/1.87
• (HAL)/.45
• (HAS)/.94
• (HTLD)/.25
• (JNJ)/2.55
• (LMT)/4.67
• (MAN)/2.32
• (NVS)/1.50
• (TFC)/1.15

After the Close:

• (CALM)/1.96
• (IBKR)/.90
• (JBHT)/2.35
• (NFLX)/2.95
• (OMC)/1.56
• (PNFP)/1.67
  

Economic Releases

8:30 am EST:

• Housing Starts for June is estimated to rise to 1580K versus 1549K in May.
• Building Permits for June is estimated to fall to 1650K versus 1695K in May.
  

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Fed's Brainard speaking, RBA Minutes and the weekly US retail sales reports 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 healthcare 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 25% net long heading into the day.