Bull Radar

Style Outperformer:

• Large-Cap Value -.2%

Sector Outperformers:

• 1) Oil Service +.7% 2) Alt Energy +.6% 3) Gambling +.5%

Stocks Rising on Unusual Volume:

• CHPT, SNAP, CGEM, FSLR and LXU
  

Stocks With Unusual Call Option Activity:

• 1) NTNX 2) AVCT 3) AMBA 4) XOP 5) EW

Stocks With Most Positive News Mentions:

• 1) NETI 2) BNED 3) MRTX 4) ALT 5) PINS
  

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running -6.0% Below 100-Day Average 
• 8 Sectors Declining, 3 Sectors Rising
• 40.0% of Issues Advancing, 54.9% Declining
• 6 New 52-Week Highs, 114 New Lows
• 30.5% of Issues Above 200-day Moving Average
• Average 14-Day RSI 42.1% 
• Bloomberg Global Risk-On/Risk-Off Index 40.4 +1.6%
  
• Russell 1000: Growth/Value 15,564.5 -.27%
  
• Vix 25.7 -2.0%
• Total Put/Call 1.12 -6.7%
• TRIN/Arms 1.03 +7.3% 

Wednesday Watch

Evening Headlines

Bloomberg:      

• Inflation in UK Shops Climbs to Highest Rate on Record.  
• China Slowdown Means Contrasting Fortunes for Asia’s Exporters.  
• Xi’s Tech Crackdown Fuels Another Crisis: Out-of-Work Youth.  
  
• China Arrests Hundreds in Nation's Biggest-Ever Bank Fraud Probe.
  
• Canada’s Rail Upsets May Stall Much-Needed Grain Shipments.
• Stocks in Asia Set for More Pressure From Fed Path: Markets Wrap.  
• Oil Slumps in Low-Volume Trading After Iraq Calms Supply Nerves.
• Fed Gets New Path to Go Big as Job Openings, Confidence Surprise.
• Wall Street West Is Booming in Aspen With New Crop of Elite Residents.  
• Apple’s Chief Privacy Officer Set to Leave Company for Law Firm.  
• Fed Officials Renew Rate-Hike Theme While Staying Vague on Size.
  
• Goldman and Morgan Stanley Ease Covid Rules, Clearing Path to Desks.   
• Chewy Stock Sinks on Cut to Sales Outlook, Slowdown in Customer Growth.
  
• Homebuilders’ Rally Fizzles as Higher Rates Are Here to Stay.  
• Bitcoin Falls Below $20,000 as Hawkish Fed Continues to Weigh on Riskier Assets.   
• There’s a New Recession Canary in the Coal Mine, Morgan Stanley Says.

Wall Street Journal:  

• How Two Mexican Drug Cartels Came to Dominate America’s Fentanyl Supply.
• Mikhail Gorbachev, Reformer of Soviet Union, Dies at 91.
• Fast-Food Operators Mobilize Against California Wage Bill.
• California Passes Bill Requiring Social-Media Companies to Consider Children’s Health.
• California Pols Aren’t Just Coming for Your Burgers. Reasonably priced menus statewide are now at risk.
• Campus Wokeness Harms America Around the World. Promoting liberal values at home and abroad was long central to higher education’s mission.
• HP Warns of Slowing Business Spending as PC Sales Sag.
• Some GOP States Push Back Against ESG Investing.
• Best Buy Sales Drop as Electronics Spending Slows.

Fox News:

• FBI 'unraveling' after reportedly shielding Hunter Biden from criminal probe, prosecutor claims.
• Grassley, Johnson call for Facebook to turn over communications with FBI over Hunter Biden story.

CNBC.com:

• Fed’s Williams pushes back on market expectations of a rate cut next year.
• Snap will lay off 20% of staff, report says.
• Goldman Sachs to lift vaccination, Covid-19 requirements in most offices next month.
• Coinbase, FTX, Binance get inquiries as Congress looks to crack down on $1 billion crypto fraud.
• Stocks making the biggest moves after hours: Chewy, HP, CrowdStrike and more.
• Bitcoin sinks, the FBI’s DeFi warning, and what’s next for bitcoin’s biggest fans: CNBC Crypto World.

MarketWatch:       

• Economist predicts a ‘whopper’ of recession in 2023 — and that’s not necessarily due to higher interest rates.
• HP revenue comes up short because of a soft PC market, sending stock down.
• Warren Buffett’s company trims its stake in Chinese EV maker BYD.
  
• Boeing, Honeywell stocks drop after Army grounds Chinook helicopters.  
• Chip stocks could plunge another 25% as ‘we are entering the worst semiconductor downturn in a decade,’ analyst says.  
• 20 dividend stocks with high yields that are expected to raise payouts the most through 2024.

Zero Hedge:

• 10 Facts Electric Vehicle Advocates Don't Want You To Know.
• China Is Aggressively Reselling Russian Gas To Europe. 
• China Threatens To Destroy Elon Musk's Starlink.
• Used-Car Market Cools As Prices Plunge To One Year Low.
• Pennsylvania Abruptly Changes Voter Registration Form, Combines With Mail-In Ballot Application.
• Dow Theory Reasserts Its Cyclically-Bearish Signal As BofA's "Biggest Support" Level Looms.
• Goldman: Buy This Now, Worry About The Recession Later.
• The Lab-Leak Theory And What We Know About The Cover-Up.
• Biden Preparing $1.1 Billion Arms Sale To Taiwan.
• Progressive Policies Turning Chicago's Magnificent Mile Into Murderous Mile.
• Taiwan Fired "Defensive Shots" At China Drones For First Time.
• US stocks were pressured amid hawkish central bank rhetoric and geopolitical concerns - Newsquawk Asia-Pac Market Open.
• Days After Approving Another $3BN For Ukraine War, US Says No More Money For Free COVID Tests.
• Chinese Nuclear-Capable Bombers To Conduct Regular Patrols Near Taiwan.
• WTI Slips Lower After API Reports Unexpected Crude Build.
• Stocks and bonds sold after hawkish CB speak, strong data, and Taiwan drone shots - Newsquawk US Market Wrap.
• Kyle Bass: China Will Invade Taiwan In The Next 1-2 Years.
• How To Protect Yourselves From The Ministry Of Propaganda.
• Bad 'Good News' Batters Big-Tech, Bitcoin, Black-Gold, & Bonds.

Newsmax:  

• Stung by Bias Charges, AG Bans DOJ Political Appointees From Campaign Event Roles.
• Dershowitz to Newsmax: DOJ Can't Be Trusted to Assess Trump Raid Papers.  
• Herschel Walker: 'Big Contrast' Drives Ga. Senate Race.

TheGatewayPundit.com: 

• Biden Goes Off-Script, Threatens “Right-Wing Americans” in PA Speech: “If You Wanna Fight Against the Country… You Need an F-15, Something More Than a Gun” (VIDEO).
• CRAZY: California’s Outlawing Of Gas-Powered Vehicles Will Apply To Virginia, Too.
• Confirmed: New Study Reveals Disposable Face Masks Contain Four Times the Acceptable Carcinogen Exposure Levels.
• HUGE! Computer Expert Jeff Lenberg: “The Biggest Smoking Gun That Exists Anywhere In All Of This [Elections]”.
•  Never Forget: Charlie Crist’s Running Mate Karla Hernandez Mats Called LatinX Communitites “Racist and” Full of “White Supremacy”.
• Man Freed by Bail Fund Supported by Kamala Harris Charged with Murder.
• Rio Grande Valley Border Patrol Agents Apprehend 494 Migrants, Including 130 Unaccompanied Children, in Three Large Groups.
• Another One: Poultry Processing Plant Catches Fire in Montebello, California (VIDEO).
• Proud Boy Infuriates Regime By Still Insisting Election Was Stolen — Sentenced to 4.5 Years in Prison for Smashing a Sign on Jan. 6… And Resisting Narrative.
  

The Epoch Times:

• Kyle Bass: Pull Your Money Out of China.

Twitter: 

• @WallStreetSilv - Lines to the food bank in Italy’s richest city Milan are getting very long… Food price inflation is pushing families to the edge. (video)
• @PeterDClack - The US has 276 million motor vehicles, the UK 31 million. Electrifying all US vehicles alone would need 18 times current global production of cobalt, nine times the neodymium, three quarters of lithium & half the world's copper & rare earths. China dominates all these markets. 
• @endless_frank - I don’t think most Americans realize how dire the situation is in Europe. If your utility bill went from $250/month to $2500, discretionary spending would get obliterated. The EU makes up 25% of $SPX earnings. Corporate earnings will fall off a cliff as the weather cools.

GETTR:

• @ConceptualJames - ESG is a death cult. Coming to a country near you. Arguably the most important thing I've recorded yet. We have to understand and confront SEL. We must protect our children from it.

 OpenVAERS:

• VAERS US COVID Vaccine Adverse Event Reports. 859,590 Reports(+2,247 from prior week) Through August 19th, 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 -1.0% to -.5% on average.

• Asia Ex-Japan Investment Grade CDS Index 137.0 +1.0 basis point. 

• China Sovereign CDS 73.0 +1.0 basis point.
  

• Bloomberg Emerging Markets Currency Index 48.82 +.06%.  
• Bloomberg Global Risk-On/Risk Off Index 40.5 +1.8%. 
• Bloomberg US Financial Conditions Index -.45 -1.0 basis point
  
• Volatility Index(VIX) futures 26.3 -.6%
• Euro Stoxx 50 futures -.2%.

• S&P 500 futures +.06%.

• NASDAQ 100 futures +.16%  

Morning Preview Links

Earnings of Note 
Company/Estimate 

 

Before the Open: 

• (PLAN)/-.07
• (BF/B)/.47
• (DCI)/.84
• (VRA)/.12
  

After the Close:

• (AI)/-.24
• (COO)/3.23
• (FIVE)/.79
• (MDB)/-.28
• (OKTA)/-.30
• (SMTC)/.85
  

Economic Releases

8:15 am EST

• The ADP Employment Change for Aug. is estimated at 300K.
  

9:45 am EST

• The MNI Chicago PMI report for Aug. is estimated to rise to 52.2 versus 52.1 in July.
  

10:30 am EST

• Bloomberg consensus estimates call for a weekly crude oil inventory decline of -1,033,333 barrels versus a -3,282,000 barrel decline the prior week. Gasoline inventories are estimated to fall by -733,330 barrels versus a -27,000 barrel decline the prior week. Distillate inventories are estimated to fall by -450,000 barrels versus a -662,000 barrel decline the prior week. Finally, Refinery Utilization is estimated to fall by -.28% versus a +.3% gain prior.

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Fed's Mester speaking, Fed's Bostic speaking, China Services PMI report, weekly MBA Mortgage Applications report, Deutsche Bank Tech Conference and the (BBBY) investor update could also impact global trading today.

US Equity Market Hours

• 9:30 am - 4:00 pm EST
  

BOTTOM LINE: Asian indices are lower, weighed down 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.

Stocks Falling into Afternoon on US Policy-Induced Stagflation Fears, China Hard-Landing Worries, Technical Selling, Commodity/Gambling Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Lower
  

• Sector Performance: Every Sector Declining
  

• Volume:  Below Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 27.3 +4.0%
• DJIA Intraday % Swing 1.74% +59.4%
  
• Bloomberg Global Risk On/Risk Off Index 39.5 -5.4%

• Euro/Yen Carry Return Index 143.14 +.27%

• Emerging Markets Currency Volatility(VXY) 11.7 -.6%

• CBOE S&P 500 Implied Correlation Index 46.8 +1.9% 

• ISE Sentiment Index 87.0 -8.0 points
  

• Total Put/Call 1.17 -3.3%

• NYSE Arms 1.62 +68.4%

Credit Investor Angst:

• North American Investment Grade CDS Index 91.4 +3.9%
  

• US Energy High-Yield OAS 416.82 +2.7%
• Bloomberg TRACE # Distressed Bonds Traded 356.0 +6.0
  

• European Financial Sector CDS Index 126.68 +5.6%

• Italian/German 10Y Yld Spread 232.0 basis points +2.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 134.28 -2.4%
  

• Emerging Market CDS Index 328.82 +.6%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 26.53 -.54%

• 2-Year Swap Spread 36.0 basis points +1.5 basis points
  

• TED Spread 17.25 basis points -8.0 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -13.75 basis points +.5 basis point
  
• MBS  5/10 Treasury Spread  140.0 +3.0 basis points
  
• iShares CMBS ETF 47.52 -.15%
• Avg. Auto ABS OAS .80 -1.0 basis point
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 48.80 -.04%
• 3-Month T-Bill Yield 2.89% +3.0 basis points
  

• Yield Curve -35.5 basis points (2s/10s) -4.5 basis points
  

• China Iron Ore Spot 98.2 USD/Metric Tonne -3.1%
• Dutch TTF Nat Gas(European benchmark) 253.0 euros/megawatt-hour -7.2%

• Citi US Economic Surprise Index -16.8 +5.5 points

• Citi Eurozone Economic Surprise Index -34.5 -2.2 points
  

• Citi Emerging Markets Economic Surprise Index 19.4 +.1 point
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 237.02 +.09:  Growth Rate +15.9% +.1 percentage point, P/E 16.8 -.3 point
  
• Bloomberg US Financial Conditions Index -.40 -5.0 basis points
  
• US Atlanta Fed GDPNow Forecast +1.57% unch.
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +4.62% unch.: CPI YoY +8.28% unch.
  
• 10-Year TIPS Spread 2.55 -2.0 basis points
  
• Highest target rate probability for November 2nd FOMC meeting: 66.9%(+4.9 percentage points) chance of 3.5%-3.75%. Highest target rate probability for December 14th meeting: 68.4%(+9.3 percentage points) chance of 3.75%-4.0%.
  

US Covid-19:

• 182 new infections/100K people(last 7 days total). 10.5%(unch.) of 1/14/22 peak(1,740) -0/100K people from prior report.
  
• New Covid-19 patient hospital admissions per 100K population -75.6%(+1.6 percentage points) from peak 7-day avg. of 1/9/22 - 1/15/22
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -285 open in Japan 
• China A50 Futures: Indicating -105 open in China

• DAX Futures: Indicating -43 open in Germany

Portfolio:

• Slightly Higher:  On gains in my index hedges and emerging market shorts
  

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

• Market Exposure:  Moved to Market Neutral
  

Bear Radar

Style Underperformer:

• Small-Cap Growth -1.5%

Sector Underperformers:

• 1) Oil Service -4.9% 2) Energy -3.5% 3) Steel -3.3%

Stocks Falling on Unusual Volume: 

• APA, AXSM, CLAR, OXY, MOS, SD, DNOW, EXTR, SJT, INSW, VNOM, VRDN, NFE, GNK, ESTE, PFHC, FCX, CF, LXU, NOG, STLD, STR, AR, HPK, EE, EGLE, RYI, CHK, AR, RRC, LCID, AEHR, BROS, EQT, CYRX, KYMR, ASIX, LPG, BTU, SMR, CRGY, CLDX, BPT, AA, JACK, CRK, CFVI, IPI, VERU and PLAB
  

Stocks With Unusual Put Option Activity:

• 1) AFL 2) BBY 3) WM 4) MMM 5) BIG
  

Stocks With Most Negative News Mentions:

• 1) AZRE 2) KIRK 3) LCID 4) MNSO 5) GME
  

Charts:

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

Bull Radar

Style Outperformer:

• Large-Cap Value -1.1%

Sector Outperformers:

• 1) Banks -.1% 2) Foods -.4% 3) REITs -.4%

Stocks Rising on Unusual Volume:

• FAZE, AVID, BIG and BBY
  

Stocks With Unusual Call Option Activity:

• 1) AVCT 2) NTNX 3) BBY 4) VTI 5) NUGT

Stocks With Most Positive News Mentions:

• 1) AVID 2) FAZE 3) PROC 4) NSSC 5) MMYT
  

Charts:

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