Bear Radar

Style Underperformer:

• Small-Cap Growth -2.8%

Sector Underperformers:

• 1) Alt Energy -5.4% 2) Cybersecurity -5.0% 3) Semis -4.8%

Stocks Falling on Unusual Volume: 

• SJT, PSTG, PLNT, NSTG, XPER, NVRO, PCOR, CWAN, DOMO, MFA, CRC, BROS, PDCO, AVID, SNPS, PATH, CRDO, ALB, AVAV, WOLF, HRL, NFE, ESTC, MRVL, ATRC, MXL, POWI, TWLO, CRWD, ACLS, TRUP, SITM, CELH, ASTS, SNOW, NEOG, SMAR, PLAB, AEHR, SMG, SLAB, CHPT, AMRK, DDOG, MPWR, CIEN, AMBA, NCNO, PD, CLFD, NVDA, SGRY, VICR, S, BASE, VEEV, LE, GTLB, IOT, AI, MDB, SMTC and OKTA
  

Stocks With Unusual Put Option Activity:

• 1) OKTA 2) ARCC 3) IJR 4) MDB 5) EFA
  

Stocks With Most Negative News Mentions:

• 1) AI 2) NVDA 3) MSTR 4) U 5) BBBY
  

Charts:

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

Bull Radar

Style Outperformer:

• Large-Cap Value -.8%

Sector Outperformers:

• 1) Utilities +1.0% 2) Pharma +.5% 3) Insurance -.1%

Stocks Rising on Unusual Volume:

• FMTX, NTNX, AGIO, CLAR, FIVE and DXC
  

Stocks With Unusual Call Option Activity:

• 1) OKTA 2) MPC 3) MDLZ 4) BSM 5) MPW

Stocks With Most Positive News Mentions:

• 1) NTNX 2) TWIN 3) AGIO 4) BKE 5) BF/B
  

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 
• 11 Sectors Declining, 0 Sectors Rising
• 12.7% of Issues Advancing, 84.0% Declining
• 5 New 52-Week Highs, 219 New Lows
• 27.7% of Issues Above 200-day Moving Average
• Average 14-Day RSI 39.7% 
• Bloomberg Global Risk-On/Risk-Off Index 39.9 -1.0%
  
• Russell 1000: Growth/Value 15,497.6 -.55%
  
• Vix 27.4 +5.7%
• Total Put/Call 1.08 -.9%
• TRIN/Arms 1.27 +39.6% 

Thursday Watch

Evening Headlines

Bloomberg:     

• UN Report Accuses China of ‘Serious’ Rights Abuses in Xinjiang.  
• UK Households Facing Biggest Living Standards Shock in a Century.
• G-7 to Discuss Cap on Price of Russian Oil in Bid to Ease Prices.  
• Yen Falls to Fresh 24-Year Low as US-Japan Policy Gap Weighs.  
• Korea Posts Record Trade Deficit on Inflation, Weaker Won.
  
• Six Problems That Will Plague Australia’s Big Economic Summit.
  
• China’s Love of Local EVs Is Bad News for Foreign Carmakers.
• US Futures, Asia Stocks Fall; Yen Hits 24-Year Low: Markets Wrap.  
• Oil Extends Longest Losing Streak Since 2020 on Slowdown Concern.
• Jeremy Grantham Warns ‘Super Bubble’ in Stocks Has Yet to Burst.  
• The Market Is Underestimating Fed Risk Even After Rout, Bank of America Says.
  
• Bulls Starved in August During Worst Cross-Asset Selloff Since ‘81.
  
• Stock Indexes Face Fresh Low This Year, Morgan Stanley's Wilson Says.
• Treasury Two-Year Yield Tops 3.5% for First Time Since 2007.  
• Fed’s Logan Says Restoring Price Stability Is Number One Task.  
• Outspoken China Analyst to Join Hedge Fund as Chief Economist.

Wall Street Journal:  

• S&P 500 Drops 4.2% in August; Fed Is in Focus.
• Inflation Tops 9% in Eurozone.
• Starbucks Is Rethinking Almost Everything, Including How to Make Frappuccinos.
• U.S., Allies Prepare to Outline Plan to Limit Price of Russian Oil.
• U.N. Human-Rights Agency Issues Report on Xinjiang Over China’s Protest.
• Ukrainian Soldiers Say They Are Advancing in the South, but at a Cost.
• No Fun in the California Sun. The state says don’t charge the EVs it will soon force you to buy.
• Biden Misidentifies the Crime Culprit. President Biden does political damage control amid rising urban disorder.

Fox News:

• California pleads for drivers to stop charging cars, save energy right after banning gas vehicles.
• Youngkin vows to fight 'ludicrous' law tying state to California ban on gas-powered cars.
• DeSantis announces lawsuit against Biden administration.
• Trump team responds to DOJ argument against 'special master'.

CNBC.com:

• Anticipating pain ahead: Sifting through the short-term drops.
• Walmart-owned Sam’s Club raises annual membership fee for the first time in nine years.
• Fed’s Mester sees benchmark rate above 4% and no cuts through 2023.
• Bed Bath & Beyond announces store closures, layoffs and new financing to fix struggling business.
• Bitcoin falls 13% in August, and how the Merge will cut Ethereum’s energy use: CNBC Crypto World.
• Stocks making the biggest moves after hours: Okta, Nutanix, Five Below and more

Zero Hedge:

• Just Days After Phasing Out New Gas Cars, California Says "Avoid Charging EVs" Amid Grid Emergency.
• "How In The Name Of God": Shocked Europeans Post Astronomical Energy Bills As 'Terrifying Winter' Approaches.
• Western Allies Led By UK's Johnson Sabotaged Tentative Ukraine-Russia Peace Deal... In April
• White House Alarmed India Joins Russian War Games Simultaneous To Participating In US Exercises.
• Oil Market "Completely Broken" Says World's Largest Commodity Hedge Fund Trader
• Michael Saylor & MicroStrategy Sued By D.C. AG For Tax Fraud.
• "Worse Than Couple Years Ago:" Food Bank Demand Spikes As Inflation Wrecks Households.
• NVDA Tumbles After Biden Blocks Chip Exports To China.
• Never catch a falling knife?
• Russia To Hold 'Limited' Ukraine Annexation Vote, Including For Region Of Zaporizhzhia Nuclear Plant.
• Treasuries' Worsening Liquidity Points To Broader Market Turmoil.
• US stocks extended on losses at month-end - Newsquawk Asia-Pac Market Open.
• Era Of Fake Money Is Gone: Egon von Greyerz Warns "No One Can Escape What's Coming".
• California Will Now Punish Doctors For Refusing To Comply With The Establishment COVID Narrative.
• "Prepare For An Epic Finale" - Jeremy Grantham Warns Stock Market 'Super Bubble' Has Yet To Burst.
• Stocks and bonds sold into month-end; hot EZ inflation boosts 75bps calls from ECB - Newsquawk US Market Wrap.
• August Hawk-nado Hammers Stocks, Bonds, Commodities, & Crypto.

TheGatewayPundit.com: 

• Connecticut Assistant Principal Caught on Undercover Video Admitting to Discriminating Against Catholics Placed on Leave.
• Karine Jean-Pierre Says People Who Voted For Trump Are “an Extreme Threat to Our Democracy, to Our Freedom, to Our Rights” (VIDEO). 
  
• HERE WE GO: NSA Deploys ‘Election Security Group’ to Combat Foreign Cyberhackers and ‘Protect’ Midterm Elections.
• Blue Wave Crashing? New Poll Shows Biden Approval Back in the 30s; Abortion a Low Priority Even for Democrats.
• BIG TECH RAMPS UP PURGE OF THE TRUTH: Google Just Removed World Net Daily, The First Online Conservative News Site, From Its Search Engine — LOOK What Happens When You Click On WND From Google’s Search Engine.
• Fetterman Ducks Debate With Oz, Says Still Recovering From Speech and ‘Auditory Processing’ Health Issues from Stroke.
• Destroying America One Day at a Time: Strategic Oil Reserve at Lowest Level in 40 Years #BidenEffect.
• Give it a Rest: Reformulated Covid-19 Booster Shot Gets “Emergency Authorization” Without Ever Being Tested on Humans.
• California Urges Avoiding Charging Electric Cars to Ward Off Blackouts in Heatwave Because State Loses Solar Power When the Sun Goes Down.
  

The Epoch Times:

• Trump’s China Tariffs Yield $150 Billion.

Twitter: 

• @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 - This is what I've been trying to tell people for years. Idiot conservatives respond to Woke programming with "they should teach kids how to think." Idiots. That's exactly what they're doing. They're teaching them how to think about everything... like Marxists.

 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 -1.75% to -.75% on average.

• Asia Ex-Japan Investment Grade CDS Index 142.75 +5.75 basis points. 

• China Sovereign CDS 74.75 +1.75 basis points.
  

• Bloomberg Emerging Markets Currency Index 48.7 -.07%.  
• Bloomberg Global Risk-On/Risk Off Index 40.6 +.8%. 
• Bloomberg US Financial Conditions Index -.40 +1.0 basis point
  
• Volatility Index(VIX) futures 27.5 +1.8%
• Euro Stoxx 50 futures -.82%.

• S&P 500 futures -.64%.

• NASDAQ 100 futures -1.1%  

Morning Preview Links

Earnings of Note 
Company/Estimate 

 

Before the Open: 

• (FLWS)/-.25
• (CPB)/.56
• (CIEN)/.34
• (GCO)/.26
• (GIII)/.47
• (HRL)/.41
• (OLLI)/.33
• (PDCO)/.38
• (SIG)/2.59
• (TTC)/1.13
• (WB)/.45
  

After the Close:

• (AVGO)/9.55
• (LULU)/1.85
• (OXM)/3.48
• (PD)/-.08
  

Economic Releases

7:30 am EST

• Challenger Job Cuts for Aug.
  

8:30 am EST

• Initial Jobless Claims for last week are estimated to rise to 248K versus 243K the prior week.
• Continuing Claims are estimated to rise to 1438K versus 1415K prior.
  

10:00 am EST

• Construction Spending MoM for July is estimated to fall -.3% versus a -1.1% decline in June.
• ISM Manufacturing for Aug. is estimated to fall to 51.9 versus 52.8 in July.
• ISM Prices Paid for Aug. is estimated to fall to 55.3 versus 60.0 in June.
  

Afternoon:

• Wards Total Vehicle Sales for Aug. is estimated to fall to 13.3M versus 13.35M in July.

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The China Manufacturing PMI report and the weekly EIA natural gas inventory data 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 modestly lower and to maintain losses into the afternoon. The Portfolio is 25% net long heading into the day.

Stocks Reversing Lower into Final Hour on US Policy-Induced Stagflation Fears, Earnings Outlook Worries, Rising European/Emerging Markets/US High-Yield Debt Angst, Consumer Discretionary/Tech Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Lower Lower
  

• Sector Performance: Most Sectors Declining
  

• Volume:  Below Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 26.0 -.8%
• DJIA Intraday % Swing 1.16% -33.5%
  
• Bloomberg Global Risk On/Risk Off Index 40.1 +1.1%

• Euro/Yen Carry Return Index 143.59 +.33%

• Emerging Markets Currency Volatility(VXY) 11.5 -1.8%

• CBOE S&P 500 Implied Correlation Index 45.7 +.2% 

• ISE Sentiment Index 103.0 +17.0 points
  

• Total Put/Call 1.07 -10.8%

• NYSE Arms .88 -8.3%

Credit Investor Angst:

• North American Investment Grade CDS Index 91.9 +1.3%
  

• US Energy High-Yield OAS 426.0 +1.0%
• Bloomberg TRACE # Distressed Bonds Traded 364.0 +8.0
  

• European Financial Sector CDS Index 130.27 +2.8%

• Italian/German 10Y Yld Spread 235.0 basis points +3.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 139.38 +2.6%
  

• Emerging Market CDS Index 330.12 +.9%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 26.75 +.94%

• 2-Year Swap Spread 36.75 basis points +.75 basis point
  

• TED Spread 18.0 basis points +.75 basis point
  

• 3-Month EUR/USD Cross-Currency Basis Swap -14.5 basis points -.75 basis point
  
• MBS  5/10 Treasury Spread  141.0 +1.0 basis point
  
• iShares CMBS ETF 47.56 +.11%
• Avg. Auto ABS OAS .79 -1.0 basis point
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 48.72 -.14%
• 3-Month T-Bill Yield 2.91% +2.0 basis points
  

• Yield Curve -32.0 basis points (2s/10s) +2.5 basis points
  

• China Iron Ore Spot 100.6 USD/Metric Tonne +1.3%
• Dutch TTF Nat Gas(European benchmark) 240.0 euros/megawatt-hour -9.6%

• Citi US Economic Surprise Index -27.6 -10.8 points

• Citi Eurozone Economic Surprise Index -25.4 -9.1 points
  

• Citi Emerging Markets Economic Surprise Index 8.8 -10.6 points
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 237.06 +.04:  Growth Rate +16.0% +.1 percentage point, P/E 16.8 unch.
  
• Bloomberg US Financial Conditions Index -.40 +4.0 basis points
  
• US Atlanta Fed GDPNow Forecast +1.57% unch.
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +4.62% unch.: CPI YoY +8.24% -4.0 basis points
  
• 10-Year TIPS Spread 2.51 -4.0 basis points
  
• Highest target rate probability for November 2nd FOMC meeting: 64.8%(-2.8 percentage points) chance of 3.5%-3.75%. Highest target rate probability for December 14th meeting: 61.8%(-2.7 percentage points) chance of 3.75%-4.0%.
  

US Covid-19:

• 175 new infections/100K people(last 7 days total). 10.0%(-.5 percentage point) of 1/14/22 peak(1,740) -7/100K people from prior report.
  
• New Covid-19 patient hospital admissions per 100K population -75.5%(+.1 percentage point) from peak 7-day avg. of 1/9/22 - 1/15/22
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -262 open in Japan 
• China A50 Futures: Indicating -103 open in China

• DAX Futures: Indicating -33 open in Germany

Portfolio:

• Slightly Higher:  On gains in my medical sector longs and index hedges
  

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

• Market Exposure:  Moved to 25% Net Long
  

Bear Radar

Style Underperformer:

• Mid-Cap Growth -.4%

Sector Underperformers:

• 1) Semis -1.4% 2) Computer Hardware -1.2% 3) Retail -1.1%

Stocks Falling on Unusual Volume: 

• LEVI, FWONK, BBY, ATI, AOSL, SYNA, ENVX, WSM, CIEN, OLLI, DOMO, FAZE, MOS, UPLD, FCF, CLAR, XMTR, CRWD, HPQ, BIG, CHWY, PVH and AMBA
  

Stocks With Unusual Put Option Activity:

• 1) NTNX 2) TIP 3) SNAP 4) DD 5) MDB
  

Stocks With Most Negative News Mentions:

• 1) AZRE 2) AMBA 3) GME 4) PVH 5) NBEV
  

Charts:

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