Morning Market Internals

NYSE Composite Index:

• Volume Running -21.1% Below 100-Day Average 
• 8 Sectors Declining, 3 Sectors Rising
• 50.9% of Issues Advancing, 44.8% Declining
• 63 New 52-Week Highs, 16 New Lows
• 54.5%(-.3%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 60.0 -1.0
  
• Bloomberg Global Risk-On/Risk-Off Index 56.6 -.3%
  
• Russell 1000: Growth/Value 14,485.9 +.11%
  
• Vix 19.6 -1.0%
• Total Put/Call .98 +8.9%
• TRIN/Arms 1.46 +52.0%
  

Tuesday Watch

Evening Headlines

Bloomberg:        

• US Confronts China Over Companies’ Ties to Russian War Effort.
• China Slams US on Debt Limit and Accuses Washington of Sabotage.  
• Australian Business Conditions Fall for a Third Straight Month.
• US to Boost Pressure on China to Stop Importing Iran Oil, Envoy Says.   
• ECB Will Stay Course to Return Inflation to 2%, Lagarde Says.
• Asian Equities Rise in Slipstream of US Tech Rally: Markets Wrap.
  
• Oil Steadies as Traders Look to China to Deliver Demand Boost.  
• Texas Oil Industry Paid Record $24.7 Billion in Taxes Last Year.
• Biden May Have to Act Unilaterally to Avoid Default, Khanna Says.  
• Key Takeaways From Musk’s Second Day of Testimony in Fraud Trial.
  
• DOJ Poised to Sue Google Over Digital Ad Market Dominance.  
• Tech’s Ferocious Rally Raises Bar for Earnings as Red Flags Wave.  
• A New Fed Paper Takes on the ‘Vibecession’ of Tumbling Economic Indicators.

Wall Street Journal: 

• Juvenile Crime Surges, Reversing Long Decline.
• White House Doesn’t Commit to Cooperating With GOP Probes of Biden Documents.
• Market Recovery Hinges on Rapid Drop in Inflation.
• Russia Presses Attack in Ukraine’s South.
• Congress Must Halt Big Tech’s Power Grab. Lawmakers don’t have to rewrite the antitrust laws; instead, these three steps could make a difference.
• Spotify to Cut 6% of Staff.

Fox News:

• White House asked point blank if Biden engaged in 'cover-up' as scandal embroils administration.

CNBC.com:

• Crypto exchange Gemini lays off 10% of workforce in its latest round of cuts.

MarketWatch:            

• What is naked short selling of stocks and why has it suddenly become a hot topic?  
• Opinion: ‘The Fed-fueled fantasy bubble has popped.’ Stock investors are about to get a big dose of reality.

Zero Hedge:

• Blank Check? Democrats Want To Totally Eliminate Debt Ceiling With New Bill.
• George Soros Urged Use Of Eastern European Soldiers To "Reduce The Risk Of Body-Bags For NATO Countries" In 'New World Order' Article. 
• Ron Paul Hammers Debt-Ceiling Hysteria & Hypocrisy.
• ZH Geopolitical Week Ahead - Germany's Leopard Tank Dilemma & Warnings Of "Global Catastrophe". 
• Biden Administration Still Pushing For Forced Masking.
• Top FBI 'Russiagate' Official Arrested For Colluding With Russian Oligarch: DOJ.
• California City Gives Up On 100% Renewable Plan.
• FBI's Most Wanted Woman, Known As 'Cryptoqueen' Sends Signal After Five Years Of Hiding.
• "Labor Hoarding": New Theory Emerges To Explain The Lack Of Labor Market Collapse.
• Social Security Will Be Bankrupt By 2033 On Current Trajectory: CBO Report.
• US NatGas Prices Soar After Freeport "Completed Repairs" Of Damaged Terminal, Aims For Partial Restart.
• 2023: Fourth Turning Meets Mass Formation Psychosis.
• US stocks rallied amid continued tech strength heading into a heavy slate of earnings - Newsquawk Asia-Pac Market Open.
• Ken Griffin Overtakes "Greatest Trade Ever" With Record $16 Billion Profit For Clients In 2022.
• "Domestic Terrorism" - Atlanta Mayor Disputes Claims That Anti-Police Riots Weren't Violent.
• IRS Says Tax Filing Season Starts Today: Here’s What To Expect.
• 'Leading Indicators' Roar Recession As Nasdaq Soars To Best Start To Year Since 2001.
• Stocks rally as tech leads ahead of earnings - Newsquawk US Market Wrap.

Newsmax:

• Rep. Comer Calls for Biden's Secret Service Home Visitor Logs

TheGatewayPundit.com:

• North Carolina Police Shoot Unarmed, Disabled White Man Who Had His Hands Up (DISTURBING VIDEO).
• Bidenomics: Egg Prices are So High Border Patrol Is Reporting a Surge in Egg Smuggling at US Border with Mexico.
• DeSantis Discusses Ban of High School AP African American Studies Class That Contained CRT and Section On ‘Queer Theory’.
• Get Woke, Go Broke: M&Ms Replaces Woke Spokescandies with Comedian Maya Rudolph.
• Retired Firefighter Richard Barnett Who Sat and Posed in Pelosi’s Office for Reporters on Jan. 6 Convicted on All Charges in DC Kangaroo Court.
• FBI Special Agent Who Investigated Trump-Russia Collusion Arrested for… Conspiring with Russian Oligarch.
• Woke Medical Journal Says Humans Are No More Valuable Than Animals, Calls For Shift Away From Human-Centered Health Care.
• NY Gov. Hochul: Rules for Thee But Not For Me-Uses Gas Stoves While Pushing Ban on The Little People.
• High School Football Star in Need of a New Heart After a Major Heart Attack.
• Meta-Facebook Takes Ukraine’s Nazi Azov Regiment Off Dangerous Organizations List.
• Australia: Death by Heart Attack Surges by 17% in 2022 – What Changed?
• Biden Admin Offers Emotional Support Dogs to Border Patrol After Fourteen Suicides in 2022.

The Epoch Times:

• China’s 2022 Economic Growth One of the Worst on Record, Post-Pandemic Policy Faces Test.
• Prominent Virologist Criticizes CCP’s Coverup of COVID Data, Says Virus Could Have Mutated in China.

Twitter: 

• @The_Real_Fly - THE UN WARNS ELON MUSK TO CENSOR ELSE FACE SANCTIONS. (video) Ghislane Maxwell on Jeffrey Epstein: “I believe that he was murdered”.

OpenVAERS:

• VAERS US COVID Vaccine Adverse Event Reports. 922,020 Reports(+3,512 from prior week) Through January 6th, 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 unch. to +.5% on average.

• Asia Ex-Japan Investment Grade CDS Index 107.0 +1.25 basis points. 

• China Sovereign CDS 52.25 unch. 
• China Iron Ore Spot 125.1 USD/Metric Tonne -.5%.

• Bloomberg Emerging Markets Currency Index 48.5 -.01%.
• Bloomberg Global Risk-On/Risk Off Index  57.1 +.6%. 
• Bloomberg US Financial Conditions Index .17 -9.0 basis points.
  
• Volatility Index(VIX) futures 20.8 +.22%.
• Euro Stoxx 50 futures +.17%.

• S&P 500 futures -.06%.

• NASDAQ 100 futures -.11%.  

Morning Preview Links

Earnings of Note 
Company/Estimate 

 

Before the Open: 

• (MMM)/2.39
• (DHI)/2.26
• (DHR)/2.51
• (GE)/1.16
• (HAL)/.67
• (JNJ)/2.24
• (LMT)/7.37
• (PCAR)/2.20
• (RTX)/1.25
• (TRV)/3.40
• (UNP)/2.77
• (VZ)/1.19
  

After the Close:

• (CNI)/2.09
• (COF)/3.86
• (FFIV)/2.33
• (ISRG)/1.25
• (MRTN)/.31
• (MSFT)/2.32
• (TXN)/2.03
• (TRMK)/.80
  

Economic Releases

8:30 am EST

• The Philly Fed Non-Manufacturing Activity Index for Jan.
  

9:45 am EST

• S&P Global US Manufacturing PMI for Jan. is estimated to fall to 46.0 versus 46.2 in Dec.
• S&P Global US Services PMI for Jan. is estimated to rise to 45.0 versus 44.7 in Dec.
• S&P Global US Composite PMI for Jan. is estimated to rise to 46.4 versus 45.09 in Dec.

10:00 am EST

• The Richmond Fed Manufacturing Index for Jan. is estimated to fall to -5 versus 1 in Dec.

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Eurozone PMI report, 2Y T-Note auction, weekly US retail sales reports and the (ALB) analyst day 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 technology and consumer 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.

Stocks Higher into Final Hour on Rising Fed "Pivot" Expectations, Loosening US Financial Conditions, Short-Covering, Tech/Alt Energy 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) 19.5 -.4%
• DJIA Intraday % Swing 1.39%
  
• Bloomberg Global Risk On/Risk Off Index 56.9 +2.6%

• Euro/Yen Carry Return Index 147.2 +.9%

• Emerging Markets Currency Volatility(VXY) 10.6 -.09%

• CBOE S&P 500 Implied Correlation Index 38.2 -.7% 

• ISE Sentiment Index 88.0 -6.0 points
  

• Total Put/Call .83 -5.7%

• NYSE Arms .73 +30.4%

Credit Investor Angst:

• North American Investment Grade CDS Index 72.35 -2.8%
  

• US Energy High-Yield OAS 355.5 -2.2%
• Bloomberg TRACE # Distressed Bonds Traded 318.0 -19.0
  

• European Financial Sector CDS Index 87.81 -3.5% 
• Credit Suisse Subordinated 5Y Credit Default Swap 376.50 -.48%
  

• Italian/German 10Y Yld Spread 182.0 basis points unch.
  

• Asia Ex-Japan Investment Grade CDS Index 106.6 +.7%
  

• Emerging Market CDS Index 227.07 -1.5%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 28.09 +.16%

• 2-Year Swap Spread 24.0 basis points -1.25 basis points
  

• TED Spread 18.75 basis points +.5 basis point
  

• 3-Month EUR/USD Cross-Currency Basis Swap -14.0 -.25 basis point
  
• MBS  5/10 Treasury Spread  138.0 -2.0 basis points
  
• Bloomberg US Agg CMBS Avg OAS 108.0 -2.0 basis points
  
• Avg. Auto ABS OAS .72 -3.0 basis points
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 48.5 +.02%
• 3-Month T-Bill Yield 4.65% +1.0 basis point
  

• China Iron Ore Spot 125.8 USD/Metric Tonne +.11%
• Dutch TTF Nat Gas(European benchmark) 66.0 euros/megawatt-hour -1.3%

• Citi US Economic Surprise Index -17.7 unch.

• Citi Eurozone Economic Surprise Index 84.6 -3.1 points
  

• Citi Emerging Markets Economic Surprise Index 4.0 -2.9 points
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 228.28 -.19:  Growth Rate +10.7% -.2 percentage point, P/E 17.6 +.4
  
• Bloomberg US Financial Conditions Index .27 +6.0 basis points
  
• Yield Curve -71.75 basis points (2s/10s) -1.0 basis point
• US Atlanta Fed GDPNow Forecast +3.53% unch.
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +4.45% unch.: CPI YoY +6.34% unch.
  
• 10-Year TIPS Spread 2.28 +5.0 basis points
  
• Highest target rate probability for March 22nd FOMC meeting: 88.5%(+9.4 percentage points) chance of 4.75%-5.0%. Highest target rate probability for May 3rd meeting: 57.4%(+.8 percentage point) chance of 4.75%-5.0%.
  

US Covid-19:

• 105 new infections/100K people(last 7 days total). 7.2%(-.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 -81.0%(-3.5 percentage points) from peak 7-day avg. of 1/9/22 - 1/15/22
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +229 open in Japan 
• China A50 Futures: Indicating +170 open in China

• DAX Futures: Indicating +46 open in Germany

Portfolio:

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

• Disclosed Trades:  Covered some of my (IWM)/(QQQ) hedges, then added them back
  

• Market Exposure: 50% Net Long
  

Bear Radar

Style Underperformer:

• Small-Cap Value +1.1%
  

Sector Underperformers:

• 1) Shipping -.6% 2) Gold & Silver -.5% 3) Pharma -.1%

Stocks Falling on Unusual Volume: 

• SBLK, SYF, NCNO, XPOF, PSFE, STNG, BMA, ASC, TRMD, EVER, NINE, XYL and CPRX
  

Stocks With Unusual Put Option Activity:

• 1) RITM 2) GE 3) EWJ 4) W 5) BBWI
  

Stocks With Most Negative News Mentions:

• 1) BBBY 2) VERU 3) ROIV 4) YMAB 5) TIG
  

Charts:

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

Bull Radar

Style Outperformer:

• Mid-Cap Growth +1.9%

Sector Outperformers:

• 1) Alt Energy +4.7% 2) Semis +4.7% 3) Computer Hardware +3.8%

Stocks Rising on Unusual Volume:

• PLRX, W, SI, AQUA, RIVN, IDCC, AEHR, ARHS, CRDO, UCTT, IAA, AI, VTYX, WNC, ALLY, CRM, AGIO and CEQP
  

Stocks With Unusual Call Option Activity:

• 1) RITM 2) SBUX 3) BHC 4) RVNC 5) RTX

Stocks With Most Positive News Mentions:

• 1) PLRX 2) W 3) BOXD 4) WDC 5) SWKS
  

Charts:

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

Mid-Day Market Internals

NYSE Composite Index:

• Volume Running -9.3% Below 100-Day Average 
• 0 Sectors Declining, 11 Sectors Rising
• 76.5% of Issues Advancing, 21.0% Declining
• 56 New 52-Week Highs, 6 New Lows
• 54.1%(+3.5%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 61.0 +6.0
  
• Bloomberg Global Risk-On/Risk-Off Index 56.9 +2.5%
  
• Russell 1000: Growth/Value 14,483.5 +.70%
  
• Vix 19.6 -1.1%
• Total Put/Call .78 -11.4%
• TRIN/Arms .96 +71.4%