Tuesday Watch

Evening Headlines

Bloomberg:

• England’s Health Crisis to Deepen Amid Latest Doctors’ Strike
• Foreigners Are Flocking to New Zealand, Immigration Data Show.
• Wall Street Momentum to Support Asian Stocks Open: Markets Wrap.
• Apple Shares Close at Record in Latest Sign of Big Tech’s Dominance.
• San Francisco Dealt Another Blow as Westfield Walks Away From Downtown Mall Property.
• NYC Police Commissioner Keechant Sewell Resigns, Adams Says.
• Instant Pot and Pyrex Maker Instant Brands Files for Bankruptcy.
• Google CEO Vows Not to Rush AI and Says Efficiency Drive Continues.
• Chegg Slashes 4% Of Workforce Following Shift to Embrace AI.
• Citigroup Warns Bond Traders Are Misreading Inflation Ahead of CPI.
• Five Things You Need to Know to Start Your Day.

Zero Hedge:

• "He's Always Been A C**t": Rogan Rips Biden Over Lifetime Of Lies, Shady Ties To Ukraine And China
• Female-Only Spa With Compulsory Nudity Must Admit 'Transgender Women' With Penises: Judge.
• CPI Set For "Historic" Drop Over "Next Two Months".
• "Rantings Of A Demagogue" - Parents Angered By Princeton President's Graduation Address.
• As Panama Canal Hit With Draft Restrictions, Goldman Says Shippers Have Three Options.
• Goldman: This Is A Rally People Don't Believe In, But Have Finally Given Up Fighting Against.
• Saudi Arabia, China Ink $10 Billion In Investment Deals.
• Women's Group To Spend "Tens Of Millions" To Boost Kamala's Image.
• Pre FOMC FOMO.
• Notes From The Memory Hole: The Great Double-Talking Vaccine Scientist.
• US stocks gained with the S&P 500 and Nasdaq 100 at fresh YTD highs as yields eventually softened ahead of key events - Newsquawk Asia-Pac Market Open.
• US Lawmakers File "SEC Stabilization Act" To Fire Gary Gensler.
• Watch: McCarthy Destroys CNN Reporter When Asked About Classified Doc Scandal.
• Big Tech squeezes market higher into CPI and FOMC - Newsquawk US Market Wrap.
• 11 Signs That Our Economic Problems Are Accelerating A Lot Faster Than Most People Were Anticipating.
• Can Americans 'Handle The Truth'?
• Bonds, Banks, Bullion, & Black Gold Dip As Mega-Cap Tech Continues To Rip.
• Moving To 'Wall Street South' From NYC Can Save You Up To $200k.

Wall Street Journal:

• Jerome Powell’s Big Problem Just Got More Complicated.
• Executives Quiet Their Diversity, Sustainability Talk.
• Companies That Embraced Social Issues Have Second Thoughts.
• Xi Prepares China for ‘Extreme’ Scenarios.
• Hotel Owners Start to Write Off San Francisco as Business Nosedives.
• Oil-Field-Services Companies Hold Merger Talks.
• U.S. Spy Agencies Buy Vast Quantities of Americans’ Personal Data, U.S. Says.

CNBC.com:

• Big banks are talking up generative A.I. — but they’re not diving in headfirst.
• ILWU Canada West Coast port workers support strike in landslide vote.
• Amazon is using generative A.I. to summarize product reviews.
• FTC files to block Microsoft-Activision as deadline approaches.
• Oracle beats on top and bottom lines as cloud revenue jumps.
• Twitter CEO Linda Yaccarino echoes Musk in emphasizing freedom of speech in debut tweet thread.

MarketWatch:

• ‘This is something huge for us’: Food-delivery workers in New York set to earn $18 minimum wage next month
• Investors increasingly expect U.S. stock-market rally to continue as bears finally surrender.
• Bank of America executives blew $93.6 billion. Here’s how they did it.
• Jump in cloud revenue lifts Oracle’s results, and stock gains after hours.

Newsmax:

• Bid to End Senate Standoff on Military Promotions, Abortion Policy Fizzles.
• Miami Girds for Arraignment.  
• Riley Gaines: Biden WH Out to 'Erase Women'.

Fox News:

• Catholic bishops torch the Dodgers for honoring drag nun group
• San Francisco mall owner hands property back to bank as exodus continues

TheGatewayPundit.com:

• Conservatives Call for Kellogg’s Boycott After Dylan Mulvaney Poses with Tony the Tiger at the Tony Awards (VIDEO).
• Sen. Chuck Grassley Reveals Foreign National in Alleged Biden Burisma Bribe Scheme Has 17 Audio Recordings of Joe and Hunter Biden He Kept as “Insurance Policy” (Video)
• Trump Attorney General William Barr Reveals He Had Intimate Knowledge of Biden Ukraine FD-1023 Investigation in Summer 2020; Failed to Tell American People Joe Biden Was Credibly Accused of Taking $5 Million Foreign Bribe as Vice President.
• Joe Biden To Group of LGBTQ+ Supporters: This is Most Courageous Group “I’ve seen in anytime in the recent past”…Forgets 13 Military Members Murdered By Terrorists While Protecting Airport In Hostile Afghanistan With No Support [VIDEO].
• “TRANTIFA”…UN Investigator and Republican Lawmakers Warn Of New Violent Extremist Group [VIDEO].
• Comer Says More FBI Documents Detailing Biden Bribery Scheme Exist (VIDEO).
• Award-Winning 42 Year Old ESPN Director and Former Athlete Dies After Suffering Unknown Medical Emergency at NCAA Baseball Tournament.
• Jeffrey Epstein Trafficking Ring: JPMorgan Chase Bank Settles With ‘Jane Doe’ Victim – Value Is Said to Be $290 Million.
• Louisiana Sovereignty Resolution Should Be Model for Entire Nation as DC Government Becomes Increasingly Lawless.
• FOX News Sends Tucker Carlson Cease and Desist Letter as His Twitter Videos Crash 100 Million Views – His Attorney Responds.

 The Epoch Times:

• Saudi Arabia Signs Investment Deals Worth $10 Billion With China
• Honduras Opens Embassy in China After Breaking Off Ties With Taiwan

Twitter: 

• @The_Real_Fly - DEGENERACY ON THE WHITE HOUSE LAWN *. (video)
• @FxHedgers - AMERICANS SHOULD PREPARE FOR CYBER SABOTAGE FROM CHINESE HACKERS: US OFFICIAL.
• @jsolomonReports - DON'T BACK THE COURT PACK! | POLL SHOWS MOST AMERICANS AGAINST COURT PACKING.
• @stkirsch - If you think the FDA cares about safety and transparency, you should read this article right now. You'll see that they really don't. There is no doubt about it.
• @SayNoToSino -  Marriages in China slump to historic low - Reuters.
• @CitizenFreePres - Children are watching this garbage at DC parade. (video)

OpenVAERS:

• VAERS US COVID Vaccine Adverse Event Reports. 964,389 Reports(+1,106 from prior week) Through June 2nd, 2023.

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.

Night Trading 

• Asian equity indices are -.25% to +.5% on average.

• Asia Ex-Japan Investment Grade CDS Index 113.75 -.25 basis point. 

• China Sovereign CDS 61.5 +.25 basis point.
  
• China Iron Ore Spot 108.9 USD/Metric Tonne -.02%.

• Bloomberg Emerging Markets Currency Index 45.1 -.04%.
• Bloomberg Global Risk-On/Risk Off Index 60.8 +.78%. 
• Bloomberg US Financial Conditions Index .04 -3.0 basis points.
  
• Volatility Index(VIX) futures 17.1 -.3%.
• Euro Stoxx 50 futures +.46%.

• S&P 500 futures unch.

• NASDAQ 100 futures +.06%.  

Morning Preview Links

BOTTOM LINE: Asian indices are mostly higher, boosted by tech and industrial 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 Rising into Afternoon on US Economic "Soft-Landing" Hopes, FANG+ Stock Frenzy, Short-Covering, Tech/Alt Energy Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Higher
  

• Sector Performance: Most Sectors Rising
  

• Volume: Around Average

• Market Leading Stocks: Underperforming
  

Equity Investor Angst:

• Volatility(VIX) 14.7 +6.3%
• DJIA Intraday % Swing .37%
  
• Bloomberg Global Risk On/Risk Off Index 60.4 -.5%

• Euro/Yen Carry Return Index 157.7 +.18%

• Emerging Markets Currency Volatility(VXY) 9.5 +.11%

• CBOE S&P 500 Implied Correlation Index 20.2 +.8% 

• ISE Sentiment Index 135.0 +20.0 points
  

• Total Put/Call .80 -5.9%

• NYSE Arms .84 -7.7%

Credit Investor Angst:

• North American Investment Grade CDS Index 70.9 +.4%
  

• US Energy High-Yield OAS 384.08 +1.7%
• Bloomberg TRACE # Distressed Bonds Traded 411.0 -14.0
  

• European Financial Sector CDS Index 88.5 +1.2% 
• Deutsche Bank Subordinated 5Y Credit Default Swap 287.5 -1.5%
  

• Italian/German 10Y Yld Spread 167.0 basis points -7.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 113.9 -1.5%
  

• Emerging Market CDS Index 218.5 -.6%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 26.3 -.32%

• 2-Year Swap Spread 19.25 basis points -.5 basis point
  

• TED Spread 31.0 basis points +4.0 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -23.5 -.75 basis point
  
• MBS  5/10 Treasury Spread 162.0 -3.0 basis points
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 732.0 +2.0 basis points
  
• Avg. Auto ABS OAS 85.0 -1.0 basis point
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 45.1 -.4%
• 3-Month T-Bill Yield 5.23% unch.
  

• China Iron Ore Spot 108.6 USD/Metric Tonne -.3%
• Dutch TTF Nat Gas(European benchmark) 31.0 euros/megawatt-hour  -3.2%

• Citi US Economic Surprise Index 19.1 -.7 point

• Citi Eurozone Economic Surprise Index -92.1 -.2 point

• Citi Emerging Markets Economic Surprise Index 13.0 +2.8 points
• S&P 500 Current Quarter EPS Growth Rate YoY(499 of 500 reporting) -2.7% unch.
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 230.54 +.17:  Growth Rate +3.1% +.1 percentage point, P/E 18.7 unch.
  
• S&P 500 Current Year Estimated Profit Margin 12.25% +2.0 basis points
  
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(10 of 10 reporting) -2.7% unch.
  
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 207.64 +.40: Growth Rate +36.4% +.2 percentage point, P/E 36.1 +.1
  
• Bloomberg US Financial Conditions Index .09 -4.0 basis points
• Bloomberg Euro-Zone Financial Conditions Index -4.10 +3.0 basis points
  
• US Yield Curve -82.5 basis points (2s/10s) +2.75 basis points
• US Atlanta Fed 2Q GDPNow Forecast +2.20% unch.
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +4.71% unch.: CPI YoY +4.13% unch.
  
• 10-Year TIPS Spread 2.19 -2.0 basis points
  
• Highest target rate probability for July 26th FOMC meeting: 57.8%(+5.0 percentage points) chance of 5.25%-5.5%. Highest target rate probability for Sept. 20th meeting: 56.1%(+6.1 percentage points) chance of 5.25%-5.5%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +246 open in Japan 
• China A50 Futures: Indicating -96 open in China

• DAX Futures: Indicating +25 open in Germany

Portfolio:

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

• Disclosed Trades:  None
  

• Market Exposure: 75% Net Long
  

Bear Radar

 Style Underperformer:

• Small-Cap Value -.1%
  

Sector Underperformers:

• 1) Oil Service -1.9% 2) Banks -1.4% 3) Energy -1.3%

Stocks Falling on Unusual Volume: 

• DOCU, MBLY, SWTX, ABM, CFG, SYM, KEY, MEOH and NDAQ
  

Stocks With Unusual Put Option Activity:

• 1) XME 2) NCLH 3) BBAI 4) KR 5) XPEV
  

Stocks With Most Negative News Mentions:

• 1) CUTR 2) MSTR 3) COIN 4) TX 5) VTNR
  

Charts:

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

Bull Radar

Style Outperformer:

• Mid-Cap Growth +.9%
  

Sector Outperformers:

• Semis +2.6% 2) Networking +2.6% 3) Alt Energy +2.6%

Stocks Rising on Unusual Volume:

• KDNY, ARVN, CCL, BE, XMTR, NPWR, INTA, PLUG, CTLT, KYMR, CVNA, NCLH, LZ, AMPX, RUM, GME, ORCL, AAP, SCPH, UPST, AVGO, CYRX, EXTR, ADBE, PLTR, BRZE, EXPI and ILMN
  

Stocks With Unusual Call Option Activity:

• 1) VRM 2) RUM 3) ORCL 4) CCL 5) CHGG

Stocks With Most Positive News Mentions:

• 1) ORCL 2) CCL 3) OCC 4) IRON 5) INTA
  

Charts:

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

Tomorrow's Earnings/Economic Releases of Note; Market Movers

Earnings of Note 
Company/Estimate 

Before the Open:

• None of note
  

After the Close: 

• None of note
  

Economic Releases    

6:00 am EST

• The NFIB Small Business Optimism Index for May is estimated to fall to 88.5 versus 89.0 in April.

8:30 am EST

• The CPI MoM for May is estimated to rise +.2% versus a +.4% gain in April.
• The CPI Ex Food and Energy MoM for May is estimated to rise +.4% versus a +.4% gain in April.
• The CPI YoY for May is estimated to rise +5.2% versus a +5.5% gain in April.
• Real Average Weekly Earnings YoY for May is estimated n/a versus a -1.2% decline in April.

Upcoming Splits 

• None of note
  

Other Potential Market Movers

• The Eurozone ZEW Survey, 30Y T-Bond auction, weekly US retail sales reports, Wells Fargo Industrials Conference, RBC Financial Tech Conference, Deutsche Bank Auto Industry Conference, (THS) investor day, (HD) investor conference and the (PI) investor day could also impact global trading tomorrow.

US Equity Market Hours

• 9:30 am - 4:00 pm EST

Mid-Day Market Internals

NYSE Composite Index:

• NYSE Volume Running +1.2% Above 100-Day Average 
• Nasdaq/NYSE Volume Ratio 8.6 -.6
  
• 5 Sectors Declining, 6 Sectors Rising
• 50.7% of Issues Advancing, 47.0% Declining
• 60 New 52-Week Highs, 8 New Lows
• 50.5%(+1.4%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 59.0 unch.
  
• Bloomberg Global Risk-On/Risk-Off Index 60.6 +.01%
  
• Russell 1000: Growth/Value 17,270.7 +.51%
• 1-Day Vix 11.0 -4.8%
  
• Vix 14.5 +4.8% 
  
• Total Put/Call .81 -4.7%
• TRIN/Arms .90 -1.1%