Wednesday Watch

Around X:

• @elonmusk

• Biden, in fact, ordered the US Border Patrol to stop patrolling the border and start ushering in Illegal aliens via mass parole at the border. US Border Parole. Unprecedented betrayal. (graph)
• In 2021 over 96% of political donations from Harvard faculty went to Democrat candidates. Defund Harvard. Veritas. 
• The latest Yale Youth Poll confirms the trend we’ve seen at one campus after another: The youngest voters have turned sharply to the right. Yale found 22-29 year olds favored Democrats by ONLY 6.4 points. But kids of college age, 18-21, lean Republican by almost 12 (!!) The most dramatic generational political swing in history is unfolding before our eyes. Wow.

• @LauraLoomer

• Incredible how Democrats will travel to El Salvador to demand the release of a member of MS13, but they won’t go to GAZA to demand HAMAS release innocent American hostages. Democrats love criminals and terrorists. Speaks volumes, doesn’t it? (video)

• @MarioNawful

• LETITIA JAMES' MORTGAGE NIGHTMARE: FEDS REFER NY'S TOP PROSECUTOR TO DOJ. Federal Housing Director William Pulte formally refers NY Attorney General Letitia James to Justice Department for criminal investigation over alleged mortgage fraud. FHFA letter claims James falsified documents to secure favorable loan terms while representing Virginia property as her "principal residence" despite serving as NY elected official. The prosecutor who's made a career of investigating others' financial dealings now faces scrutiny of her own mortgage applications.
• TRUMP TARIFFS COULD COST U.S. CHIPMAKERS OVER $1 BILLION A YEAR?! Trump’s latest tariff plan could burn U.S. chip equipment makers for over $1 billion a year — and no, that’s not a rounding error. Big dogs like Applied Materials, Lam Research, and KLA are each staring down $350 million in losses, while smaller players like Onto Innovation get hit with the “just tens of millions” tax. 
• THE SOROS SHADOW SYSTEM: HOW ONE BILLIONAIRE THREATENS ELECTION INTEGRITY. While Americans focus on presidential politics, George Soros has quietly implemented a far more effective strategy to reshape America—buying district attorneys who control whether election laws are enforced. This isn't conspiracy theory—it's documented fact. 
• TRUMP GOES MINERAL MODE — NEW TARIFF PROBE STRIKES AT CHINA’S CORE. Trump just greenlit a Section 232 investigation into all critical mineral imports—a not-so-subtle flex at China, the global supply chain overlord. The U.S. barely produces any lithium, cobalt, or nickel. Yet it needs them all—for chips, bombs, EVs, and staying a superpower. Trump: "Imports risk America’s security and resilience.”

• @zerohedge

• Nvidia Plunges After US Imposes License On H20 Chip Sales To China, Slaps Company With $5.5 Billion Charge.
• CIA To Unleash 'Finely Tuned Machine' To Destroy Mexican Cartels. 
• "Headline Fatigue Is Real Now" - Bonds & Bullion Bid As Top Goldman Trader Warns "Tape Remains Fragile".
• First basis trade blow up. 
• "Insane Charts": Liquidity, Flows And Positioning Across Institutions, Hedge Funds, CTAs And Retail.

• @LiveSquawk

• Trump Pledges To Cut Drug Prices For Americans – FT.

• @amuse

• DOGE: Billionaire and massive Democratic donor Antonio Gracias dedicated his time to fixing the Social Security Administration, instead he discovered what would be described as a criminal enterprise. Hear Antonio discuss his discoveries on the All-In podcast. (video)

• @VigilantFox

• DISTURBING: The FDA has just fast-tracked a SELF-AMPLIFYING RNA vaccine. If you thought the COVID shots were bad, this new technology takes things even further. The difference with this new technology is that it AMPLIFIES in dose over time. What’s even more terrifying is that it could also mean the vaccine doesn’t stay confined to the person who received it. Yes, that means shedding.

• @sheislaurenlee

• HEARTBREAKING: Massachusetts just kidnapped 5 children from parents who refused to vaccinate their 9-month-old baby. When the parents fled the state to protect their family, they were ARRESTED. This is one of the darkest stories of the year. THREAD.

• @CartlandDavid

• Bill Gates is NOT slowing down. More harmful vaccines are coming thanks to his "philanthropy." He will not stop until every living organism is injected with mRNA. (video)

• @RodDMartin

• WHAT'S REALLY GOING ON WITH CHINA: Trump's tariff strategy isn't just about economics - it's about containing the next global threat: CHINA. And trust me, this goes DEEPER than the mainstream media will tell you... THREAD.

Night Trading 

• Asian equity indices are -.75% to +.25% on average. 
• Asia Ex-Japan Investment Grade CDS Index 106.5 -1.25 basis points. 
• China Sovereign CDS 66.75 -4.0 basis points.
• China Iron Ore Spot 97.7 USD/Metric Tonne -1.0%
• Swiss Franc/Offshore Chinese Renminbi Cross 8.95 +.52%.
• Bloomberg Emerging Markets Currency Index 36.7 -.07%.
• Bloomberg Global Risk-On/Risk Off Index 55.1 -1.6%.
• US 10-Year Yield 4.32% -1.0 basis point
• Volatility Index(VIX) futures 26.7 +4.6%.
• Euro Stoxx 50 futures -.7%. 
• S&P 500 futures -1.0%. 
• NASDAQ 100 futures -1.5%.

Morning Preview Links

BOTTOM LINE: Asian indices are mostly lower, weighed down by technology and consumer discretionary 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 Slightly Lower into Final Hour on Global Growth Worries, China's Trade War Escalation, Technical Selling, Consumer Discretionary/Alt Energy Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Modestly Lower
  

• Sector Performance: Mixed

• Volume: Below Average

• Market Leading Stocks: Performing In Line

Equity Investor Angst:

• Volatility(VIX) 30.0 -2.6%
• S&P 500 Intraday % Swing .9 -52.2%
• Bloomberg Global Risk On/Risk Off Index 56.1 +.2% 
• Swiss Franc/Offshore Chinese Renminbi Cross 8.91 -.67%

• Euro/Yen Carry Return Index 180.9 -.6%

• Emerging Markets Currency Volatility(VXY) 9.23 -4.0%

• CBOE S&P 500 Implied Correlation Index 39.7 +4.0% 

• ISE Sentiment Index 120.0 -2.0 points
  

• Total Put/Call 1.04 +3.0%

• NYSE Arms 1.40 +22.8%
• NYSE Non-Block Money Flow -$208.1M 
  

Credit Investor Angst:

• North American Investment Grade CDS Index 69.98 -1.4%
  

• US Energy High-Yield OAS 520.7 +.4%
• Bloomberg TRACE # Distressed Bonds Traded 300.0 -5.0

• European Financial Sector CDS Index 77.4 -2.5%
  
• Deutsche Bank Subordinated 5Y Credit Default Swap 185.3 -2.5%
  

• Italian/German 10Y Yld Spread 118.0 basis points +1.0 basis point

• Asia Ex-Japan Investment Grade CDS Index 103.61 -3.75%
  

• Emerging Market CDS Index 207.1 -.7%
• Israel Sovereign CDS 112.5 -3.9%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 23.48 +.48%

• 2-Year SOFR Swap Spread -23.5 basis points +1.5 basis points

• 3M T-Bill Treasury Repo Spread -4.0 basis points +4.75 basis points

• 3-Month EUR/USD Cross-Currency Basis Swap -1.0 +2.5 basis points
• MBS  5/10 Treasury Spread 156.0 -2.0 basis points
• Bloomberg CMBS Investment Grade Bbb Average OAS 647.0 +3.0 basis points
• Avg. Auto ABS OAS 71.0 +1.0 basis point

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 36.7 -.27% 
• US 10-Year T-Note Yield 4.32% -6.0 basis points
• 3-Month T-Bill Yield 4.29% -1.0 basis point
  

• China Iron Ore Spot 98.4 USD/Metric Tonne -.4%
• Dutch TTF Nat Gas(European benchmark) 34.4 euros/megawatt-hour -.3%

• Citi US Economic Surprise Index -18.8 -.5 point

• Citi Eurozone Economic Surprise Index 1.9 -6.8 points

• Citi Emerging Markets Economic Surprise Index 8.8 -.4 point
• S&P 500 Current Quarter EPS Growth Rate YoY(34 of 500 reporting) +6.6% -.8 percentage point
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 277.04 -.30:  Growth Rate +12.8% -.1 percentage point, P/E 19.6 +.2
• S&P 500 Current Year Estimated Profit Margin 13.48% -1.0 basis point
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(0 of 10 reporting) n/a
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 418.21 unch.: Growth Rate +20.9% unch., P/E 28.0 +.5
• Bloomberg US Financial Conditions Index -.52 +29.0 basis points
• Bloomberg Euro-Zone Financial Conditions Index .73 +31.0 basis points
• US Yield Curve 49.25 basis points (2s/10s) -3.0 basis points
• US Atlanta Fed GDPNow Q1 Forecast -2.4% unch.
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 38.0% unch.

• Cleveland Fed Inflation Nowcast Core PCE YoY +2.54% unch.: CPI YoY +2.42% unch.
• 10-Year TIPS Spread 2.20 -4.0 basis points
• Highest target rate probability for June 18th FOMC meeting: 60.0% (-1.5 percentage points) chance of 4.0%-4.25%. Highest target rate probability for July 30th meeting: 47.0%(-2.4 percentage points) chance of 3.75%-4.0%. (current target rate is 4.25-4.5%)
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +418 open in Japan 
• China A50 Futures: Indicating -74 open in China

• DAX Futures: Indicating +177 open in Germany

Portfolio:

• Slightly Higher: On gains in my tech/utility sector longs
• Disclosed Trades: Added to my (IWM)/(QQQ) hedges, then covered some
• Market Exposure: 50% net long

Bear Radar

Style Underperformer:

• Small-Cap Growth -.6%
  

Sector Underperformers:

• 1) Airlines -.2% 2) Healthcare Providers -.2% 3) Gambling +.3%

Stocks Falling on Unusual Volume: 

• DOW, ANGI, PPTA, SLP, CERT, VRDN, FA, HZO, ACI, SDGR, HSAI, MP, SMMT, ALGM, MTSR and BULL

Stocks With Unusual Put Option Activity:

• 1)  2) ACI 3) MP 4) TMC 5) HU YA

Stocks With Most Negative News Mentions:

• 1) APLD 2) ALGM 3) COTY 4) FLNC 5) HTZ

Sector ETFs With Most Negative Money Flow:

• 1) SMH 2) KWEB 3) QTEC 4) FDN 5) XRT

Charts:

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

Bull Radar

Style Outperformer:

• Large-Cap Growth +.5%

Sector Outperformers:

• 1) Regional Banks +2.2% 2) Banks +1.7% 3) Airlines +1.1%

Stocks Rising on Unusual Volume:

• EWTX, PAY, RKLB, DJT, TTAN, NFLX, SRRK, SKE, PTCT, HPE, ADMA, CRWD, BAC and YMM

Stocks With Unusual Call Option Activity:

• 1) KEY 2) USAR 3) TMC 4) PL 5) PRMW

Stocks With Most Positive News Mentions:

• 1) IE 2) VERV 3) SNYR 4) THCH 5) RZLV

Sector ETFs With Most Positive Money Flow:

• 1) XLF 2) SOXX 3) XLI 4) XLY 5) IHI

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:

• (ABT)/1.07
• (ASML)/6.16
• (ALV)/1.66
• (ALV)/1.66
• (CFG)/.75
• (TRV)/.81
• (USB)/.98
  

After the Close: 

• (AA)/1.65
• (OZK)/1.41
• (CSX)/.37
• (KMI)/.35
• (SLG)/1.32
• (SNV)/1.12
• (LVS)/.59
• (PGR)/4.79
  

Economic Releases

8:30 am EST

• Retail Sales Advance MoM for March is estimated to rise +1.3% versus a +.2% gain in Feb.
• Retail Sales Ex Autos MoM for March is estimated to rise +.4% versus a +.3% gain in Feb.
• Retail  Sales Ex Autos and Gas for March is estimated to rise +.6% versus a +.5% gain in Feb. 
• NY Fed Services Business Activity Index for April is estimated to rise to -12.4 versus -19.3 in March.

9:15 am EST

• Industrial Production MoM for March is estimated to fall -.2% versus a +.7% gain in Feb.
• Capacity Utilization for March is estimated to fall to 77.9% versus 78.2% in Feb.
• Manufacturing Production for March is estimated to rise +.2% versus a +.9% gain in Feb.

10:00 am EST

• Business Inventories for Feb. is estimated to rise +.2% versus a +.3% gain in Jan.
• The NAHB Housing Market Index for April is estimated to fall to 38.0 versus 39.0 in March.

4:00 pm EST

• Net Long-Term TIC Flows for Feb.
  

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Fed's Powell speaking, Fed's Hammack speaking, Fed's Schmid speaking, Atlanta Fed GDPNow 1Q update, 20Y bond auction, weekly MBA Mortgage Applications report, BofA Auto Summit, (RF) annual meeting, (HUM) annual meeting and the (EQT) annual meeting could also impact global trading tomorrow.

US Equity Market Hours

• 9:30 am - 4:00 pm EST

Mid-Day Market Internals

NYSE Composite Index:

• Volume Running -10.5% Below 100-Day Average 
• Nasdaq/NYSE Volume Ratio 15.5 -2.0
• 2 Sectors Declining, 9 Sectors Rising
• 69.8% of Issues Advancing, 28.7% Declining 
• TRIN/Arms 1.45 +27.2%
  
• Non-Block Money Flow -$9.7M
  
• 23 New 52-Week Highs, 13 New Lows
• 25.2% (+5.4%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 46.3 +1.7

Other:

• Bloomberg Global Risk-On/Risk-Off Index 57.0 +1.9%
• Bloomberg Cyclicals/Defensives Index 224.2 -.12%
  
• Russell 1000: Growth/Value 19,746.7 -.1%
• CNN Fear & Greed Index 20.0 (EXTREME FEAR) +1.0
• 1-Day Vix 21.3 -25.4%
  
• Vix 28.9 -6.4%
  
• Total Put/Call 1.0 -1.0%