Wednesday Watch

Night Trading 

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

• Asia Ex-Japan Investment Grade CDS Index 86.5 -.75 basis point.

• China Sovereign CDS 38.0 -.5 basis point.

• Bloomberg Emerging Markets Currency Index 61.25 +.04%.
• Bloomberg Global Risk-On/Risk Off Index 3,256.0 +2.0 points.
• Volatility Index(VIX) futures 20.5 -1.2%.
• FTSE 100 futures unch..

• S&P 500 futures +.30%.

• NASDAQ 100 futures +.41%.

Morning Preview Links

Earnings of Note 
Company/Estimate 

 

Before the Open: 

• (ANF)/-.54
• (DKS)/.99

After the Close:

• (UHAL)/5.07
• (AEO)/.23
• (ELF)/.09
• (NVDA)/3.22
• (OKTA)/-.21
• (SNOW)/-.16
• (WSM)/1.72
• (WDAY)/.73
  

Economic Releases

10:30 am EST

• Bloomberg consensus estimates call for a weekly crude oil inventory decline of -750,830 barrels versus a +1,320,000 barrel gain the prior week. Gasoline supplies are estimated to fall by -1,360,640 barrels versus a -1,963,000 barrel decline the prior week. Distillate inventories are estimated to fall by -2,035,820 barrels versus a -2,324,000 barrel decline the prior week. Finally, Refinery Utilization is estimated to rise by +.12% versus a +.2% gain prior.
  

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Fed's Quarles speaking, Japan Foreign Investment report, House Hearing with major banks, weekly MBA Mortgage Applications report, $61B 5Y T-Note auction, TD Telecom/Media Conference, (SU) virtual investor day, (DCO) investor day, Oppenheimer MedTech/Tools/Diagnostics Summit and the (DPZ) virtual investor day could also impact global trading today.

US Equity Market Hours

• 9:30 am - 4:00 pm EST
  

BOTTOM LINE: Asian indices are mostly higher, boosted by technology and consumer shares in the region. I expect US stocks to open modestly higher and to weaken into the afternoon, finishing mixed. The Portfolio is 75% net long heading into the day.

Stocks Reversing Lower into Final Hour on Growth Worries, Less Dovish Fed Commentary, Technical Selling, Commodity/Financial 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) 18.7 +1.7%
• Bloomberg Global Risk On/Risk Off Index 3,270.0 +1.0 point

• Euro/Yen Carry Return Index 137.67 +.27%

• Emerging Markets Currency Volatility(VXY) 9.2 +.22%

• S&P 500 Implied Correlation 50.9 +2.9%

• ISE Sentiment Index 95.0  -28.0 points
  

• Total Put/Call .78 -7.1%

• NYSE Arms 1.15 +11.7%

Credit Investor Angst:

• North American Investment Grade CDS Index 51.94 +.83%
  

• US Energy High-Yield OAS 440.04 +.48%

• European Financial Sector CDS Index 59.60 -.91%

• Italian/German 10Y Yld Spread 113.0 -4.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 86.55 -1.63%
  

• Emerging Market CDS Index 161.70 +.4%
  

• China Corp. High-Yield Bond USD ETF(KCCB) 39.40 +.17%

• 2-Year Swap Spread 8.5 -.25 basis point

• TED Spread 14.5 -.5 basis point
  

• 3-Month EUR/USD Cross-Currency Basis Swap -1.75 -.25 basis point
  
• MBS  5/10 Treasury Spread  62.5 +.5 basis point
  
• IHS Markit CMBX BBB- 6 71.75 unch.
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 61.24 -.11%
• 3-Month T-Bill Yield .01% unch.
  

• Yield Curve 145.0 -2.0 basis points
  

• China Iron Ore Spot 184.60 USD/Metric Tonne -.5%

• Citi US Economic Surprise Index 4.0 -7.3 points

• Citi Eurozone Economic Surprise Index 136.50 +.3 point
  

• Citi Emerging Markets Economic Surprise Index 53.4 +.2 point

• 10-Year TIPS Spread 2.45 -1.0 basis point
• 93.0% chance of no change at Sept. 22nd meeting, 93.0% chance of no change at Nov. 3rd meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating +146 open in Japan 
• China A50 Futures: Indicating +145 open in China

• DAX Futures: Indicating -2 open in Germany

Portfolio:

• Slightly Lower: On losses in my biotech/commodity sector longs and emerging market shorts
  

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

• Market Exposure: Moved to 75% Net Long
  

Mid-Day Market Internals

NYSE Composite Index:

• Volume Running -14.4% Below 100-Day Average 
• 6 Sectors Rising, 4 Sectors Declining
• 44.7% of Issues Advancing, 50.8% Declining
• 167 New 52-Week Highs, 17 New Lows
• 87.4% of Issues Above 200-day Moving Average
• Average 14-Day RSI 51.8%
  
• Bloomberg Global Risk-On/Risk-Off Index 3,266.0 -3.0 points
• Vix 18.6 +1.1%
• Total Put/Call .79 -3.7%
• TRIN/Arms 1.02 -.97%

Tuesday Watch

Evening Headlines

Bloomberg:               

• Biden Orders U.S. to Develop ‘Options’ for Belarus Response.
• U.S. Warns Against Japan Travel, Sowing New Doubt About Olympics.  
• Korea Consumer Confidence Hits 3-Year High as Recovery Quickens.
• Central Banks Running Out of Options as Recovery Falters in Asia.
  
• China’s Commodity Markets Hear Mixed Message in Price Crackdown.
  
• SoftBank’s Son Joins Growing Calls Opposing Tokyo Olympic Games.  
• Asian Stocks Steady Amid Easing Inflation Fears: Markets Wrap.
  
• Oil Holds Two-Day Surge as Investors Weigh Iran Talks, Demand.
  
• U.S. Cases Slow to New Low, Warns on Japan Travel: Virus Update.
• Elizabeth Warren Floats $31.5 Billion Plan to Pursue Tax Cheats.  
• A $16 Billion Quant ETF Is Poised to Reshuffle 68% of Portfolio.

Wall Street Journal:

• The Wuhan Lab Leak Question: A Disused Chinese Mine Takes Center Stage.
• Fans Are Back and Acting Crazy. Sports Are Back to Normal.
• Belarus Faces EU Flight Ban for Grounding Ryanair Plane. 
• New York City Schools Will Be Fully In-Person in Fall.
• The Rise of Woke Anti-Semitism.

Fox News:

• NY Magazine writer calls out 'liberal media' for dismissing COVID lab-leak theory, 'smearing' its backers.
• Mainstream media eating their words after attacking conservatives for lab leak claims.
• Pompeo says it's 'outrageous' US officials, including Fauci, dismissed lab leak theory.
• COVID-19 origins: Scalise, Comer demand House Dems launch 'full and complete' probe into China's role.
• Dem rips progressives' 'deafening' silence on anti-Semitic attacks.
  

CNBC.com:

• Amazon nears deal to buy MGM Studios for nearly $9 billion.
• Lordstown Motors shares fall after company slashes 2021 production plans, says it needs more capital.
• One chart reveals bullish setup for semis stocks against broader tech sector: Oppenheimer.

MarketWatch.com:        

• Why once-hot hedge-fund stock picks are now the ‘pain trade’ of 2021.
  
• Bitcoin isn’t a currency or financial asset, but ‘looks like a bubble’: Roubini.
  
• If bitcoin’s price falls below this crucial level, watch out.

Zero Hedge:

• Biden Spox Deflects Over Wuhan Bombshells During Tense Exchange.
• Vox Stealth Edits March 2020 Article "Debunking" Lab Origin Of COVID.
• Washington Reality Versus American Reality.
• "Fact-Checking" Takes Another Beating: Taibbi.
• Tow "Range Anxiety" Builds For Ford's All-New F-150 Electric Truck.
• Support For Black Lives Matter Drops To Two Year Low.
• 'Devout Catholic' Biden Bails On Notre Dame Commencement After 1000s Sign Petition Demanding No Invite.
• New York City Is Back: At Least 30 People Shot Over The Weekend.
• Lithium, Cobalt, & Rare Earths: The Post-Petroleum Resource Race.
• UK Airlines Ordered To Avoid Belarusian Airspace As Ryanair CEO Blasts "State-Sponsored Hijacking".
• Preference Or Prejudice? Federal Court Finds Biden Administration Is Engaged In Racial and Gender Discrimination.
• Bitcoin, Bullion, & Big-Tech Soar As Dollar Drop Resumes.

Newsmax: 

• Rep. Ann Wagner to Newsmax: WHO Should Not Be the Entity Investigating COVID Origins.
  

TheGatewayPundit.com:

• EXCLUSIVE: US Capitol Doors on Jan. 6 Were Magnetically Locked – Someone Inside Capitol Security Had to Release the Lock to Open the Doors (VIDEO).
• Fox News’ Peter Doocy Repeatedly Grills Psaki on WSJ Report Alleging Three Wuhan Researchers Fell Very Ill in November 2019 (VIDEO).
• TGP’s Jim Hoft Joins Steve Bannon on The War Room to Discuss “Rat in a Trap” Anthony Fauci’s Latest Admission on Wuhan Funding (VIDEO).
• John Fredericks: Six Affidavits from Georgia Election Witnesses Allege 30,000 Ballots are Fake (VIDEO).

The Epoch Times: 

• US-China Chip Hegemony War: South Korea Under Pressure to Pick a Side. 
• Biden’s Solar Ambitions Collide With China Forced Labor Complaints.

Digital Blackboard:

• Daily New Cases by Region.

Worldometer:

• New Cases/Deaths by state.

Rt Covid-19:

• How fast virus is growing by state.

KFF:

• State Data(Tests/Hospitalizations).

Night Trading 

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

• Asia Ex-Japan Investment Grade CDS Index 87.25 -2.0 basis points.

• China Sovereign CDS 38.5 -1.25 basis points.

• Bloomberg Emerging Markets Currency Index 61.32 +.01%.
• Bloomberg Global Risk-On/Risk Off Index 3,271.0 +2.0 points.
• Volatility Index(VIX) futures 20.9 +.69%.
• FTSE 100 futures -.11%.

• S&P 500 futures +.05%.

• NASDAQ 100 futures -.01%.

Morning Preview Links

Earnings of Note 
Company/Estimate 

 

Before the Open: 

• (AZO)/18.38
• (CBRL)/.32
• (DY)/.23
• (VSAT)/.27
  

After the Close:

• (A)/.82
• (INTU)/6.82
• (JWN)/-.61
• (RRGB)/-1.16
• (TOL)/.81
• (URBN)/.06
• (ZS)/.07
  

Economic Releases

9:00 am EST

• The FHFA House Price Index MoM for March is estimated to rise +1.2% versus a +.9% gain in February.
• The S&P CoreLogic CS 20-City MoM for March is estimated to rise +1.3% versus a +1.17% gain in February.
  

10:00 am EST

• New Home Sales for April is estimated to fall to 950K versus 1021K in March.
• Conference Board Consumer Confidence for May is estimated to fall to 119.0 versus a reading of 121.7 in April.
• The Richmond Fed Manufacturing Index for May is estimated to rise to 19.0 versus 17.0 in April.
  

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Fed's Quarles testimony to Senate, US weekly retail sales reports, Wolfe Research Transport/Industrials Conference and the UBS Energy Conference could also impact global trading today.

US Equity Market Hours

• 9:30 am - 4:00 pm EST
  

BOTTOM LINE: Asian indices are mostly higher, boosted by technology and commodity shares in the region. I expect US stocks to open mixed and to rally into the afternoon, finishing modestly higher. The Portfolio is 100% net long heading into the day.

Stocks Surging into Afternoon on Stable Long-Term Rates, Oil Gain, Dollar Weakness, Tech/Gaming Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Modestly Higher
  

• Sector Performance: Most Sectors Rising
  

• Volume: Below Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 18.8 -6.8%
• Bloomberg Global Risk On/Risk Off Index 3,251.0 +111.0 points

• Euro/Yen Carry Return Index 137.31 +.14%

• Emerging Markets Currency Volatility(VXY) 9.1 +1.1%

• S&P 500 Implied Correlation 49.7 -5.8%

• ISE Sentiment Index 132.0  +25.0 points
  

• Total Put/Call .78 -7.1%

• NYSE Arms 1.01 -7.3%

Credit Investor Angst:

• North American Investment Grade CDS Index 51.88 -.95%
  

• US Energy High-Yield OAS 438.25 +.09%

• European Financial Sector CDS Index 60.15 -1.55%

• Italian/German 10Y Yld Spread 117.0 +1.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 87.90 -1.98%
  

• Emerging Market CDS Index 161.05 -1.5%
  

• China Corp. High-Yield Bond USD ETF(KCCB) 39.40 +.25%

• 2-Year Swap Spread 8.75 -.75 basis point

• TED Spread 15.0 -.25 basis point
  

• 3-Month EUR/USD Cross-Currency Basis Swap -1.5 -.25 basis point
  
• MBS  5/10 Treasury Spread  62.0 -1.0 basis point
  
• IHS Markit CMBX BBB- 6 71.75 unch.
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 61.31 +.11%
• 3-Month T-Bill Yield .01% +1.0 basis point
  

• Yield Curve 147.0 -1.0 basis point
  

• China Iron Ore Spot 185.0 USD/Metric Tonne -1.0%

• Citi US Economic Surprise Index 11.3 -3.4 points

• Citi Eurozone Economic Surprise Index 136.20 -5.9 points
  

• Citi Emerging Markets Economic Surprise Index 53.2 -2.9 points

• 10-Year TIPS Spread 2.45 -1.0 basis point
• 93.0% chance of no change at Sept. 22nd meeting, 91.0% chance of no change at Nov. 3rd meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating +146 open in Japan 
• China A50 Futures: Indicating +36 open in China

• DAX Futures: Indicating +144 open in Germany

Portfolio:

• Higher: On gains in my medical/tech/industrial/commodity sector longs and emerging market shorts
  

• Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges
  

• Market Exposure: Moved to 100% Net Long
  

Bear Radar

 Style Underperformer:

• Small-Cap Value +.2%

Sector Underperformers:

• 1) Education -1.9% 2) Alt Energy -1.0% 3) Biotech -.3%

Stocks Falling on Unusual Volume: 

• VVNT, AKRO, FF, COG, QS and XEC
  

Stocks With Unusual Put Option Activity:

• 1) SPCE 2) ATOS 3) DDD 4) COG 5) CVM
  

Stocks With Most Negative News Mentions:

• 1) COE 2) GOTU 3) DG 4) TAL 5) DDD
  

Charts:

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