Stocks Modestly Higher into Final Hour on Earnings Optimism, Bargain-Hunting, Technical Buying, Commodity/Pharma Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Modestly Higher
  

• Sector Performance:  Most Sectors Rising
  

• Volume:  Around Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 30.2 -9.9%
• Bloomberg Global Risk On/Risk Off Index 3,873.0 +344.0 points

• Euro/Yen Carry Return Index 139.25 +.1%

• Emerging Markets Currency Volatility(VXY) 11.5 unch.

• CBOE S&P 500 Implied Correlation Index 48.5 -2.5% 

• ISE Sentiment Index 86.0 -11.0 points
  

• Total Put/Call 1.12 +5.7%

• NYSE Arms .72 -56.1%

Credit Investor Angst:

• North American Investment Grade CDS Index 81.15 -.30%
  

• US Energy High-Yield OAS 379.48 -.89%

• European Financial Sector CDS Index 97.82 -.01%

• Italian/German 10Y Yld Spread 177.0 +3.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 122.84 +2.7%
  

• Emerging Market CDS Index 271.53 -2.0%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 29.13 -.02%
• Russia Sovereign Debt Credit Default Swap 19,062.50 +27.5%
  

• 2-Year Swap Spread 28.75 -2.5 basis points
  

• TED Spread 39.75 -2.0 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -23.5 -.25 basis point
  
• MBS  5/10 Treasury Spread  122.0 -1.0 basis point
  
• iShares CMBS ETF 48.85 -.51%
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 52.36 -.06%
• 3-Month T-Bill Yield .81% -1.0 basis point
  

• Yield Curve 23.75(2s/10s) +.75 basis point
  

• China Iron Ore Spot 140.75 USD/Metric Tonne +.4%

• Citi US Economic Surprise Index 62.0 -.5 point

• Citi Eurozone Economic Surprise Index 58.0 +.8 point
  

• Citi Emerging Markets Economic Surprise Index 41.4 -.7 point

• 10-Year TIPS Spread 2.89 +2.0 basis points
  
• 0.0%(unch.) chance of no change at June 15th FOMC meeting, 0.0%(unch.) chance of no change at July 27th meeting

US Covid-19:

• 108 new infections/100K people(last 7 days total). 6.0%(unch.) of 1/14 peak +3/100K people from prior report.
  
• New Covid-19 patient hospital admissions per 100K population -91.5%(+.9 percentage point) from peak 7-day avg. of 1/9/21 - 1/15/22
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +114 open in Japan 
• China A50 Futures: Indicating +37 open in China

• DAX Futures: Indicating +31 open in Germany

Portfolio:

• Slightly Lower: On losses in my tech/medical sector longs and emerging market shorts
  

• Disclosed Trades:  Covered some my (IWM)/(QQQ) hedges and some of my emerging market shorts
  

• Market Exposure:  Moved to 50% Net Long
  

Bear Radar

Style Underperformer:

• Small-Cap Growth +.3%

Sector Underperformers:

• 1) Networking -2.2% 2) Networking -1.3% 3) Internet -1.0%

Stocks Falling on Unusual Volume: 

• NFLX, EW, WBD, ILPT, CVNA, RHI, TRN, BA, HA, FFIV, FRGE and NCR
  

Stocks With Unusual Put Option Activity:

• 1) BAX 2) SABR 3) BA 4) TXN 5) CAR
  

Stocks With Most Negative News Mentions:

• 1) NCR 2) BA 3) ROKU 4) HA 5) AFRM
  

Charts:

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

Bull Radar

Style Outperformer:

• Large-Cap Growth +1.3%

Sector Outperformers:

• 1) Steel +4.0% 2) Shipping +3.8% 3) Software +3.8%

Stocks Rising on Unusual Volume:

• AMR, JBT, VRT, DWAC, NKTX, MAT, SJT, INSW, BG, AA, MA, OC, SKX, MBI, SLAB, ABCB, GSHD, RUSHA, RGEN, ZNTL, FCX, HPK, KRP, MAS, AVY, MFA, SSTK, SHW, WAB, VLO, SRCL, AKRO, TMUS, FISV, DX, ARCH, SF, NOW, TENB, CMG, QS, BSM, CRM, V, ENPH, DRVN, ARLP, MSFT, CEIX, ARCC, EXAS, INBX, INSW, DCPH, ACET, ADM, SBOW, MAS, SHW, CMG and IART
  

Stocks With Unusual Call Option Activity:

• 1) GCI 2) NCR 3) FEZ 4) MAT 5) CHGG

Stocks With Most Positive News Mentions:

• 1) NUTX 2) VRT 3) RGEN 4) V 5) ARCH
  

Charts:

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

Mid-Day Market Internals

NYSE Composite Index:

• Volume Running +4.6% Above 100-Day Average 
• 10 Sectors Rising, 1 Sector Declining
• 56.9% of Issues Advancing, 38.8% Declining
• 5 New 52-Week Highs, 363 New Lows
• 37.9% of Issues Above 200-day Moving Average
• Average 14-Day RSI 41.8% 
• Bloomberg Global Risk-On/Risk-Off Index 3,809.0 +278.0 points
• Russell 1000: Growth/Value 15,537 +.37%
  
• Vix 31.2 -7.0%
• Total Put/Call 1.13 +6.6%
• TRIN/Arms .82 -50.0%

Wednesday Watch

Evening Headlines

Bloomberg:           

• Russia to Cut Gas to Poland and Bulgaria, Making Energy a Weapon.
  
• Ukraine Latest: Russia Cuts Gas, UN Seeks Mariupol Relief Role.  
• Russia Left Swaths of Ukraine Seeded With Mines, Aid Group Says.
  
• U.S. Seeks More Authority to Seize Russian Assets to Aid Ukraine.  
• Satellite Data Show Extent of China’s Crippling Lockdowns.
• China Running Out of Ways to Stem Self-Made Market Meltdown.
  
• BOJ to Reaffirm Easing Stance as Yen Risk Mounts: Decision Guide. 
• Stocks Struggle, Bonds Rise as Growth Outlook Dims: Markets Wrap.
  
• U.S. Diesel Futures Close at Record High as Shortage Deepens.
  
• Chipotle Says Food Inflation Pressure May Persist Into 2023.  
• Texas Republicans Bear Down on Wall Street Over Its Embrace of Climate Policies.   
• Churning Stocks Dealing Swift Punishment to Anyone Who Dares Buy.

Wall Street Journal:

• In Ukrainian Villages, Fears Grow for Men Taken to Russia.
• Russia’s Lavrov Says NATO Is Using Ukraine as a Proxy, Warns Against World War III.
• Latest Updates: Russia to Stop Supplying Natural Gas to Poland and Bulgaria.
• Musk Bets Twitter Users Will Like a More Freewheeling Platform.
• China Looms Large Over Twitter’s Future.
• Harvard Pledges $100 Million to Redress Ties to Slavery.
• Business Schools Try to Talk M.B.A. Prospects Into Quitting Their Jobs.
• Biden Seriously Considering Student-Loan Forgiveness, Officials Say.

Fox News:   

• McEnany on liberals' meltdown over Elon Musk buying Twitter: 'They fear a level playing field'.

CNBC.com:

• GM will start tying executive compensation to electric vehicle targets.
• Tesla stock closes down more than 12% after Musk’s Twitter deal.
• Microsoft earnings beat across the board, stock up on outlook.
• YouTube’s huge miss shows digital media ad market is getting hit hard.
• Stocks making the biggest moves after hours: Alphabet, Robinhood & more.
• Chipotle earnings beat estimates as customers paid more, helping offset surging costs.
• Biden blocks sales of inefficient lightbulbs, reversing Trump-era policy.

MarketWatch:          

• These 21 large-cap stocks have now plunged at least 50% as tech falls to fresh low.
  
• Lael Brainard confirmed to be Powell’s No. 2 at Fed.
  
• A median-priced new home in the U.S. is roughly $77,000 more expensive than it was a year ago.

Zero Hedge:

• Twitter's Top Lawyer Breaks Down In Tears During Musk Takeover Meeting.
• Poland Confirms Russia To Halt All Gas Delivery Wednesday If Payment Not Settled In Rubles.
• Biden Senior Adviser Called 'Squad' Members 'F**king Idiots' According To NYT Reporters.
• Some Vaccine-Injured Getting Better While Others See Little Improvement.
• A Lone Bank Doubles Down On Its Doomsday Call, Says Recession "Will Be Worse Than Expected".
• Bolsonaro Asks WTO Not To Sever Russian Trade As 27 Fertilizer Ships Inbound.
• Newsquawk Asia-Pac Market Open - US stocks declined and Alphabet missed on earnings.
• Broken markets...
• Big Tech Censored Biden Criticism 646 Times Over 2 Years: Report.
• WTI Slides Lower After Surprise Crude Build.
• Newsquawk US Market Wrap: Stocks plunge deeper on global growth woes while Nasdaq 100 sees biggest decline since Feb 3rd.
• "Meltdown": Bank Of America Sounding The Alarm On Collapsing Freight Demand.
• Robinhood To Fire 9% Of Full-Time Employees.
• Alphabet Plummets 7% After Missing On Earnings, YouTube Revenues, Despite New $70BN Stock Buyback. 
• Elon Musk 'Clarifies' Free Speech Stance After EU Threats.
• Pukefest!

Newsmax:  

• Fiona Hill on Putin Using Nuclear Weapons: 'Of Course He Would'.
• Ukraine Accuses Russia of Blackmail With Plan to Halt Gas to Poland.
• US, Allies Vow Heavy Arms for Ukraine, Shrug Off Russian Nuke Warning.
• Reports of Russian Concentration Camps, Demands for Money.
• Biden Admin. Pushed Germany to Delay Russian Oil Ban Until After Midterms.

TheGatewayPundit.com: 

• BREAKING: Project Veritas Releases Leaked Audio of Twitter Meeting Following Elon Musk’s Purchase.
• Schumer Says the “Only Way” to Reduce Inflation Caused by Biden and Democrats is to Raise Taxes on Americans (VIDEO).
• Family Launches Billboard Campaign – Claims Pfizer Drugs and Wisconsin Hospital Killed Their Daughter Grace.
• Double Vaccinated ESPN’s Kirk Herbstreit to Miss 2022 NFL Draft Due to Blood Clot (VIDEO).
• Joe Biden Paid For Hunter Biden’s Legal Bills For a Deal with Communist China.
• Despite Record Pain at the Pump — Joe Biden Blocks Oil Drilling on Millions of Acres of US Land.
• Biden Incurred $5.2 Million in Unexplained Income Hidden in Financial Records.
• JUST IN: Fully Vaxxed and *Double Boosted* Kamala Harris Tests Positive For Covid-19, Goes Into Isolation.
• “They Attack People Viciously and Personally Why, Because the Left Can’t Win on the Facts. Their Agenda Is Insane” – Senate Candidate and Former Governor Eric Greitens.

The Epoch Times:

• Marxists Seek to Destabilize American Society Through Sexualization of Young People: Expert.

OpenVAERS:

• VAERS US COVID Vaccine Adverse Event Reports. 807,241 Reports(+4,073 from prior week) Through April 15th, 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 121.0 +2.25 basis points. 

• China Sovereign CDS  81.5 +2.5 basis points.
  

• Bloomberg Emerging Markets Currency Index 52.36 -.05%. 
• Bloomberg Global Risk-On/Risk Off Index 3,480.0 -44.0 points.
• Volatility Index(VIX) futures 30.0 -1.0%.
• Euro Stoxx 50 futures -.3%.

• S&P 500 futures +.05%.

• NASDAQ 100 futures -.20%. 

Morning Preview Links

Earnings of Note 
Company/Estimate 

 

Before the Open: 

• (AMT)/2.48
• (ADP)/2.08
• (BA)/-.22
• (BSX)/.39
• (BG)/2.94
• (CME)/2.00
• (DISCA)/.57
• (GD)/2.52
• (GPI)/9.43
• (HOG)/1.47
• (HES)/1.11
• (HUM)/6.78
• (KHC)/.53
• (MAS)/.85
• (NSC)/2.92
• (ODFL)/2.41
• (OSK)/.17
• (OC)/2.44
• (PAG)/3.64
• (RGEN)/.72
• (R)/2.38
• (STX)/1.88
• (STM)/.70
  

After the Close:

• (AFL)/1.37
• (ALGN)/2.23
• (AMGN)/4.16
• (AVB)/2.26
• (CHRW)/1.55
• (CP)/.71
• (CAKE)/.51
• (DFS)/3.61
• (F)/.38
• (FWRD)/1.36
• (HTZ)/.86
• (LVS)/-.24
• (FB)/2.51
• (OII)/-.01
• (ORLY)/7.41
• (PYPL)/.88
• (PPC)/.68
• (QCOM)/2.92
• (RJF)/1.64
• (NOW)/1.70
• (SAVE)/-1.58
• (URI)/4.87
  

Economic Releases

8:30 am EST

• The Advance Goods Trade Balance for March is estimated at -$105.0B versus -$106.3B in Feb.
• Wholesale Inventories MoM for March is estimated to rise +1.5% versus a +2.5% gain in Feb.
• Retail Inventories MoM for March is estimated to rise +1.4% versus a +1.1% gain in Feb.
  

10:00 am EST

• Pending Home Sales MoM for March is estimated to fall -1.0% versus a -4.1% decline in Feb.

10:30 am EST

• Bloomberg consensus estimates call for a weekly crude oil inventory decline of -225,000 barrels versus a -8,020,00 barrel decline the prior week. Gasoline supplies are estimated to rise by +300,000 barrels versus a -761,000 barrel decline the prior week. Distillate inventories are estimated to fall by -985,710 barrels versus a -2,664,000 barrel decline the prior week. Finally, Refinery Utilization is estimated to rise +.21% versus a +1.0% gain prior.

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Australia Trade Balance report, 5Y T-Note auction and the weekly MBA Mortgage Applications report 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 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 25% net long heading into the day.

Stocks Falling Substantially into Final Hour on US Policy-Induced Stagflation Fears, Russia Nuclear War Rhetoric/Sovereign Default Worries, US Dollar Strength, Alt Energy/Consumer Discretionary Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Lower
  

• Sector Performance:  Almost Every Sector Declining
  

• Volume:  Around Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 31.6 +16.9%
• Bloomberg Global Risk On/Risk Off Index 3,698.0 -418.0 points

• Euro/Yen Carry Return Index 139.59 -1.1%

• Emerging Markets Currency Volatility(VXY) 11.5 +.4%

• CBOE S&P 500 Implied Correlation Index 47.4 +6.5% 

• ISE Sentiment Index 101.0 +1.0 point
  

• Total Put/Call 1.0 -13.0%

• NYSE Arms 1.26 +40.0%

Credit Investor Angst:

• North American Investment Grade CDS Index 80.06 +3.8%
  

• US Energy High-Yield OAS 378.06 +1.9%

• European Financial Sector CDS Index 97.87 +3.9%

• Italian/German 10Y Yld Spread 174.0 unch.
  

• Asia Ex-Japan Investment Grade CDS Index 119.45 -.5%
  

• Emerging Market CDS Index 274.0 +2.9%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 29.4 +.03%
• Russia Sovereign Debt Credit Default Swap 14,952.20 +19.1%
  

• 2-Year Swap Spread 30.25 +1.25 basis points
  

• TED Spread 38.0 -7.0 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -23.25 -.5 basis point
  
• MBS  5/10 Treasury Spread  123.0 unch.
  
• iShares CMBS ETF 49.07 +.35%
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 52.45 -.52%
• 3-Month T-Bill Yield .82% unch.
  

• Yield Curve 23.0(2s/10s) +2.5 basis points
  

• China Iron Ore Spot 139.75 USD/Metric Tonne +.39%

• Citi US Economic Surprise Index 62.50 unch.

• Citi Eurozone Economic Surprise Index 57.2 +.2 point
  

• Citi Emerging Markets Economic Surprise Index 42.1 +2.6 points

• 10-Year TIPS Spread 2.87 -4.0 basis points
  
• 0.0%(unch.) chance of no change at June 15th FOMC meeting, 0.0%(unch.) chance of no change at July 27th meeting

US Covid-19:

• 105 new infections/100K people(last 7 days total). 6.0%(unch.) of 1/14 peak +6/100K people from prior report.
  
• New Covid-19 patient hospital admissions per 100K population -92.4%(unch.) from peak 7-day avg. of 1/9/21 - 1/15/22
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -430 open in Japan 
• China A50 Futures: Indicating -57 open in China

• DAX Futures: Indicating +23 open in Germany

Portfolio:

• Lower: On losses in my tech/medical/consumer discretionary/industrial sector longs
  

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

• Market Exposure:  Moved to 25% Net Long