Stocks Slightly Lower into Final Hour on US Policy-Induced Stagflation Fears, Fed "Behind the Curve" Worries, Earnings Outlook Concerns, REIT/Metals&Mining Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Lower
  

• Sector Performance:  Most Sectors Declining
  

• Volume:  Above Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 35.9 +7.5%
• Bloomberg Global Risk On/Risk Off Index 3,886.0 -59.0 points

• Euro/Yen Carry Return Index 140.54 -.18%

• Emerging Markets Currency Volatility(VXY) 12.3 +1.7%

• CBOE S&P 500 Implied Correlation Index 54.5 +6.1% 

• ISE Sentiment Index 90.0 +4.0 points
  

• Total Put/Call 1.3 -4.6%

• NYSE Arms .75 -63.9%

Credit Investor Angst:

• North American Investment Grade CDS Index 85.1 +2.3%
  

• US Energy High-Yield OAS 381.59 +1.7%

• European Financial Sector CDS Index 101.6 -.6%

• Italian/German 10Y Yld Spread 189.0 +5.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 118.37 -.4%
  

• Emerging Market CDS Index 296.27 +4.0%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 29.27 -.06%
• Russia Sovereign Debt Credit Default Swap 3,717.66 +.3%
  

• 2-Year Swap Spread 32.75 -.75 basis point
  

• TED Spread 51.75 +5.75 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -21.75 unch.
  
• MBS  5/10 Treasury Spread  125.0 +2.0 basis points
  
• iShares CMBS ETF 48.29 -.84%
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 52.11 -.58%
• 3-Month T-Bill Yield .78% -5.0 basis points
  

• Yield Curve 27.0 (2s/10s) +8.75 basis points
  

• China Iron Ore Spot 145.0 USD/Metric Tonne -.33%

• Citi US Economic Surprise Index 28.0 -11.4 points

• Citi Eurozone Economic Surprise Index 40.2 -12.9 points
  

• Citi Emerging Markets Economic Surprise Index 42.7 -5.6 points

• 10-Year TIPS Spread 2.83 -15.0 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:

• 123 new infections/100K people(last 7 days total). 7.0%(unch.) of 1/14 peak +8/100K people from prior report.
  
• New Covid-19 patient hospital admissions per 100K population -91.3%(-.3 percentage point) from peak 7-day avg. of 1/9/21 - 1/15/22
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -103 open in Japan 
• China A50 Futures: Indicating -254 open in China

• DAX Futures: Indicating -64 open in Germany

Portfolio:

• Higher: On gains in my tech/consumer discretionary sector longs, index hedges and emerging market shorts
  

• Disclosed Trades:  Added to my (IWM)/(QQQ) hedges, then covered some
  

• Market Exposure:  Moved to 50% Net Long
  

Monday Watch

Today's Headlines

Bloomberg:                       

• U.S. Homeland Chief Warns of Strain If Migration Spikes.
• China’s Lockdowns Wreak Havoc on Economy as Xi Pledges Support.   
• China Contagion Threatens to Derail the World’s Emerging Markets.
• Hungary Would Veto EU Sanctions on Russian Energy, Minister Says.
• Baerbock Says Sanctions Will Only Be Lifted After Russian Withdrawal.
  
• Ukraine Latest: Pelosi in Kyiv; Moscow Tightens Grip on Kherson.  
• Tourists, Rejoice! Italy, Greece Relax COVID-19 Restrictions.  
• Can the World Feed Itself? Historic Fertilizer Crunch Threatens Food Security.
  
• End of Easy Money Brings a $410 Billion Global Financial Shock.
• Sydney House Prices Slide Further in April as Rate Rise Looms.  
• Saudi Economy Grows at Fastest Pace in a Decade on Oil Boom.
• Stocks Face Challenging Open as Growth Fears Mount: Markets Wrap.
• These Media Stocks Have Fallen More than 50% This Year.
• Biggest Treasury Buyer Outside U.S. Quietly Offloads Billions.  
• Powell’s Fed Set to Go Big and Keep Going Until Inflation Tamed.
  

Wall Street Journal:

• Pelosi Pledges to Aid Ukraine Until Victory.
• Biden Establishes a Ministry of Truth. The Disinformation Governance Board already looks like a partisan instrument.
• China’s Economy Flirts With a Recession, Threatening to Drag Down Global Growth.
• Disney’s Clash With Florida Has CEOs on Alert.
• Fed Prepares Double-Barreled Tightening With Bond Runoff.
• Americans Feel Inflation Fatigue, and Some Companies See a Breaking Point.
• For Instacart Shoppers, the Job Is Getting Harder.
• Global Supply Chain Woes Reach America’s Amish Furniture Makers.

Fox News: 

• Chaos ensues after Antifa members show up to GOP rally, understaffed police struggle to respond.
• Germany reportedly makes significant turnaround in Russian oil stance.

CNBC:

• Surging prices force consumers to ask: Can I live without it?
• Warren Buffett says inflation ‘swindles almost everybody,’ Munger rails against bitcoin, market ‘mania’.
• The Fed’s favorite inflation gauge rose 5.2% in March as worker pay fell behind.
• Electric boats built by GM and former SpaceX engineers could be the next big thing – take a look.
• Top Wall Street analysts are getting bullish on these stocks for the long run.

Zero Hedge:

• Study Links Increase In Emergency Heart Events With COVID-19 Vaccine Rollout.
• New COVID Bill Fines Parents For Unvaxxed Kids And Doubles Income Taxes.
• Drawdown Delerium: Bezos Warns "Markets Teach, The Lessons Can Be Painful".
• Time Columnist Denounces Free Speech As A White Man's "Obsession".
• Alarming Signs Farmers Reduce Fertilizer May Wreck Crop Yields. 
• Newsquawk Asia-Pac Market Open - Weekend News Round Up.
• California Expands Medi-Cal To Adults 50 And Older, Regardless Of Immigration Status.
• Buyback Blackout Period Is Over, And 10 More Reasons Why Goldman Calls The End Of The Market Carnage.
• Biden Price Hike: Most Americans Blame US President For Higher Gas Prices.
• Diesel For Dinner.
• Crisis Or Hiccup? Assessing The Logistics Impact Of China Lockdowns.
• Biden Jokes About Low Approval Ratings At Correspondents' Dinner, Says "Some Guy Named Brandon" Is Having A Really Good Year.
• The Diesel Market Is Soaring, And Gasoline Prices Will Catch Up This Summer.
• Half Of France's Nuclear Reactors Are Shutdown Amid Energy Crisis.
• The People Behind DHS's Orwellian "Disinformation Governance Board".
• CDC Reports First Human Case Of Avian Influenza.
• Michigan Investigated Hundreds Of Doctors, Nurses Over COVID-Related Complaints.
• Shanghai Ship-Jam Spells Supply Chain Trouble.
• "Not The Right Fit" - Disney Exec Who Led Anti-Florida-Bill Response Leaves Firm After 3 Months.
• Tverberg: The World Has A Major Crude Oil Problem; Expect Conflict Ahead.

MarketWatch.com:        

• AMD’s earnings outlook expected to give a clearer picture of where the chip sector is headed.
  
• Why a fragile stock market faces danger from rising real yields as ‘TINA’ trade fades.

NewsMax:      

• McCaul Warns Next Weeks 'Pivotal' In Russia's War in Ukraine.  
• Study: Half of US Doesn't Trust FBI.

TheGatewayPundit.com:

• RINOs and Democrats Just Stole Future Elections in Deep Red Alaska — And the Republican Party DID NOT LIFT A FINGER to Stop It. 
• “You Can Never Think to the Future Until We Solve the Past, Because It Will Just Happen Again.” – President Trump on Those Who Want to Move On from 2020 Election. 
• Maskless Fauci Attends White House Correspondents’ Dinner Pre-Party with Masked Servants. 
• On April 21 Obama Said Social Media Censors “Don’t Go Far Enough” – 6 Days Later Puppet Joe Biden Rolls Out “Ministry of Truth”.
• “Never Let a Crisis Go to Waste” – Samantha Power Celebrates Fertilizer Shortages That will Force Farmers to Transition to “Natural Solutions” (VIDEO).
• TIME Magazine Correspondent Labels Freedom of Speech a “White Male Obsession”.
• MUST SEE: Catherine Englebrecht of True the Vote Gives a Riveting Interview on Steve Bannon’s War Room About the Massive Fraud in 2020 Election (VIDEO).
• Pfizer Announces Paxlovid is Not Effective at Preventing Covid-19 Infection Through a Household Contact — AFTER Biden Purchases 20 Million Doses.
• Palestinians Are Reportedly Destroying the Temple Mount Similar to What ISIS Did to the Arch de Triumph and Several Antiquities in Ancient Palmyra and Throughout the Region.
• Biden Laughs After Trevor Noah Roasts Him: “Since You’ve Come Into Office, Things Are Really Looking Up – Gas Is Up, Rent is Up, Food is Up!” (VIDEO).
• Joe Biden Attacks Republicans, Defends Disney at White House Correspondents’ Dinner as Liberal Reporters Laugh (VIDEO).
• Moderna Seeks Emergency Use Authorization For Covid Vaccine for Children Under the Age of 6.

The Epoch Times:

• Chinese Regime Locks Down World’s Largest Wholesale Hub Under its Zero-COVID Policy.

OpenVAERS:

• VAERS US COVID Vaccine Adverse Event Reports. 810,170 Reports(+2,929 from prior week) Through April 22nd, 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). 
• COVID Money Tracker. Tracking the Covid response.
  

Night Trading

• Asian indices are -.75% to +.25% on average.
• Asia Ex-Japan Investment Grade CDS Index 119.0 -2.0 basis points.
• China Sovereign CDS 79.0 +1.5 basis points.
• Bloomberg Emerging Markets Currency Index 52.41 -.02%.
• Bloomberg Global Risk-On/Risk Off Index 3,979.0 +36.0 points.
• Volatility Index(VIX) futures 31.0 -.6%. 
• Euro Stoxx 50 futures n/a.
• S&P 500 futures +.21%.
• NASDAQ 100 futures +.38%.

Morning Preview Links

Earnings of Note

Company/Estimate

Before the Open:

• (AMG)/4.34
• (FSS)/.27
• (GPN)/2.04
• (ITRI)/.08
• (MCO)/2.89
• (ON)/1.05
• (SAIA)/2.72
  

After the Close:

• (ANET)/.81
• (CAR)/3.54
• (BXP)/1.74
• (EXPE)/-.43
• (FN)/1.52
• (MGM)/-.05
• (MOS)/2.42
• (NXPI)/3.19
• (RIG)/-.23
• (VNO)/.77
• (WMB)/.34
  

Economic Releases

10:00 am EST

• Construction Spending MoM for March is estimated to rise +.7% versus a +.5% gain in Feb.
• ISM Manufacturing for April is estimated to rise to 57.6 versus 57.1 in March.
• ISM Prices Paid for April is estimated to rise to 87.7 versus 87.1 in March.
  

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Eurozone PMI report and the German Retail Sales report could also impact trading today.

US Equity Market Hours

• 9:30 am - 4:00 pm EST

BOTTOM LINE: Asian indices are mostly lower, weighed down by commodity and technology shares in the region. I expect US stocks to open mixed and to weaken into the afternoon, finishing modestly lower.  The Portfolio is 25% net long heading into the week.

Today's Headlines

Bloomberg:

• Texas Border Chaos Spurs Rebuke From Mexico’s Economy Chief.
• Ukraine Latest: Small Number of Civilians Released in Mariupol.  
• South Korea’s Exports to China Drop Amid Fallout From Lockdowns.
• This Is Where Inflation Runs Hottest in America. Just Ask Voters.
  
• Buy or Rent? The Decision Has Never Been Harder as Cost Gap Narrows.
  
• Popular Retirement Funds Are Getting Hammered as Tech Stocks Plunge.  
• Thrashed Stock Bulls Look to Future and See Nothing But Bad News.
• Bond Traders Face Week That Threatens to Shatter Any Market Calm.
• Credit Markets Eye Fed Decision With $25 Billion of Sales on Tap.  
• Bonds Are Suddenly Getting Love From Investors Hedging Recession.  
• Irrational Market Exuberance Is Dying a Painful Death: Devitt.
• Einhorn’s Greenlight Defies April’s Rout With 10.6% Gain.
  
• Tough-to-Crack Housing Market Has U.S. Buyers Eyeing Second Jobs.  
• Powell Takes Lead in Round of Rate Hikes Worldwide: Eco Week.  
• Charting the Global Economy: Growth in Euro Area Weakens.

Wall Street Journal:

• Record Fertilizer Prices Drive Investors, Farmers to Microbes.
• Ukrainians Suffer Fuel Shortages.
  
• The Taxpayer Con of the Century. Writing off student loan debt is a wealth transfer to the affluent and academia.
• Tariff Probe Casts Shadow on U.S. Solar Build-Out.
• China’s Factory Activity Falls.
• Investors Are Waiting for Vehicle Prices to Drop.
• Apple’s Next Move in Microchips.

Barron's:

• Had bullish commentary on (CCL), (NCLH), (RCL), (FISV), (ROKU) and (LAD).
• Had bearish commentary on (TDOC) and (GE).

Fox News:

• Top Biden official under intensifying pressure to resign over response to domestic terrorism question.
• Mayorkas testifies more than 389,000 migrant ‘gotaways’ at border.
• Republicans accuse Mayorkas of discrediting 'legitimate criticism' with 'disinformation' board, demand info. 
• Military official fears indications point to alarming turn in Russia's war on Ukraine.

CNBC:

• Dow tumbles more than 900 points and the Nasdaq drops 4% on Friday to close out a brutal month.
• Warren Buffett says inflation ‘swindles almost everybody,’ Munger rails against bitcoin, market ‘mania".
• Warren Buffett says Berkshire owns 9.5% of Activision Blizzard shares in merger arbitrage bet.
• Amazon workers won’t get paid for Covid leave anymore.
• Buffett gives most expansive explanation for why he doesn’t believe in bitcoin.
• Charlie Munger says the Robinhood trading app is justly ‘unraveling’ for ‘disgusting’ practices.

Zero Hedge:

• "Twitter, You Failed" - Bill Maher Blasts Censorship, Cites Hunter Biden Email Story.
• Twitter's $17M Per Year Censorship Czar Could Get Axe Under Musk.
• Escobar: The Empire Of Lies, Operation Z, & The New Global Chessboard.
• $2 Billion Hedge Fund Loses Nearly Half After Carvana Plummets 75% In 2022.
• Shippers Are Back In The Driver's Seat On Rates.
• Buffett Blasts Bankers For Turning Stock Market Into "A Gambling Parlor".
• Johnstone: "Oh God It's Going To Get So Much Worse".
• NY Case Against Trump Implodes As Grand Jury Ends With No Charges.
• Why Is CDC Trying To Put A Mask On Your Face Again?
• Russia To Pull Out Of ISS Over Western Sanctions.
• "Toto, I Don't Think We're In Kansas Anymore".
• NATO Jets Intercept Russian Fighters Multiple Times In Baltic & Black Sea Regions.
• Buckle-Up, Buttercup.
• Food Processing Plant Fires: Conspiracy Or Coincidence?
• Number Of Illegal Immigrants Living In US Rose By 1 Million In Biden's First Year: Report.
• Rand Paul: Fauci "Is A Man That Is Against Everything That America Stands For".
• Watch: Biden's New 'Disinfo' Queen Goes Full 'Libs Of TikTok'.
• White House Says It Would "Strongly Support" Finland & Sweden NATO Membership.
• How Far Are We From Phasing Out Coal?
• Streaming Accounts For Just 30% Of US TV Screen-Time.
• Hundreds Of CDC Employees Still Haven't Received COVID-19 Vaccine.
• These Are The World's Biggest Shipping Hubs.
• 71% Of Elementary School Math Textbooks In Florida Contained 'Woke Indoctrination' .
• Telling The COVID 'Good Guys' From The 'Bad Guys'.
• Hospitals Ignoring Price Transparency Rule Rack Up Billion-Dollar Profit.
• Newsquawk US Market Wrap: Spooz's take a month-end haemorrhaging for their biggest loss since June 2020.
• Nasdaq Collapses To Worst Month Since Lehman As Market Starts Pricing 75bps Hike In June.

MarketWatch.com:    

• More Americans are fretting over their finances compared to last year. Take one guess on what their main worry is.
  
• Rising real yields are threatening perennial `TINA’ trade favoring U.S. stocks — and put tech names further at risk.
  
• A rough 4 months for stocks: S&P 500 books the worst start to a year since 1939. Here’s what pros say you should do now.  
• Weekend reads: How companies and consumers fight inflation and handle shrinkflation.

NewsMax:

• Dershowitz: 'No Free Lunches' With Student Loans.
• Georgian President Weighs In on Putin Using Nukes.
• Zelenskyy: Peace Talks Near Collapse.  
• Goya CEO Unanue: US 'Softening' Too Much Under Biden.

TheGatewayPundit.com:  

• NEVER FORGET… Here are the Six RINOs Who Voted to Confirm DHS Secretary Mayorkas and the Country’s Destruction Through Open Borders.
• BREAKING HUGE EXCLUSIVE: Dr. Li-Meng Yan Says China Released COVID-19 Intentionally – “THIS IS NOT AN ACCIDENT”.
• YIKES: Bill Gates Wants To Build A New Global Team Called “GERM”.
• NY Times Reporters: Manchin Would Have Given Senate Control To The GOP — But He Didn’t Like McConnell.
• Healthcare Freedom Activists Releasing “Propaganda Exposed” Documentary May 4th.
• Grassroot Patriots Are Getting the Word Out Across the Country About “2000 MULES”.
• High-Level Disney Executive Leaves In Wake Of Woke Disaster.
• BIDEN ECONOMY: The DOW and S&P 500 Record Worst April Since 1970.
• Dr. Drew Leaving YouTube and Joining Rumble After Vaccine Video Was Censored.
• Rep. Lauren Boebert Understands Danger of Biden’s Ministry of Truth and Calls for Its Defunding.
• What’s Really Going On? Georgia Governor Candidates Brian Kemp and Stacey Abrams Both Increased Their Net Worth in the Millions While 2020 Election Was Stolen.
• Dept. of Defense Study Shows Pregnant Female Soldiers Are Experiencing “Absolutely Catastrophic Rate of Abnormalities and Fetal Problems” – Dr. Naomi Wolf Drops a Bomb on the War Room (VIDEO).

The Epoch Times:

• China Deploys New Missiles Against the US Navy.

OpenVAERS:

• VAERS US COVID Vaccine Adverse Event Reports. 810,170 Reports(+2,929 from prior week) Through April 22nd, 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).