Morning Market Internals

NYSE Composite Index:

• Volume Running +8.0% Above 100-Day Average 
• 7 Sectors Declining, 4 Sectors Rising
• 41.9% of Issues Advancing, 53.7% Declining
• 7 New 52-Week Highs, 233 New Lows
• 30.6% of Issues Above 200-day Moving Average
• Average 14-Day RSI 44.1% 
• Bloomberg Global Risk-On/Risk-Off Index 3,703.0 -175.0 points
• Russell 1000: Growth/Value 14,923.0 +1.25%
  
• Vix 30.8 -.7%
• Total Put/Call 1.17 -.9%
• TRIN/Arms .74 -76.0%

Thursday Watch

Evening Headlines

Bloomberg:            

• Asia to Ramp Up Gasoline Exports to US as Sky-High Prices Beckon.
• Stocks Set to Sink as Bonds Jump on Growth Fears: Markets Wrap.
• Oil Falls as Equities Sink and China Imposes More Lockdowns.
  
• Stock Bounce Call ‘Proved Wrong,’ Cantor Strategist Concedes.
• What You Need to Know About the Baby Formula Shortage.
• Democrats Press Biden to Go Big on Forgiving Student Loan Debt.
• Farmers Are Buying Up Expensive Weedkiller Even As Costs Soar.   
• The Long, Slow Death of Lehman Brothers Is Almost Complete.  
• Vast Swath of US at Risk of Summer Blackouts, Regulator Warns.
• Buying Call Options Is New Stock Hedge for Traders Eyeing a Big Bounce.  
• Surging Dollar Stirs Markets Buzz of a 1980s-Style Plaza Accord.

Wall Street Journal:

• Biden Can Boost Energy Production—and Protect National Parks. Renewing offshore oil and gas leases would support Land and Water Conservation Fund.
• Blue chips have worst day since 2020 as S&P, Nasdaq lose over 4%.
• Stock Selloff Crunches SPAC Creators.
• Heard on the Street: This Could Be a Lost Decade for Stocks.
• High Inflation, Slowing Growth Raise Risk of Global Downturn.
• Recession Looms, but Markets Haven’t Got the Message.
• The Next Emerging-Market Crisis? Developing economies face a perilous return to monetary normal.
• Fentanyl Overdose Rates Are Rising Fast. The drug will continue killing Americans until Biden decides to get control of the border. 
• There’s a New Media Mogul Tearing Up Hollywood: ‘Zas Is Not Particularly Patient’
• Treasury Likely to Prevent U.S. Investors From Receiving Russian Debt Payments.
• Latest Updates: U.S. Embassy Resumes Work in Kyiv.
• Elon Musk Calls ESG ‘An Outrageous Scam’.
• More Crypto Market Pain Seen by SEC Chairman.
  

Fox News:

• Biden admin’s ‘bureaucratic bungling' made baby formula shortage worse, CEO who rescued GM says.
• Dem witness tells House committee men can get pregnant, have abortions.

CNBC.com:

• Here’s what Walmart, Target, Home Depot and Lowe’s tell us about the state of the American consumer.
• Bath & Body Works shares fall as retailer cuts profit outlook due to inflation.
• Cisco stock plunges as company forecasts surprising revenue decline.
• Under Armour CEO Patrik Frisk to step down, interim chief to take over June 1.
• Treasury yields fall, prices rise as investors huddle in bonds for safety amid stock sell-off.
  

MarketWatch:     

• A ‘summer of pain’? The Nasdaq could plunge 75% from peak, S&P 500 skid 45% from its top, warns Guggenheim’s Scott Minerd  
• Fed will keep raising interest rates until it is ‘confident’ inflation is moving down, Harker says  
• Goldman Sachs CEO sees a ‘30% chance of recession’ within the next 12 to 24 months.  
• Next big shoe to drop in financial markets: Inflation that fails to respond to Fed rate hikes.  
• You bought. They sold. Meet some of the insiders who unloaded $35 billion of stock in the tech IPO bonanza that tanked. 
• Bad news for the 2022 hurricane season: The Loop Current, a fueler of monster storms, is looking a lot like it did in 2005, the year of Katrina.

Zero Hedge: 

• Musk Vs. Soros: "I Can No Longer Support Democrats, Will Vote Republican".
• Biden's 'Disinfo' Board Paused As 'Scary Poppins' Resigns.
• Biden Admin Bracing For Wave Of Summer Violence Over Roe v. Wade.
• Diesel Costs Deliver Body Blow To Trucking Industry, Impacting Broader Economy.
• Mortality Among White Collar Workers Jumped 24 Percent Between 2020 And 2021, Life Insurance Data Show.
• Guess What Comes Next.
• China Mulls Extending EV Subsidies Amidst Surging Raw Material Costs.
• Trucking Stocks Massacred After Target Warns Of $1 Billion In Incremental Freight Costs.
• Goldman Economist Warns US Consumers Maxing Out Credit Cards Will Lead To Late 2022 Spending Collapse.
• UFO Hearing: Pentagon Shows Declassified Footage of Flying Spherical Object.
• "I Have Given Everything I Could": Melvin Capital Calls It A Day, Will Wind Down Fund After Gigantic Losses.
• Weaponizing The Pursuit Of Profit: Rubio Warns Of 'Extraordinary' Leverage Held By China Over American Companies.
• Newsquawk Asia-Pac Market Open - Wall Street bloodbath.
• Over-Aggressive Fed Faces "Financial Accident" - Guggenheim Warns Recession Risk Rising.
• Newsquawk US Market Wrap: Spoos records worst day since June 2020 while Treasuries and Buck soar.
• Cisco Crashes 20% On Catastrophic Guidance; Blames China, Ukraine.
• Key NIH Research Executive Received 70 Secret Royalty Payments; Colleague Got 7.
• Stocks & Bond Yields Crater As The 'American Consumer Is Strong' Narrative Implodes.

Newsmax:   

• Russia Burning Through $15.5M Per Hour on War.
• NATO Tech Officials Hold 1st Cyber Summit Amid Invasion.
• Internal Dem Generic Poll: GOP Up by 8 in Battleground Districts.

TheGatewayPundit.com: 

• Months After Infant Formula Shortages Started, Slow Joe Biden Invokes Defense Production Act.
• Just In: Health Officials Confirm First 2022 U.S. Case of Monkeypox in Massachusetts.
• Hilarious! Doocy to Jean-Pierre After Jankowicz Resigns: “The Disinformation Board is Being Shut Down Because of Disinformation?” (VIDEO).
• Here We Go: US Government to Extend Covid-19 Public Health Emergency Past July.
• Watch: Continuous Protests Spread Across Iran Following a Massive Price Hike in Food and Other Basic Goods.
• US Citizen, Four Chinese Intelligence Officers Charged with Acting as Secret Police to Harass, Stalk, Spy on US Residents Critical to China.
• Biden Transportation Secretary Pete Buttigieg Says Truckers Can Work Longer Hours to Address the Baby Formula Shortage.
• WATCH: Trump Endorsed AZ Gubernatorial Candidate Kari Lake “Flabbergasted” By Conservative Media’s Silence On 2000 Mules – “We Want People To Be Arrested, Prosecuted, And Thrown In Jail”.
• Autopsy Reveals Healthy 36-Year-Old Mother Died from Acute Myocarditis Due to Her Covid-19 Immunization.

The Epoch Times:

• Trump Announces Forthcoming Book About the 2020 Election.

OpenVAERS:

• VAERS US COVID Vaccine Adverse Event Reports. 813,020 Reports(+2,363 from prior week) Through May 6th, 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 -2.25% to -1.5% on average.

• Asia Ex-Japan Investment Grade CDS Index 129.5 +3.5 basis points. 

• China Sovereign CDS  84.75 +5.75 basis points.
  

• Bloomberg Emerging Markets Currency Index 51.64 unch.  
• Bloomberg Global Risk-On/Risk Off Index 3,842.0 -33.0 points.
• Volatility Index(VIX) futures 32.0 +1.5%.
• Euro Stoxx 50 futures -1.01%.

• S&P 500 futures -.40%.

• NASDAQ 100 futures -.62%. 

Morning Preview Links

Earnings of Note 
Company/Estimate 

 

Before the Open: 

• (BJ)/.72
• (GOOS)/-.01
• (EXP)/1.83
• (KSS)/.70
• (MNRO)/.46
• (PLCE)/1.46
• (VIPS)/1.90

After the Close:

• (AMAT)/1.90
• (DECK)/1.32
• (FLO)/.39
• (PANW)/1.68
• (ROST)/1.00
• (VFC)/.47
  

Economic Releases

8:30 am EST

• The Philly Fed Business Outlook Index for May is estimated to fall to 15.0 versus 17.6 in April.
• Initial Jobless Claims for last week are estimated to fall to 200K versus 203K the prior week.
• Continuing Claims are estimated to fall to 1320K versus 1343K prior.
  

10:00 am EST

• Existing Home Sales for April is estimated to fall to 5.65M versus 5.77M in March.
• The Leading Index for April is estimated unch. versus a +.3% gain in March.
  

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The weekly EIA natural gas inventory 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 consumer and technology 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 Plunging into Final Hour on US Policy-Induced Stagflation Fears, Fed "Behind the Curve" Worries, Rising European/Emerging Markets/US High Yield Debt Angst, Consumer Discretionary/Transport 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) 30.4 +16.5%
• Bloomberg Global Risk On/Risk Off Index 3,923.0 -478.0 points

• Euro/Yen Carry Return Index 138.18 -1.6%

• Emerging Markets Currency Volatility(VXY) 12.7 +.08%

• CBOE S&P 500 Implied Correlation Index 48.3 +1.2% 

• ISE Sentiment Index 74.0 -30.0 points
  

• Total Put/Call 1.1 +10.9%

• NYSE Arms 1.94 +321.7%

Credit Investor Angst:

• North American Investment Grade CDS Index 90.32 +7.2%
  

• US Energy High-Yield OAS 435.15 +3.2%

• European Financial Sector CDS Index 106.60 +5.0%

• Italian/German 10Y Yld Spread 193.0 basis points +1.0 basis point
  

• Asia Ex-Japan Investment Grade CDS Index 126.68 +.32%
  

• Emerging Market CDS Index 301.75 +3.5%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 28.61 -.34%
  
• Russia Sovereign Debt Credit Default Swap 15,754.8 +190.0%
  

• 2-Year Swap Spread 28.5 basis points -.25 basis point
  

• TED Spread 41.75 basis points unch.
  

• 3-Month EUR/USD Cross-Currency Basis Swap -17.75 basis points +.25 basis point
  
• MBS  5/10 Treasury Spread  128.0 +2.0 basis points
  
• iShares CMBS ETF 48.5 +.54%
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 51.62 -.47%
• 3-Month T-Bill Yield 1.02% -3.0 basis points
  

• Yield Curve 21.75 basis points (2s/10s) -4.75 basis points
  

• China Iron Ore Spot 122.2 USD/Metric Tonne -3.6%

• Citi US Economic Surprise Index -2.3 -2.5 points

• Citi Eurozone Economic Surprise Index 24.5 -1.6 points
  

• Citi Emerging Markets Economic Surprise Index 16.3 -1.5 points

• 10-Year TIPS Spread 2.75 unch.
  
• 0.0%(unch.) chance of no change at July 27th FOMC meeting, 0.0%(unch.) chance of no change at September 21st meeting

US Covid-19:

• 206 new infections/100K people(last 7 days total). 12.0%(unch.) of 1/14 peak +0/100K people from prior report.
  
• New Covid-19 patient hospital admissions per 100K population -85.4%(+2.1 percentage points) from peak 7-day avg. of 1/9/21 - 1/15/22
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -541 open in Japan 
• China A50 Futures: Indicating -164 open in China

• DAX Futures: Indicating -131 open in Germany

Portfolio:

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

• Disclosed Trades:  Added to my (IWM)/(QQQ) hedges and took profits in some consumer discretionary longs
  

• Market Exposure:  Moved to Market Neutral
  

Bear Radar

Style Underperformer:

• Mid-Cap Growth -4.6%

Sector Underperformers:

• 1) Retail -9.1% 2) Homebuilding -6.3% 3) Gambling -6.0%

Stocks Falling on Unusual Volume: 

• U, RTLR, ABR, RVT, AFRM, GXO, EXEL, SKT, MEDP, SWTX, CRI, WMT, ACRE, INBX, ALBO, UNFI, DDOG, HBI, COIN, WBA, OM, MGM, AEO, BBWI, RRR, MDB, MUSA, THC, SJM, JBHT, DOCS, CFLT, PLCE, KSS, KTB, ULTA, RH, KNX, DG, M, BBY, COST, ASO, FIVE, BIG, BOOT, TSCO, SAIA, WSM, CENX, DKS, DDS, SCVL, DLTR, BJ, WOOF, EWCZ, TGI and TGT
  

Stocks With Unusual Put Option Activity:

• 1) IHI 2) STWD 3) TSN 4) SABR 5) DLTR
  

Stocks With Most Negative News Mentions:

• 1) TGT 2) COST 3) ENDP 4) DLTR 5) CCL
  

Charts:

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

Bull Radar

Style Outperformer:

• Small-Cap Value -2.9%

Sector Outperformers:

• 1) Education +.1% 2) Shipping unch. 3) Utilities -.6%

Stocks Rising on Unusual Volume:

• TJX, ATUS and UPST
  

Stocks With Unusual Call Option Activity:

• 1) BBWI 2) GNUS 3) MNKD 4) TGT 5) MDLZ

Stocks With Most Positive News Mentions:

• 1) AGYS 2) DLO 3) MX 4) SNWV 5) TJX
  

Charts:

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

Mid-Day Market Internals

NYSE Composite Index:

• Volume Running +2.1% Above 100-Day Average 
• 11 Sectors Declining, 0 Sectors Rising
• 18.6% of Issues Advancing, 78.4% Declining
• 21 New 52-Week Highs, 253 New Lows
• 26.6% of Issues Above 200-day Moving Average
• Average 14-Day RSI 39.9% 
• Bloomberg Global Risk-On/Risk-Off Index 4,013.0 -388.0 points
• Russell 1000: Growth/Value 14,798.0 -1.2%
  
• Vix 29.0 +10.9%
• Total Put/Call 1.06 +5.0%
• TRIN/Arms 1.58 +243.6%