Tuesday Watch

Evening Headlines

Bloomberg:           

• World Bank’s Reinhart Sees More Debt Distress Risks Emerging.
• Traders Price In First Ever 50 Basis-Point Hike by South Korea.
• Japan Premier Support Slips Ahead of Vote on Inflation Worries.  
• The Big Japan Short Is Back for Traders Betting Against the BOJ.
  
• Central Banks in Asia Spend Billions to Slow Currency Declines.
• Ukraine Latest: G-7 Says ‘Abominable’ Mall Attack Is a War Crime.
• G-7 to Tell Ministers to Explore Price Cap on Russian Gas.
• Stock Rally Cools in Asia as Crude Pushes Higher: Markets Wrap. 
• Oil Rises on Supply Fears, G-7 Plan for Russian Crude Price Cap.
  
• Hottest US Housing Markets Now Have Bigger Share of Price Cuts.  
• Inflation Hits July 4 Cookouts With Food Prices Up as Much as 36%.
• Nike Skids on Downbeat Guidance Driven by Cautious China Stance.

Wall Street Journal:

• United Airlines’s Inflation Warning. Pilots get a 14.5% wage increase over 18 months, as airfares spike.
• Russian Missiles Hit Ukraine Shopping Mall as G-7 Leaders Pledge More Aid.
• Live Updates: Kremlin Says Putin to Join G-20 Summit. 
• Gas Stations Now Hold Up to $175 of Your Money When You Swipe.

Fox News:

• Unrest grips blue cities as protests and acts of vandalism pop up across the country after abortion ruling.
• Kamala Harris’ post-Roe comments in CNN interview blasted on Twitter.

CNBC.com:

• Nike tops Wall Street’s expectations, despite inflation in the U.S. and Covid lockdowns in China.
• Wall Street layoffs likely ahead as two-year hiring boom turns to bust.
• Crypto fund defaults on $670M loan, and Bitfury CEO says prices aren’t ‘relevant’: CNBC Crypto World. 
  

MarketWatch:         

• Coinbase could see ‘further degradation,’ Goldman warns in downgrade.

Zero Hedge:

• Dallas Fed Plunges As Respondents Unleash Unprecedented Slamdown Of "Disastrous" Biden Administration. 
• "F**k Clarence Thomas!" Shouts Chicago Mayor Lori Lightfoot During Pride Parade.
• 3 Dead, At Least 50 Injured After Packed Amtrak Train Derails In Missouri.
• Far-Left Groups Use Map Created By University Professors To Target Pregnancy Centers.
• Flurry Of Calls Among Saudi Diplo Staff And Spy Coincided With 9/11 Hijackers' Arrival.
• Sri Lanka Suspends Fuel Sales Amid Economic Collapse; Asks Russians For Help.
• Activity In Tropics Emerges As Next Big Hurricane Could Send Gas Prices To "Apocalyptic" Levels.
• "The Rubicon Has Been Crossed": The BOJ Now Owns More Than 50% Of All Japanese Bonds.
• Still a bear market rally?
• US stocks were mostly pressured on the higher yield environment - Newsquawk Asia-Pac Market Open.
• Pentagon Blasts Putin's Latest "Cavalier" Nuclear Threat.
• Robinhood Erases Gains As FTX Denies "Active" Acquisition Rumors.
• Banks Unveil Post-Stress-Test Dividend/Buyback Plans, Morgan Stanley Jumps On Boost To Both.
• Nasdaq lags as strong data and weak auctions boosts yields - Newsquawk US Market Wrap.
• 'Good News' Sends Stocks & Bonds Lower; Oil & Gas Prices Soar.

Newsmax:

• Russia's Medvedev: Any NATO Encroachment on Crimea Could Mean World War III.

TheGatewayPundit.com: 

• Biden Admin Signs Five Year Lease to House Illegal Alien Children at Luxury $42K Per Year Private School Campus in North Carolina.
• “I Am Really Disappointed in FOX, I Thought You Were Better Than CNN!” – BOOM! Kari Lake INCINERATES Bret Baier and FOX News for Pushing FAKE STORY on AZ Drag Queen (VIDEO).
• New York State Supreme Court Tosses NYC Law that Allows Non-Citizens to Vote.
• Pelosi Throws Gasoline on the Fire, Labels the Supreme Court an “Extremist” Body That “Punishes” the American People.
• BREAKING: Voice Message of Joe Biden Discussing China Spy Chief with Son Hunter Proves He Lied About Not Discussing Hunter’s Foreign Business Deals.
• While US Economy Crumbles, Biden Promises $200 Billion for Solar Panels, Vaccine Plants and Communication Links Around the World.
• Rep. Mayra Flores Blasts Speaker Nancy Pelosi for Elbowing and Pushing Her Daughter.

 The Epoch Times: 

• Ian Easton: The CCP’s ‘Reengineering of the World to Spread Totalitarianism, to Spread Communism’.
• G-7 Leaders Announce $600 Billion Global Infrastructure Program to Take on Beijing’s Debt Trap Diplomacy.

OpenVAERS:

• VAERS US COVID Vaccine Adverse Event Reports. 835,062 Reports(+3,252 from prior week) Through June 17th, 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 -.25% to +.25% on average.

• Asia Ex-Japan Investment Grade CDS Index 128.25 -2.25 basis points. 

• China Sovereign CDS 77.5 +1.25 basis points.
  

• Bloomberg Emerging Markets Currency Index 51.02 -.07%.  
• Bloomberg Global Risk-On/Risk Off Index 4,951.0 +29.0 points.
• Volatility Index(VIX) futures 27.3 -.6%.
• Euro Stoxx 50 futures -.20%.

• S&P 500 futures +.27%.

• NASDAQ 100 futures +.35%. 

Morning Preview Links

Earnings of Note 
Company/Estimate 

 

Before the Open: 

• None of note
  

After the Close:

• (AVAV)/.40
• (PRGS)/.95
  

Economic Releases

8:30 am EST

• Advance Goods Trade Balance for May is estimated at -$105.0B versus -$106.7B in April.
• Wholesale Inventories MoM for May is estimated to rise +2.1% versus a +2.2% gain in April.
• Retail Inventories MoM for May is estimated to rise +1.6% versus a +.7% gain in April.
  

9:00 am EST

• The FHFA House Price Index MoM for April is estimated to rise +1.5% versus a +1.5% gain in March.
• The S&P CoreLogic 20-City MoM for April is estimated to rise +1.95% versus a +2.42% gain in March.

10:00 am EST

• The Conference Board Consumer Confidence Index for June is estimated to fall to 100.0 versus 106.4 in May. 
• The Richmond Fed Manufacturing Index for June is estimated to rise to -5 versus -9 in May.
  

Upcoming Splits

• (SHOP) 10-for-1
  

Other Potential Market Movers

• The Eurozone  Industrial Production report, GFK Consumer Confidence Germany, weekly US retail sales reports and the 7Y T-Note auction 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 commodity and consumer shares in the region. I expect US stocks to open mixed and to weaken into the afternoon, finishing modestly lower. The Portfolio is 50% net long heading into the day.

Stocks Reversing Lower into Final Hour on US Policy-Induced Stagflation Fears, Higher Long-Term Rates, Technical Selling, Tech/Consumer Discretionary Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Around Even
  

• Sector Performance:  Mixed
  

• Volume:  Around Average

• Market Leading Stocks: Underperforming
  

Equity Investor Angst:

• Volatility(VIX) 27.5 +.9%
• DJIA Intraday % Swing .68% -59.2%
  
• Bloomberg Global Risk On/Risk Off Index 4,911.0 +199.0 points

• Euro/Yen Carry Return Index 147.53 +.39%

• Emerging Markets Currency Volatility(VXY) 11.8 -.3%

• CBOE S&P 500 Implied Correlation Index 46.7 -3.2% 

• ISE Sentiment Index 96.0 -7.0 points
  

• Total Put/Call .94 +10.6%

• NYSE Arms 1.11 -17.8%

Credit Investor Angst:

• North American Investment Grade CDS Index 94.86 unch.
  

• US Energy High-Yield OAS 455.20 -1.8%
• Bloomberg TRACE # Distressed Bonds Traded 379.0 -6.0
  

• European Financial Sector CDS Index 119.86 -.29%

• Italian/German 10Y Yld Spread 197.0 basis points -5.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 128.52 -4.2%
  

• Emerging Market CDS Index 322.85 +1.8%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 27.51 -.34%
  
• Ukraine Sovereign Debt Credit Default Swap 9,404.86 -15.3%
  

• 2-Year Swap Spread 31.75 basis points -2.25 basis points
  

• TED Spread 60.25 basis points +4.75 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -22.5 basis points -.75 basis point
  
• MBS  5/10 Treasury Spread  136.0 -1.0 basis point
  
• iShares CMBS ETF 47.45 -.48%
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 51.07 +.50%
• 3-Month T-Bill Yield 1.64% -1.0 basis point
  

• Yield Curve 6.5 basis points (2s/10s) +.5 basis point
  

• China Iron Ore Spot 119.0 USD/Metric Tonne-.7%

• Citi US Economic Surprise Index -66.9 +4.8 points

• Citi Eurozone Economic Surprise Index -28.2 -2.4 points
  

• Citi Emerging Markets Economic Surprise Index 24.1 -1.5 points

• 10-Year TIPS Spread 2.56 -1.0 basis point
  
• Highest target rate probability for September 21st FOMC meeting: 65.4%(+1.9 percentage points) chance of 2.75%-3.0%. Highest target rate probability for November 2nd meeting: 46.2%(+6.4 percentage points) chance of 3.25%-3.5%.
  

US Covid-19:

• 234 new infections/100K people(last 7 days total). 14.0%(+1.0 percentage point) of 1/14 peak +13/100K people from prior report.
  
• New Covid-19 patient hospital admissions per 100K population -80.5%(-1.0 percentage point) from peak 7-day avg. of 1/9/21 - 1/15/22
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -131 open in Japan 
• China A50 Futures: Indicating -11 open in China

• DAX Futures: Indicating -81 open in Germany

Portfolio:

• Higher:  On gains in my commodity/medical sector longs and index hedges
  

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

• Market Exposure:  Moved to 25% Net Long
  

Morning Market Internals

NYSE Composite Index:

• Volume Running -7.5% Below 100-Day Average 
• 5 Sectors Declining, 6 Sectors Rising
• 65.0% of Issues Advancing, 31.6% Declining
• 9 New 52-Week Highs, 35 New Lows
• 19.8% of Issues Above 200-day Moving Average
• Average 14-Day RSI 42.0% 
• Bloomberg Global Risk-On/Risk-Off Index 4,910.0 +198.0 points
• Russell 1000: Growth/Value 15,344.0 -.53%
  
• Vix 27.5 +.9%
• Total Put/Call .80 -5.9%
• TRIN/Arms 1.20 -11.11%

Monday Watch

Night Trading

• Asian indices are +.5% to +1.5% on average.
• Asia Ex-Japan Investment Grade CDS Index 130.75 -.5 basis point.
• China Sovereign CDS 76.25 -5.5 basis points.
• Bloomberg Emerging Markets Currency Index 51.01 +.38%.
• Bloomberg Global Risk-On/Risk Off Index 4,814.0 +100.0 points.
• Volatility Index(VIX) futures 28.7 +.8%. 
• Euro Stoxx 50 futures +.09%.
• S&P 500 futures -.43%.
• NASDAQ 100 futures -.40%.

Morning Preview Links

Earnings of Note

Company/Estimate

Before the Open:

• (JEF)/.51
• (NKE)/.81
  

After the Close:

• None of note
  

Economic Releases

8:30 am EST

• Durable Goods Orders for May is estimated to rise +.2% versus a +.5% gain in April.
• Durables Ex Transports for May is estimated to rise +.4% versus a +.4% gain in April.
• Cap Goods Orders Non-Defense Ex-Air for May is estimated to rise +.2% versus a +.4% gain in April.
  

10:00 am EST

• Pending Home Sales MoM for May is estimated to fall -3.8% versus a -3.9% decline in April.
  

10:30 am EST

• The Dallas Fed Manufacturing Activity Index for June.

Upcoming Splits

• (SHOP) 10-for-1
  

Other Potential Market Movers

• The 2/5 Year N-Note auctions and the Japan Unemployment report could also impact trading today.

US Equity Market Hours

• 9:30 am - 4:00 pm EST

BOTTOM LINE: Asian indices are modestly higher, boosted by commodity and technology shares in the region. I expect US stocks to open modestly higher and to weaken into the afternoon, finishing mixed.  The Portfolio is 50% net long heading into the week.

Today's Headlines

Bloomberg:         

• G-7 Negotiators Put Russia Oil Price Cap on Agenda for Leaders.
• G-7 Set to Ban New Russian Gold Imports in Pledge Backed by US.  
• A Defiant Boris Johnson Says He’s Staying UK Leader Into 2030s.  
• Zimbabwe Plans Triple-Digit Interest Rate Hike to Tame Inflation.
• Fear Has Gone Missing in Wall Street’s Slow-Motion Bear Market.
  
• Hot Job Market May Ease Sting of Potential US Recession: Q&A.
  
• US Layoffs, Hiring Freezes Are Tip of Labor Market Slowdown.  
• Bond Traders Are Trapped Between Recession and Inflation Fears.
  
• Ghislaine Maxwell Placed on Suicide Watch Before Sentencing.  
• Why Margin Calls and Bot Liquidations Are Roiling Crypto.
  
• Powell Shares His Troubles With Lagarde and Bailey: Eco Week.  
• Charting the Global Economy: Activity Cools in Europe, US.

Wall Street Journal:

• Employers Weigh In on Abortion and Benefits—Cautiously.
• Democrats Focus on Abortion Fight in Upcoming Elections.
• Why Not Prosecute Intimidation Of Supreme Court Justices? The Justice Department hasn’t ensured peace at the homes of the Justices.
• AT&T, Verizon Raise Prices and Test Consumer Budgets.
• Uvalde Residents Press for Answers a Month After School Massacre.
• How the Bipartisan Gun Deal Got Done.

Barron's:

• Had bullish commentary on (MDLZ), (SBUX), (HSY), (DHI), (TPH), (TOL), (X), (NUE), (CLF) and (LW).

Fox News:

• LIVE UPDATES:Police make arrests in front of Supreme Court as coast-to-coast protests rage on.
• Biden admin raises alarm by echoing foreign countries in blasting SCOTUS.

CNBC:

• Ukraine’s Sievierodonetsk falls to Russia after one of war’s bloodiest fights.
• Every new passenger car sold in the world will be electric by 2040, says Exxon Mobil CEO Darren Woods.
• Disney, Apple and Amazon keep waiting as NFL considers Sunday Ticket offers.

Zero Hedge:

• Doctors' Group Urges Biden Administration To End Quarantine, Vaccine Recommendations For Children.
• The Dobbs Decision Unleashes Rage And Revisionism.
• "First Real Buying In 3 Weeks"; Goldman Trader Explains Why Friday's Surge Is The Start Of The Next Big Move Higher.
• "It's Infuriating": DC Democrats In Chaos, Demand Biden Act On Abortion.
• Keith Olbermann Calls For The Supreme Court To Be Dissolved.
• Maxine Waters: "To Hell With The Supreme Court! We Will Defy Them!".
• Russia To Transfer Nuclear-Capable Missiles To Belarus "Within Months": Putin.
• The Great Crash Of 2022.
• Diesel Demand Set To Drop As Economies Enter Recession: Kemp.
• The Gas Inflation Crisis Is Far From Over – Where Will Prices Finally Stop?
• Biden Signs Gun Control Bill Into Law.
• Norway Terror Alert Raised To Highest Level After Deadly Mass Shooting.
• The 1970s Revisited?
• "Like COVID Never Happened": Ibiza Parties Like It's 2019.
• TGIF (and a squeeze)...
• EU Renews Digital COVID Pass Despite 99% Negative Public Feedback.
• Germany Fears Russia Could Shut Nord Stream 1 Within Weeks.
• The European Union Is Again Close To A Meltdown.
• The Link Between Soaring Food Prices & Political Instability.
• Everybody's Guilty: To The Police State, We're All Criminals Until We Prove Otherwise.
• New Study Finds Hawaii, Oregon, Among Least Affordable States To Live In.
• Prepare For A Tidal Wave Of Evictions.
• Did Durham Play Us For A Fool?
• Reactivation Of Chickenpox Virus Following COVID-19 Injections On The Rise.

MarketWatch.com:           

• Recession is challenging inflation as top fear among stock and bond investors.
  
• Energy ETFs are the unloved relative to ‘outstanding’ gains as growth bets in stock market head for worst first half ever.

NewsMax: 

• Biden Signs $13B Gun Control Law, Vows 'Much More Work to Do'.

TheGatewayPundit.com: 

• Disney Announces They’ll Pay For Employees’ Abortion-Related Travel Costs.
• MUST SEE VIDEO: Day 1 of the Abortionist Insurrection – Democrat Leaders Lead Calls for Mass Violence, Violent Mobs Terrorize Communities, Crack Heads.
• DICK’S Sporting Goods Announces it Will Provide Up to $4,000 For Employees’ Abortion-Related Travel Expenses.
• Biden’s Transgender Assistant Health Secretary Rachel Levine: Sex Reassignment Surgery For KIDS is “Lifesaving, Medically Necessary” (VIDEO).
• Twitter Allows Racist Attacks on Justice Clarence Thomas to Trend.
• Tragic: 14-Year-Old Boy Collapses and Dies Suddenly in School Classroom – Cause of Death Unknown.
• Islamist Terror Attack on Gay Nightclub in Oslo, Norway Kills Two, Wounds 21; Iranian Gunman Arrested.

The Epoch Times:

• A Quarter of European Companies Plan to Leave China Over Strict ‘Zero-COVID’ Policy: Report.

OpenVAERS:

• VAERS US COVID Vaccine Adverse Event Reports. 835,062 Reports(+3,252 from prior week) Through June 17th, 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).