Stocks Rising into Afternoon on Loosening US Financial Conditions, Meme Stock Revival, Massive Short-Covering, Alt Energy/Tech Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Modestly Higher
  

• Sector Performance: Mixed
  

• Volume:  Below Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 18.3 -2.5%
• DJIA Intraday % Swing .84%
  
• Bloomberg Global Risk On/Risk Off Index 59.5 +1.6%

• Euro/Yen Carry Return Index 146.4 -.5%

• Emerging Markets Currency Volatility(VXY) 10.3 -.3%

• CBOE S&P 500 Implied Correlation Index 33.6 -7.1% 

• ISE Sentiment Index 99.0 -1.0 point
  

• Total Put/Call .82 -6.8%

• NYSE Arms 1.02 -15.0%

Credit Investor Angst:

• North American Investment Grade CDS Index 71.3 -.3%
  

• US Energy High-Yield OAS 352.16 +.16%
• Bloomberg TRACE # Distressed Bonds Traded 305.0 -8.0
  

• European Financial Sector CDS Index 87.0 -.4% 
• Credit Suisse Subordinated 5Y Credit Default Swap 345.3 -2.5%
  

• Italian/German 10Y Yld Spread 186.0 basis points +4.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 103.3 -1.3%
  

• Emerging Market CDS Index 223.02 -1.9%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 27.9 +.02%

• 2-Year Swap Spread 28.0 basis points unch.
  

• TED Spread 14.25 basis points -1.5 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -13.5 +.5 basis point
  
• MBS  5/10 Treasury Spread  131.0 -3.0 basis points
  
• Bloomberg US Agg CMBS Avg OAS 107.0 unch.
  
• Avg. Auto ABS OAS .70 unch.
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 48.6 -.24%
• 3-Month T-Bill Yield 4.65% -1.0 basis point
  

• China Iron Ore Spot 126.6 USD/Metric Tonne +.2%
• Dutch TTF Nat Gas(European benchmark) 55.4 euros/megawatt-hour +1.1%

• Citi US Economic Surprise Index -3.1 +1.4 points

• Citi Eurozone Economic Surprise Index 83.2 -2.1 points
  

• Citi Emerging Markets Economic Surprise Index 3.5 +.6 point
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 227.47 -.13:  Growth Rate +10.4% -.7 percentage point, P/E 17.9 +.1
  
• Bloomberg US Financial Conditions Index .37 +4.0 basis points
  
• Yield Curve -68.75 basis points (2s/10s) +.75 basis point
• US Atlanta Fed 1Q GDPNow Forecast +.67% -286.0 percentage points
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +4.30% -15.0 basis points: CPI YoY +6.39% unch.
  
• 10-Year TIPS Spread 2.33 -1.0 basis point
  
• Highest target rate probability for March 22nd FOMC meeting: 85.5%(+.2 percentage point) chance of 4.75%-5.0%. Highest target rate probability for May 3rd meeting: 55.4%(-1.7 percentage points) chance of 4.75%-5.0%.
  

US Covid-19:

• 91 new infections/100K people(last 7 days total). 5.2%(-2.0 percentage points) of 1/14/22 peak(1,740) -14/100K people from prior report.
  
• New Covid-19 patient hospital admissions per 100K population -80.2%(-.4 percentage point) from peak 7-day avg. of 1/9/22 - 1/15/22
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +93 open in Japan 
• China A50 Futures: Indicating +422 open in China

• DAX Futures: Indicating +58 open in Germany

Portfolio:

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

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

• Market Exposure: Moved to 75% Net Long
  

Mid-Day Market Internals

NYSE Composite Index:

• Volume Running -15.3% Below 100-Day Average 
• 4 Sectors Declining, 7 Sectors Rising
• 57.1% of Issues Advancing, 39.2% Declining
• 88 New 52-Week Highs, 2 New Lows
• 56.0%(+.3%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 63.0 +1.0
  
• Bloomberg Global Risk-On/Risk-Off Index 59.7 +2.0%
  
• Russell 1000: Growth/Value 14,595.8 +.66%
  
• Vix 18.1 -3.3%
• Total Put/Call .85 -3.4%
• TRIN/Arms 1.10 -6.7%
  

Friday Watch

Evening Headlines

Bloomberg:              

• China Sure to Hit Back Over Chip Controls, Japan Lawmaker Says.  
• Pro-China Propaganda Group Tried, Failed to Go Viral on Google.  
• South Korea Tech Industry’s Confidence Sours to Seven-Year Low.
• Singapore Home Prices Grow the Least Since 2020 as Boom Eases.  
• Asia Stocks to Rally as Tech Pulls S&P 500 Higher: Markets Wrap.  
• Oil Edges Higher as Slowdown Concerns Vie With China Optimism.
• Adani Short Seller Takes On ‘Largest Con in Corporate History’.
• DeSantis Calls for ‘New Blood’ at RNC Ahead of Contentious Vote.
  
• We Asked ChatGPT to Make a Market-Beating ETF. Here’s What Happened.  
• Bitcoin Declines as Risk Correlation Eases After Recent Rally.

Wall Street Journal:

• Russia’s War on Ukraine Changed Global Oil Trade.
• Partisan ‘Fact Checkers’ Spread Climate-Change Misinformation. I posted sound statistics on polar-bear populations, and Agence France-Presse called them ‘misleading.’
• State Department Issues Warning for Travelers Going to Cancún.
• Layoffs Spread Beyond Tech Titans.
• CNBC Names Successor to Shepard Smith’s Show, Shakes Up Lineup.

Fox News:

• Report reveals Great Depression warning sign not seen since 1932.
• Biden admin's change to definition of 'White' further divides meanings of race.
• Rapper praises Ron DeSantis' leadership after fleeing Dem-run city.

CNBC.com:

• Intel’s horrible quarter revealed an inventory glut and underused factories.
• Bed Bath & Beyond warns it can’t pay down debts, defaults on credit line.
• Stocks making the biggest moves after hours: Intel, Visa, Hasbro and more.

MarketWatch:                   

• KLA Corp. stock sinks as outlook disappoints following drop in chip demand.
  
• Hasbro plans to lay off 15% of workforce and warns of holiday-season loss.
  
• FDA advisers back plan for once-a-year COVID boosters.
  
• Foot Locker cuts staff and another exec departs: ‘Every executive from the 2019 analyst day is now gone,’ analyst says.  
• ‘The Nasdaq is our favorite short.’ This market strategist sees recession and a credit crunch slamming stocks in 2023.   
• Suze Orman says ‘most of America today has absolutely no money.’ Here’s where the personal-finance guru is putting her funds.   
• Fannie Mae chief economist sees house prices dropping in 2023 and 2024 — these are the warning signs that prices are falling in your city.

Zero Hedge:

• Satire Or Serious: "Why Didn't The Unvaccinated Do More To Warn Us?"
• National Archives Misses Deadline To Send Biden Materials To House Republicans.
• Busted Pfizer R&D Exec Claims He Lied About "Mutating COVID" To "Impress A Date Like Normal People".
• Middle-Aged Tech Mogul Spends $2 Million Per Year To Achieve '18-Year-Old' Body.
• Colorado To Consider Its Own Gun Ban.
• IMF Mulling Fresh $16 Billion Ukraine Aid Package. 
• "Near Miss": Asteroid To Make One Of 'Closest Ever' Approaches To Earth On Thursday.
• Utah Plastic Surgeon Allegedly Destroyed COVID Vaccines, Gave Fake Shots To Children.
• Fire Sale: Bel-Air Land Hits Auction Block At 70% Discount.
• Judge Blocks California’s COVID-19 Misinformation Law.
• Toyota's CEO To Step Down As New Chief Will "Remodel" Automaker.
• Market on the MOVE.
• Rand Paul, GOP Senators Push Bill To Reinstate Service Members Fired For Refusing COVID Vaccines.
• US stocks gained on strong data releases including Q4 GDP - Newsquawk Asia-Pac Market Open.
• Stock Warnings Get Louder With Estimates Falling.
• Beware Of Driving Through The Rear-View Mirror.
• Intel Craters After Shockingly Bad Earnings, Catastrophic Guidance.
• Bed Bath & Beyond Craters After Confirming It Received Default Notice From JPMorgan.
• Stocks, yields, and oil rise on strong GDP and falling jobless claims - Newsquawk US Market Wrap.
• Bonds & Bullion Drop, Stocks & Dollar Pop On Hawkish Rate-Hike-Odds Shift.

Newsmax: 

• Sen. Rand Paul Says He Canceled DirecTV, and You Should, Too.
• Sen. Ernst: US Must Stop Funding EcoHealth.
• Rep. Mary Miller: DirecTV Act 'Totalitarian Left in Action'.
• Trump Calls AT&T DirecTV ‘Disgusting,’ Urging Boycott.
• Sen. Ron Johnson: Vote With Your Feet Against DirecTV.

TheGatewayPundit.com:

• Pfizer Director Physically Assaults James O’Keefe and Veritas Staff, Destroys iPad Showing Undercover Recordings About “Mutating” Covid Virus – NYPD Responds (VIDEO). 
• HUGE BREAKING EXCLUSIVE: Hunter Biden Was Receiving Classified State Department Briefings on Regular Basis – Used to Promote Biden Family Business.
• Doctor Who Claimed Obesity Can’t Be Treated With Diet and Exercise Tapped for Role in USDA’s Dietary Guidelines Advisory Committee.
• “During My Time as CIA Director and Secretary of State, I Know He Leaked Classified Information” – Mike Pompeo on Adam Schiff (VIDEO).
• WATCH: KILLER Attack Ad Decimates Ronna Romney McDaniel for Her Horrific Record As RNC Chair and Spending Millions on Private Jets, Booze, Cosmetics – VOTE IS TOMORROW.
• Biden Regime Working With Big Tech And Academia To Adapt Military-Grade AI Used Against ISIS To Target Americans Worried About Vaccine Safety and Election Integrity.
• Biden to Families Struggling to Put Food on the Table: Buy a New Energy-Efficient Refrigerator (VIDEO).
• Tucker Blasts AG Barr’s Response To Jeffrey Epstein’s Death – “Maybe Someone In The New Republican Congress Should Look Into All Of This” (VIDEO).
• EXCLUSIVE: Arizona State Senator Wendy Rogers Reacts To Newly Discovered Signature Verification And Voting Machine Failures That Put Over 500,000 2022 Election Ballots Into Question (VIDEO).
• Sen. Johnson Calls For Congress to Investigate Vaccine Manufacturers and Covid Vax Approval Process in Response to Project Veritas’ Exposé on Pfizer.
• JUST IN: Former NFL Player Jessie Lemonier Dies Suddenly at 25.
• WSJ Mocks Comey’s Russia Probe: “The Alleged Culprit Was A Member Of Mr. Comey’s Own Team”.

The Epoch Times:

• Chinese Students Must Pledge Loyalty to CCP Before Arriving Abroad: Report.

Twitter: 

• @backtolife_2023 - Biden's new chief of staff curiously saw his wealth explode as Covid czar. (video)
• @TomFitton - URGENT: A big New Zealand study reveals high rates of kidney injury after the Pfizer jab: @alexberenson.
• @billmaher - I don't understand why this is the hill @theDemocrats want to die on. (video)
  
• @Partisangirl - I used to work for Pfizer. I can tell you that most of the company meetings were about how we can make more money not how we can cure disease. So the cash cow comment on the gain of function research in the Project Veritas @JamesOKeefeIII video hits home. (video)
• @Project_Veritas - BREAKING: Senator @marcorubio Sends Letter to @Pfizer CEO @AlbertBourla “If the claims detailed in the [Veritas] video are true, Pfizer has put its desire for profit over the concern of national and global health and must hold itself accountable.”
• @Newsfilter2 - Protests are spreading across Europe for the victims of the #mRNA shot. This one is in Turin, Italy. Demand justice! (video)
  

OpenVAERS:

• VAERS US COVID Vaccine Adverse Event Reports. 922,020 Reports(+3,512 from prior week) Through January 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 -.25% to +.5% on average.

• Asia Ex-Japan Investment Grade CDS Index 102.75 -2.25 basis points. 

• China Sovereign CDS 49.5 -1.75 basis points. 
• China Iron Ore Spot 126.2 USD/Metric Tonne +.5%.

• Bloomberg Emerging Markets Currency Index 48.7 unch.
• Bloomberg Global Risk-On/Risk Off Index  58.6 +.06%. 
• Bloomberg US Financial Conditions Index .31 -2.0 basis points.
  
• Volatility Index(VIX) futures 19.8 +.5%.
• Euro Stoxx 50 futures +.29%.

• S&P 500 futures -.31%.

• NASDAQ 100 futures -.57%.  

Morning Preview Links

Earnings of Note 
Company/Estimate 

 

Before the Open: 

• (AXP)/2.24
• (ALV)/1.65
• (BMI)/.60
• (BAH)/1.04
• (CHTR)/8.97
• (CVX)/4.29
• (CL)/.77
• (GNTX)/.39
• (HCA)/4.79
  

After the Close:

• None of note
  

Economic Releases

8:30 am EST

• Personal Income for Dec. is estimated to rise +.2% versus a +.4% gain in Nov.
• Personal Spending for Dec. is estimated to fall -.1% versus a +.1% gain in Nov.
• The PCE Core Deflator MoM for Dec. is estimated unch. versus a +.1% gain in Nov.
• The PCE Core YoY for Dec. is estimated to rise +4.4% versus a +4.7% gain in Nov.
  

10:00 am EST

• Pending Home Sales MoM for Dec. is estimated to fall -1.0% versus a -4.0% decline in Nov.

11:00 am EST

• The Kansas City Fed Services Activity Index for Jan.

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Australia PPI report and the (SCHW) business update 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 lower and to rally into the afternoon, finishing mixed.  The Portfolio is 50% net long heading into the day.

Stocks Higher into Final Hour on Loosening US Financial Conditions, US Economic Soft-Landing Hopes, Earnings Outlook Optimism, Energy/Tech Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Slightly Higher
  

• Sector Performance: Mixed
  

• Volume:  Around Average

• Market Leading Stocks: Underperforming
  

Equity Investor Angst:

• Volatility(VIX) 19.0 -.47%
• DJIA Intraday % Swing .84%
  
• Bloomberg Global Risk On/Risk Off Index 58.5 +3.7%

• Euro/Yen Carry Return Index 147.0 +.2%

• Emerging Markets Currency Volatility(VXY) 10.3 unch.

• CBOE S&P 500 Implied Correlation Index 36.5 -.03% 

• ISE Sentiment Index 106.0 +27.0 points
  

• Total Put/Call .85 -13.3%

• NYSE Arms 1.28 +66.2%

Credit Investor Angst:

• North American Investment Grade CDS Index 71.2 -.7%
  

• US Energy High-Yield OAS 356.22 -1.6%
• Bloomberg TRACE # Distressed Bonds Traded 313.0 -13.0
  

• European Financial Sector CDS Index 87.3 -2.4% 
• Credit Suisse Subordinated 5Y Credit Default Swap 354.14 -1.9%
  

• Italian/German 10Y Yld Spread 182.0 basis points +3.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 104.5 -1.2%
  

• Emerging Market CDS Index 228.2 -.1%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 28.06 +.12%

• 2-Year Swap Spread 28.0 basis points -1.5 basis points
  

• TED Spread 15.75 basis points -.5 basis point
  

• 3-Month EUR/USD Cross-Currency Basis Swap -14.0 unch.
  
• MBS  5/10 Treasury Spread  131.0 -3.0 basis points
  
• Bloomberg US Agg CMBS Avg OAS 107.0 -1.0 basis point
  
• Avg. Auto ABS OAS .70 -2.0 basis points
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 48.7 -.04%
• 3-Month T-Bill Yield 4.66% +1.0 basis point
  

• China Iron Ore Spot 126.2 USD/Metric Tonne +.5%
• Dutch TTF Nat Gas(European benchmark) 54.8 euros/megawatt-hour -3.3%

• Citi US Economic Surprise Index -4.5 +11.2 points

• Citi Eurozone Economic Surprise Index 85.3 -2.4 points
  

• Citi Emerging Markets Economic Surprise Index 2.9 -.6 point
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 227.60 -.32:  Growth Rate +11.9% +.5 percentage point, P/E 17.8 +.2
  
• Bloomberg US Financial Conditions Index .30 +3.0 basis points
  
• Yield Curve -69.5 basis points (2s/10s) -.75 basis point
• US Atlanta Fed GDPNow Forecast +3.53% unch.
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +4.45% unch.: CPI YoY +6.39% +5.0 basis points
  
• 10-Year TIPS Spread 2.34 +6.0 basis points
  
• Highest target rate probability for March 22nd FOMC meeting: 84.3%(+3.0 percentage points) chance of 4.75%-5.0%. Highest target rate probability for May 3rd meeting: 54.6%(-2.2 percentage points) chance of 4.75%-5.0%.
  

US Covid-19:

• 105 new infections/100K people(last 7 days total). 7.2%(-.0 percentage point) of 1/14/22 peak(1,740) -0/100K people from prior report.
  
• New Covid-19 patient hospital admissions per 100K population -80.2%(-.4 percentage point) from peak 7-day avg. of 1/9/22 - 1/15/22
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +118 open in Japan 
• China A50 Futures: Indicating +376 open in China

• DAX Futures: Indicating +57 open in Germany

Portfolio:

• Slightly Higher:  On gains in my medical/tech/utility/industrial/commodity sector longs
  

• Disclosed Trades:  None
  

• Market Exposure: 50% Net Long
  

Bear Radar

Style Underperformer:

• Small-Cap Value -.2%
  

Sector Underperformers:

• 1) Gold & Silver -2.0% 2) Computer Services -1.9% 3) Alt Energy -1.3%

Stocks Falling on Unusual Volume: 

• RETA, LHCG, FLEX, RAPT, ARHS, VRT, AZPN, ATAT, KMPR, NVS, FCX, NVRO, CHK, RJF, WOLF, ARRY, ETD, U, LUV, XRX, IBM, SNX, BOWL, CEIX, CRNX, MKC, DEO, CLFD, PLUG, MAG, HOLO, VIRT, SHW, BRKL, BFH, HZO, FNA and CUBI
  

Stocks With Unusual Put Option Activity:

• 1) TRIP 2) EWC 3) DISH 4) KNX 5) IBB
  

Stocks With Most Negative News Mentions:

• 1) CUBI 2) LC 3) PLXS 4) IBM 5) SHW
  

Charts:

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

Bull Radar

Style Outperformer:

• Large-Cap Growth +.5%

Sector Outperformers:

• 1) Steel +2.9% 2) Energy +1.9% 3) Gambling +1.9%

Stocks Rising on Unusual Volume:

• XM, BOOT, TSLA, DV, BHLB, HXL, URI, WBS, LVS, EXTR, LEVI, NUE, MUR, TSCO and AXTA
  

Stocks With Unusual Call Option Activity:

• 1) LC 2) SABR 3) HPE 4) ACI 5) NOW

Stocks With Most Positive News Mentions:

• 1) XM 2) CVX 3) CACI 4) STX 5) LYTS
  

Charts:

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