Thanks for reading my Diary today and all week.

Losing two good friends in a matter of three or four weeks has been tough. Thanks for the nice emails.

But we move on.

Enjoy the weekend.

Be safe.

Sprott Uranium Miners ETF URNM is on quite a ramp.

I am selling some at $57.91.

* At 2:15 p.m.

Scott Galloway's No Mercy/No Malice... "Earners vs Owners."

Perhaps the best header of any article in the last few weeks by our contributors is The Divine Ms M's "Wall Street Turns Into Penny Lane."

The decline in bond prices (and rise in bond yields) has accelerated in the last hour:

* The yield on the 2-Year Treasury note is +4 bps.

* The yield on the 10-Year Treasury note is +5 bps.

* The yield on the long bond is +5 bps.

Market doesn't care.. but I do.

"Inflation to remain elevated for some time; Will remain cautious in rate change decisions."

- Fed's Bowman (voter, hawk)

- Have not yet seen further progress on inflation this year  — Reiterates baseline outlook that inflation will decline further with policy rate steady, but there are risks

- Labor market balancing has slowed — Repeats willing to hike if inflation stalls, reverses 

I am having lunch with a friend at 1 p.m.

Be back at around 2 p.m.

Radio silence.

Occasionally we keep tabs on investor sentiment on The Death Star - in order to more accurately assess investor sentiment.

Over the last three days 34 guests have pronounced their bullishness.

None were bearish.

Frankly, I don't recall this ever happening. 

* And I grow more worried...

In this morning's An Inflection Point (Lower) In The Nasdaq? I observed:

Interestingly, the total of “off-board” volume or retail flow today topped 51% of the total shares that traded hands, the largest percentage year to date. There was a great statistic that got sent around today, that “45% of the total market volume today was in <$1 stocks ( (CRKN) , (GWAV) , (FFIE) , (SINT ) stick out specifically). This compares to the year to date average of ~12% for <$1 stocks". (Source: Goldman Sachs)

This morning, more of the same... 2.1 billion shares (or about 50% of Nasdaq volume) in the first two hours were in the shares of GWAV, CRKN, FFIE, CRAY.

* At 10:30 am

* Another day of heavy volume on the Nasdaq

- NYSE volume 142M shares, flat to its one-month average

- Nasdaq volume 3.35B shares, 114% above its one-month average

- VIX: down 1.29%$ to 12.26

Breadth

Biggest Movers

Nasdaq 100 Heat Map

From Peter:

Positives

1) April CPI rose .3% both headline and core with the former one tenth less than expected and the latter as forecasted. Due to rounding though, the y/o/y gain of 3.4% was in line and vs 3.5% in March. The core rate y/o/y was higher by 3.6% vs 3.8% in the month before. The slow drip of inflation deceleration.

2) May PPI was about as expected when we include the downward revisions to March. The headline print of .5% m/o/m follows a one tenth drop in March. The same was seen with the core rate. Versus last year, headline PPI was higher by 2.2% and by 2.4% ex food and energy.

3) The April NFIB small business optimism index rose 1.2 pts m/o/m to 89.7 and which compares with 89.4 in February and 89.9 in January. So, we continue to bounce along the bottom. For reference, the 50 yr average is 98. The bottom line from the NFIB, "Cost pressures remain the top issue for small business owners, including historically high levels of owners raising compensation to keep and attract employees. Overall, small business owners remain historically very pessimistic as they continue to navigate these challenges. Owners are dealing with a rising level of uncertainty but will continue to do what they do best - serve their customers."

4) Somewhat dated but foreigners got really bullish on US stocks and chased the rally in March (sometimes though their timing isn't very good) as the Treasury International flow data was released and revealed that foreigners bought a net $81.5b, the 2nd highest amount on record. As for their purchases of US notes and bonds, it totaled $42.2b vs $87.4b in February and $48.7b in January. Foreigners are still buying but their percentage ownership of Treasury marketable securities continues to shrink as we become more and more reliant on domestic buying.

5) Mortgage rates fell again w/o/w which helped refi's rise 4.7% w/o/w but purchase applications fell by 1.7%. Those purchase apps are still hovering around 30 yr lows.

6) From Walmart: "The momentum we see across the business is driven by growth in units sold and transaction counts, as well as market share gains, including general merchandise. These are not inflation driven results."

7) From Hapag-Lloyd: "We've seen recently a very steep increase in spot rates. It's a little bit difficult to understand where that spike comes from. We do see very strong demand over the last number of weeks, but the background of that is a bit unclear. Is that a short term spike or does it really have to do something with an early peak season or some restocking activities here or there?" Or, "And possibly with all the uncertainty that there is around the globe, some people pulling forward some orders, which is something that we highlighted as a possibility also when we did our earnings call six weeks ago."

8) From Cisco: "So from a macro perspective...we saw the quarter showed slight improvement as we moved through the quarter. So the end of the quarter was actually a little stronger than the beginning...we obviously believe that our customers now are on track with the inventory digestion that we talked about last quarter, so that's positive."

9) From Boot Barn: "To summarize, we have seen broad based sequential improvement across virtually all major merchandise departments, both stores and e-commerce channels and in all four regional geographies. This trajectory began as we progress from our 3rd quarter into the 4th quarter, then improved in April and again into May where we have seen positive same store sales in bulk channels on a m/o/m basis."

10) From Sphere Entertainment: "For the third quarter (of their fiscal yr), Sphere welcomed nearly 1 million guests to more than 270 events. This event volume once again far exceeded the world's busiest venues."

11) China dramatically steps up its attempts to stem the distress in its residential real estate market by encouraging local governments (we'll see where money comes from) to buy unsold properties and further entice people to buy apartments via lower down payment requirements. We are hopefully nearing the end of this financial and economic mess.

12) China's April CPI was up .3% y/o/y, up from .1% in March and vs the estimate of up .2%. Taking out food and energy prices saw core CPI up .7% y/o/y and actually has been pretty stable around these levels for a while now.

13) Chinese industrial production in April exceeded expectations.

14) The German ZEW measuring expectations of the German economy rose to 47.1 from 42.9 and the Current Situation was less bad at -72.3 from -79.2. The ZEW said "Signs of an economic recovery are growing, bolstered by better assessments of the overall eurozone and of China as a key export market. The increased optimism is reflected in particular in the sharp rise in expectations for domestic consumption, followed by the construction and machinery sectors."

15) My son is graduating college today. Wow, bittersweet and time flies but "Time Stands Still" sang Rush. "I'm not looking back but I want to look around me now. Time stands still. See more of the people and the places that surround me now. Freeze this moment a little bit longer, make each sensation a little bit stronger. Make each impression a little bit stronger, freeze this motion a little bit longer. The innocence slips away. The innocence slips away. Time stands still."

Negatives

1) Initial jobless claims for the week ended May 11th remained elevated, relative to the multi month trend, at 222k, 2k more than expected and vs 232k in the week before. Smoothing this out has the 4 week average ticking up to 218k from 215k and that is the most since November 2023. Also of note, and not subject to the NY quirk last week, continuing claims rose to 1.794mm from 1.781mm, remaining near the highest since November 2021.

2) Import prices in April far exceeded expectations with a headline jump of .9% m/o/m, triple the estimate and March was revised up to a .6% gain from .4% initially. Also, ex petro saw import prices rise by .7% m/o/m, well more than the forecast of up .1%. Price spikes were seen in food/beverage and industrial supplies but were muted for capital goods, autos/parts and consumer goods. Bottom line, something to watch but y/o/y prices are still benign, up 1.1% headline, up .7% ex petro, and up .4% ex food/fuels.

3) Core retail sales fell .3% m/o/m instead of rising by one tenth as expected and March was revised down just one tenth to a still good 1% gain. The components remained mixed. On a dollar basis, in the first four months of 2024, headline retail sales are up just .3% and thus running below the rate of inflation which is up 1.4% year to date.

4) The Philly region said its May manufacturing index was +4.5 vs +15.5 in April and that, while still positive, was below the estimate of +7.8. Confidence still remains that things will get better in the coming 6 months as the outlook held high at 32.4, though down 1.9 pts m/o/m. The optimism is based on hopes for inventory restocking as this category was positive for a 3rd month. Capital spending plans were little changed.

5) The NY May manufacturing index was -15.6 vs -14.3 in April. The estimate was -10. Of note too, the 6 month business activity fell 2.2 pts m/o/m to 14.5 which is a 5 month low. Capital spending plans receded again but picked up a touch for tech spending in particular.

6) Housing starts in April totaled 1.36mm, well below the estimate of 1.421mm and March was revised down by 34k to 1.287mm. Single family starts held steady at 1.031mm m/o/m while they rose a bit for multi family to 329 after collapsing to just 252k in March and vs 412k in February. As for permits, they fell 8k m/o/m for single family to 976k which happens to be the smallest since last August. Permits to build multi family dropped by 37k m/o/m to 464k which matches the lowest since August 2020 and the lowest since January 2019 not including Covid.

7) Home builder sentiment faltered in May as the NAHB index fell 6 pts m/o/m to back under 50 at 45. The estimate was exactly 50. Both the Present Situation and Expectation components were down m/o/m and Prospective Buyers Traffic declined by 4 pts m/o/m to just 30, a 4 month low and well below 50.

8) US industrial production was softer than forecasted in April driven by a decline in manufacturing production.

9) From the NY Fed's Quarterly Report on Household Debt and Credit, "In the first quarter of 2024, credit card and auto loan transition rates into serious delinquency continued to rise across all age groups. An increasing number of borrowers missed credit card payments, reveling worsening financial distress among some households."

10) In the NY Fed's Consumer Expectations survey the one yr inflation guess rose to 3.3% from 3% and that is the highest since November. The 3 yr slipped by one tenth to 2.8% while the 5 yr rose to 2.8%, up 2 tenths. There was a slight drop in income expectations and expectations for employment. While there was a drop in those expecting to lose their job, "The mean perceived probability of finding a job if one's current job was lost declined for the 4th consecutive month to 50.9% from 51.2% in March. This is the lowest reading of the series since April 2021."

Finally of note, "Perceptions about households' current financial situations deteriorated with fewer respondents reporting being better off and more respondents reporting being worse off than a year ago. Year-ahead expectations also deteriorated marginally with a smaller share of respondents expecting to be better off a year from now."

11) The Cass Freight April index saw a 1.6% m/o/m drop seasonally adjusted "as for-hire demand remains broadly soft." They said "Lunar New Year timing and/or the Baltimore bridge may have temporarily affected April data, but at this pace, volumes are at risk of giving up those gains in Q2."

12) From the Dallas Fed's Banking Conditions Survey: "Loan volumes grew for the first time in over a year despite credit standards continuing to tighten, and loan pricing continuing to rise. Credit tightening accelerated for commercial and residential mortgages while it decelerated for commercial and industrial loans and consumer loans. Loan nonperformance picked up slightly overall. Bankers’ outlooks turned pessimistic: They expect a modest decrease in loan demand six months from now in addition to a deterioration in loan performance and overall business activity."

13) From the CBO's Monthly Budget Review which came out last week, and for the longer run outlook, I need to include these comments from my friend Barry Knapp, "Spending is running +6%, with social security +9%, Medicare +10% and refundable tax credits, primarily due to the expansion of Obamacare eligibility, also up 10% year-to-date from a year ago. These three categories account for 36% of year-to-date outlays. More shockingly, interest on the debt increased 42% year-to-date and has passed Medicare, Medicaid and Defense spending in total size."

14 )From Walmart: “Many consumer pocketbooks are still stretched, and we see the effect of that in our business mix as they’re spending more of their paychecks on non-discretionary categories and less on general merchandise...We're seeing higher engagement across income cohorts, with upper income households continuing to account for the majority of the share gains."

15) Cracker Barrel lowered its earnings guidance, "primarily due to weaker than anticipated traffic."

16) From Jack in the Box: "we in the industry are all seeing this kind of pressure from the headwinds on the consumer. We definitely felt it coming into the 2nd quarter and so we know that value is going to be something we talk about for the rest of the year."

17) From Home Depot: "Big ticket comp transactions or those over $1,000 were down 6.5% compared to the first quarter of last year. We continue to see softer engagement in larger discretionary projects where customers typically use financing to fund the project such as kitchen and bath remodels."

18) From Soho House: "What we've seen is where members come in, they're just spending a little bit less, a little bit more cautiously."

19) The Shanghai to Rotterdam container route price rose $463 w/o/w after jumping by $606 last week. At $4,172 for a 40 ft container, it compares with $1,667 at the beginning of the year. The ride from Shanghai to LA saw a similar bump and at $4,476 that journey price is vs $2,100 at year end '23.

20) While a month and half into Q2, Japan reported its Q1 GDP figure and a contraction was seen of 2% annualized, worse than the estimate of down 1.2% and Q4 was revised to zero growth from .4% initially. A decline in personal spending, with inflation rising faster than wages and business spending led the way. Net exports too were a slight drag.

21) China PPI was down 2.5% y/o/y in April and continues to be a symptom of the slowdown in manufacturing being seen globally.

22) China also reported a sharp slowdown in money supply growth with M2 rising 7.2% y/o/y, down from 8.3% in March and vs the forecast of 8.3%. Also, and something that hasn't happened since 2005, aggregate financing shrunk in April from March. At 12.73 trillion yuan year to date thru April, it's about 1 trillion below expectations and down from March. Corporate, household and government borrowing all were soft and a continued sign of deleveraging that is going on there, whether via choice or by distress.

23) Chinese retail sales in April were softer than expected and home prices fell again.

24) The UK labor market softened in Q1 with their unemployment rate rising by one tenth to 4.3%, which matches the highest since September 2021. The number of employed fell by 178k, though that wasn't as much as the expectations for a drop of 220k. Wage growth though remained good, rising by 6% y/o/y ex bonuses, the same pace seen in the month prior.

I added to my XLF short at $42.30 this morning.

The market's hesitancy might be a function of the reversal higher by about three basis points in yields.

No trades today!

From Peter:

Chinese property stocks continue to rally as there was an official announcement of what was speculated yesterday that local governments were going to start buying some of the unsold residential real estate developer apartment inventory, partly financed by PBOC lending. Not only that, the PBOC also lowered the downpayment requirements for first and second homes nationwide to 15% and 25% respectively from 20% and 30%. 

After a few years into this property bubble unwind and distress for many builders, the Chinese authorities are now ripping the band aid off and these steps should go a long way in both stabilizing this very important industry for them and giving a lift to other parts of the economy, especially consumer spending. That is because there is so much wealth tied up in property and that has taken a mark to market hit with the drop in home prices.

The Hang Seng property index jumped another 2.5% overnight and the Mainland properties index was higher by 5.3% after rising by 4.9% yesterday. We remain bullish and long some stocks in Hong Kong where the Hang Seng is now up 14.7% year to date.

China also reported some mixed April data overnight with retail sales softer than expected but industrial production surprising to the upside. Home prices continued to fall in April but the steps mentioned above should stem this.

I mentioned yesterday the comments from Hapag Lloyd that they've seen a lift in volumes but couldn't put their finger on exactly why and what Maersk said last week that the Houthi's are widening their area of attack. In response to both, container shipping prices jumped again for the week ended 5/16.

The Shanghai to Rotterdam route price rose $463 after jumping by $606 last week. At $4,172 for a 40 ft container, it compares with $1,667 at the beginning of the year. The ride from Shanghai to LA saw a similar bump and at $4,476 that journey price is vs $2,100 at year end '23.

Shanghai to Rotterdam price

Here is what Walmart said of note:

"The momentum we see across the business is driven by growth in units sold and transaction counts, as well as market share gains, including general merchandise. These are not inflation driven results."

"In the US, like-for-like sales inflation was about 40 bps for the quarter, including mid single digit deflation in general merchandise and low single digit inflation in food and consumables."

"We're seeing higher engagement across income cohorts, with upper income households continuing to account for the majority of the share gains."

"Consumer economic conditions have been relatively consistent since the start of the year. Many of the value seeking behaviors we witnessed last year have continued, particularly around seasonal events. Our focus on providing customers with value and convenience is resonating and we're gaining share."

“Many consumer pocketbooks are still stretched, and we see the effect of that in our business mix as they’re spending more of their paychecks on non-discretionary categories and less on general merchandise.”

On why their Q2 revenue guide was only 3.5-4.5% growth after almost 6% growth in Q1, "We think it's prudent to be patient on this performance...I think we'd all agree that we're in far from a certain environment around the consumer. It's the health of the consumer is something we read about every single day. And given that we're one quarter into the year, we just want to be patient on this."

Cracker Barrel lowered its earnings guidance, "primarily due to weaker than anticipated traffic."

10:15 AM: Fed Board Governor Christopher Waller (Voter) speaks on payments innovation, technical standards and the Fed’s roles at the International Organization for Standardization Technical Committee 68 Financial Services 44th Plenary Meeting (Text expected. No Q&A. Webcast: minneapolisfed.org/live); Minneapolis Fed President Neel Kashkari (Non-Voter) is expected to give brief introductory remarks.

12:15 PM: Fed Bank of San Francisco President Daly (Voter) gives commencement address at the University of San Francisco School of Management (Prepared remarks expected. No Q&A. Livestream at school-of-management-commencement-address-2024/).

5/18: (SATURDAY)

5:45 PM: Fed Board Governor Kugler (Voter) speaks at University of Virginia 2024 Commencement Ceremony – Frank Batten School of Leadership and Public Policy, Charlottesville, VA (Text expected. No Q&A. No webcast).

Upside

-DOCS +17% (earnings, guidance)

-RDDT +11% (earnings, guidance)

-DESP +10% (earnings, guidance)

-NUVL +2.6% (earnings, guidance)

Downside

-AMPG -33% (earnings, guidance)

-DXC -25% (earnings, guidance)

-GME -20% (earnings, guidance)

-CBRL -14% (earnings, guidance)

-GLOB -3.3% (earnings, guidance)

-TTWO -2.8% (earnings, guidance) 

Yesterday, on CNBC, three of the four Final Trades on "Halftime" were financial stocks (Berkshire BRK.B, Bank of America BAC and Citigroup C). 

That, in and of itself, might be a good reason to consider selling/shorting financials!

But I have more substantive reasons -- as in a backdrop of "slugflation," and given the sharp share price appreciation over the last month and the extended overbought (and RSI readings) financials are likely vulnerable to a tradeable correction today.

Here are the components of XLF.

BAC, C and BRK.B account for 25% of XLF with Berkshire at 13% and JP Morgan JPM at about 10%.

A decade ago I was the "credentialed bear" at Berkshire Hathaway's Annual Meeting - asking tough questions sitting on the dais with Warren Buffett and Charlie Munger. I had the time of my life. I have written volumes about that experience and, in general, on Berkshire Hathaway since I began writing my Diary so there is no reason to recount my concerns that Berkshire Hathaway is, at best, a GDP grower.

A lot of Berkshire's success over the last two decades has been Warren's ability to move quickly and invest sizeable sums "on the fly." Berkshire's investment in Bank of America - conceived while taking a bath - was a vivid example of this.

But size and competition now represent bonafide challenges for Berkshire to repeat its successes of the past.

* The company's past success and current size will be Berkshire's greatest enemy over the next decade. Berkshire is simply becoming too big for incremental acquisitions/investments to move the corporate needle. With an accumulated $200 billion in cash, Warren basically admitted recently in his Annual Meeting that the ability to employ large sums of capital have been markedly reduced.

* Berkshire now faces competition for deals that it never had before - private equity, private capital, etc.

* Greg Abel, Warren's successor is able, but with Charlie now gone and Warren getting older - the full input of this remarkable twosome will, in the fullness of time, be absent. Investors might consider getting prepared for this.

* The eventual passing of Warren Buffett will not be accompanied by a corporate paradigm shift (i.e., leading to divestitures, spin offs or sales) as some holders may currently hope for. That plan is certainly not in Warren's DNA - nor is it in Greg Abel's.

Berkshire's shares have appreciated mightily over the last several years - in my view, some of that excellent performance was a sizeable and very timely purchase of Apple AAPL.

The Apple investment was Berkshire's most successful investment ever. It is not reasonable to expect that another Apple opportunity lies ahead - that was, simply stated, a once in a lifetime investment for Berkshire.

To summarize, despite CNBC's protestations, the fundamental and investing challenges now facing the company may represent risk to its shares over the next few years - which might result in a challenge for Berkshire to achieve growth in sales, profits and intrinsic value relative to the U.S. economy and S&P 500 Index.

Berkshire represents 13% of XLF.

I added to my XLF short on Thursday.

From Danielle DiMartino Booth:

The shift in the winds is increasingly difficult for fans of headline data to ignore. As expected, Thursday’s release of initial jobless claims perfectly unwound that aberrant 10,000-worker pop from the prior week as New York bus drivers and other public school employees returned to work. The remaining 222,000 initial claimants nonetheless marked the highest weekly tally since last November.

I asked QI’s Dr. Gates if he’d also sensed that a baton handoff had occurred, that momentum had shifted from continuing to initial claims. Rather than words, he replied graphically, illustrating that last September, initial claims were declining by 20% on a 13-week annualized basis; that’s since flipped to +5.0% (lilac line). Continuing claims, on the same basis, were rising by a pace north of 16% in February 2023 and have since flatlined (teal line).

Of course, stock jocks will tell you they won’t blink an eye until initial claims are above the 300,000 mark. If they prefer unequivocal, they can relish in the Philadelphia Federal Reserve’s May read on manufacturing. The granddaddy of all factory surveys flashed double outliers -- the more than -20-point swings in May’s New Orders and Shipments gauges boast a scant eight comparables since the survey’s 1968 inception. The ties that bind the precedents are scares of the recessionary, financial, pandemic, or geopolitical variety.

Don’t you know? You can marry the first two regional Fed manufacturing surveys out of the gate each month -- Empire and Philly – to proxy the ISM (blue line). To scale these reports to the national figure, the five components of New Orders, Shipments, Employment, Inventories and Delivery Times are weighted accordingly (yellow line). Echoing a relatively more stressed household sector in the region, Northeast factories are underperforming the broader U.S. For what it’s worth, divergences of the current magnitude occurred during the Great Recession and the 2015 global industrial recession.

With recessionary parallels multiplying, investors are existential, trying to gameplan Fed Chair Jerome Powell’s thinking. Is it the pre-May-FOMC Powell, who’s focused primarily on inflation? Or is this the post-May, dual mandate Powell, the guy who has rediscovered the importance of the labor market?

Luckily, the Philly Fed opens prisms to both versions of Powell. Manufacturers’ resource utilization gauges inflationary pressures. Rising capacity utilization tends to be accompanied by adding extra shifts to satisfy marginal demand. The opposite dynamic is at work, with the U.S. factory operating rate in a persistent downturn (purple line). Capitulation manifests at the worker level, which is on full display in the Philly Fed, which is flashing red as its Current Employment and Current Workweek indexes are in deep contraction (orange and lime lines, respectively). You can see the future of inflation, the sole phenomenon that lags lagging labor.

Also high up on the list of post-pandemic lags is the auto sector. We waited forever for those darn semiconductors to arrive from overseas to finish out fields of Ford F-150s. Long since satisfied, we now dread the pendulum has swung too far as oversupply sets in amidst consumers who will be increasingly challenged to access financing for big-ticket items.

In the meantime, ex-auto manufacturing has been contracting since late 2022 (red line). As Gates notes, “Not cranking out more products at the production level means not shipping them downstream at the distribution level. We see this underperformance in rail carloads relative to output (light blue line).” As detailed in depth in this week’s Quill, the state of U.S. household balance sheets is flagging exhaustion on the demand and supply sides, from maxed-out credit card lines to lenders poised to sustain such heavy losses, standards will remain tight. If only we could be 18 again, with our sole worry being that of deciding which classes to register for come fall.

* Equities stalled after a few weeks of explosive gains.

* My continued view is that equities are not compensating investors for risks and are expensive against interest rates and rising inflation.

* Stock futures were flat overnight, with the slightest of movement in a remarkably narrow range.

* The S&P Short-Range Oscillator remains deeply overbought - at 6.7%.

* Bond yields are little changed after a yield gap to the upside on Thursday.

* The U.S. dollar is much higher against the yen.

* Brent is flat

* Gold is +$2.10 and silver is up $0.04

* Bitcoin is +$1,100 (+2%).

* TGIF:

Alarm clock, ding-dong, pants up, boots on

Coffee, cigarette, blue-collar breakfast

Hard hat, fork lift, dragging through a swing shift

Stacking up the boxes, watching that clock

Tick tock, tick tock, tick tock, tick tock

Working for the man sure makes a man thirsty

Need a little neon, get a little drink on

Friday can't come fast enough y'all

- Rascal Flatts, It's Friday 

This daily Futures feature is like inside baseball. I try to show you and write about what I believe thoughtful hedge fund managers are looking at when they awake -- let's call it our normal routine -- setting the stage for their strategy for the day. The market is a complicated mosaic and the more info you have, the better trader and investor you will be!

The market (and money) never sleeps -- and neither do I, it appears! I have previously described the importance that overnight futures trading hold for me here. It is a guidepost to my strategy in the regular trading session. Moreover, the overnight/early morning futures hold opportunities as they are (1) inefficient, though liquid and (2) it seems fear and greed are often exaggerated outside the regular trading session. I frequently try to capture those efficiencies by trading actively both in the pre- and after-market sessions.

Here are brief observations I wanted to highlight and provide a summary of overnight price movements in various asset classes:

* Stock futures travelled in a remarkably narrow range overnight. S&P futures peaked at +4 and bottomed at -4. Nasdaq futures peaked at +24 and bottomed at -13. At 5:50 am ET, S&P futures were unchanged and Nasdaq futures were +7:

* Commodities are generally higher. Brent crude was +$0.06 to $83.33.

* The S&P Short-Range Oscillator is deeply overbought at 6.70% v 8.22%.

* The VIX is at 12.33 (+0.09). Given the low vol I am still out of straddles/strangles now.

* The US dollar is higher against the yen, euro and pound.

* Interest rates are little changed. The yield on the two-year Treasury is 4.786% (-1 basis point). The yield on the 10-year Treasury is +1 basis point at 4.389%. The long bond yield is +1 bp at 4.530%. Over there gilts (10 year) is +2 basis points.

* Overnight, the inversion of the 2s/10s Treasuries curve is unchanged at -40 basis points.

* Gold is +$2.10 at $2,387. Silver is +$0.08.

* Bitcoin was +2% or +$1,200 and is $66.3k.

Here is a synopsis of some of my columns I believe were important, or in the event you were out for the day and/or did not read my Diary. The principal intent is to review the logic of my market moves and other factors:

God Only Knows

"The Sell Off"

Dust in the Wind

Oh, Deere

I, Too, Call BS

Wondering Out Loud

Chart of the Day (The VIX)

Here were yesterday's trades:

* Buying back Viking Therapeutics VKTX (on a scale)

Biden announcement on marijuana.

"There is nothing more deceptive than an obvious fact."

- Arthur Conan Doyle

Bonus - here are some great links:

New Highs 

A Special Type of All Time High

My Bespoke Charts

Bonds Trigger A Tactical Buy 

Was yesterday a bearish reversal of the Nasdaq?

Interestingly, the total of “off-board” volume or retail flow today topped 51% of the total shares that traded hands, the largest percentage year to date.

There was a great statistic that got sent around today, that “45% of the total market volume today was in <$1 stocks (CRKN, GWAV, FFIE, SINT stick out specifically). This compares to the year to date average of ~12% for <$1 stocks". (Source: Goldman Sachs)

Thursday's reversal in the Indexes, though minor, was accompanied by a sharp rise in bullish investor sentiment in the surveys (AAIIX, Investors Intelligence, etc.). And it was accompanied by a deep overbought - with the S&P Short Range Oscillator rising to 8.22% (an overbought level not seen in quite a while).

Finally, as mentioned at day's end yesterday - there was another possible divergence of a big rise in volume as the Nasdaq reversed lower intraday:

Wondering Out Loud...

It might be somethin' (resistance/liquidation) or it might be nothin' (normal profit-taking after a sensational move to the upside in a brief period of time) — but the Nasdaq closed with slight negative breadth on extraordinarly high volume.

Not surprisingly no one in the business media has picked up on this:

- NYSE volume 398M shares, 10% below its one-month average;

- NASDAQ volume 10.1B shares, 140% above its one-month average

- VIX: +0.08% to 12.46

I am in agreement:

Wolf Street howls about credit cards.