Tuesday, October 31, 2023

Wednesday Watch

Evening Headlines

Bloomberg:

Zero Hedge:

Wall Street Journal:

Newsmax:
TheGatewayPundit.com:

The Epoch Times:

OpenVAERS:
SKirsch.com:
Night Trading 
  • Asian equity indices are unch. to +1.0% on average.
  • Asia Ex-Japan Investment Grade CDS Index 137.5 -1.0 basis point.
  • China Sovereign CDS 80.75 -1.25 basis points.
  • China Iron Ore Spot 122.2 USD/Metric Tonne +.53%.
  • Bloomberg Emerging Markets Currency Index 41.27 -.03%.
  • Bloomberg Global Risk-On/Risk Off Index 65.2 +%. 
  • Bloomberg US Financial Conditions Index -.11 -1.0 basis point.
  • Volatility Index(VIX) futures 18.7 +.64%.
  • Euro Stoxx 50 futures +.22%.
  • S&P 500 futures -.30%.
  • NASDAQ 100 futures -.31%.  
Morning Preview Links

BOTTOM LINE: Asian indices are modestly higher, boosted by technology and industrial 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 day.

Stocks Modestly Higher into Afternoon on Stable Long-Term Rates, Oil Decline, Month-End Short-Covering, Defense/Homebuilding Sector Strength

Broad Equity Market Tone:

  • Advance/Decline Line: Higher
  • Sector Performance: Most Sectors Rising
  • Volume: Around Average
  • Market Leading Stocks: Performing In Line
Equity Investor Angst:
  • Volatility(VIX) 18.4 -7.0%
  • DJIA Intraday % Swing .74% -8.2%
  • Bloomberg Global Risk On/Risk Off Index 63.6 +.3%
  • Euro/Yen Carry Return Index 170.9 +1.2%
  • Emerging Markets Currency Volatility(VXY) 8.17 -1.5%
  • CBOE S&P 500 Implied Correlation Index 30.2 -6.7% 
  • ISE Sentiment Index 100.0 +12.0
  • Total Put/Call 1.03 -4.6%
  • NYSE Arms 1.13 +32.2%
Credit Investor Angst:
  • North American Investment Grade CDS Index 79.08 -2.21%
  • US Energy High-Yield OAS 358.8 -2.9%
  • Bloomberg TRACE # Distressed Bonds Traded 367 +2
  • European Financial Sector CDS Index 98.8 -2.6% 
  • Deutsche Bank Subordinated 5Y Credit Default Swap 287.79 -1.74%
  • Italian/German 10Y Yld Spread 192.0 basis points unch.
  • Asia Ex-Japan Investment Grade CDS Index 137.9 -.33%
  • Emerging Market CDS Index 228.02 -1.8%
  • Israel Sovereign CDS 137.75 -3.2%
  • China Corp. High-Yield Bond USD ETF(KHYB) 24.60 -.06%
  • 2-Year SOFR Swap Spread -11.5 basis points +.75 basis point
  • TED Spread 17.5 basis points -2.25 basis points
  • 3-Month EUR/USD Cross-Currency Basis Swap -25.0 +.75 basis point
  • MBS  5/10 Treasury Spread 183.0 -2.0 basis points
  • Bloomberg CMBS Investment Grade Bbb Average OAS 921.0 unch.
  • Avg. Auto ABS OAS 96.0 unch.
Economic Gauges:
  • Bloomberg Emerging Markets Currency Index 41.3 -.1%
  • 3-Month T-Bill Yield 5.46% unch.
  • China Iron Ore Spot 122.2 USD/Metric Tonne +.49%
  • Dutch TTF Nat Gas(European benchmark) 48.0 euros/megawatt-hour-9.5%
  • Citi US Economic Surprise Index 63.4 +2.0 points
  • Citi Eurozone Economic Surprise Index -45.5 -3.9 points
  • Citi Emerging Markets Economic Surprise Index 26.3 +.2 point
  • S&P 500 Current Quarter EPS Growth Rate YoY(281 of 500 reporting) +2.5% -3.2 percentage points
  • S&P 500 Blended Forward 12 Months Mean EPS Estimate 240.54 unch.:  Growth Rate +9.4% unch., P/E 17.3 unch.
  • S&P 500 Current Year Estimated Profit Margin 12.14% -1.0 basis point
  • NYSE FANG+ Current Quarter EPS Growth Rate YoY(6 of 10 reporting) +51.9% unch.
  • NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 272.65 +.52: Growth Rate +60.9% +.4 percentage point, P/E 26.4 -.3
  • Bloomberg US Financial Conditions Index -.14 +5.0 basis points
  • Bloomberg Euro-Zone Financial Conditions Index n/a
  • US Yield Curve -19.75 basis points (2s/10s) -3.0 basis points
  • US Atlanta Fed 3Q GDPNow Forecast +2.26% unch.
  • Cleveland Fed Inflation Nowcast Core PCE YoY +3.63% unch.: CPI YoY +3.28% -4.0 basis points
  • 10-Year TIPS Spread 2.42 -1.0 basis point
  • Highest target rate probability for Dec. 13th FOMC meeting: 68.9%(-5.5 percentage points) chance of 5.25%-5.5%. Highest target rate probability for Jan. 31st meeting: 60.6%(-6.2 percentage points) chance of 5.25%-5.5%.
Overseas Futures:
  • Nikkei 225 Futures: Indicating +461 open in Japan 
  • China A50 Futures: Indicating +31 open in China
  • DAX Futures: Indicating +82 open in Germany
Portfolio:
  • Slightly Higher:  On gains in my tech/transport/industrial/utility sector longs
  • Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges
  • Market Exposure: Moved to 50% Net Long

Bear Radar

Style Underperformer:

  • Large-Cap Growth +.2%
Sector Underperformers:
  • 1) Gold & Silver -2.6% 2) Airlines -2.2% 3) Electric Vehicles -2.0%
Stocks Falling on Unusual Volume: 
  • APO, PDD, FNV, HTLD, NTR, AMGN, KMPR, TECH, IGT, WK, DCPH, AESI, VNO, DIOD, BP, Z, CAT, HUBB, ZG, HAYW, RGNX, FMC, CEIX, ELF, ZI, VFC, LSCC, CTLT and SRPT
Stocks With Unusual Put Option Activity:
  • 1) JBLU 2) TAL 3) PINS 4) APO 5) WDC
Stocks With Most Negative News Mentions:
  • 1) CAT 2) PFE 3) VFC 4) JBLU 5) SRPT
Charts:

Bull Radar

Style Outperformer:

  • Small-Cap Growth +.8%
Sector Outperformers:
  • 1) Networking +2.9% 2) Defense +1.6% 3) Cyber Security +1.6%
Stocks Rising on Unusual Volume:
  • VERV, WOLF, SSTK, PINS, RGEN, GVA, TWO, COCO, ANET, BEAM, HLIT, VRNS, NSP, MPWR, CYTK, XYL, GEHC, NRDS, QTWO, CRK, AMKR, SRC and GPK
Stocks With Unusual Call Option Activity:
  • 1) SRPT 2) GNRC 3) PINS 4) ZI 5) ANET
Stocks With Most Positive News Mentions:
  • 1) ANET 2) COCO 3) PINS 4) ARDX 5) OTTR

Tomorrow's Earnings/Economic Releases of Note; Market Movers

Earnings of Note 
Company/Estimate 

Before the Open:
  • (AVA)/.14
  • (BLCO)/.19
  • (EAT)/.06
  • (GOOS)/-.16
  • (CVS)/2.13
  • (DD)/.84
  • (EL)/-.21
  • (FDP)/.42
  • (GNRC)/1.55
  • (GSK)/1.11
  • (HUM)/7.16
  • (IDXX)/2.37
  • (KHC)/.66
  • (NCLH)/.68
  • (SMG)/-2.88
  • (SPWR)/-.01
  • (WAY)/-.48
  • (WING)/.52
  • (YUM)/1.27
After the Close: 
  • (AFL)/1.49
  • (ABNB)/2.11
  • (ALB)/3.77
  • (ALL)/.45
  • (CAR)/14.18
  • (BXP)/1.84
  • (CHRW)/.81
  • (CF)/1.02
  • (CAKE)/.43
  • (CLX)/-.24
  • (CTSH)/1.09
  • (DASH)/-.40
  • (ELF)/.53
  • (EIX)/1.44
  • (EA)/1.25
  • (ETSY)/.50
  • (EXAS)/-.47
  • (HLF)/.73
  • (HST)/.35
  • (IR)/.69
  • (LMND)/-.94
  • (MTW)/.06
  • (MRO)/.72
  • (MCK)/6.13
  • (MET)/1.95
  • (MSTR)/.30
  • (MDLZ)/.78
  • (PYPL)/1.23
  • (PRU)/3.13
  • (QCOM)/1.91
  • (ROKU)/-2.04
  • (STAA)/.13
  • (RGR)/.88
  • (SUM)/.75
  • (SMCI)/3.27
  • (WERN)/.49
  • (WMB)/.41
  • (ZG)/.22
Economic Releases

8:15 am EST

  • The ADP Employment Change for Oct. is estimated to rise to 150K versus 89K in Sept.

10:00 am EST

  • Construction Spending MoM for Sept. is estimated to rise +.4% versus a +.5% gain in Aug.
  • JOLTS Job Openings for Sept. is estimated to fall to 9400K versus 9610K in Aug.
  • ISM Manufacturing for Oct. is estimated at 49.0 versus 49.0 in Sept.
  • ISM Prices Paid for Oct. is estimated to rise to 45.0 versus 43.8 in Sept.

10:30 am EST

  • Bloomberg consensus estimates call for a weekly crude oil inventory build of +1,480,800 barrels versus a +1,372,000 barrel gain the prior week. Gasoline supplies are estimated to fall by -593,200 barrels versus a +156,000 barrel gain the prior week. Distillate inventories are estimated to fall by -1,584,000 barrels versus a -1,686,000 barrel decline the prior week. Finally, Refinery Utilization is estimated to rise by +.28% versus a -.5% decline prior.

2:00 pm EST

  • The FOMC is expected to leave the benchmark Fed Funds Rate at 5.25-5.5%.

Afternoon:

  • Wards Total Vehicle Sales for Oct. is estimated to fall to 15.6M versus 15.67M in Sept.

Upcoming Splits 

  • None of note
Other Potential Market Movers
  • The FOMC press conference, weekly MBA Mortgage Applications report and the (KLAC) annual meeting could also impact global trading tomorrow.
US Equity Market Hours
  • 9:30 am - 4:00 pm EST

Mid-Day Market Internals

NYSE Composite Index:

  • NYSE Volume Running -1.0% Below 100-Day Average 
  • Nasdaq/NYSE Volume Ratio 7.8 -.3
  • 4 Sectors Declining, 7 Sectors Rising
  • 71.8% of Issues Advancing, 25.6% Declining
  • 9 New 52-Week Highs, 77 New Lows
  • 27.0%(+5.9%) of Issues Above 200-day Moving Average
  • Average 14-Day RSI 37.0 +4.0
  • Bloomberg Global Risk-On/Risk-Off Index 63.8 +.5%
  • Russell 1000: Growth/Value 17,868.9 -.72%
  • 1-Day Vix 15.0 -7.8%
  • Vix 19.1 -3.5%
  • Total Put/Call .95 -12.0%
  • TRIN/Arms 1.20 -15.5%

Monday, October 30, 2023

Tuesday Watch

 Night Trading 

  • Asian equity indices are -.25% to +.5% on average.
  • Asia Ex-Japan Investment Grade CDS Index 138.5 -.25 basis point.
  • China Sovereign CDS 82.0 -2.0 basis points.
  • China Iron Ore Spot 121.1 USD/Metric Tonne -.47%.
  • Bloomberg Emerging Markets Currency Index 41.1 unch.
  • Bloomberg Global Risk-On/Risk Off Index 65.2 +2.7%. 
  • Bloomberg US Financial Conditions Index -.21 -2.0 basis points.
  • Volatility Index(VIX) futures 19.6 +.05%.
  • Euro Stoxx 50 futures n/q.
  • S&P 500 futures -.11%.
  • NASDAQ 100 futures -.14%.  
Morning Preview Links

BOTTOM LINE: Asian indices are mostly higher, boosted by financial and commodity 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 day.

Stocks Higher into Final Hour on Diminished Mid-East Regional War Fears, Stable Long-Term Rates, Earnings Outlook Optimism, Transport/Financial Sector Strength

Broad Equity Market Tone:

  • Advance/Decline Line: Higher
  • Sector Performance: Most Sectors Rising
  • Volume: Around Average
  • Market Leading Stocks: Underperforming
Equity Investor Angst:
  • Volatility(VIX) 19.8 -6.8%
  • DJIA Intraday % Swing .80% -43.5%
  • Bloomberg Global Risk On/Risk Off Index 63.2 +2.0%
  • Euro/Yen Carry Return Index 168.8 +.08%
  • Emerging Markets Currency Volatility(VXY) 8.22 -.72%
  • CBOE S&P 500 Implied Correlation Index 32.2 -7.1% 
  • ISE Sentiment Index 106.0 +23.0
  • Total Put/Call .90 -26.8%
  • NYSE Arms 1.06 -25.4%
Credit Investor Angst:
  • North American Investment Grade CDS Index 80.65 -.37%
  • US Energy High-Yield OAS 370.30 -1.4%
  • Bloomberg TRACE # Distressed Bonds Traded 365 +19
  • European Financial Sector CDS Index 101.40 -.86% 
  • Deutsche Bank Subordinated 5Y Credit Default Swap 293.19 -.16%
  • Italian/German 10Y Yld Spread 192.0 basis points -5.0 basis points
  • Asia Ex-Japan Investment Grade CDS Index 138.7 +.43%
  • Emerging Market CDS Index 233.0 -2.7%
  • Israel Sovereign CDS 142.34 -1.4%
  • China Corp. High-Yield Bond USD ETF(KHYB) 24.59 +.16%
  • 2-Year SOFR Swap Spread -12.25 basis points -.75 basis point
  • TED Spread 19.75 basis points -.5 basis point
  • 3-Month EUR/USD Cross-Currency Basis Swap -25.75 -.25 basis point
  • MBS  5/10 Treasury Spread 185.0 -2.0 basis points
  • Bloomberg CMBS Investment Grade Bbb Average OAS 921.0 -5.0 basis points
  • Avg. Auto ABS OAS 96.0 +3.0 basis points
Economic Gauges:
  • Bloomberg Emerging Markets Currency Index 41.33 +.21%
  • 3-Month T-Bill Yield 5.46% +1.0 basis point
  • China Iron Ore Spot 120.9 USD/Metric Tonne -.63%
  • Dutch TTF Nat Gas(European benchmark) 50.5 euros/megawatt-hour unch.
  • Citi US Economic Surprise Index 61.4 +2.3 points
  • Citi Eurozone Economic Surprise Index -41.6 +3.5 points
  • Citi Emerging Markets Economic Surprise Index 26.1 -.3 point
  • S&P 500 Current Quarter EPS Growth Rate YoY(252 of 500 reporting) +5.7% -.1 percentage point
  • S&P 500 Blended Forward 12 Months Mean EPS Estimate 240.54 +.39:  Growth Rate +9.4% +.2 percentage point, P/E 17.3 unch.
  • S&P 500 Current Year Estimated Profit Margin 12.15% +4.0 basis points
  • NYSE FANG+ Current Quarter EPS Growth Rate YoY(6 of 10 reporting) +51.9% unch.
  • NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 272.13 +2.26: Growth Rate +60.5% +1.3 percentage points, P/E 26.7 unch.
  • Bloomberg US Financial Conditions Index -.21 +9.0 basis points
  • Bloomberg Euro-Zone Financial Conditions Index -.12 -1.0 basis point
  • US Yield Curve -16.75 basis points (2s/10s) +.25 basis point
  • US Atlanta Fed 3Q GDPNow Forecast +2.26% unch.
  • Cleveland Fed Inflation Nowcast Core PCE YoY +3.63% unch.: CPI YoY +3.32% unch.
  • 10-Year TIPS Spread 2.43 unch.
  • Highest target rate probability for Dec. 13th FOMC meeting: 74.1%(-5.0 percentage points) chance of 5.25%-5.5%. Highest target rate probability for Jan. 31st meeting: 66.6%(-2.9 percentage points) chance of 5.25%-5.5%.
Overseas Futures:
  • Nikkei 225 Futures: Indicating -61 open in Japan 
  • China A50 Futures: Indicating +31 open in China
  • DAX Futures: Indicating +109 open in Germany
Portfolio:
  • Slightly Higher:  On gains in my tech/transport/industrial/utility sector longs
  • Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges
  • Market Exposure: Moved to 50% Net Long