Weekly Outlook

• Wall St. Week Ahead by Reuters.
• Global Economy Week by Bloomberg. 
• The Week Ahead by Yahoo. (video)
• Stocks to Watch Next Week by Seeking Alpha.
• Weekly Economic Calendar by Briefing.com.

BOTTOM LINE: I expect US stocks to finish the week mixed as global recession fears, rising China tensions and profit-taking offset coronavirus vaccine/treatment optimism, falling Biden Presidency odds and global stimulus hopes. My intermediate-term trading indicators are giving bearish signals and the Portfolio is 50% net long heading into the week.

Today's Headlines

Bloomberg:      

• China’s Battered Bonds May See Further Pressure on Funding Pains.
• Scholz Says Germany Should Re-Implement Debt Limits in 2022.  
• Macron Shares Concerns Over Human Rights With Chinese Minister. 
• Charting the Global Economy: Rebound Signs Come With a Caveat.  
• A Major Hurricane Capped Oil Output and Prices Barely Budged.
• Job Cuts at MGM, Coca-Cola, Boeing Herald Economic Pain Ahead.
• Winners Taking Everything in Relentless Five-Week Nasdaq Surge.
• BlackRock Gets Approval to Set Up Mutual Fund Company in China.
• Heroin’s Hidden Ingredient Is a Chemical Made by U.S. Companies.  
• U.S. Cases Rise; Berlin Police Attacked in Protest: Virus Update.  
• Trump’s Convention Offered Peek at 2024 Republican Primary.  
• Where U.S. Small Businesses Are Feeling the Most Pandemic Pain.   
• Hedge Fund Strategist Warns Election Season May Sow Volatility.

Wall Street Journal:

• New Wave of Layoffs Makes Pandemic Job Losses Permanent.
• Robot Boats Leave Autonomous Cars in Their Wake.
• Financial Firms Fail to Own Up to Advisers’ Past Misdeeds.
• Cuomo Gets a Nursing Home Inspection.
• One Step Ahead of the Woke Mob.
• Today’s College Classroom Is a Therapy Session.
• Trump Bets on Law-and-Order Message to Sway Swing Voters.
• China Tightens AI Export Restrictions.
• The Future of Cleaning Oil Spills: Robots, Wood Chips and Sponges.

CNBC:

• China tightens tech export controls potentially jeopardizing TikTok deal, reports say.
• CDC director says there will likely be a limited supply of coronavirus vaccines at first.
• S&P 500′s stunning summer rally points to best August since 1986.
• IRS guidelines on Trump’s payroll tax holiday leaves employers on the hook.
• Abbott is testing rapid coronavirus test on asymptomatic people in hopes of expanding FDA approval.
• Apple is making it harder to track iPhone users, which could hurt Facebook: CNBC After Hours.
• DraftKings CEO sounds alarm on SPAC market: ‘Hopefully the market settles down a little bit there’.
• Hedge fund manager Steven Cohen in exclusive talks to buy New York Mets.

IG:

• Weekend Markets Trading Live.

Barron's:

• Had bullish commentary on (TOL),(TMHC), (MCD) and (SBUX).

MarketWatch.com:   

• White House chief of staff says Trump team has offered Pelosi $1.3 trillion for next coronavirus relief deal.
• Apple CEO Tim Cook sold shares ahead of stock split.
• Kenosha police union gives account of Jacob Blake shooting, says depictions are 'wholly inaccurate'.

Fox News:

• SEN. RAND PAUL: Protesters attacked me, were encouraged by Dems.  
• Trump slams 'thugs' who harassed supporters after RNC speech.
• This city could face 'explosive' coronavirus spread from cold weather, schools reopening.
  

Zero Hedge:    

• Schiff, Pelosi Livid After Intel Community Ditches 'Manipulated' Election Briefings For Written Updates.
• "She Hasn't Done Her Job": Looting, Riots, & Mayoral Ineptitude Prompt Mass Exodus Of Chicago Residents.  
• Amazon Orders 1,800 EV Delivery Vans From Mercedes, Commits To Go Carbon-Neutral By 2039.
• US Cases Stabilize As California Set To Become 1st State To Pass 700k COVID-19 Cases: Live Updates.
• Trump Gains In Post-Convention Poll As Biden Support Slips.
• 84% Of CFOs Say Stocks Are Overvalued.
• NPR Claims That Calling A Riot A "Riot" Is Racist.
• NYC Landlords Wage War Against Remote Working.
• "This Might Be The Weirdest Market I’ve Ever Seen" - Charting The Market's Descent Into Insanity.
• ESG Is The Folly Of "Woke Capitalism".
• Michael Moore & Bill Maher Beg Dems To Wake Up: "Enthusiasm For Trump OFF THE CHARTS! Are You Ready For Trump Victory?".
• UCLA Researcher Arrested, Charged With Destroying Evidence In China Espionage Probe.
• Sandia Labs Goes Nuclear On Employee Who Sparked Internal Revolt Over Critical Race Theory.
• Rittenhouse Lawyers Say Video Evidence Proves Kenosha Shootings Were 'Acts Of Self-Defense'.
• New Jersey Town Bills Teenage BLM Protest Organizer $2,500 For Police Overtime.
• CNN Has Turned Itself Into America's "Baghdad Bob".
• Hedge Funds Start Piling Into "The Big Short 3.0".
• German Court Overturns Protest Ban - Tomorrow's Massive Anti-Lockdown March To Go-Ahead.
• Americans Sense Something Is Wrong: Gun Sales Up 72%.
• Tennessee Teachers Are Worried You'll Overhear What They Teach Your Kids.
• Silent Majority: Over 10% Of Trump Voters Won't Admit Preferences To Pollsters.
• Apple Revokes Epic Games Developer Credentials As Anti-Trust Battle Heats Up.
• Chicago Teachers Union "Endorses" Guillotine Built By Protesters Outside Jeff Bezos' House.
• "They Would Have Killed Us" - Rand Paul Describes Attack By "Unhinged" Mob.
• The MTA Is Preparing For A "Doomsday Scenario" That Includes Higher Fares, 40% Cut In Service.
• After Buying DirecTV For $50 Billion In 2015, AT&T Now Seeks To Sell It For Under $20 Billion.
• A Quarter Of All Personal Income In The US Comes From The Government.
• Exposing The Waste In The Democrats' "HEROES Act".
• Powell Pumps S&P To Best August Since '86, Dollar & Bonds Puked.

Business Insider:

• Fake N95 face masks were being sold on this ISIS-linked website — and it shows how terror groups are using COVID-19 as a propaganda tool.
• AI experts doubt Amazon's new Halo wearable can accurately judge the emotion in your voice, and worry about the privacy risks.
• Stolen Fortnite accounts are being sold on the black market for hundreds of dollars.
  

The Epoch Times:

• Trump Administration Says Sinochem and Others Backed by Chinese Military.
• Chinese Regime Using Australian Scientists in Quest for Tech, Military Dominance.
  

Digital Blackboard:

• Daily New Cases by Region.

Worldometer:

• New Cases/Deaths by state.

Rt Covid-19:

• How fast virus is growing by state.

KFF:

• State Data(Tests/Hospitalizations).

Stocks Higher into Final Hour on Trump Speech, Global Central Bank Hopes, Technical Buying, Gaming/Airline Sector Strength

 Broad Equity Market Tone:

• Advance/Decline Line: Higher
  

• Sector Performance: Mixed
  

• Volume: Below Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 23.8 -2.7%
• Bloomberg Global Risk On/Risk Off Index 555.0 +77.0 points

• Euro/Yen Carry Return Index 129.86 -.53%

• Emerging Markets Currency Volatility(VXY) 11.03 -.63%

• S&P 500 Implied Correlation 37.4 -1.7%

• ISE Sentiment Index 124.0 +22.0 points

• Total Put/Call .66 +6.5%

• NYSE Arms .66 -22.2%

Credit Investor Angst:

• North American Investment Grade CDS Index 67.12 -.63%
  

• US Energy High-Yield OAS 760.65 +.25%

• European Financial Sector CDS Index 61.30 +1.66%

• Italian/German 10Y Yld Spread 143.5 +.25 basis point
  

• Asia Ex-Japan Investment Grade CDS Index  62.07 -.08%
  

• Emerging Market CDS Index 175.25 -2.9%
  

• iBoxx Offshore RMB China Corporate High Yield Index 177.58 +.04%

• 2-Year Swap Spread 9.0 +.25 basis point

• TED Spread 16.0 unch.

• 3-Month EUR/USD Cross-Currency Basis Swap -4.5 -1.0 basis point
  
• MBS  5/10 Treasury Spread  93.5 +3.25 basis points
  
• IHS Markit CMBX BBB- 6 68.25 unch.

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 60.83 +1.12%
• 3-Month T-Bill Yield .10% unch.

• Yield Curve 61.5 +8.5 basis points
  

• China Iron Ore Spot 119.70 USD/Metric Tonne +2.1%

• Citi US Economic Surprise Index 242.50 -.3 point

• Citi Eurozone Economic Surprise Index 151.9 +5.9 points

• Citi Emerging Markets Economic Surprise Index 25.0 +.4 point

• 10-Year TIPS Spread 1.77 +3.0 basis points
• 100.0% chance of no change at Nov. 5th meeting, 100.0% chance of no change at Dec. 16th meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating -12 open in Japan 
• China A50 Futures: Indicating -58 open in China

• DAX Futures: Indicating -7 open in Germany

Portfolio:

• Slightly Higher: On gains in my industrial/consumer staple/tech sector longs
  

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

• Market Exposure: Moved to 75% Net Long

 

Morning Market Internals

NYSE Composite Index:

• Volume Running -31.3% Below 100-Day Average
• 5 Sectors Rising, 6 Sectors Declining
• 53.2% of Issues Advancing, 43.7% Declining
• 47 New 52-Week Highs, 8 New Lows
• 47.1% of Issues Above 200-day Moving Average
• Average 14-Day RSI 49.0% 
• Bloomberg Global Risk-On/Risk-Off Index 406.0 -72.0 points
• Vix 25.9 +5.7%
• Total Put/Call .50 -19.4%
• TRIN/Arms .73 +1.4%

Friday Watch

Night Trading 

• Asian equity indices are -.25%  to +.25% on average.

• Asia Ex-Japan Investment Grade CDS Index 62.75 +.5 basis point.

• China Sovereign CDS 35.75 unch.

• Bloomberg Emerging Markets Currency Index 60.16 +.01%.
• Bloomberg Global Risk-On/Risk Off Index 465.0 -12.0 points
• Volatility Index(VIX) futures 26.9 -.46%
• FTSE 100 futures +.17%.

• S&P 500 futures +.20%.

• NASDAQ 100 futures +.14%.

Morning Preview Links

Earnings of Note 
Company/Estimate

Before the Open:

• (BIG)/2.70
• (HIBB)/1.15
  

After the Close:

• None of note
  

Economic Releases

8:30 am EST

• Advance Goods Trade Balance report for July is estimated to widen to -$72.0B versus -$70.6B in June.
• Wholesale Inventories MoM for July is estimated to fall -.9% versus a -1.4% decline in June.
• Retail Inventories MoM for July is estimated to fall -1.1% versus a -2.6% decline in June.
• Personal Income for July is estimated to fall -.4% versus a -1.1% decline in June.
• Personal Spending for July is estimated to rise +1.5% versus a +5.6% gain in June.
• The PCE Core MoM for July is estimated to rise +.5% versus a +.2% gain in June.
  

9:45 am EST

• The MNI Chicago PMI for August is estimated to rise to 52.6 versus 51.9 in July.
  

Upcoming Splits

• (AAPL)/4-for-1
• (TSLA)/5-for-1
  

Other Potential Market Movers

• The Fed's Bullard speaking, Fed's Harker speaking, Fed's Mester speaking and the GFK Consumer Confidence Index could also impact trading today.

Market Hours
Normal:

• 9:30 am - 4:00 pm EST
  

BOTTOM LINE: Asian indices are mostly lower, weighed down by financial 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 50% net long heading into the day.

Stocks Higher into Afternoon on Central Bank Hopes, Diminishing Coronavirus Fears, Technical Buying, Financial/Transport Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Lower
  

• Sector Performance: Mixed
  

• Volume: Below Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 24.4 +4.9%
• Bloomberg Global Risk On/Risk Off Index 568.0 -45.0 points

• Euro/Yen Carry Return Index 130.63 +.54%

• Emerging Markets Currency Volatility(VXY) 11.13 -.45%

• S&P 500 Implied Correlation 38.48 +1.29%

• ISE Sentiment Index 102.0 -28.0 points

• Total Put/Call .61 -6.15%

• NYSE Arms .83 -23.2%

Credit Investor Angst:

• North American Investment Grade CDS Index 67.28 +.94%
  

• US Energy High-Yield OAS 761.09 -.61%

• European Financial Sector CDS Index 60.30 -1.69%

• Italian/German 10Y Yld Spread 143.25 -1.75 basis points
  

• Asia Ex-Japan Investment Grade CDS Index  62.29 +.37%
  

• Emerging Market CDS Index 181.22 +.98%
  

• iBoxx Offshore RMB China Corporate High Yield Index 177.51 +.01%

• 2-Year Swap Spread 8.75 +.75 basis point

• TED Spread 16.0 +2.25 basis points

• 3-Month EUR/USD Cross-Currency Basis Swap -3.5 -1.5 basis points
  
• MBS  5/10 Treasury Spread  90.25 unch.
  
• IHS Markit CMBX BBB- 6 68.25 unch.

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 60.18 +.15%
• 3-Month T-Bill Yield .10% unch.

• Yield Curve 53.0 -2.0 basis points
  

• China Iron Ore Spot 118.0 USD/Metric Tonne -1.20%

• Citi US Economic Surprise Index 242.80 +4.7 points

• Citi Eurozone Economic Surprise Index 146.0 +2.3 points

• Citi Emerging Markets Economic Surprise Index 24.6 -.3 point

• 10-Year TIPS Spread 1.74 +1.0 basis point
• 100.0% chance of no change at Nov. 5th meeting, 100.0% chance of no change at Dec. 16th meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating +12 open in Japan 
• China A50 Futures: Indicating -26 open in China

• DAX Futures: Indicating -25 open in Germany

Portfolio:

• Higher: On gains in my medical/industrial/consumer staple/biotech sector longs and emerging market shorts
  

• Disclosed Trades: None

• Market Exposure: 50% Net Long