Thursday Watch

Evening Headlines

Bloomberg:  

• China Fires Missiles Into Disputed Waterway; U.S. Adds Sanctions.   
• China Increases Key Purchases With U.S. Target Still Far Off.
• Global Cases Pass 24 Million; U.S. Test Criticism: Virus Update.
• Global Stock Rally Stalls in Asia; Dollar Dips. Asian stocks began Thursday’s session mixed as a rally that pushed global equities to a record high showed signs of stalling ahead of a speech from Federal Reserve Chair Jerome Powell. The dollar edged lower. Japanese shares slipped, while those in South Korea and Australia traded flat. Futures on the S&P 500 dipped after a surge in technology shares earlier pushed that index and the Nasdaq Composite to fresh highs for a fourth consecutive day, while the MSCI All-Country World Index climbed to a record. U.S. durable goods orders were more than double estimates, indicating factories will help support the economic rebound in coming months. Treasuries edged up. The offshore yuan traded at the highest since January amid signs of tight liquidity. S&P 500 futures slipped 0.1% as of 9:05 a.m. in Tokyo. The gauge rose 1% on Wednesday. Japan’s Topix index slid 0.3%. South Korea’s Kospi lost 0.3%. Australia’s S&P/ASX 200 Index rose 0.1%.
• Oil Edges Up With Traders Assessing U.S. Gulf Hurricane Impact.
• Fed’s 5-Year Plan, Davos Delayed, Bracing for Impact: Eco Day.  
• Saks Faces Eviction in Miami Over $1.9 Million in Unpaid Rent.
• Trump Says He’s Sending Law Enforcement to Quell Protests in Wisconsin.
• Laura to Be Worst Louisiana Storm in 160 Years: Hurricane Update.
  
• U.S. Commercial-Property Prices Fall With Worst Yet to Come.
  
• Red-Hot Nasdaq 100 Is Threatening to Double Inside of Two Years.
• Coronavirus in Vacant Apartment Suggests Toilets’ Role in Spread.  
• Key Lawmaker Vows to Loosen Big Tech’s ‘Deeply Disturbing’ Grip. 
• Chicago School Board Votes to Renew Contract With City’s Police.

Wall Street Journal:

• The More Important Election.
• Mission Creep at the Fed
• Joe Biden Can’t Restore Normalcy.
• Abbott’s $5 Covid-19 Rapid Antigen Test Gets Emergency-Use Status From FDA.
• Ford Rethinks the Office, Betting Work Will Be Partly Remote Longer-Term.
• Transgender Student Wins Court Ruling on School-Bathroom Use.
  

Fox News:

• Pence to highlight Trump's economic, foreign accomplishments in 'optimistic' speech at RNC night.
• La. gov. predicts Hurricane Laura search, rescue missions by tomorrow.
• Gore suggests military will remove Trump if he doesn't concede.
  

CNBC.com:

• The Fed is expected to use a pandemic era tool to fight a long running battle against low inflation.
• Time to ring the register on part of your position, Jim Cramer says.
• Laura upgraded to Category 4 hurricane, ‘unsurvivable’ storm surge forecast for Texas-Louisiana.
• GOP set to propose smaller coronavirus stimulus bill.
• Jeff Bezos is now worth more than $200 billion.
• Stocks making the biggest moves after hours: NetApp, Williams-Sonoma, Box & more.
• ‘What is the plan?’ NYC restaurant owners plead for clarity on when indoor dining can resume.

MarketWatch.com:         

• Salesforce’s nearly 30% stock rally this week is a possible ‘nightmare’ scenario for the Dow committee.
  
• Box shares surge on better-than-expected results, strong guidance.

Zero Hedge: 

• Marxism Is Coming At Breathtaking Speed - Do This Before It's Too Late.
  
• Everything Changes After Kenosha... "Divided We Stand".
• US Cargo Thefts Erupt As Violent Crime Spreads Across America. 
• Dr. Fauci Worried New CDC Guidelines Are Being "Misinterpreted": Live Updates.  
• New York's MTA Is Losing An Astounding $200 Million Per Week.
• Trump Wants Biden Drug Tested Before First Debate.
• Is Andrew Cuomo Responsible For Thousands Of Nursing Home Deaths? The DoJ Is Trying To Find Out.  
• Milwaukee Bucks Are Refusing To Play Today's NBA Playoff Game In "Protest" For Social Justice.
•  Salesforce Fires 1,000 On Day Its Stock Soars To All Time High.
• Global Stocks Hit Record High, Gold Spikes Ahead Of Powell Speech.

The Epoch Times:

• Faulty Chinese Testing Kits Result in Thousands of Virus False Positives in Sweden.
  

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).

Night Trading 

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

• Asia Ex-Japan Investment Grade CDS Index 62.25 +.25 basis point.

• China Sovereign CDS 35.75 -.25 basis point.

• Bloomberg Emerging Markets Currency Index 60.11 +.03%.
• FTSE 100 futures +.02%.

• S&P 500 futures -.13%.

• NASDAQ 100 futures -.24%.

Morning Preview Links

Earnings of Note 
Company/Estimate

Before the Open:

• (FLWS)/.19
• (ANF)/-.83
• (BURL)/-1.06
• (DG)/2.47
• (DLTR)/.93
• (FRO)/1.02
• (SAFM)/.79
• (TIF)/.17
• (TD)/1.23
  

After the Close:

• (DELL)/1.40
• (GPS)/-.36
• (HPQ)/.43
• (MRVL)/.20
• (OKTA)/-.02
• (OLLI)/.90
• (ULTA)/.16
• (VMW)/1.45
• (WDAY)/.66
  

Economic Releases

8:30 am EST

• Initial Jobless Claims are estimated to fall to 1000K versus 1106K the prior week.
• Continuing Claims are estimated to fall to 14400K versus 14844K prior.
  

10:00 am EST

• Pending Home Sales MoM for July is estimated to rise +2.0% versus a +16.6% gain in June.
  

11:00 am EST

• Kansas City Fed Manufacturing Activity for August is estimated to rise to 5.0 versus 3.0 in July.

Upcoming Splits

• (AAPL)/4-for-1
• (TSLA)/5-for-1
  

Other Potential Market Movers

• The Fed's Powell speaking, Fed's Kaplan speaking, Japan CPI report, weekly Bloomberg Consumer Comfort Index, $47B 7Y T-Note auction and the weekly EIA natural gas inventory report 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 Final Hour on Earnings Optimism, Central Bank Stimulus Hopes, Technical Buying, Tech/Metals & Mining Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Lower
  

• Sector Performance: Mixed
  

• Volume: Below Average

• Market Leading Stocks: Underperforming
  

Equity Investor Angst:

• Volatility(VIX) 22.0 unch. 
• Bloomberg Global Risk On/Risk Off Index 567.15 -54.4 points
  

• Euro/Yen Carry Return Index 129.87 -.46%

• Emerging Markets Currency Volatility(VXY) 11.09 +.36%

• S&P 500 Implied Correlation 37.37 -2.5%

• ISE Sentiment Index 130.0 +33.0 points

• Total Put/Call .61 -1.6%

• NYSE Arms .93 -11.4%

Credit Investor Angst:

• North American Investment Grade CDS Index 66.20 +.16%
  

• US Energy High-Yield OAS 764.98 -.26%

• European Financial Sector CDS Index 61.33 -2.6%

• Italian/German 10Y Yld Spread 145.0 +1.25 basis points
  

• Asia Ex-Japan Investment Grade CDS Index  62.0 -.05%
  

• Emerging Market CDS Index 180.03 +1.37%
  

• iBoxx Offshore RMB China Corporate High Yield Index 177.50 +.06%

• 2-Year Swap Spread 8.0 +.75 basis point

• TED Spread 13.75 -2.25 basis points

• 3-Month EUR/USD Cross-Currency Basis Swap -2.0 -.5 basis point
  
• MBS  5/10 Treasury Spread  90.25 +.75 basis point
  
• IHS Markit CMBX BBB- 6 68.25 unch.

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 60.09 -.15%
• 3-Month T-Bill Yield .10% +1.0 basis point

• Yield Curve 55.0 +4.5 basis points
  

• China Iron Ore Spot 119.45 USD/Metric Tonne -.54%

• Citi US Economic Surprise Index 238.10 +2.7 points

• Citi Eurozone Economic Surprise Index 143.70 -2.9 points

• Citi Emerging Markets Economic Surprise Index 24.9 +.2 point

• 10-Year TIPS Spread 1.73 +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 -10 open in Japan 
• China A50 Futures: Indicating -39 open in China

• DAX Futures: Indicating -39 open in Germany

Portfolio:

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

• Disclosed Trades: None

• Market Exposure: 50% Net Long

Bear Radar

Style Underperformer:

• Small-Cap Value -1.1%

Sector Underperformers:

• 1) Oil Service-2.5% 2) Airlines -2.3% 3) Healthcare Providers -1.6%

Stocks Falling on Unusual Volume: 

• ITRI, SPAQ, ED, TPVG, ROAD, PINC, OSUR, H, SMG, OPCH, BWXT, LAD, HEI, JWN, CUTR, OTRK, GRWG, KRTX, PSTG and LRN
  

Stocks With Unusual Put Option Activity:

• 1) JWN 2) X 3) ADSK 4) SPLK 5) WDAY
  

Stocks With Most Negative News Mentions:

• 1) REX 2) PINK 3) XOM 4) AAL  5) TEVA
  

Charts:

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

 

Bull Radar

Style Outperformer:

• Large-Cap Growth +1.7%

Sector Outperformers:

• 1) Internet +3.9% 2) Software +3.7% 3) Gold & Silver +2.7%

Stocks Rising on Unusual Volume:

• FLDM, PLAN, CRM, BIGC, CYRX, URBN, SWBI, DKS, TRUP, NFLX, DPHC, HIBB, AYX, WDAY, ADBE, BKU, FB, SPWH and DY
  

Stocks With Unusual Call Option Activity:

• 1) URBN 2) DKS 3) CRM 4) INTU 5) WDAY

Stocks With Most Positive News Mentions:

• 1) CRM 2) ROKU 3) DAKT 4) URBN 5) DKS

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running -25.8% Below 100-Day Average
• 4 Sectors Rising, 7 Sectors Declining
• 36.9% of Issues Advancing, 58.9% Declining
• 56 New 52-Week Highs, 7 New Lows
• 47.8% of Issues Above 200-day Moving Average
• Average 14-Day RSI 49.8% 
• Bloomberg Global Risk-On/Risk-Off Index 625.0 +45.0 points
• Vix 21.7 -1.5%
• Total Put/Call .63 +1.6%
• TRIN/Arms .77 -26.7%

Wednesday Watch

Evening Headlines

Bloomberg:          

• Wuhan Beat the Virus. Now It’s Moving on by Shutting Out the World.   
• Losses from China Overseas Takeover Binge Are Piling Up Fast.   
• Three-Decade Economic Boom Comes to a Sudden Halt in Vietnam.
• Seoul Doctors Strike; FDA Chief Addresses Mistake: Virus Update.  
• Asian Stocks See Muted Start; Dollar Holds Retreat: Markets Wrap.  Asian stocks began Wednesday in mixed fashion, despite another record high on Wall Street, as investors mulled the pace of the recent equity rally and expectations for loose monetary policy. The dollar retained losses. Shares fluctuated in Japan and South Korea, and dipped in Australia. S&P 500 futures were steady after both the benchmark and the Nasdaq Composite notched fresh highs, helped by gains in Facebook Inc. Crude oil traded near the highest in five months as Hurricane Laura bore down on key refining facilities on the U.S. Gulf Coast. The yen dipped and gold was little changed. Treasuries edged lower. S&P 500 futures were little changed as of 9:01 a.m. in Tokyo. The gauge gained 0.4% on Tuesday. Japan’s Topix index slipped 0.3%. South Korea’s Kospi index dropped 0.2%. Australia’s S&P/ASX 200 Index lost 0.2%.
• Oil, Gasoline Climb to Five-Month Highs With Hurricane Nearing.  
• U.S.-China Cooperate, Vietnam Stall, German Job Support: Eco Day.
• Wisconsin Governor Declares State of Emergency After Jacob Blake Protests.
  
• Bed Bath & Beyond to Eliminate 2,800 Jobs in Restructuring Plan.  
• Carnival’s Princess Cancels Some World Cruises in Early 2021.
• Hurricane Laura Threatens the U.S. With an $18 Billion Disaster.  
• Toll Brothers Orders Jump 26% in U.S. Rebound for Home Sales.  
• Commercial Mortgage Debt in Distress Surges 320%, Moody’s Says.

Wall Street Journal:

• Wisconsin’s Governor Declares State of Emergency Amid Protests.
• Chinese Diplomats Helped Military Scholars Visiting the U.S. Evade FBI Scrutiny, U.S. Says.
• Exxon’s Departure From Dow Highlights Market’s Retreat From Energy Bets.
• Remember the Trump Economy?
• Some Mortgage Firms Ask Borrowers to Pledge They Won’t Skip Payments.
  

Fox News:

• Melania Trump seeks positive message as she and Pompeo take spotlight at RNC night 2.
• Clinton says Biden should not concede on election night.
  

CNBC.com:

• Stocks making the biggest moves after hours: Salesforce, Nordstorm, HP Enterprise and more.
• Etsy CEO says Amazon is trying to squash competitors by backing California bill.
• Palantir files to go public, lost about $580 million last year.
• New cases of the coronavirus are falling in most of the U.S., but epidemiologists urge caution.
• Nordstrom’s sales fall 53% as department store chain suffers store closures amid pandemic.

MarketWatch.com:       

• The stock market’s record rally is on the cusp of ‘euphoria’ — here’s what’s driving it.  
• These ‘Dividend Aristocrat’ stocks have been raising their dividends for decades, and there have been no dividend cuts during the pandemic.

Zero Hedge: 

• Gov Evers Declares 'State Of Emergency' As Wisconsin Braces For 3rd Night Of Violence.
• Russia Declassifies Footage Of Biggest Nuke Ever Tested: "Mushroom Cloud 7 Times Higher Than Everest".
• New Jersey Governor Proposes Hiking Millionaire Taxes To Plug $1 Billion Spending Hole.
• "Stand Down!" - How One Navy Seal Killed A Multi-Billion Hedge Fund.
• Snyder: We Should Mourn For What Is Happening To America.
• Sun Belt's Summer Outbreak Continues To Ease; Spain Rejects Another National COVID-19 Lockdown: Live Updates.
• Police Requests To Access Your Smart Speaker Are Up 72% Since 2016.
• Trump Reportedly Considers Accusing China Of "Genocide" Over Treatment Of Uighurs.
• "There's Too Much Product": Miami Has 30 Months' Of Unsold Condos After Covid Ravages Its Economy.
• Schiff: Government Is Trying To Replace The Economy With A Printing Press.
• WTI Holds Near 6-Month Highs Amid Gulf Shut-Ins, Inventory Draws.
• Nasdaq Hits New Record High As Confidence Crashes To 6 Year Lows.
  

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).

Night Trading 

• Asian equity indices are -.5%  to unch. on average.

• Asia Ex-Japan Investment Grade CDS Index 62.0 -.75 basis point.

• China Sovereign CDS 36.0 -1.25 basis points.

• Bloomberg Emerging Markets Currency Index 60.19 +.01%.
• FTSE 100 futures +.19%.

• S&P 500 futures +.07%.

• NASDAQ 100 futures +.2%.

Morning Preview Links

Earnings of Note 
Company/Estimate

Before the Open:

• (PLAN)/-.12
• (CHS)/-.26
• (DKS)/1.22
• (EV)/.78
  

After the Close:

• (BOX)/.05
• (NTAP)/.41
• (SMTC)/.42
• (SPLK)/-.34
• (WSM)/.98
  

Economic Releases

8:30 am EST

• Durable Goods Orders for July is estimated to rise +4.5% versus a +7.6% gain in June.
• Durables Ex Transports for July is estimated to rise +1.9% versus a +3.6% gain in June.
• Cap Goods Orders Non-Defense Ex-Air for July is estimated to rise +1.8% versus a 3.3% gain in June.
  

10:30 am EST

• Bloomberg consensus estimates call for a weekly crude oil inventory decline of -2,530,400 barrels versus a -1,632,000 barrel decline the prior week. Gasoline supplies are estimated to fall by -1,746,400 barrels versus a -3,322,000 barrel decline the prior week. Distillate inventories are estimated to fall by -166,600 barrels versus a +152,000 barrel gain the prior week. Finally, Refinery Utilization is estimated to fall by -.36% versus a -.1% decline prior.
  

Upcoming Splits

• (AAPL)/4-for-1
• (TSLA)/5-for-1
  

Other Potential Market Movers

• The Mexico GDP report, $51B 5Y T-Note auction and the weekly MBA Mortgage Applications report could also impact trading today.

Market Hours
Normal:

• 9:30 am - 4:00 pm EST
  

BOTTOM LINE: Asian indices are modestly lower, weighed down by financial and industrial 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 day.

 

Stocks Slightly Higher into Final Hour on China Trade Deal Optimism, Oil Gain, Technical Buying, Biotech/Restaurant Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: About Even
  

• Sector Performance: Mixed
  

• Volume: Below Average

• Market Leading Stocks: Performing In Line

Equity Investor Angst:

• Volatility(VIX) 22.6 +1.1%

• Euro/Yen Carry Return Index 130.39 +.71%

• Emerging Markets Currency Volatility(VXY) 11.08 -1.2%

• S&P 500 Implied Correlation 40.1 +3.9%

• ISE Sentiment Index 97.0 +22.0 points

• Total Put/Call .60 -21.1%

• NYSE Arms 1.05 +94.4%

Credit Investor Angst:

• North American Investment Grade CDS Index 66.19 -.09%
  

• US Energy High-Yield OAS 769.15 -.86%

• European Financial Sector CDS Index 62.97 +1.21%

• Italian/German 10Y Yld Spread 143.75 +1.25 basis points
  

• Asia Ex-Japan Investment Grade CDS Index  62.10 -1.5%
  

• Emerging Market CDS Index 179.03 +.36%
  

• iBoxx Offshore RMB China Corporate High Yield Index 177.39 -.01%

• 2-Year Swap Spread 7.25 +.5 basis point

• TED Spread 16.0 -.25 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -1.5 +1.0 basis point
  
• MBS  5/10 Treasury Spread  89.5 +.5 basis point
  
• IHS Markit CMBX BBB- 6 68.25 unch.

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 60.16 +.12%
• 3-Month T-Bill Yield .09% unch.

• Yield Curve 50.5 +2.0 basis points
  

• China Iron Ore Spot 116.9 USD/Metric Tonne -3.2%

• Citi US Economic Surprise Index 235.30 -1.4 points

• Citi Eurozone Economic Surprise Index 146.60 +13.4 points

• Citi Emerging Markets Economic Surprise Index 24.7 -.7 point

• 10-Year TIPS Spread 1.70 +2.0 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 -53 open in Japan 
• China A50 Futures: Indicating -34 open in China

• DAX Futures: Indicating -7 open in Germany

Portfolio:

• Slightly Higher: On gains in my biotech/medical/tech sector longs
  

• Disclosed Trades: None

• Market Exposure: 50% Net Long

Bear Radar

Style Underperformer:

• Small-Cap Value -.7%

Sector Underperformers:

• 1) Gold & Silver -1.7% 2) Steel -1.6% 3) Homebuilding -1.5%

Stocks Falling on Unusual Volume: 

• AAL, XOM, GTLS, TIF, SHLL, SJI, APPS, CIEN, PRPL, BBY, OSTK, WSM, PINC, IMUX, PSNL, LL, ROAD, CARG, SLQT, USX, NVAX, POR, CWH, HAIN, SWBI and PLCE
  

Stocks With Unusual Put Option Activity:

• 1) JETS 2) BBY 3) PANW 4) TOL 5) USB
  

Stocks With Most Negative News Mentions:

• 1) POR 2) ROAD 3) NPTN 4) TIF  5) XEL
  

Charts:

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

Bull Radar

Style Outperformer:

• Large-Cap Growth +.2%

Sector Outperformers:

• 1) Restaurants +1.5% 2) Biotech +1.4% 3) Alt Energy +1.2%

Stocks Rising on Unusual Volume:

• BIGC, CYRX, GPS, AMRC, DKNG, CVET, SJM, TCDA, AMGN and IMVT
  

Stocks With Unusual Call Option Activity:

• 1) HYG 2) ODT 3) BBY 4) PANW 5) HON

Stocks With Most Positive News Mentions:

• 1) TCDA 2) FB 3) GPS 4) SJM 5) MDT

Charts:

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

 

Morning Market Internals

NYSE Composite Index:

• Volume Running -25.8% Below 100-Day Average
• 1 Sector Rising, 10 Sectors Declining
• 36.2% of Issues Advancing, 61.1% Declining
• 54 New 52-Week Highs, 7 New Lows
• Bloomberg Risk-On/Risk-Off Index 5.80 +.96 point
  
• 47.9% of Issues Above 200-day Moving Average
• Average 14-Day RSI 51.0%
• Vix 23.0 +2.7%
• Total Put/Call .51 -32.9%
• TRIN/Arms 1.15 +118.5%