Bull Radar

Style Outperformer:

• Small-Cap Value -.9%

Sector Outperformers:

• 1) Gaming +.9% 2) Banks +.6% 3) Steel -.1%

Stocks Rising on Unusual Volume:

• DOMO, DLTH, COO, BLMN and LIND
  

Stocks With Unusual Call Option Activity:

• 1) AKBA 2) AM 3) VUZI 4) LYB 5) TECS

Stocks With Most Positive News Mentions:

• 1) NCMI 2) ANPC 3) COO 4) MIK 5) DOMO

Charts:

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

 

Morning Market Internals

NYSE Composite Index:

• Volume Running -12.2% Below 100-Day Average
• 2 Sectors Rising, 9 Sectors Declining
• 18.7% of Issues Advancing, 78.9% Declining
• 44 New 52-Week Highs, 15 New Lows
• 48.1% of Issues Above 200-day Moving Average
• Average 14-Day RSI 47.0% 
• Bloomberg Global Risk-On/Risk-Off Index -140.0 -18.0 points
• Vix 33.2 -1.1%
• Total Put/Call .94 -2.1%
• TRIN/Arms .91 +16.7%

 

Friday Watch

Night Trading 

• Asian equity indices are -1.5% to -1.0% on average.

• Asia Ex-Japan Investment Grade CDS Index 58.5 +1.25 basis points.

• China Sovereign CDS 36.0 +2.25 basis points.

• Bloomberg Emerging Markets Currency Index 60.71 -.02%.
• Bloomberg Global Risk-On/Risk Off Index -198.0 -76.0 points.
• Volatility Index(VIX) futures 37.92 -2.8%
• FTSE 100 futures -.4%.

• S&P 500 futures -.3%.

• NASDAQ 100 futures -1.20%.

Morning Preview Links

Earnings of Note 
Company/Estimate

Before the Open:

• None of note
  

After the Close:

• None of note
  

Economic Releases

8:30 am EST:

• The Change in Non-Farm Payrolls for Aug. is estimated to fall to 1350K versus 1763K in July.
• The Unemployment Rate for Aug. is estimated to fall to 9.8% versus 10.2% in July.
• Average Hourly Earnings MoM for Aug. is estimated unch. versus a +.2% gain in July.
  

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Canadian Unemployment Rate 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 technology and commodity shares in the region. I expect US stocks to open lower and to maintain losses into the afternoon. The Portfolio is 25% net long heading into the day.

Stocks Falling Substantially into Afternoon on Global Recession Fears, US Election Uncertainty, Profit-Taking, Tech/Alt Energy Sector Weakness

 Broad Equity Market Tone:

• Advance/Decline Line: Substantially Lower
  

• Sector Performance: Almost Every Sector Declining
  

• Volume: Around Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 32.5 +22.7%
• Bloomberg Global Risk On/Risk Off Index -79.0 -460.0 points

• Euro/Yen Carry Return Index 130.23 -.16%

• Emerging Markets Currency Volatility(VXY) 11.3 unch.

• S&P 500 Implied Correlation 48.68 +12.3%

• ISE Sentiment Index 88.0 -28.0 points

• Total Put/Call 1.0 +37.0%

• NYSE Arms .64 -21.0%

Credit Investor Angst:

• North American Investment Grade CDS Index 65.02 +4.66%
  

• US Energy High-Yield OAS 760.08 +.64%

• European Financial Sector CDS Index 59.44 +5.16%

• Italian/German 10Y Yld Spread 144.25 -1.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index  57.04 -.87%
  

• Emerging Market CDS Index 167.08 +5.53%
  

• iBoxx Offshore RMB China Corporate High Yield Index 177.62 +.06%

• 2-Year Swap Spread 9.75 +.5 basis point

• TED Spread 15.0 +1.0 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -5.25 +.25 basis point
  
• MBS  5/10 Treasury Spread  89.0 +1.5 basis points
  
• IHS Markit CMBX BBB- 6 68.25 unch.

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 60.62 -.17%
• 3-Month T-Bill Yield .10% unch.

• Yield Curve 52.5 -2.75 basis points
  

• China Iron Ore Spot 121.52 USD/Metric Tonne -1.23%

• Citi US Economic Surprise Index 193.30 -.1 point

• Citi Eurozone Economic Surprise Index 100.50 -6.9 points

• Citi Emerging Markets Economic Surprise Index 13.4 +3.2 points

• 10-Year TIPS Spread 1.66 -7.0 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 -390 open in Japan 
• China A50 Futures: Indicating -171 open in China

• DAX Futures: Indicating -67 open in Germany

Portfolio:

• Lower: On losses in my tech/industrial/biotech/medical/consumer staple sector longs
  

• Disclosed Trades: Added to my (IWM)/(QQQ) hedges and to my emerging market shorts
  

• Market Exposure: Moved to 25% Net Long

 

Bear Radar

Style Underperformer:

• Mid-Cap Growth -4.0%

Sector Underperformers:

• 1) Networking -7.3% 2) Internet -5.8% 3) Alt Energy -5.5%

Stocks Falling on Unusual Volume: 

• TRMB, FEAC, PEN, BSTZ, TWLO, CRM, AAPL, CPB, ADSK, APPN, FSLR, ADBE, OKTA, PANW, CUE, SQ, MDB, ALB, SPAQ, MITK, CYRX, FVAC, GRAF, PYPL, GMS, UCTT, AMBA, TDOC, NET, DDOG, COUP, RGR, TSLA, W, AMD, SWKS, VIAV, AYX, ETSY, QRVO, CHWY, BILL, BL, FTNT, WORK, NVDA, IPHI, LGIH, EXPI, JNPR, CHGG, PTON, MTSI, NLS, CALX, OTRK, CRWD, RUN, PDCO, APPS, CC, ZS, SWBI, PRTS, PLUG, SHLL, CLDR, GRWG, ZM, HOME, ENPH, LPSN, IIVI, DT, ACMR, NTLA, LITE, DOCU, SPWH, MDLA, RKT, SMAR, CONN, CIEN,  PD and ZUO
  

Stocks With Unusual Put Option Activity:

• 1) XLF 2) VGK 3) CIEN 4) XLB 5) XRT
  

Stocks With Most Negative News Mentions:

• 1) ZM 2) ALV 3) TWTR 4) FAST  5) ZUO
  

Charts:

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

Bull Radar

Style Outperformer:

• Small-Cap Value -1.8%

Sector Outperformers:

• 1) Oil Service -.1% 2) Banks -.2% 3) Insurance -.2%

Stocks Rising on Unusual Volume:

• FLGT, STRO, WLL, LIND, FIVE, CCL and DLTH
  

Stocks With Unusual Call Option Activity:

• 1) CIEN 2) FIVE 3) SABR 4) ZUO 5) AMBA

Stocks With Most Positive News Mentions:

• 1) FIVE 2) FLGT 3) PVH 4) NVAX 5) FE

Charts:

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

 

Morning Market Internals

NYSE Composite Index:

• Volume Running +2.2% Above 100-Day Average
• 3 Sectors Rising, 8 Sectors Declining
• 34.1% of Issues Advancing, 62.8% Declining
• 38 New 52-Week Highs, 7 New Lows
• 52.4% of Issues Above 200-day Moving Average
• Average 14-Day RSI 51.4% 
• Bloomberg Global Risk-On/Risk-Off Index 279.0 -101.0 points
• Vix 27.3 +2.6%
• Total Put/Call .55 -24.7%
• TRIN/Arms .53 -34.6%

Thursday Watch

Evening Headlines

Bloomberg:         

• Beijing Pushes Its Big Banks to Weakest Health in a Decade.
• U.K. Expands Test Funding; Preakness to Go Ahead: Virus Update.
• Thailand to Miss Stimulus Borrowing Target as Spending Falters.
• Asia Stocks to Track U.S. Gains; Dollar Climbs: Markets Wrap. Asian stocks looked set to follow their U.S. peers higher Thursday where shares continued to set fresh records despite a setback for some tech giants. The dollar advanced. Futures rose in Japan and Australia, though dipped in Hong Kong. S&P 500 contracts were steady after the index gained 1.5% to hit another all-time high with utilities and materials stocks leading the charge and technology shares lagging. The dollar gained the most in almost two weeks as the euro slid further below $1.20, a level it breached for the first time in more than two years Tuesday. Oil steadied after a slide, while gold held Wednesday’s retreat. Treasury yields retreated. S&P 500 Index futures dipped 0.1% as of 7:17 a.m. in Tokyo. The gauge gained 1.5% on Wednesday. Futures on Japan’s Nikkei 225 advanced 1%. Hang Seng futures earlier fell 0.1%. Futures on Australia’s S&P/ASX 200 Index added 0.7%. 
• Oil Drops With Upcoming Refiner Maintenance a Warning for Demand.
• Fed Observations, China Banking Stress, BOE Bond Option: Eco Day.
• CBO Sees U.S. Federal Debt Exceeding Size of Economy in 2021.
• CDC Tells States to Get Ready for Nov. 1 Vaccine Distribution.
• Trump Marks World War II’s End With Criticism of ‘Violent Mobs’.
• McConnell Raises Doubts on Congress Getting New Stimulus Done.
• Covid-19 Flares in New Hot Spots as Americans Let Their Guard Down.
• Murphy Envisions N.J. Trade Tax for Social Justice Agenda.   
• Airlines Are Removing Seats to Make Space for Gadgets and Seafood.
  

Wall Street Journal:

• What Could Go Wrong on Election Day.
• The Culture Wars Are Back.
• Allow Us to Present the Pandemic Bill.
• Saudi Aramco Slows Diversification Plans Amid Industry Downturn.
• A Texas School Reopens and Everyone Holds Their Breath.
• Fox News, NBC and C-Span Journalists to Moderate Debates.
  

Fox News:

• Pelosi 'apologizes' after being caught on video getting styled at COVID-shuttered salon.
• Barr says there's no 'epidemic' of cops shooting unarmed Black men.
  

CNBC.com:

• It sure feels like the easy money has been made, PNC’s Amanda Agati says.
• Dr. Fauci says U.S. coronavirus cases are ‘unacceptably high’ going into Labor Day.
• Pelosi says Dems, White House have ‘serious differences’ over coronavirus aid after Mnuchin call.
• Job growth appears stuck in neutral after enhanced unemployment expired, data shows.

MarketWatch.com:   

• Tesla’s stock sinks again to kick off a correction after disclosure of another large seller.  
• The government is making a big change in how it reports jobless claims. Here’s why.

Zero Hedge: 

• "It Was A Setup": Pelosi Blames Salon For Covert Blow-Out, Demands Apology.
• Air Travel Bust Worsens As Carriers Need More Cash.
• 'Occupy Lafayette Square' Protestors Planning 50 Day "White House Siege", Warn "Things Could Turn Very Ugly".
• Pompeo Unveils Extensive New Restrictions On Chinese Diplomats In US.
• Portland Mayor Tells Neighbors He's Moving After Riot Outside His Condo.
• BMO: The Relationship Between Equity Vol And Financial Conditions Has All But Institutionalized The Powell Put.
• Trump Foe Chris Wallace Among Moderators Chosen For Upcoming Presidential Debates.
• Chicago, Portland, Baltimore – The Things We've Warned About Are Now Starting To Happen Everywhere.
• EU Official Warns COVID-19 Cases "Almost Back To March Levels": Live Updates.
• "Demand Is Insane": NYC Movers Turn People Away, Suburban & Rural Housing Snagged Up, As Big City COVID-Exodus Accelerates.
• Creating Perverse Asymmetries To Extort The "Little Guy": The Special "Screw You" Of Junk Bond Bailouts.
• Will You Choose Freedom?
• An Epic Battle Is Raging Beneath The Market Surface.
• 81 Scientists Back Biden After He Commits To Shuttering Economy If Advised... By Scientists.
• S&P Reaches Critical Resistance, Valuation At Record High As Liquidity Crashes.

 Business Insider:  

• Target adds to its Good & Gather brand as private labels sales soar.
  
• Robinhood is reportedly facing an SEC investigation over deals with high-speed trading firms.
• Half of US adults now report some sign of depression, twice as much compared to a few years ago, study finds.   
  
• Ben & Jerry's is launching a podcast about white supremacy in America, after calling for civil rights reforms earlier this summer.
• 'High valuations will become a speed limit': A Goldman Sachs portfolio strategist warns the stock market's record-setting August is setting traders up for disappointment.

The Epoch Times:

• Long Queues at Hospitals, Apartment Lockdowns in Wuhan as Some Suspect Virus Resurgence.
• House Lawmakers Introduce Bill to Reduce US Reliance on China for Rare Earths.
  

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 unch. to +1.0% on average.

• Asia Ex-Japan Investment Grade CDS Index 57.25 -2.5 basis points.

• China Sovereign CDS 32.75 -.5 basis point.

• Bloomberg Emerging Markets Currency Index 60.71 -.01%.
• Bloomberg Global Risk-On/Risk Off Index 413.0 +32.0 points.
• Volatility Index(VIX) futures 35.30 -.07%
• FTSE 100 futures +.49%.

• S&P 500 futures unch.

• NASDAQ 100 futures -.04%.

Morning Preview Links

Earnings of Note 
Company/Estimate

Before the Open:

• (CPB)/.53
• (CIEN)/.82
• (CONN)/-.04
• (DCI)/.44
• (GCO)/-1.85
• (JW/A)/.10
• (KFY)/.08
• (MIK)/-.13
• (PDCO)/.24
• (SIG)/-2.07
• (TTC)/.56
  

After the Close:

• (AVGO)/5.24
• (COO)/1.54
• (DOCU)/.07
• (OXM)/-.61
• (NX)/.08
• (RH)/3.19
• (SWBI)/.49
  

Economic Releases

7:30 am EST

• The Challenger Job Cuts YoY report for August..
  

8:30 am EST:

• Initial Jobless Claims for last week are estimated to fall to 950K versus 1006K the prior week. 
• Continuing Claims are estimated to fall to 14000K versus 14535K prior.
• The Trade Balance for July is estimated to widen to -$58.0B versus -$50.7B in June.
  

10:00 am EST

• ISM Services for August is estimated to fall to 57.0 versus 58.1 in July.

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The weekly EIA natural gas inventory report, Eurozone Services PMI report, Bloomberg weekly Consumer Comfort Index and the Australia Sales report could also impact trading today.

Market Hours
Normal:

• 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 mixed and to weaken into the afternoon, finishing modestly lower. The Portfolio is 50% net long heading into the day.

 

Stocks Surging into Afternoon on Falling Biden Presidency Odds, Lower Long-Term Rates, Technical Buying, Utility/Tech Sector Strength

 Broad Equity Market Tone:

• Advance/Decline Line: About Even
  

• Sector Performance: Mixed
  

• Volume: Below Average

• Market Leading Stocks: Underperforming
  

Equity Investor Angst:

• Volatility(VIX) 26.5 +1.3%
• Bloomberg Global Risk On/Risk Off Index 385.0 -75.0 points

• Euro/Yen Carry Return Index 130.25 -.41%

• Emerging Markets Currency Volatility(VXY) 11.3 +.36%

• S&P 500 Implied Correlation 43.8 -2.2%

• ISE Sentiment Index 116.0 -4.0 points

• Total Put/Call .73 +15.8%

• NYSE Arms 1.20 +4.4%

Credit Investor Angst:

• North American Investment Grade CDS Index 62.57 +.09%
  

• US Energy High-Yield OAS 757.75 -.29%

• European Financial Sector CDS Index 56.52 -3.1%

• Italian/German 10Y Yld Spread 145.25 -3.25 basis points
  

• Asia Ex-Japan Investment Grade CDS Index  57.58 -4.55%
  

• Emerging Market CDS Index 158.60 -2.1%
  

• iBoxx Offshore RMB China Corporate High Yield Index 177.51 -.03%

• 2-Year Swap Spread 9.25 +.25 basis point

• TED Spread 14.0 -1.0 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -5.5 -1.75 basis points
  
• MBS  5/10 Treasury Spread  87.5 -1.75 basis points
  
• IHS Markit CMBX BBB- 6 68.25 unch.

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 60.67 -.45%
• 3-Month T-Bill Yield .10% +1.0 basis point

• Yield Curve 55.25 -2.5 basis points
  

• China Iron Ore Spot 122.80 USD/Metric Tonne +.73%

• Citi US Economic Surprise Index 193.40 -13.4 points

• Citi Eurozone Economic Surprise Index 107.40 +.2 point

• Citi Emerging Markets Economic Surprise Index 9.2 -2.0 points

• 10-Year TIPS Spread 1.73 -5.0 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 +143 open in Japan 
• China A50 Futures: Indicating -82 open in China

• DAX Futures: Indicating +47 open in Germany

Portfolio:

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

• Disclosed Trades: None
  

• Market Exposure: 75% Net Long

 

Bear Radar

Style Underperformer:

• Small-Cap Value +.2%

Sector Underperformers:

• 1) Oil Service -2.1% 2) Alt Energy -1.6% 3) Education -1.3%

Stocks Falling on Unusual Volume: 

• LE, GRWG, PD, FANG, MIK, SWBI, WDAY, AMBA, APPS, HLNE, SPWH, CLDR, PRTS, MUR, RPAY, ZM, JAMF, TSLA, OSTK, WKHS, PLUG, ARCT, AMRC and HOME
  

Stocks With Unusual Put Option Activity:

• 1) MNK 2) HOME 3) IWD 4) GOGO 5) DOCU
  

Stocks With Most Negative News Mentions:

• 1) AMRN 2) GSX 3) DAO 4) SCVL  5) OSPN
  

Charts:

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

Bull Radar

Style Outperformer:

• Large-Cap Value +1.0%

Sector Outperformers:

• 1) Disk Drives +3.0% 2) Utilities +2.8% 3) Semis +2.4%

Stocks Rising on Unusual Volume:

• CORT, FEAC, CAL, NLS, GES, ATNX, BF/B, GRAF, FVAC, SHLL, TRNE, PTON, DXC, DKNG, COHU, ZUO and SPAQ
  

Stocks With Unusual Call Option Activity:

• 1) CORT 2) ZUO 3) GOGO 4) NLS 5) HRB

Stocks With Most Positive News Mentions:

• 1) GES 2) DKNG 3) PTON 4) NVDA 5) IBM

Charts:

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

 

Morning Market Internals

NYSE Composite Index:

• Volume Running -8.2% Below 100-Day Average
• 9 Sectors Rising, 2 Sectors Declining
• 51.5% of Issues Advancing, 45.2% Declining
• 109 New 52-Week Highs, 8 New Lows
• 49.4% of Issues Above 200-day Moving Average
• Average 14-Day RSI 50.0% 
• Bloomberg Global Risk-On/Risk-Off Index 355.0 -104.0 points
• Vix 26.5 +1.5%
• Total Put/Call .59 -6.35%
• TRIN/Arms 1.38 +20.0%