Monday, October 23, 2023

Stocks Reversing Slightly Higher into Final Hour on Lower Long-Term Rates, Falling Oil, Short-Covering, Gambling/Homebuilding Sector Strength

Broad Equity Market Tone:

  • Advance/Decline Line: Lower
  • Sector Performance: Mixed
  • Volume: Around Average
  • Market Leading Stocks: Performing In Line
Equity Investor Angst:
  • Volatility(VIX) 19.7 -9.5%
  • DJIA Intraday % Swing .86% -7.1%
  • Bloomberg Global Risk On/Risk Off Index 66.2 +.7%
  • Euro/Yen Carry Return Index 170.3 +.64%
  • Emerging Markets Currency Volatility(VXY) 8.44 +.24%
  • CBOE S&P 500 Implied Correlation Index 26.6 -8.7% 
  • ISE Sentiment Index 106.0 +22.0
  • Total Put/Call .86 -19.6%
  • NYSE Arms .91 -35.0%
Credit Investor Angst:
  • North American Investment Grade CDS Index 79.1 -2.7%
  • US Energy High-Yield OAS 378.39 -1.4%
  • Bloomberg TRACE # Distressed Bonds Traded 340 -11
  • European Financial Sector CDS Index 99.89 -3.6% 
  • Deutsche Bank Subordinated 5Y Credit Default Swap 309.38 +.14%
  • Italian/German 10Y Yld Spread 197.0 basis points -7.0 basis points
  • Asia Ex-Japan Investment Grade CDS Index 137.9 +1.5%
  • Emerging Market CDS Index 238.23 -2.6%
  • Israel Sovereign CDS 144.97 +5.8%
  • China Corp. High-Yield Bond USD ETF(KHYB) 24.6 -.1%
  • 2-Year SOFR Swap Spread -13.0 basis points -.75 basis point
  • TED Spread 21.25 basis points -.25 basis point
  • 3-Month EUR/USD Cross-Currency Basis Swap -27.0 -1.25 basis points
  • MBS  5/10 Treasury Spread 190.0 +3.0 basis points
  • Bloomberg CMBS Investment Grade Bbb Average OAS 908.0 +3.0 basis points
  • Avg. Auto ABS OAS 92.0 +5.0 basis points
Economic Gauges:
  • Bloomberg Emerging Markets Currency Index 41.2 +.09%
  • 3-Month T-Bill Yield 5.45% -1.0 basis point
  • China Iron Ore Spot 112.0 USD/Metric Tonne -.68%
  • Dutch TTF Nat Gas(European benchmark) 51.28 euros/megawatt-hour +.32%
  • Citi US Economic Surprise Index 48.7 -4.2 points
  • Citi Eurozone Economic Surprise Index -28.9 +3.5 points
  • Citi Emerging Markets Economic Surprise Index 22.7 -.3
  • S&P 500 Current Quarter EPS Growth Rate YoY(86 of 500 reporting) +2.2% unch.
  • S&P 500 Blended Forward 12 Months Mean EPS Estimate 240.28 unch.:  Growth Rate +9.3% unch., P/E 17.6 -.1
  • S&P 500 Current Year Estimated Profit Margin 12.12% +1.0 basis point
  • NYSE FANG+ Current Quarter EPS Growth Rate YoY(2 of 10 reporting) -20.9% unch.
  • NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 267.89 +.58: Growth Rate +58.0% +.3 percentage point, P/E 27.7 +.2
  • Bloomberg US Financial Conditions Index -.20 +6.0 basis points
  • Bloomberg Euro-Zone Financial Conditions Index -.28 -2.0 basis points
  • US Yield Curve -23.0 basis points (2s/10s) -6.25 basis points
  • US Atlanta Fed 2Q GDPNow Forecast +5.41% unch.
  • Cleveland Fed Inflation Nowcast Core PCE YoY +3.70% unch.: CPI YoY +3.36% unch.
  • 10-Year TIPS Spread 2.40 -7.0 basis points
  • Highest target rate probability for Dec. 13th FOMC meeting: 74.6%(-5.5 percentage points) chance of 5.25%-5.5%. Highest target rate probability for Jan. 31st meeting: 64.0%(-7.8 percentage points) chance of 5.25%-5.5%.
Overseas Futures:
  • Nikkei 225 Futures: Indicating -4 open in Japan 
  • China A50 Futures: Indicating +4 open in China
  • DAX Futures: Indicating +52 open in Germany
Portfolio:
  • Slightly Lower:  On losses in my commodity sector longs, index hedges and emerging market shorts
  • Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges
  • Market Exposure: Moved to 50% Net Long

Bear Radar

Style Underperformer:

  • Mid-Cap Growth -.1%
Sector Underperformers:
  • 1) Energy -1.3% 2) Oil Service -1.2% 3) Electric Vehicles -1.0%
Stocks Falling on Unusual Volume: 
  • OCFC, IMVT, PHR, SYM, OXY, JAZZ, ASO, RNG, EH, ACMR, PBR, SUM, BCYC, AYX, YPF, ZNTL, IMGN, OKTA, EXEL, ALKS, FMC and RVMD
Stocks With Unusual Put Option Activity:
  • 1) EMLV 2) XME 3) IMGN 4) DD 5) OKTA
Stocks With Most Negative News Mentions:
  • 1) RVMD 2) OKTA 3) EVA 4) PBR 5) AAP
Charts:

Bull Radar

Style Outperformer:

  • Large-Cap Growth +.7%
Sector Outperformers:
  • 1) Gambling +3.0% 2) Homebuilding +1.5% 3) Regional Banks +1.3%
Stocks Rising on Unusual Volume:
  • ESMT, MSTR, OLMA and AX
Stocks With Unusual Call Option Activity:
  • 1) TCOM 2) LVS 3) XLC 4) ASTS 5) OKTA
Stocks With Most Positive News Mentions:
  • 1) AULT 2) HLCO 3) MSTR 4) WBA 5) RIOT

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

Earnings of Note 
Company/Estimate 

Before the Open:
  • (MMM)/2.34
  • (ADM)/1.53
  • (AWI)/1.31
  • (KO)/.69
  • (GLW)/.46
  • (DHR)/1.79
  • (DOW)/.44
  • (GE)/.56
  • (GM)/1.87
  • (HAL)/.77
  • (HRI)/4.15
  • (ITW)/2.46
  • (KMB)/1.60
  • (NUE)/4.29
  • (PCAR)/2.13
  • (PII)/2.71
  • (PHM)/2.83
  • (PACW)/.04
  • (DGX)/2.19
  • (SHW)/2.78
  • (VZ)/1.18
After the Close: 
  • (GOOG)/1.46
  • (BYD)/1.44
  • (CNI)/1.70
  • (CB)/4.46
  • (FFIV)/3.21
  • (MSFT)/2.65
  • (RHI)/.81
  • (SNAP)/-.24
  • (TDOC)/-.37
  • (TXN)/1.82
  • (V)/2.25
  • (HCA)/3.98
  • (IRBT)/-1.67
  • (EDU)/.80
Economic Releases  

8:30 am EST:

  • Philly Fed Non-Manufacturing Activity for Oct.

9:45 am EST

  • The S&P Global US Manufacturing PMI for Oct. is estimated to fall to 49.5 versus 49.8 in Sept.
  • The S&P Global US Services PMI for Oct. is estimated to fall to 49.9 versus 50.1 in Sept.
  • The S&P Global US Composite PMI for Oct. is estimated to fall to 50.0 versus 50.2 in Sept.

10:00 am EST

  • The Richmond Fed Manufacturing Index for Oct. is estimated to fall to 2.0 versus 5.0 in Sept.

Upcoming Splits 

  • None of note
Other Potential Market Movers
  • The weekly US retail sales reports could also impact global trading tomorrow.
US Equity Market Hours
  • 9:30 am - 4:00 pm EST

Morning Market Internals

NYSE Composite Index:

  • NYSE Volume Running -3.5% Below 100-Day Average 
  • Nasdaq/NYSE Volume Ratio 9.2 +2.9
  • 3 Sectors Declining, 8 Sectors Rising
  • 50.1% of Issues Advancing, 47.2% Declining
  • 6 New 52-Week Highs, 379 New Lows
  • 27.6%(-1.1%) of Issues Above 200-day Moving Average
  • Average 14-Day RSI 35.0 -1
  • Bloomberg Global Risk-On/Risk-Off Index 66.4 +.9%
  • Russell 1000: Growth/Value 18,029.6 +.47%
  • 1-Day Vix 14.5 -30.2%
  • Vix 20.5 -5.8%
  • Total Put/Call .88 -17.8%
  • TRIN/Arms .78 -44.3%

Sunday, October 22, 2023

Monday Watch

Today's Headlines

Bloomberg:
Zero Hedge:
Wall Street Journal:
CNBC:
NewsMax:
Fox News: TheGatewayPundit.com:
OpenVAERS:
SKirsch.com:
Night Trading
  • Asian indices are -.75% to -.25% on average.
  • Asia Ex-Japan Investment Grade CDS Index 137.5 +2.0 basis points.
  • China Sovereign CDS 87.0 +.5 basis point.
  • China Iron Ore Spot 111.7 USD/Metric Tonne -.8%.
  • Bloomberg Emerging Markets Currency Index 41.2 -.04%.
  • Bloomberg Global Risk-On/Risk Off Index 67.1 +2.1%.
  • Bloomberg US Financial Conditions Index -.25 +2.0 basis points. 
  • Volatility Index(VIX) futures 20.6 -.7%. 
  • Euro Stoxx 50 futures +.05%.
  • S&P 500 futures +.22%.
  • NASDAQ 100 futures +.25%.

BOTTOM LINE: Asian indices are modestly lower, weighed down by commodity 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 25% net long heading into the week.

Saturday, October 21, 2023

Today's Headlines

Bloomberg:

Zero Hedge:
Wall Street Journal:
Barron's:
  • Had bullish commentary on (LULU), (ONON), (NKE) and (AEO).
  • Had bearish commentary on (GPS).

CNBC:

MarketWatch.com:

NewsMax:    

Fox News:

TheGatewayPundit.com:

 Breitbart:
Twitter:
OpenVAERS:
SKirsch.com: