Weekly Scoreboard*

Indices

• S&P 500 2,136.20 +.48%

• DJIA 18,122.20 +.18%

• NASDAQ 5,239.22 +2.17%

• Russell 2000 1,223.22 +.35%

• S&P 500 High Beta 31.89 -.80%

• Goldman 50 Most Shorted 115.17 -.37% 

• Wilshire 5000 22,124.0 +.35%

• Russell 1000 Growth 1,033.95 +1.17%

• Russell 1000 Value 1,022.83 -.31%

• S&P 500 Consumer Staples 541.80 +.50%

• Solactive US Cyclical 136.30 -.15%

• Morgan Stanley Technology 1,180.96 +1.73%

• Transports 7,781.20 -.65%

• Utilities 670.54 +1.99%

• Bloomberg European Bank/Financial Services 75.23 -5.4%

• MSCI Emerging Markets 36.48 -2.39%

• HFRX Equity Hedge 1,131.10 -.99%

• HFRX Equity Market Neutral 995.55 -.58%

Sentiment/Internals

• NYSE Cumulative A/D Line 269.033 -.94%

• Bloomberg New Highs-Lows Index -53 -407

• Bloomberg Crude Oil % Bulls 32.35 +61.75%

• CFTC Oil Net Speculative Position 285,795 -16.26%

• CFTC Oil Total Open Interest 1,861,718 +4.13%

• Total Put/Call 1.02 -13.56%

• OEX Put/Call .67 -60.36%

• ISE Sentiment 82.0 +15.5%

• NYSE Arms 1.38 -16.07%

• Volatility(VIX) 15.93 -9.48%

• S&P 500 Implied Correlation 53.43 -5.45%

• G7 Currency Volatility (VXY) 10.12 +2.12%

• Emerging Markets Currency Volatility (EM-VXY) 10.98 +9.04%

• Smart Money Flow Index 19,575.65 +.13%

• ICI Money Mkt Mutual Fund Assets $2.659 Trillion -1.43%

• ICI US Equity Weekly Net New Cash Flow -$4.542 Billion

• AAII % Bulls 27.9 -6.1%

• AAII % Bears 35.9 +26.1%

Futures Spot Prices

• CRB Index 180.78 -.96%

• Crude Oil 43.13 -5.62%

• Reformulated Gasoline 144.62 +6.21%

• Natural Gas 2.95 +5.43%

• Heating Oil 140.67 -1.67%

• Gold 1,307.70 -1.40%

• Bloomberg Base Metals Index 148.39 -.10%

• Copper 216.0 +3.35%

• US No. 1 Heavy Melt Scrap Steel 209.33 USD/Ton unch.

• China Iron Ore Spot 55.97 USD/Ton -3.13%

• Lumber 304.20 -1.90%

• UBS-Bloomberg Agriculture 1,150.01 +.64%

Economy

• Atlanta Fed GDPNow Forecast +3.0% -30.0 basis points
• ECRI Weekly Leading Economic Index Growth Rate +8.7% +40.0 basis points

• Philly Fed ADS Real-Time Business Conditions Index -.2784 +6.67%

• S&P 500 Blended Forward 12 Months Mean EPS Estimate 127.84 +.31%

• Citi US Economic Surprise Index -3.0 +1.9 points

• Citi Eurozone Economic Surprise Index -21.7 -3.0 points

• Citi Emerging Markets Economic Surprise Index -14.70 -3.1 points

• Fed Fund Futures imply 80.0% chance of no change, 20.0% chance of 25 basis point hike on 9/21

• US Dollar Index 96.06 +.71%
• MSCI Emerging Markets Currency Index 1,534.34 -.51%

• Euro/Yen Carry Return Index 119.30 -.92%

• Yield Curve 93.0 +4.0 basis points

• 10-Year US Treasury Yield 1.70% +3.0 basis points

• Federal Reserve's Balance Sheet $4.431 Trillion +.50%

• U.S. Sovereign Debt Credit Default Swap 25.27 -1.25%

• Illinois Municipal Debt Credit Default Swap 355.0 -.03%

• Western Europe Sovereign Debt Credit Default Swap Index 25.51 +3.53%

• Asia Pacific Sovereign Debt Credit Default Swap Index 38.55 +.7%
  

• Emerging Markets Sovereign Debt CDS Index 103.33 -.70%
  

• Israel Sovereign Debt Credit Default Swap 66.75 -4.42%

• Iraq Sovereign Debt Credit Default Swap 754.16 +2.78%

• Russia Sovereign Debt Credit Default Swap 204.97 +1.30%

• iBoxx Offshore RMB China Corporate High Yield Index 131.67 +.03%

• 10-Year TIPS Spread 1.52% +1.0 basis point
  

• TED Spread 56.50 +7.5 basis points

• 2-Year Swap Spread 25.5 -.75 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -33.5 -5.0 basis points

• N. America Investment Grade Credit Default Swap Index 76.33 +.8%

• America Energy Sector High-Yield Credit Default Swap Index 665.0 +.19%

• European Financial Sector Credit Default Swap Index 96.0 +8.20%
  

• Emerging Markets Credit Default Swap Index 260.57 +6.32%
  

• CMBS AAA Super Senior 10-Year Treasury Spread to Swaps 140.0 +1.0 basis point
  

• M1 Money Supply $3.292 Trillion -1.17%

• Commercial Paper Outstanding 963.70 -1.9%

• 4-Week Moving Average of Jobless Claims 260,750 -500

• Continuing Claims Unemployment Rate 1.6% unch.

• Average 30-Year Mortgage Rate 3.50% +6.0 basis points

• Weekly Mortgage Applications 572.90 +4.18%

• Bloomberg Consumer Comfort 42.20 -1.8 points

• Weekly Retail Sales +.6% -20.0 basis points

• Nationwide Gas $2.18/gallon unch.

• Baltic Dry Index 764.0 -4.98%

• China (Export) Containerized Freight Index 711.55 +2.44%

• Oil Tanker Rate(Arabian Gulf to U.S. Gulf Coast) 22.50 -10.0%

• Rail Freight Carloads 230,267 -13.34%

Best Performing Style

• Small-Cap Growth +.9%

Worst Performing Style

• Mid-Cap Value -.7%

Leading Sectors

• Gaming +5.1%

• Biotech +4.1%

• Semis +3.9%

• Computer Hardware +2.3%

• Utilities +1.9%

Lagging Sectors

• Construction -3.3% 

• Alt Energy -3.8%

• Steel -3.8%

• Oil Tankers -4.8%

• Coal -7.9%

Weekly High-Volume Stock Gainers (10)

• VTAE, AERI, LXRX, FNSR, LJPC, ISIL, AAPL, CRUS, ETFC and BRC

Weekly High-Volume Stock Losers (14)

• IR, INGR, UVV, APD, RPM, CBRL, WIRE, WFC, MCK, UFPI, GMS, BECN, APOG and PII

Weekly Charts

ETFs

• High-Volume Gainers

• High-Volume Losers

Stocks

• High-Volume Gainers

• High-Volume Losers

*5-Day Change

Stocks Falling into Final Hour on Fed Rate-Hike Fears, Rising European/Emerging Markets/US High-Yield Debt Angst, Oil Decline, Financial/Homebuilding Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Lower
  

• Sector Performance: Most Sectors Declining
  

• Volume: Heavy

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 16.18 -.74%

• Euro/Yen Carry Return Index 119.33 -.46%

• Emerging Markets Currency Volatility(VXY) 10.98 +1.29%

• S&P 500 Implied Correlation 54.61 +3.9%

• ISE Sentiment Index 81.0 -30.8%
  

• Total Put/Call 1.03 +21.18%

• NYSE Arms 1.47 +119.54% 

Credit Investor Angst:

• North American Investment Grade CDS Index 76.17 +2.13%
  

• America Energy Sector High-Yield CDS Index 664.0 -3.08%

• European Financial Sector CDS Index 96.0 +4.17%

• Western Europe Sovereign Debt CDS Index 25.51 +.79%

• Asia Pacific Sovereign Debt CDS Index 38.55 +.57%

• Emerging Market CDS Index 260.57 +1.64%
  

• iBoxx Offshore RMB China Corporate High Yield Index 131.66 +.02%

• 2-Year Swap Spread 25.5 unch.

• TED Spread 56.50 +3.5 basis points

• 3-Month EUR/USD Cross-Currency Basis Swap -33.50 -4.5 basis points
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 72.13 -.3%
• 3-Month T-Bill Yield .28% unch.

• Yield Curve 92.50 +4.5 basis points
  

• China Import Iron Ore Spot $55.97/Metric Tonne unch.

• Citi US Economic Surprise Index -3.0 +6.5 points

• Citi Eurozone Economic Surprise Index -21.70 -.7 point

• Citi Emerging Markets Economic Surprise Index -14.7 -.4 point

• 10-Year TIPS Spread 1.52% +1.0 basis point
• 28.7% chance of Fed rate hike at Nov. 2 meeting, 55.4% chance at Dec. 14 meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating -200 open in Japan 
• China A50 Futures: Indicating +42 open in China

• DAX Futures: Indicating +2 open in Germany

Portfolio: 

• Slightly Higher: On gains in my biotech sector longs, index hedges and emerging markets shorts

• Disclosed Trades: Added to my (IWM)/(QQQ) hedges

• Market Exposure: Moved to 25% Net Long

Bear Radar

Style Underperformer:

• Large-Cap Value -.8%

Sector Underperformers:

• 1) Gold & Silver -2.4% 2) Homebuilders -1.9% 3) Oil Service -1.7%

Stocks Falling on Unusual Volume: 

• FCAM, CRH, MCK, NH, DB, FTRPR, DXB, FGP, DKT, SWNC, FTD, ORCL, DTK, RRC, GWW, EXPE, PRLB, LSI, SAM, PAYX, AAPL, CAA, VOD, DRQ, WFC and GWW

Stocks With Unusual Put Option Activity:

• 1) CCL 2) VNQ 3) EXPE 4) ORCL 5) SCTY

Stocks With Most Negative News Mentions:

• 1) NVAX 2) FTD 3) BAS 4) WHR 5) MKC

Charts:

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

Bull Radar

Style Outperformer:

• Small-Cap Growth -.3%

Sector Outperformers:

• 1) HMOs +1.1% 2) Hospitals +.9% 3) Biotech +.2%

Stocks Rising on Unusual Volume:

• GNMK, AERI, DEPO, RVNC, FIX, CAR, BZUN, SCOR, GPRO, MGNX and CLCD
  

Stocks With Unusual Call Option Activity:

• 1) NVAX 2) JCI 3) ALLY 4) SLCA 5) COTA

Stocks With Most Positive News Mentions:

• 1) INTC 2) ALIM 3) GNMK 4) NURO 5) BCR

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running +22.4% Above 100-Day Average
• 1 Sector Rising, 9 Sectors Declining
• 26.5% of Issues Advancing, 70.8% Declining
• 21 New 52-Week Highs, 10 New Lows
• 59.3% of Issues Above 200-day Moving Average
• Average 14-Day RSI 37.0%
• Vix 16.2 -.4%
• Total Put/Call 1.03 +21.2%
• TRIN/Arms 1.54 +130.3%

Friday Watch

Evening Headlines

Bloomberg:

• Europe Said to Threaten Revolt Over Bank Capital-Rule Overhaul. Europeans told the world’s top banking regulator that they’ve had enough. In two heated meetings in the past week, regulators from countries including Germany and Italy told the Basel Committee on Banking Supervision that proposed changes to how banks assess credit, market and operational risks must be scaled back and slowed down, according to two people with knowledge of the matter. Some European officials went so far as to say they wouldn’t adopt the proposals on the table, according to the people, who asked not to be identified because the deliberations were private. If the European Union -- home to nearly half of the world’s most systemically important banks -- balks at implementing the Basel Committee’s rules, it could undermine the global regulator’s authority and contribute to fragmentation of the industry.
• Yen Traders in Paralysis as Central Banks Become Guessing Game. Just when the world is most craving clarity on the future of Japan’s monetary policy, currency markets show it has become particularly hard to predict. With so little consensus on what Bank of Japan Governor Haruhiko Kuroda will come up with for the Sept. 21 policy decision, Eaton Vance Corp. and a unit of Bank of New York Mellon Corp. are abstaining from any positions in the yen, while JPMorgan Chase & Co. says some investors have closed out bets on declines in the dollar versus the yen. Such is the consternation that the options premium on contracts to buy the currency in a month’s time disappeared for the first time since November, before reversing course this week.
• Asian Stocks End Six-Day Slump as Fed Rate-Increase Bets Wither. Asian stocks rebounded from its longest losing streak since May, after weaker-than-anticipated U.S. data triggered a delay in investor expectations for an American interest-rate increase, spurring a rally in risk assets. The MSCI Asia Pacific Index rose 0.2 percent to 136.82 as of 9:05 a.m. in Tokyo, halting a six-day run of declines and paring this week’s loss to 2.5 percent. Reports Thursday showed U.S. industrial production contracted more than forecast, while retail sales unexpectedly slid, sending the odds for a rate increase from the Federal Reserve next week to below 20 percent.
• Oil Set for Weekly Drop as Resilient Supply Seen Sustaining Glut. Oil headed for a weekly loss on speculation a global crude glut will persist as disrupted supply returns and demand growth slows. Futures fell 0.6 percent in New York, extending a weekly decline to 4.9 percent. OPEC members Libya and Nigeria, whose supplies have been reduced by domestic conflicts, are preparing to boost exports within weeks. The oil surplus will last longer than previously thought as demand growth slumps and output proves resilient, the International Energy Agency said Tuesday.
• Commodities Seen Ending With Whimper After World-Beating Rally. For commodities, 2016 started with a bang. If history is any guide, it will end with a whimper. The Bloomberg Commodity Index, tracking returns for 22 components, is heading for a third-quarter slump after posting consecutive gains in the first two periods. Since the data begins in 1991, that’s only happened in four other years -- and the final quarter was a loser for three of them. With supply gluts persisting from corn to oil, traders are already gearing up for declines. Investors pulled $791 million out of exchange-traded funds tracking commodities over the past month, a reversal from earlier this year that have still left inflows up by $34.1 billion for the year. Hedge funds have cut their combined wagers on a rally for raw materials in nine of the past 11 weeks, and open interest across the asset class has fallen.

Wall Street Journal:

• Optimism Fades for Economic Boost By Year-End. Retail sales and manufacturing data damp expectations of strong growth.

Fox News:

• Fox News Poll: Clinton and Trump in a one-point race among likely voters. (video)

MarketWatch:

• Hello self-driving cars, goodbye 4.1 million jobs?

CNBC:

• Deutsche Bank asked to pay $14 billion to resolve US mortgage securities probe. (video)

Zero Hedge: 

• Harvard Crushes The "Obama Recovery" Farce With 9 Simple Charts.
• Former Treasury Secretary Warns Banks Riskier Now Than In 2008 Crisis.
• Infrastructure Spending Does Not "Grow The Economy".
• Clinton Foundation CEO Admits To Pay-For-Play: "No Question" That "Courtesy Appointments" Were Made.
• Deutsche Bank Slapped With $14 Billion Fine By DOJ Over Mortgage Probe.
• Six Striking Observations About Corporate Debt.
• GMO: The Market Is About 70% Overvalued.
• Beware Central Banks' "Illusion Of Control"; Spitznagel Warns "If The Fed Hikes, Markets Will Go Down Very, Very Hard".
• European, Japanese Bankers Threaten Mutiny Over Basel Committee's Capital Rules.
• Dismal Data Deluge Sparks Buying-Panic In Stocks. (graph)

Business Insider:

• An NYPD officer was attacked by a man with a meat cleaver.
• Food stamps may soon be available for online shopping.
• Next week, Oracle(ORCL) will start a price war with Amazon(AMZN) over cloud computing.
• There's a frightening message from corporate America.
• Samsung Galaxy Note 7 is officially recalled.

Night Trading 

• Asian equity indices are +.25% to +.75% on average.
• Asia Ex-Japan Investment Grade CDS Index 113.0 +.5 basis point.
• Asia Pacific Sovereign CDS Index 38.25 -.5 basis point.
• Bloomberg Emerging Markets Currency Index 72.40 +.07%. 
• S&P 500 futures -.19%. 
• NASDAQ 100 futures -.17%.

Morning Preview Links

Earnings of Note
Company/Estimate 

• None of note

Economic Releases
8:30 am EST

• The CPI MoM for August is estimated to rise +.1% versus unch. in July.
• The CPI Ex Food and Energy MoM for August is estimated to rise +.2% versus a +.1% gain in July.
• Real Avg. Weekly Earnings YoY for August.
  

10:00 am EST

• Preliminary Univ. of Mich. Consumer Sentiment for September is estimated to rise to 90.6 versus 89.8 in August.

12:00 pm EST

• 2Q Household Change in New Worth.
  

4:00 pm EST

• Net Long-Term TIC Flows for July.
  

Upcoming Splits 

• (TTC) 2-for-1

Other Potential Market Movers

• The EU Summit and Italy Trade Balance report could also impact trading today.

BOTTOM LINE:  Asian indices are modestly higher, boosted by by commodity 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.