Bull Radar

Style Outperformer:

• Large-Cap Growth unch.

Sector Outperformers:

• 1) Biotech +1.0% 2) Drugs +.4% 3) Restaurants +.2%

Stocks Rising on Unusual Volume:

• DTSI, TBRA, AQXP, AMPH, SRPT, PBYI, ESPR, AERI and ICPT
  

Stocks With Unusual Call Option Activity:

• 1) OUT 2) CHTR 3) RPTP 4) CAG 5) COTY

Stocks With Most Positive News Mentions:

• 1) TBRA 2) TSRA 3) SRPT 4) DTSI 5) MAR

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running -12.1% Below 100-Day Average
• 7 Sectors Rising, 3 Sectors Declining
• 58.7% of Issues Advancing, 41.3% Declining
• 27 New 52-Week Highs, 19 New Lows
• 59.8% of Issues Above 200-day Moving Average
• Average 14-Day RSI 37.2%
• Vix 15.4 -.84%
• Total Put/Call 1.06 +34.18%
• TRIN/Arms .99 -22.49%

Tuesday Watch

Evening Headlines

Bloomberg:

• China’s Failing Property Curbs Risk Bubble That May Hurt Economy. China’s attempts to slow runaway home-price growth in major cities are showing little sign of success, stoking the threat of a housing bubble that could destabilize the economy. New home prices rose the most in six years in August, jumping 1.2 percent from July, according to Bloomberg calculations based on government data. Home prices rose in 64 of 70 cities tracked by the government, up from 51 the previous month. Shanghai prices surged a record 4.4 percent for a year-on-year gain of 31 percent, while Beijing’s climbed 24 percent from a year earlier.
• Turkey’s Army Is Driving Deeper Into Syria as Latest Truce Frays. Behind their dirt embankments on the frontier with Syria, Turkish soldiers take refuge from the scorching sun in the shade of pine trees. A pile of shells sits beside them on the road, ready for action. The border they’re defending is effectively less of a border than it used to be, and the action is further away. That’s because Turkey’s army, since it crossed into Syria late last month to fight Islamic State and Kurdish militias, has driven the front line deep into the neighboring state. It now controls a 900 square-kilometer (350 square-mile) area inside Syria. And that’s just the start, judging by President Recep Tayyip Erdogan’s comments on Monday. 
• After Another Loss at the Polls, Merkel's Political Future Is Unclear. Another week, another election defeat for Angela Merkel, and a familiar round of calls for the chancellor to acknowledge she’s to blame. Each successive blow at the hands of the anti-immigration Alternative for Germany party piles pressure on Merkel to admit that her refugee policy of the past 12 months is leading her Christian Democratic Union ever further into the electoral desert. So far she’s refusing to recant, leading to speculation she may not contest federal elections due in 2017. 
• Australia Stock Market Reopens After Worst Outage Since 2011. Australian stock trading resumed Tuesday after a technical fault shut the nation’s largest exchange in the biggest challenge yet for the bourse operator’s new boss. Less than two months into Dominic Stevens’s tenure, the ASX Ltd. chief executive officer was forced to apologize for a hardware failure that saw the equity exchange open late and close early Monday in its worst such disruption in almost five years. ASX said the technical issue had been resolved, after brokerages and investors criticized the firm for not fixing the outage sooner or giving them more details on the malfunction.
• Asian Stocks Little Changed as Traders Await Central Bank Moves. Asian stocks were little changed as Japanese shares swung between gains and losses ahead of this week’s key policy decisions from the Federal Reserve and the Bank of Japan. The MSCI Asia Pacific Index slipped less than 0.1 percent to 138.31 as of 9:16 a.m. in Tokyo. Japan’s Topix index rose 0.1 percent as Tokyo markets resumed following a holiday on Monday, with the yen trading at 101.87 against the dollar. Monetary policy uncertainty has helped reignite volatility in global markets over the past two weeks, with traders split over what action the BOJ will undertake in its review Wednesday. Bets on an interest-rate increase from the Fed this week remain around 20 percent even as U.S. inflation data for August rose more than projected.
• Oil Halts Gains Amid Signs Rising Global Supply to Sustain Glut. Futures were little changed in New York after advancing 0.6 percent Monday. Nigeria’s output reached 1.75 million barrels a day and will keep rising after government outreach and a cease-fire with militants allowed some production to restart, Minister of State for Petroleum Emmanuel Kachikwu said. U.S. crude stockpiles probably increased by 3.13 million barrels last week, according to a Bloomberg survey before government data Wednesday.
• What Steel Glut? India Defies World Losses With Output Expansion. At a time when a surplus is forcing steel mills to close around the world, India’s debt-laden producers are ramping up to supply more of the metal than ever. Steel Authority of India Ltd., Tata Steel Ltd. and JSW Steel Ltd. -- which all posted losses last year -- are targeting record output in 2016 and want to almost triple capacity over the next decade. They expect demand in the world’s third-largest producing country to grow at about quadruple the current rate as Prime Minister Narendra Modi embarks on huge investments in new railroads, highways and ports, including $44 billion pledged for this year.

Wall Street Journal:

• Another Terror Weekend. Three attacks remind Americans of the clear and present danger.
• N.Y. Bomb Suspect Ahmad Khan Rahami Captured; No Others Being Sought. Blast now termed ‘an act of terror’ by authorities.
• Two of Fed’s Own Primary Dealers Warn Shock Hike Awaits Markets. There’s uncommon dissent in the ranks of the Federal Reserve’s primary dealers over the central bank’s interest-rate decision this week. Two of the Fed’s 23 preferred bond-trading partners -- Barclays Plc and BNP Paribas SA -- are betting against their peers and the bond market by forecasting officials will raise rates Wednesday. It’s the first time more than one dealer has gone against the consensus during the week of a policy meeting since last September, data compiled by Bloomberg show. Economists at both banks say traders have too steeply discounted officials’ intent to hike after the Fed has remained on hold for longer than expected.

Fox News:

• Bomb suspect Rahami a deadbeat, hated America, says his daughter’s mother. (video) The man who police nabbed and shot Monday after a day-long dragnet in connection with a series of terror attacks in and around New York was a bad father who disliked America, hated gays and took long trips to his homeland of Afghanistan, according to the mother of his young daughter. Maria, whose full name is being withheld by FoxNews.com, said her high school sweetheart, Ahmad Khan Rahami, didn’t pay child support and often railed against American culture. The 26-year-old, who spoke after her grandmother called her for a reporter who produced his press credential and identified himself at the grandmother’s home in Elizabeth, said she had not seen Rahami in two years.
• Aid convoy attacked as Syria calls cease-fire finished. (video) A U.N. humanitarian aid convoy inside Syria was hit by airstrikes, U.N. officials said, as the Syrian military declared on Monday that the week-long U.S.-Russian brokered cease-fire had failed.

MarketWatch:

• Meet the affable bear who expects the S&P to tumble to 20-year lows.

CNBC:

• Apple's(AAPL) EU tax nemesis takes aim at other U.S. companies' offshore profits.
• Top 10 most-crowded trades, according to UBS.
• What we know about suspect Ahmad Khan Rahami.

Zero Hedge:

• Dear FBI, This Is Intent: Hillary's "Oh Shit" Guy Sought Reddit Advice On How To "Strip VIP's Emails".
• Italy's PM Unloads On Deutsche Bank's Unfixable Problem: "Hundreds And Hundreds Of Billions Of Derivatives".
• The Gravest Threat To Your Retirement. (graph)
• "The Big Short's" Steve Eisman Reveals What The Next Big Short Is.
• DHS Admits "Mistakenly" Granting Citizenship To 858 Immigrants From "Countries Of Concern To National Security".
• President Clinton Admits "Some" Foundation Donors "Gave Money" To Gain Political Influence.
• Why Socialism Is Here To Stay.
• The 'Emerging Art Bubble' Has Burst: "Everyone Got Caught With Their Pants Down".
• "Panic Gasoline Buying" In Southeast Leads To "Massive Lines", Gas Shortages, Price Gouging.
• Fun With Fake Statistics: The 5% "Increase" In Median Household Income Is Pure Illusion.
• Traders Worry As Divergence Deja Vu Looms. (graph)
• "Buy-The-Bombing" Stock Rally Fades Amid Crude Tumble & China Turmoil. (graph)

Business Insider:

• The crazy series of events that brought down the suspect in the New York and New Jersey bombings.
• NBC anchor Lester Holt just announced the topics for the first presidential debate.
• We're entering the twilight zone of banking.
• CRUZ: We're entering 'new phase' in terror war, 'must avoid the trap' of dismissing attacks as 'isolated incidents'.

Telegraph:

• China facing full-blown banking crisis, world's top financial watchdog warns.

Night Trading 

• Asian equity indices are -.25% to +.25% on average.
• Asia Ex-Japan Investment Grade CDS Index 111.50 +1.75 basis points.
• Asia Pacific Sovereign CDS Index 37.75 +.5 basis point.
• Bloomberg Emerging Markets Currency Index 72.39 +.03%. 
• S&P 500 futures +.18%. 
• NASDAQ 100 futures +.19%.

Morning Preview Links

Earnings of Note
Company/Estimate 

• (LEN)/.90
• (ADBE)/.72
• (CPRT)/.55
• (FDX)/2.78
• (KBH)/.39

Economic Releases
8:30 am EST

• Housing Starts for August are estimated to fall to 1190K versus 1211K in July.
• Building Permits for August are estimated to rise to 1165K versus 1152K in July.
  

Upcoming Splits 

• None of note

Other Potential Market Movers

• The German PPI, Japan Trade Balance report, weekly US retail sales reports, Goldman Communacopia Conference, Johnson Rice Energy conference and the (RMBS) analyst day could also impact trading today.

BOTTOM LINE:  Asian indices are modestly higher, boosted by by industrial 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 25% net long heading into the day.

Stocks Reversing Slightly Lower into Afternoon on Terrorism Fears, Yen Strength, Technical Selling, Gaming/Hospital Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Slightly Higher
  

• Sector Performance: Mixed
  

• Volume: Below Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 15.95 +3.64%

• Euro/Yen Carry Return Index 118.73 -.38%

• Emerging Markets Currency Volatility(VXY) 10.80 -.74%

• S&P 500 Implied Correlation 55.46 +8.05%

• ISE Sentiment Index 76.0 -19.15%
  

• Total Put/Call .68 -32.0%

• NYSE Arms 1.54 +19.82% 

Credit Investor Angst:

• North American Investment Grade CDS Index 74.93 -1.34%
  

• America Energy Sector High-Yield CDS Index 683.0 +2.73%

• European Financial Sector CDS Index 92.49 -3.66%

• Western Europe Sovereign Debt CDS Index 25.20 -1.22%

• Asia Pacific Sovereign Debt CDS Index 38.05 -1.30%

• Emerging Market CDS Index 252.48 -2.97%
  

• iBoxx Offshore RMB China Corporate High Yield Index 131.60 -.05%

• 2-Year Swap Spread 25.25 -.25 basis point

• TED Spread 57.25 +.75 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -32.75 +.75 basis point
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 72.35 +.32%
• 3-Month T-Bill Yield .25% -3.0 basis points

• Yield Curve 92.0 -.5 basis point
  

• China Import Iron Ore Spot $55.68/Metric Tonne -.52%

• Citi US Economic Surprise Index 3.30 +6.3 points

• Citi Eurozone Economic Surprise Index -24.40 -2.7 points

• Citi Emerging Markets Economic Surprise Index -15.1 -.4 point

• 10-Year TIPS Spread 1.52% unch.
• 26.8% chance of Fed rate hike at Nov. 2 meeting, 55.5% chance at Dec. 14 meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating -200 open in Japan 
• China A50 Futures: Indicating +13 open in China

• DAX Futures: Indicating -42 open in Germany

Portfolio: 

• Slightly Lower: On losses in my retail sector longs and emerging markets shorts

• Disclosed Trades: None

• Market Exposure: 25% Net Long

Today's Headlines

Bloomberg:

• Apple(AAPL) Helps Salvage S&P 500 Advance in Wildest Week Since Brexit. It took Apple Inc.’s best week in almost five years, but the S&P 500 Index overcame the wildest five days since Brexit to eke out a gain amid swings that at times seemed sure to end in grief for bulls. While the gauge hasn’t recovered from the 2.5 percent rout last Friday, stocks did manage to hold above a closely watched technical level on charts, a victory some analysts say lays the foundation for more strength. The S&P 500 rose 0.5 percent to end the five days at 2,139.16. Along the way, the equity index notched three moves of at least 1 percent after going 43 days through Sept. 8 without one. The CBOE Volatility Index swung at least 10 percent on three days, the most in any week since the Brexit vote.
• S&P Downgrades Nigeria Further Into Junk as Oil Woes Worsen. S&P Global Ratings downgraded Nigeria further into junk territory just as Africa’s most populous nation prepares to issue its first Eurobond since 2013, amid low oil prices and severe shortages of foreign exchange. S&P lowered Nigeria’s rating one level to B, five levels below investment grade and in line with Kyrgyzstan and Angola. The outlook was changed from negative to stable. “Nigeria’s economy has weakened more than we expected owing to a marked contraction in oil production, a restrictive foreign exchange policy and delayed fiscal stimulus,” S&P said Friday in an e-mailed statement after markets closed. While government debt remains low, “servicing costs as a percentage of general government revenues are high and rising,” the company said.
• The Apple(AAPL) Store Line Is Dying. The frayed scrap of paper taped to the sidewalk outside Apple Inc.’s flagship store in San Francisco’s Union Square had a simple message: $5 for photographs. The sight of Apple fans clamoring to get the latest phone was replaced Friday by people looking to make a few bucks from their lead spot in the line. For the first time, being first through Apple store doors around the world is no guarantee of securing the top-of-the-line new iPhone. A combination of limited supply and Apple’s push toward online pre-orders meant walk-in customers were unable to buy the larger 7 Plus version.
• ITT Educational Services Files for Bankruptcy After Shutdown. ITT Educational Services Inc. filed for bankruptcy after closing 136 technical schools, leaving over 35,000 students stranded in one of the largest college shutdowns in U.S. history. The 50-year-old for-profit college operator, which had campuses in 38 states, said it was forced to close its doors after the U.S. Education Department demanded a steep increase in the security the company would have to post to guarantee federal student aid. More than 8,000 employees were affected, with the majority losing their jobs on Sept. 6, Carmel, Indiana-based ITT said.

Wall Street Journal:

• Libya Won’t Freeze Oil Production. Oil official says Libya’s target is 1.6 million barrels of oil a day.

Barron's:

• Had bullish commentary on (HPE), (CAA), (PICO), (NWL) and (LH).

Fox News:

• US military 'certain' strike mistakenly hit Syrian forces, official says. (video)
• Poll: Trump catching Clinton in critical Electoral College vote. (video)

CNBC:

• Hundreds of thousands take to streets in Germany against Obama-backed trade deal.
• Top investors have one theme on their minds: Danger.

Zero Hedge:

• Chaffetz Obliterates Stunned FBI Official; Serves Him With A Subpoena During Testimony.
• It's Still The Debt, Stupid.
• Trump: "Hillary's Bodyguards Should Drop All Weapons. Let's See What Happens To Her".
• More Data For The "Data Dependent" To Ignore.
• A Striking Chart.
• The SEC's Former Top "HFT Expert" Joins HFT Titan Citadel.
• Why The Fed Destroyed The Market Economy.
• "Well, That's Never Happened Before". (graph) 
• George Friedman: Italy Is the Mother of All Systemic Threats.
• Alabama, Tennessee, & Georgia Declare States Of Emergency As Gas Shortages Loom After Pipeline Leak.
• Cop Violence Returns: Police Officers Shot In Philadelphia, Fort Worth.
• New Study Finds Taxpayers Are Fleeing New York, Illinois and California.
• Pipe Bomb Explodes At Marine Charity Run In New Jersey.
• Welcome To Paris...
• New Rasmussen Poll Reveals Dems Want Bernie If Hillary Forced Out.
• Foreign Central Banks Sell A Record $343 Billion In US Trasuries In The Last Year. (graph)
• Weekend Reading: Volatility Returns With A Vengeance.
• VIXtermination Trumps Deutsche Damage, Dismal Data; But Stocks End Week Weak. (graph)

recode:

• More than two million people watched Twitter’s(TWTR) NFL stream on Thursday night. And 48 million watched it on regular TV.

Market Week in Review

• S&P 500 2,136.20 +.48%

 

The Weekly Wrap by Briefing.com.

*5-Day Change