Bear Radar

Style Underperformer:

• Large-Cap Growth +.5%

Sector Underperformers:

• 1) Papers -.4% 2) Semis -.4% 3) Road & Rail -.2%

Stocks Falling on Unusual Volume: 

• BMY, SYT, TWTR, HVT, DOV, ACIA, NTLA, WLDN, EXEL, NORD, NVS, HOLI, TWLO, BTI, NEP, ISCA, MXIM, MB, BIS, GNRC, UTZ and AZZ

Stocks With Unusual Put Option Activity:

• 1) CF 2) TWLO 3) SCHW 4) JNPR 5) EWZ

Stocks With Most Negative News Mentions:

• 1) MYGN 2) HSNI 3) TWTR 4) HVT 5) BMY

Charts:

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

Bull Radar

Style Outperformer:

• Small-Cap Growth +1.2%

Sector Outperformers:

• 1) Steel +2.0% 2) Airlines +1.8% 3) Hospitals +1.8%

Stocks Rising on Unusual Volume:

• PRMW, TSRO, CRM, FANG, MYL, CLVS, SGMS and CWEI

Stocks With Unusual Call Option Activity:

• 1) BSX 2) TSRO 3) IMPV 4) ETE 5) BMY

Stocks With Most Positive News Mentions:

• 1) TSN 2) ARIA 3) CDN 4) AEO 5) TSRO

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running -12.8% Below 100-Day Average
• 10 Sectors Rising, 0 Sectors Declining
• 76.8% of Issues Advancing, 21.4% Declining
• 129 New 52-Week Highs, 11 New Lows
• 57.3% of Issues Above 200-day Moving Average
• Average 14-Day RSI 37.8%
• Vix 13.4 -.6%
• Total Put/Call .90 -23.7%
• TRIN/Arms .81 -13.2%

Monday Watch

Today's Headlines

Bloomberg:  

• U.S. Loosens Iran Sanctions to Smooth Dollar Transactions. The U.S. Treasury Department is loosening sanctions on Iran, relaxing rules on foreigners doing dollar-denominated transactions with businesses in the nation. The new rules allow such deals with entities in Iran that aren’t under sanctions even if they are minority owned or controlled by someone who is on the sanctions list. “It is not necessarily sanctionable for a non-U.S. person” to engage in deals with an entity not on the list “but that is minority owned, or that is controlled in whole or in part, by an Iranian or Iran-related person on the” list, the Treasury said in guidance for businesses updated on its website late on Friday. 
• Germany Escapes Bomb Attack as Syrian Suspect Still at Large. Police are hunting a terror suspect and may have foiled an attack in Germany by raiding an apartment in Chemnitz and seizing explosives. A manhunt is under way for 22-year-old Syrian national Jaber Albakr on suspicion that he may have planned a bomb attack, police in Saxony said. Several hundred grams of highly dangerous explosives were found during a search of his home Saturday that followed a tip-off by German secret services, and a person who may have been an accomplice has been detained. A second apartment was raided on Sunday, and special forces captured another male who is believed to have been in contact with the main suspect, police said.
• Yuan Drops as PBOC Weakens Fix Beyond 6.7 First Time Since 2010. China’s central bank allowed the yuan to slip past 6.7 a dollar, weakening its reference rate beyond that level for the first time in six years after a holiday that saw the offshore rate declining, foreign-exchange reserves shrinking and the dollar strengthening. The increased pressures drove the overseas rate’s discount to the onshore price to the widest since June last week, when comparing Hong Kong levels with those on the mainland before the holiday. A gauge of the greenback’s strength climbed 1 percent last week as Federal Reserve officials talked up the possibility of an increase in borrowing costs.
• Kuroda Signals BOJ May Delay Hitting Inflation Target to 2018. Governor Haruhiko Kuroda gave the clearest signal yet that the Bank of Japan may postpone the forecast date for achieving its 2 percent inflation target to 2018, even with economic growth set to accelerate next year. “It may take slightly more months to reach the 2 percent inflation rate” than the current forecast to hit it in the coming fiscal year, Kuroda said in an interview with Bloomberg Television’s Francine Lacqua on the sidelines of an annual gathering of finance chiefs in Washington. “We have to carefully study all relevant statistics before we review the forecast. So we may change, we may not change.”
• Gulf Stocks Decline After Fed Rate Bets Sink Emerging Markets. Most Gulf stocks dropped, tracking a retreat in emerging markets on Friday as U.S. jobs data spurred speculation the Federal Reserve will raise interest rates this year, diminishing the appeal of riskier assets. Saudi Arabia’s Tadawul All Share Index, whose 10-day volatility surged to the highest since February, tumbled 2.2 percent at the close in Riyadh, the first decline in four days. Shares in Dubai, Abu Dhabi, Kuwait and Bahrain also slid, dragging the BGCC 200 Index, which comprises the biggest and most liquid stocks in the six-nation Gulf Cooperation Council, down 1.2 percent.
• Asian Stocks Advance Amid U.S. Debate as Fed Rate Hike Looms. Asian stocks climbed, led by materials and consumer companies, as investors watched the second U.S. presidential debate. The MSCI Asia Pacific excluding Japan Index added 0.2 percent as of 9:04 a.m. in Hong Kong. Stocks in Australia and South Korea climbed, while shares in New Zealand fell. U.S. presidential nominee Donald Trump’s reputation took a blow ahead of a closely watched debate with Hillary Clinton after a 2005 video surfaced of him talking in vulgar and degrading terms about women. An American jobs report on Friday showed its central bank remains on course to lift interest rates in December.
• OPEC's Miracle Might Just Be a Mirage. 
• Clean Energy Investment Dropped 43% in Worst Quarter Since 2013.

Fox News:

• Decision 2016 Debate Live Blog: Second presidential debate. (video)

CNBC:

• Bank of America's recession warning: This market is scary. (video) There's a chilling trend in the market, and it could wreak havoc on your portfolio, a top market watcher said. "We are seven years into a full-fledged, all out, central bankers doing everything they can to stimulate demand," Bank of America-Merrill Lynch's head of U.S. equity and quantitative strategy Savita Subramanian recently warned on CNBC's "Fast Money." "We looked at all of these indicators that have been pretty good at forecasting recessions and we extrapolated that if they follow the current trends they're on, we're going to hit a recession sometime in the second half of next year." The most unsettling thing is that this recession risk isn't discounted into the market at these levels, according to Subramanian. 
• Russia says US actions threaten its national security.

Zero Hedge: 

• A Mile-High House Of Cards.
• Two Words Suddenly Strike Fear In Silicon Valley Hearts..."Price Reduced".
• Why Goldman Is Bearish On Q3 Earnings: "4 Out Of 5 Factors Suggest Disappointing Results Ahead".
• The Economic "Recovery" Feels Weak Because The Great Recession Never Really Ended. (video)
• Hangzhou, We Have A Problem: "Over 71% Of New Chinese Loans Went To Fund Mortgages". (graph)
• Deutsche Bank Tells Investors Not To Worry About Its €46 Trillion In Derivatives.
• MidEast Massacre As Saudi Bank Stocks Crash To Crisis Lows. (graph)
• America Is On A Slippery Slope.
• Never. Been. Higher. (graph)
• Deutsche Bank(DB) CEO Returns Home Empty-Handed After Failing To Reach 'Deal' With DOJ: Bild.
• Wikileaks Releases Hillary's Paid Wall Street Speech Transcripts: Hundreds Of "Sensitive" Excerpts.
• Ray Dalio Warns A 1% Rise In Yields Would Lead To Trillions In Losses.
• Globalization Is Done.
• Deutsche Bank(DB) Raises $3 Billion In Debt, As Hedge Fund Explains What Its "Bail-In" Would Look Like.
• Twitter(TWTR) Sale Process Said To Be "Almost Dead".

Business Insider:

• Trump holds surprise pre-debate press conference with women who have accused Bill Clinton of misconduct.
• 'Why wait?': Ted Cruz asks why NBC didn't release damning tapes of Donald Trump during GOP primaries.
• 'One on three': Watch Donald Trump slam the debate moderators. (video)
• China's property bubble is bigger than subprime.
• Putin just upped Russia's status in global oil markets.

Telegraph:

• China must wean itself off debt addiction if it is to avoid financial calamity, warns IMF chief.

Night Trading

• Asian indices are -.25% to +.25% on average.
• Asia Ex-Japan Investment Grade CDS Index 114.25 -1.75 basis points.
• Asia Pacific Sovereign CDS Index 32.75 unch.
• Bloomberg Emerging Markets Currency Index 72.79 +.08%.
• S&P 500 futures +.24%.
• NASDAQ 100 futures +.21%.

Morning Preview Links

Earnings of Note

Company/Estimate

• None of note

Economic Releases

• None of note 

Upcoming Splits

• None of note

Other Potential Market Movers

• The Fed's Evans speaking, Eurogroup meeting and the Japan Trade Balance report could also impact trading today.

BOTTOM LINE: Asian indices are slightly higher, boosted 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 week.

Weekly Outlook

• Week Ahead by Bloomberg.
• Wall St. Week Ahead by Reuters.
• Weekly Economic Calendar by Briefing.com.

BOTTOM LINE: I expect US stocks to finish the week modestly lower on election uncertainty, global growth worries, commodity weakness, yen strength, rising European/Emerging Markets/US High-Yield debt angst and technical selling. My intermediate-term trading indicators are giving neutral signals and the Portfolio is 50% net long heading into the week.

Market Week in Review

• S&P 500 2,153.74 -.67%*

The Weekly Wrap by Briefing.com.

*5-Day Change