Bull Radar

Style Outperformer:

• Large-Cap Growth -.6%

Sector Outperformers:

• 1) Coal +.3% 2) Homebuilders -.1% 3) Medical Equipment -.2%

Stocks Rising on Unusual Volume:

• MGNX, LN, ANTX, AKAM, CARO, VLRS, TPH, PFBC, KRA, NUVA, GRUB, FLIR, HLI, IT, UTHR, USNA, PAG, RHI, GRA, TU, ANTM, FBNC, CLLS, HNI, ADMS, TPH, CSL, BTU, NKE and POL

Stocks With Unusual Call Option Activity:

• 1) ICE 2) MAT 3) AKAM 4) GRUB 5) RF

Stocks With Most Positive News Mentions:

• 1) GRUB 2) NOC 3) AKAM 4) PHM 5) COF

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running +23.7% Above 100-Day Average
• 2 Sectors Rising, 8 Sectors Declining
• 15.5% of Issues Advancing, 81.8% Declining
• 92 New 52-Week Highs, 83 New Lows
• 47.6% of Issues Above 200-day Moving Average
• Average 14-Day RSI 38.2%
• Vix 11.8 +5.7%
• Total Put/Call 1.14 +46.2%
• TRIN/Arms 1.06 +23.6%

Wednesday Watch

Evening Headlines

Bloomberg:

• Stocks in Asia Rise on Earnings. Japan’s stocks opened higher with the Nikkei 225 Stock Average poised to extend gains for a 17th session. Profit at Caterpillar Inc., a bellwether for global growth, reinforced the view that the international economic expansion is the most synchronized since the start of the decade. Alongside solid manufacturing readings from Europe, Japan and the U.S., that pushed 10-year Treasury yields to 2.42 percent and lifted the greenback to the highest level since July. Japan’s Topix index and the Nikkei 225 each climbed 0.4 percent as of 9:13 a.m. in Tokyo. Australia’s S&P/ASX 200 Index rose 0.1 percent as did South Korea’s Kospi index. Hang Seng Index futures gained 0.5 percent.
• Five Things You Need to Know to Start Your Day.
• Senate Passes Hurricane Relief Bill Granting Puerto Rico Loans. The Senate sent President Donald Trump a $36.5 billion hurricane relief bill Tuesday that gives Puerto Rico access to $4.9 billion in low-interest Treasury loans, amid concerns that recovery efforts from the recent disasters will require significantly more funding. The measure, passed 82-17, also would replenish the troubled National Flood Insurance Program, which runs out of money as early as this week.
• Rising Corporate Earnings Have Market Bulls Feeling Vindicated. “You have two very important factors -- better-than-expected earnings from companies like Caterpillar, viewed as a proxy for domestic and global growth, and you have economic data that support growth outlook,” said Bruce Bittles, Robert W. Baird & Co. chief investment strategist. “These factors are pretty good tailwinds to the markets, and they send a clear risk-on message.”
• Texas Instruments(TXN) Gives Upbeat Forecast on Industrial Demand. Texas Instruments Inc. gave an upbeat forecast and reported earnings that indicated semiconductor orders remain strong from industrial-equipment manufacturers and automakers. Fourth-quarter profit will be $1.01 to $1.15 a share, the Dallas-based company said Tuesday in a statement. Revenue will be $3.57 billion to $3.87 billion. Analysts on average projected net income of $1 a share on sales of $3.67 billion, according to data compiled by Bloomberg.

Wall Street Journal:

• Trump Asks GOP Senators: Should Taylor or Powell Be Fed Chief? The president sees John Taylor and Jerome Powell as the front-runners, says one person familiar with Trump’s search.
• New Ransomware Outbreak Spreads Through U.S., Russia and Ukraine. Homeland Security says late Tuesday it received ‘multiple reports’ of infections.
• India Announces Measures to Boost Credit Growth, Private Investment. Federal cabinet approves capital infusion of $32.5 billion into state-run banks to increase the scope of lending.

Fox News: 

• Clinton campaign, DNC helped fund research that led to salacious Trump dossier, report says.

CNBC:

• Department of Education: Hackers are now targeting elementary and high schools.
• Mark Zuckerberg and Priscilla Chan have already committed $45 million to prison reform and affordable housing, report says.
• Twitter(TWTR) will now label political ads, including who bought them and how much they are spending. (video)

Zero Hedge: 

• Hillary Clinton Lied, Paid For "Trump Dossier".
• "It's A Huge Story": China Launching "Petroyuan" In Two Months.
•  Washington Is "The New Rome".
• Jeff Flake Blasts "Reckless, Outrageous And Undignified" Trump; Announces Retirement From Senate.
• China Regulator Instructs Companies To Delay Bad Results Until After Congress.
• Hungary Launches Anti-Soros Political Campaign.
• WTI/RBOB Extend Gains After Major Gasoline, Distillate Draws. (graph)
• Chipotle(CMG) Tumbles On Poor Earnings, Disappointing Guidance; Blames Hurricanes, Data Breach.
• Weinstein Victim Breaks NDA To Speak Out About Former Boss's Harassment.
• The Dow Hasn't Done This Since 2008. (graph)

Telegraph:

• Decades long deflationary shock threatened by artificial intelligence.

Night Trading 

• Asian equity indices are unch. to +.5% on average.

• Asia Ex-Japan Investment Grade CDS Index 75.0 +.25 basis point. 

• Asia Pacific Sovereign CDS Index 15.5 -.25 basis point.

• Bloomberg Emerging Markets Currency Index 73.08 -.02%.

• S&P 500 futures -.13%.

• NASDAQ 100 futures -.10%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (ALK)/2.30
• (AB)/.52
• (BAX)/.59
• (BA)/2.65
• (KO)/.49
• (DPS)/1.16
• (EXP)/1.58
• (FCX)/.31
• (GD)/2.43
• (HES)/-1.29
• (IR)/1.43
• (IP)/1.05
• (LH)/2.39
• (LEA)/3.74
• (NSC)/1.64
• (NOC)/2.92
• (OC)/1.26
• (S)/.00
• (UTHR)/4.57
• (V)/.85
• (WYN)/2.02
• (AFL)/1.63
• (AMGN)/3.10
• (ABX)/.16
• (BGG)/-.34
• (BWLD)/.79
• (ETH)/.28
• (FFIV)/2.20
• (LSTR)/.97
• (LVS)/.68
• (NXPI)/1.69
• (ORLY)/3.16
• (RJF)/1.32
• (TSCO)/.68
• (VAR)/1.19
• (XLNX)/.63

Economic Releases 

8:30 am EST

• Preliminary Durable Goods Orders for September is estimated to rise +1.0% versus a +2.0% gain in August.
• Preliminary Durables Ex Transports for September is estimated to rise +.5% versus a +.5% gain in August.
• Cap Goods Orders Non-Defense Ex-Air for September is estimated to fall -.1% versus a +1.1% gain in August.
  

9:00 am EST

• The FHFA House Price Index MoM for August is estimated to rise +.4% versus a +.2% gain in September.
  

10:00 am EST

• New Home Sales MoM for September is estimated to fall -1.1% versus a -3.4% decline in August.
  

10:30 am EST

• Bloomberg consensus estimates call for a weekly crude oil inventory  decline of -2,625,330 barrels versus a -5,731,000 barrel decline the prior week. Gasoline supplies are estimated to rise by +397,440 barrels versus a +908,000 barrel gain the prior week. Distillate inventories are estimated to fall by -179,670 barrels versus a +528,000 barrel gain prior. Finally, Refinery Utilization is estimated to rise by +1.69% versus a -4.7% decline prior.
  

Upcoming Splits

• None of note

Other Potential Market Movers

• The German IFO report, UK GDP report, Australia Consumer Price Index report, $34B 5Y T-Note auction, weekly MBA Mortgage Applications report and the (NKE) investor day could also impact trading today.

BOTTOM LINE:  Asian indices are slightly higher, boosted by industrial and technology shares in the region. I expect US stocks to open modestly lower and to rally into the afternoon, finishing mixed.  The Portfolio is 75% net long heading into the day.

Stocks Rising into Final Hour on Tax Reform Hopes, Earnings Optimism, Oil Gain, Financial/Homebuilding Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Higher
  

• Sector Performance: Most Sectors Rising
  

• Volume: Above Average

• Market Leading Stocks: Outperforming
  

Equity Investor Angst:

• Volatility(VIX) 10.75 -2.89%

• Euro/Yen Carry Return Index 139.54 +.42%

• Emerging Markets Currency Volatility(VXY) 8.25 +.36%

• S&P 500 Implied Correlation 16.63 -2.29%

• ISE Sentiment Index 73.0 -38.66%
  

• Total Put/Call .82 -15.5%

• NYSE Arms .89 -43.0%

Credit Investor Angst:

• North American Investment Grade CDS Index 52.61 -.50%
  

• America Energy Sector High-Yield CDS Index 387.0 +.49%

• European Financial Sector CDS Index 57.54 -1.2%

• Western Europe Sovereign Debt CDS Index 4.69 -1.57%

• Asia Pacific Sovereign Debt CDS Index 15.40 -1.34%

• Emerging Market CDS Index 175.06 +.25%
  

• iBoxx Offshore RMB China Corporate High Yield Index 144.66 +.15%

• 2-Year Swap Spread 23.75 unch.

• TED Spread 26.25 -.5 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -40.75 -1.75 basis points

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 73.15 -.15%
• 3-Month T-Bill Yield 1.11% +2.0 basis points
  

• Yield Curve 83.0 +2.0 basis points

• China Import Iron Ore Spot $62.42/Metric Tonne +.68%

• Citi US Economic Surprise Index 7.0 +4.0 points

• Citi Eurozone Economic Surprise Index 51.80 -1.1 basis points

• Citi Emerging Markets Economic Surprise Index 17.0 +.1 basis point

• 10-Year TIPS Spread 1.88 +1.0 basis points
  
• 84.2% chance of Fed rate hike at Dec. 13 meeting, 85.1% chance at Jan. 31 meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating +105 open in Japan 
• China A50 Futures: Indicating +21 open in China

• DAX Futures: Indicating -3 open in Germany

Portfolio: 

• Slightly Higher: On gains in my tech/retail sector longs

• Disclosed Trades: None

• Market Exposure: 75% Net Long

Today's Headlines

Bloomberg:

• Russia Cements Top Spot in Crude Sales to China as Saudis Recede. The Asian nation’s imports of Russian crude jumped 61 percent to a record 6.35 million metric tons in September from a year earlier, according to General Administration of Customs data. That helped Russia retain the top spot for the seventh straight month. Saudi Arabia, the world’s biggest crude exporter, supplied about 10 percent more at 4.28 million tons, while retreating to the third-biggest. Angola was the No. 2 seller.
• Caterpillar(CAT) Is the Latest Sign the World's Economy Hasn't Looked This Good in Years. (video)
• Your Evening Briefing.
• Amazon(AMZN) Launches ‘Business Prime’ to Bring Quick Delivery to Work. (video)
• Einhorn Questions Whether His Strategy Even Works Anymore. Hedge fund manager David Einhorn is wondering if value investing -- the strategy he’s famous for following -- remains viable. In a letter to investors Tuesday, Einhorn expressed frustration that growth stocks have outperformed value stocks -- and questioned whether investors are being clear-eyed when considering equity values.

Wall Street Journal:

• China Boosts Powers of Xi Jinping as Equal to Mao. Leader’s ideology—and sway over policy—is enshrined in Communist Party charter.

MarketWatch.com:

• Stock market would see ‘setback’ if Trump tax package fails, says BlackRock’s Fink.

Fox News:

• Republicans see tables turned as Dems face fresh Russia controversies. (video)
• Georgetown student group targeted as 'hate group' for Catholic beliefs, could be sanctioned.

CNBC:

• Home equity loans set to soar along with home prices. (video)
• Billionaire investor Cooperman sees 8 cheap stocks including Amazon(AMZN) and Wells Fargo(WFC).
• House Republicans aim to unveil tax bill on Nov. 1, source says. (video)
• Dow surges 190 points, hits record high after Caterpillar and 3M beat the Street. (video)
• Goldman(GS) says market not 'fully appreciating' what's sending copper higher, as it ups forecast.
• Leon Cooperman says market is fine, conditions for a big decline 'aren't present'. (video)
• McDonald's(MCD) plans delivery from 5,000 US restaurants by the end of 2017.
• Hedge-fund billionaire Cooperman fears US will move 'to the left' if Trump and GOP fail.

Zero Hedge:

• "Incompetent, Clueless" Corker Slams "Utterly Untruthful President" Trump Ahead Of Party-Unity Meeting.
• House Launches Probe Into Comey's Handling Of Clinton Email Investigation.
• Professor Claims Math, Algebra, And Geometry Promote "White Privilege".
• Overstock(OSTK) Shares Pop As Company Sets Date For ICO.
• UBS Slams "#FakeEconomics" As PMI Surveys Suggest Economy At 9-Month Highs. (graph)
• Trump To Annouce Tougher Caps, Vetting Rules For Refugees.
• How A Quant Hedge Fund Surpassed Renaissance And DE Shaw To Become A $50 Billion Behemoth. (graph)
• 10Y Treasury Yields Just Did Something Every Bond Bear Was Waiting For. (graph)
• Caterpillar(CAT) Soars 7% To All Time High After Smashing Earnings, Boosting Guidance.

Bear Radar

Style Underperformer:

• Mid-Cap Value +.1%

Sector Underperformers:

• 1) Computer Services -1.3% 2) Drugs -1.2% 3) REITs -.6%

Stocks Falling on Unusual Volume: 

• WHR, HNI, CVLT, LOGI, IONS, WMK, PCAR, OMER, IPG, EDU and VECO

Stocks With Unusual Put Option Activity:

• 1) MDXG 2) TSCO 3) PII 4) ETP 5) AMJ

Stocks With Most Negative News Mentions:

• 1) HNI 2) GWW 3) WASH 4) GE 5) PBF

Charts:

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