Bull Radar

Style Outperformer:

• Mid-Cap Growth +.3%

Sector Outperformers:

• 1) Paper +2.5% 2) Steel +1.7% 3) Homebuilders +1.3%

Stocks Rising on Unusual Volume:

• PRQR, VRA, DRNA, COUP, CRON, TSRO, SYBX, GME, AMD, DLTH, VCEL, HQY, DTV, TALO, MBUU, AGIO, AOI, PRFT, MNTA, HABT, LOCO, PII, ALE and ASIX

Stocks With Unusual Call Option Activity:

• 1) NRG 2) MNKD 3) DISH 4) STI 5) TSRO

Stocks With Most Positive News Mentions:

• 1) COUP 2) MNKD 3) VRA 4) CAT 5) HQY

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running +1.1% Above 100-Day Average
• 5 Sectors Rising, 6 Sectors Declining
• 35.5% of Issues Advancing, 60.4% Declining
• 53 New 52-Week Highs, 71 New Lows
• 53.1% of Issues Above 200-day Moving Average
• Average 14-Day RSI 48.4%
• Vix 14.0 +6.6%
• Total Put/Call .95 +13.1%
• TRIN/Arms 1.21 +7.1%

Wednesday Watch

Evening Headlines

Bloomberg:       

• Contagion or Not, These Emerging Markets Hold Key to Selloff.

• Rupee Woes Set to Deepen as India Braces for External Headwinds.

• Google(GOOGL) Heads Into Showdown With Congress After Witness Is Rejected.

• Asia Stocks Face Drop Amid EM Turmoil, Dollar Gain. Asian stocks were set for declines after the dollar strengthened and U.S. equities slipped amid continued pressure for many emerging markets and as trade tensions persisted. Futures on equity indexes fell in Japan, China, Hong Kong and Australia. The dollar climbed though some of its advance was pared following robust U.S. economic data which also pushed Treasury yields higher. Emerging-market currencies headed for the lowest close this year. Oil climbed as a storm threatened U.S. production on the Gulf Coast. Futures on Japan’s Nikkei 225 slid 0.3 percent in Singapore. Futures on Australia’s S&P/ASX 200 Index lost 0.3 percent. FTSE China A50 Index futures sank 0.4 percent. Futures on Hong Kong’s Hang Seng fell 0.9 percent.

• Five Things You Need to Know to Start Your Day.

Wall Street Journal:

• U.S., Canada Face Tough Issues as They Resume Nafta Talks.

• Sheryl Sandberg’s New Job Is to Fix Facebook’s Reputation—and Her Own.

• See the House Seats in Play for the Midterms.

• U.S. Factory Sector Clocks Strongest Growth in 14 Years.

• Ten Years After Crisis, Central Banks Are at a Crossroads.

• Chicago Mayor Won’t Seek Re-Election.

MarketWatch.com:

• Key contrarian indicator falls to 9-month low as stock investors grapple with higher global risk.

• AMD(AMD) stock rallies for best day since Epyc, Radeon unveilings; closes at new 12-year high.

• Why stock investors shouldn’t fear the historically weak month of September this year.  
  

• Forget the September stock slump and brace for the market’s ‘best 9-month stretch’. 

• Ed Yardeni: The surprising reasons why Trump’s trade wars will boost U.S. jobs — and stocks.

Fox News:

• NFL reacts after Nike's Kaepernick deal triggers firestorm of support and police backlash.

CNBC: 

• After-hours buzz: RH, CAL & more.

• How Amazon gets to $2 trillion.

• Nike(NKE) shares fall as backlash erupts over new ad campaign featuring Colin Kaepernick. 

• Justin Trudeau indicates he will not bend on key NAFTA demands at talks.

• Workday(WDAY) shares drop even though earnings and revenue top estimates.

• Scientists just made stunning progress in 'rewiring' bacteria to fight disease.

Zero Hedge:

• No Fracking Way: Debt-Laden Shale Producers May Unleash The Next Financial Crisis.

• Google(GOOGL) Notifies Users Of Court-Ordered Data Demands In Secret FBI Investigation.

• Massive Tesla Expose Reveals "Chaos" For Workers While Musk Does "Whatever He Wants".

• Average US Rent Hits All Time High Of $1,412; Biggest Increase In 18 Months.

• Mueller Will Accept Written Answers From Trump On Russian Collusion.

• Chinese Billionaire's Arrest Connected To Suspected Rape.

• Obamacare Requirement Blamed For Doctor Burnout.

• Trump Says Nike(NKE) Sent "Terrible Message" As NFL Backs Kaepernick.

• 5 Things To Know About McCain's Senate Replacement, Jon Kyl.

• GM Sales Plunge 13% As August Passenger Car Sales Collapse.

• Chaos Erupts During Kavanaugh Hearing After Hecklers Begin Shrieking, 22 Arrested.

• Kelly Says He Didn't Call Trump "Idiot", As White House Slams Woodward's "Fabricated Stories".

• India Joins China In Defying Trump, Will Allow Imports Of Iranian Oil.

• September Starts With A Swoon After Quietest August In Over 50 Years.

Night Trading 

• Asian equity indices are -.25% to unch. on average.

• Asia Ex-Japan Investment Grade CDS Index 84.25 +.25 basis point. 

• Asia Pacific Sovereign CDS Index 11.75 +1.0 basis point

• Bloomberg Emerging Markets Currency Index 64.95 unch.

• FTSE 100 futures -.07%.

• S&P 500 futures -.09%.

• NASDAQ 100 futures -.11%.

Morning Preview Links

Earnings of Note
Company/Estimate
Before the Open:

• (DLTH)/.14

• (HDS)/.96

• (VRA)/.16

After the Close:

• (AVAV)/.31

• (CLDR)/-.15

• (CTRP)/.20

• (CWK)/.56

• (OLLI)/.36

• (ZS)/-.05

Economic Releases 
8:30 am EST

• The Trade Deficit for July is estimated to widen to -$50.2B versus -$46.3B in June.

Upcoming Splits

• None of note

Other Potential Market Movers

• The Fed's Williams speaking, Fed's Kashkari speaking, Fed's Williams speaking, Fed's Bostic speaking, Eurozone Services PMI report, US weekly retail sales reports, weekly MBA Mortgage Applications report, (FB)/(GOOGL) testimonry to Senate, (TWTR) CEO testimony to House, (COST) August sales results, RBC Industrials Conference, Cowen Transport Conference, Goldman Retailing Conference, Keefe Bruyette Woods Insurance Conference, Citi Biotech Conference, Citi Tech Conference, Raymond James Bank Conference, Robert W. Baird Healthcare Conference, UBS Chemical/Paper/Packaging Conference, Wells Fargo Healthcare Conference, (SQM) investor day and the Barclays Consumer Staples Conference could also impact trading today.

BOTTOM LINE:  Asian indices are slightly lower, weighed down by commodity and consumer 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 Modestly Lower into Final Hour on Trade War Fears, Emerging Market Currency/Debt Angst, Oil Decline, Commodity/Gaming Sector Weakness

 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) 13.4 +4.0%

• Euro/Yen Carry Return Index 134.30 +.01%

• Emerging Markets Currency Volatility(VXY) 12.90 +2.3%

• S&P 500 Implied Correlation 20.59 +1.30%

• ISE Sentiment Index 110.0 +22.2%
  

• Total Put/Call .79 -23.3%

• NYSE Arms 1.23 +4.2%

Credit Investor Angst:

• North American Investment Grade CDS Index 60.51 +.78%
  

• America Energy Sector High-Yield CDS Index 413.0 -.62%

• European Financial Sector CDS Index 81.12 -3.44%

• Italian/German 10Y Yld Spread 266.0 -5.0 basis points
  

• Asia Pacific Sovereign Debt CDS Index 11.68 +7.55%

• Emerging Market CDS Index 244.35 +3.62%
  

• iBoxx Offshore RMB China Corporate High Yield Index 150.96 +.04%

• 2-Year Swap Spread 19.25 +.75 basis point

• TED Spread 20.75 -2.5 basis points

• 3-Month EUR/USD Cross-Currency Basis Swap -13.0 unch.

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 64.94 -.70%
• 3-Month T-Bill Yield 2.11% -2.0 basis points

• Yield Curve 24.5 2.75 basis points

• China Iron Ore Spot 66.30 USD/Metric Tonne -.3%

• Citi US Economic Surprise Index -5.90 +11.8 points

• Citi Eurozone Economic Surprise Index 5.30 +3.9 points

• Citi Emerging Markets Economic Surprise Index -8.0 unch.

• 10-Year TIPS Spread 2.10 unch.
  
• 96.4% chance of Fed rate hike at Nov. 8th meeting, 98.8% chance at Dec. 19th meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating +10 open in Japan 
• China A50 Futures: Indicating -65 open in China

• DAX Futures: Indicating +2 open in Germany

Portfolio: 

• Higher: On gains in my retail sector longs and emerging market shorts

• Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges

• Market Exposure: Moved to 100% Net Long

Bear Radar

Style Underperformer:

• Small-Cap Value -.5%

Sector Underperformers:

• 1) Gold & Silver -4.3% 2) Steel -2.7% 3) Gaming -2.2%

Stocks Falling on Unusual Volume: 

• CONN, RIG, ATTU, STX, JD, GGAL, AAOI, RH, BMA and WDC

Stocks With Unusual Put Option Activity:

• 1) NKE 2) TGTX 3) CBL 4) FTV 5) AOBC

Stocks With Most Negative News Mentions:

• 1) WDC 2) STX 3) UEIC 4) WYNN 5) MGM

Charts:

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