Bull Radar

Style Outperformer:

• Large-Cap Value -.8%

Sector Outperformers:

• 1) Utilities +2.5% 2) REITs +1.3% 3) Foods +.4%

Stocks Rising on Unusual Volume:

• LRN, CMTA, LAD, BCO, TUP, VAR, USNA, PS, APH, MKTX, OHI, TMO, GRA, CVTI, MLM, RUSHA, PG, GMLP, XRX, BA, WTR, VZ, MLI, MHO, DTE, JNPR and BXMT

Stocks With Unusual Call Option Activity:

• 1) NYT 2) DXC 3) LQD 4) XHB 5) RH

Stocks With Most Positive News Mentions:

• 1) LRN 2) TUP 3) DDD 4) DTE 5) LAD

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running +14.5% Above 100-Day Average
• 7 Sectors Rising, 4 Sectors Declining
• 47.5% of Issues Advancing, 49.7% Declining
• 7 New 52-Week Highs, 122 New Lows
• 26.7% of Issues Above 200-day Moving Average
• Average 14-Day RSI 36.6%
• Vix 21.5 +3.9%
• Total Put/Call .99 -4.8%
• TRIN/Arms 1.69 +88.8%

Wednesday Watch

Evening Headlines

Bloomberg:        

• One of China's Biggest Asset Managers Prepares to Dump Stocks.

• Trump Defers to Congress on U.S. Response to Khashoggi Killing. 

• Asia Stocks Look Mixed as Late U.S. Rally Falters. Asian stocks headed for a mixed start to trading Wednesday as worries about future earnings revived by Caterpillar Inc. dragged U.S. equities lower, offsetting a late-in-the-day revival of risk appetite. Treasuries climbed with the yen and gold. An afternoon rally in the S&P 500 Index helped buoy futures for Japan and China equities, indicating the two-biggest Asian markets may eke out gains at the open, while Hong Kong futures pointed to a lower start. Australian shares were flat. Treasuries led gains in safe-haven assets, though 10-year yields did pare losses into the close. Oil maintained losses after tumbling more than 4 percent on a pledge by Saudi Arabia to meet any supply shortfall that materializes from Iranian sanctions. The dollar was lower against most major peers. Futures on Japan’s Nikkei 225 added 1 percent in Singapore trading. FTSE China A50 Index futures advanced 0.8 percent. Australia’s S&P/ASX 200 Index added less than 0.1 percent. Futures on Hong Kong’s Hang Seng Index fell 0.3 percent. S&P 500 futures lost 0.1 percent.    

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

• Oil Tumbles 5% After Saudis Pledge to Produce as Much as They Can.

• Semis Set for More Pain After Texas Instruments Warns on Demand.

Wall St. Journal:

• Stocks’ Wild Swings Rattle Investors. 

• Another Migrant Caravan Gathers in Guatemala. 

• Manufacturers See Signs of New Risks.

MarketWatch.com:

• China investors fear too much stock is being used as collateral, a big market drag.

• China’s stock selloff could wreak a lot more havoc before it’s over: Merrill Lynch.

CNBC:         

• The fear gauge and strong earnings tell Jim Cramer this bottom in the stock market may be real.

• Target's(TGT) battle plan for the holidays: Free two-day shipping, more staff and toys.  

• Texas Instruments(TXN) falls after posting revenue miss, disappointing outlook.

• E-cigarette maker Juul boosts lobbying spend by 452% amid regulatory crackdown.

• Stocks making the biggest moves after hours: Texas Instruments, iRobot, Barnes & Noble and more.

Zero Hedge: 

• New Migrant Caravan Forms; Former Trump Campaign Adviser Calls "Political Gift" Before Midterms.

• "Shorting Bond Vol Is Now A Dangerous Game": Here's How One Trader Is Going Long.

• Category 3 Hurricane Willa Makes Landfall In Mexico Tonight - 500,000 Tourists In Path.

• Rates Of STDs Rise Sharply: "We Are Sliding Backward".

• The New Social Media: Alternatives To Facebook, YouTube, Twitter, And Other Big Tech Platforms.

• Brady: Trump's 10% Tax Cut To Be Advanced Only If Republicans Retain Control Of House.

• Obama Calls Trump "Tin-Pot Dictator", Takes Credit For "Economic Miracles".

• "Worst Coverup Ever": Trump Blasts Saudis Over Khashoggi Murder; US To Revoke Visas.

• WTI Slumps Back To A $65 Handle After Huge Crude Build.

• US Plunge Protection Team Rescues Market As Global Stocks Turn Red For 2018.

Night Trading 

• Asian equity indices are -.25% to +.50% on average.

• Asia Ex-Japan Investment Grade CDS Index 89.50 +1.5 basis points. 

• Asia Pacific Sovereign CDS Index 10.0 +.25 basis point.

• Bloomberg Emerging Markets Currency Index 66.82 -.01%.

• FTSE 100 futures +.56%.

• S&P 500 futures -.15%.

• NASDAQ 100 futures -.22%.

Morning Preview Links

Earnings of Note
Company/Estimate
Before the Open:

• (ALXN)/1.75

• (AB)/.63

• (T)/.95

• (BA)/3.47

• (BSX)/.34

• (FCX)/.32

• (GD)/2.77

• (HLT)/.76

• (ITW)/1.88

• (IR)/1.71

• (LH)/2.89

• (NSC)/2.44

• (NOC)/4.36

• (OC)/1.66

• (SCHN)/.95

• (TUP)/.82

• (UPS)/1.82

After the Close:

• (AMD)/.13

• (AFL)/.99

• (ABX)/.06

• (ETH)/.33

• (FFIV)/2.63

• (F)/.28

• (KNX)/.58

• (LSTR)/1.60

• (LVS)/.81

• (MSFT)/.96

• (ORLY)/4.30

• (RJF)/1.81

• (TSLA)/-.10

• (V)/1.20

• (WHR)/3.77

• (XLNX)/.76

Economic Releases

9:00 am EST

• The FHFA House Price Index MoM for August is estimated to rise +.3% versus a +.2% gain in September.
  

9:45 am EST

• The Preliminary Markit US Manufacturing PMI for October is estimated to fall to 55.3 versus 55.6 in September.

• The Preliminary Markit US Services PMI for October is estimated to rise to 54.0 versus 53.5 in September.
  

10:00 am EST

• New Home Sales for September is estimated to fall to 625K versus 629K in August.

10:30 am EST

• Bloomberg consensus estimates call for a weekly crude oil inventory gain of +3,522,920 barrels versus a +6,490,000 barrel gain the prior week. Gasoline supplies are estimated to fall by -1,424,750 barrels versus a -2,016,000 barrel decline the prior week. Distillate inventories are estimated to fall by -1,681,830 barrels versus a -827,000 barrel decline the prior week. Finally, Refinery Utilization is estimated to rise by +.09% versus unch. prior.

2:00 pm EST

• US Fed's Beige Book report. 

Upcoming Splits

• None of note

Other Potential Market Movers

• The Fed's Bostic speaking, Fed's Bullard speaking, Fed's Mester speaking, Eurozone PMI report, $39B 5Y T-Note auction, weekly MBA Mortgage and the (HPE) analyst meeting could also impact trading today.

BOTTOM LINE:  Asian indices are are mostly higher, boosted by consumer and industrial shares in the region. I expect US stocks to open modestly lower and to rally into the afternoon, finishing mixed.  The Portfolio is 50% net long heading into the day.

Stocks Lower into Final Hour on Fed Rate-Hike Fears, Global Growth Worries, Earnings Jitters, Commodity/Transport 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) 20.5 +4.5%

• Euro/Yen Carry Return Index 134.14 -.26%

• Emerging Markets Currency Volatility(VXY) 9.97 +2.26%

• S&P 500 Implied Correlation 42.01 +1.0%

• ISE Sentiment Index 80.0 -10.11%
  

• Total Put/Call 1.09 +2.8%

• NYSE Arms .85 -35.1%

Credit Investor Angst:

• North American Investment Grade CDS Index 67.89 +.02%
  

• America Energy Sector High-Yield CDS Index 431.0 +2.48%

• European Financial Sector CDS Index 95.98 +5.32%

• Italian/German 10Y Yld Spread 318.25 +14.0 basis points
  

• Asia Pacific Sovereign Debt CDS Index 10.05 +2.45%

• Emerging Market CDS Index 202.22 -.13%
  

• iBoxx Offshore RMB China Corporate High Yield Index 150.09 -.15%

• 2-Year Swap Spread 20.0 +.5 basis point

• TED Spread 17.5 +.25 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -42.25 +.75 basis point

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 66.84 -.21%
• 3-Month T-Bill Yield 2.33%+3.0 basis points

• Yield Curve 29.5 +1.0 basis point

• China Iron Ore Spot 71.37 USD/Metric Tonne -.24%

• Citi US Economic Surprise Index -.2 +.3 point

• Citi Eurozone Economic Surprise Index -27.8 +.4 point

• Citi Emerging Markets Economic Surprise Index -3.4 +1.0 point

• 10-Year TIPS Spread 2.09 -2.0 basis points
• 76.6% chance of Fed rate hike at Dec. 19th meeting, 77.4% chance at Jan. 30th meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating +170 open in Japan 
• China A50 Futures: Indicating +86 open in China

• DAX Futures: Indicating +135 open in Germany

Portfolio: 

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

• Disclosed Trades: None

• Market Exposure: 50% Net Long