Bull Radar

Style Outperformer:

• Large-Cap Value -.1%

Sector Outperformers:

• 1) Pharma +.4% 2) Utilities +.1% 3) Homebuilding +.1%

Stocks Rising on Unusual Volume:

• CDW, ROAD, RPAY and TW

Stocks With Unusual Call Option Activity:

• 1) FDX 2) CLVS 3) APC 4) ADBE 5) LLY

Stocks With Most Positive News Mentions:

• 1) DE 2) CVGI 3) PLUG 4) GSBC 5) DUK

Charts:

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

Mid-Day Market Internals

NYSE Composite Index:

• Volume Running -16.6% Below 100-Day Average
• 4 Sectors Rising, 7 Sectors Declining
• 38.7% of Issues Advancing, 58.6% Declining
• 72 New 52-Week Highs, 9 New Lows
• 62.1% of Issues Above 200-day Moving Average
• Average 14-Day RSI 51.9%
• Vix 15.2 +5.2%
• Total Put/Call .99 +19.3%
• TRIN/Arms 2.11 +15.9%

Wednesday Watch

Night Trading 

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

• Asia Ex-Japan Investment Grade CDS Index 54.5 -1.5 basis points.

• China Sovereign CDS 39.25 +.5 basis point.

• Bloomberg Emerging Markets Currency Index  65.88 +.02%.
• FTSE 100 futures n/a.

• S&P 500 futures -.02%.

• NASDAQ 100 futures -.01%.

Morning Preview Links 

Earnings of Note 

Company/Estimate

Before the Open:

• (GIS)/.77

After the Close:

• (MLHR)/.78

Economic Releases

8:30 am EST

• Housing Starts for August are estimated to rise to 1250K versus 1191K in July.
• Building Permits for August are estimated to fall to 1300K versus 1336K in July.

10:30 am EST

• Bloomberg consensus estimates call for a weekly crude oil inventory decline of -2,534,750 barrels versus a -6,912,000 barrels the prior week. Gasoline supplies are estimated to fall by -569,330 barrels versus a -682,000 barrel decline the prior week. Distillate inventories are estimated to rise by +370,170 barrels versus a 2,704,000 barrel gain the prior week. Finally, Refinery Utilization is estimated to fall by -.34% versus a +.3% gain the prior week.
  

2:00 pm EST

• The FOMC is expected to lower the benchmark Fed Funds Rate 25.0 basis points to 1.75-2.0%.
  

Upcoming Splits

• None of note

Other Potential Market Movers

• The FOMC's press conference, UK PPI report, Eurozone CPI report, weekly MBA Mortgage Applications report, DA Davidson Industrials/Services Conference, (PPC) analyst day and the (CRM) investor meeting could also impact trading today.

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

Stocks Slightly Higher into Final Hour on US Economic Data, Diminished Geopolitical Fears, Technical Buying, Metals&Mining/Restaurant Sector Strength

 Broad Equity Market Tone:

• Advance/Decline Line: Modestly Lower
  

• Sector Performance: Mixed
  

• Volume: Around Average

• Market Leading Stocks: Performing In Line

Equity Investor Angst:

• Volatility(VIX) 14.6 -.7%

• Euro/Yen Carry Return Index 124.30 +.62%

• Emerging Markets Currency Volatility(VXY) 8.24 +1.48%

• S&P 500 Implied Correlation 37.2 +2.6%

• ISE Sentiment Index 89.0 unch.
  

• Total Put/Call .76 -36.1%

• NYSE Arms 1.78 +114.4%

Credit Investor Angst:

• North American Investment Grade CDS Index 51.74 +1.75%
  

• America Energy Sector High-Yield CDS Index 357.0 -7.39%

• European Financial Sector CDS Index 58.54 +3.11%

• Italian/German 10Y Yld Spread 139.5 +7.25 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 55.10 -1.15%
  

• Emerging Market CDS Index 205.20 +.74%
  

• iBoxx Offshore RMB China Corporate High Yield Index 165.49 -.04%

• 2-Year Swap Spread -1.75 -3.5 basis points

• TED Spread 15.25 -.75 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -8.75 +6.0 basis points

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 65.87 -.07%
• 3-Month T-Bill Yield 1.98% -1.0 basis point

• Yield Curve .08 -2.0 basis points

• China Iron Ore Spot 93.27 USD/Metric Tonne -1.04%

• Citi US Economic Surprise Index 26.10 +7.5 points

• Citi Eurozone Economic Surprise Index -26.10 +7.8 points

• Citi Emerging Markets Economic Surprise Index -8.4 +.6 point

• 10-Year TIPS Spread 1.66 -2.0 basis points
• 100.0% chance of Fed rate cut at Oct. 30th meeting, 100.0% chance of cut at Dec. 11th meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating -126 open in Japan 
• China A50 Futures: Indicating +38 open in China

• DAX Futures: Indicating +9 open in Germany

Portfolio:

• Slightly Higher: On gains in my medical/tech sector longs and index hedges

• Disclosed Trades: None

• Market Exposure: 75% Net Long

Morning Market Internals

NYSE Composite Index:

• Volume Running +16.3% Above 100-Day Average
• 7 Sectors Rising, 4 Sectors Declining
• 43.1% of Issues Advancing, 54.1% Declining
• 41 New 52-Week Highs, 5 New Lows
• 63.2% of Issues Above 200-day Moving Average
• Average 14-Day RSI 52.4%
• Vix 14.7 +.1%
• Total Put/Call .71 -40.3%
• TRIN/Arms 1.60 +92.8%

Tuesday Watch

Evening Headlines

Bloomberg: 

• Trump Says U.S., Japan Reach Initial Agreement on Tariffs.

• Asia Stocks Set for Muted Open; Treasuries Climb. Asian stocks look set for a muted open Tuesday as investors assessed heightened geopolitical risks in the aftermath of the strike on Saudi Arabia’s crude production that sent oil prices soaring. Treasuries advanced. Futures pointed to modest losses in Australia and Hong Kong, while traders in Japan return after a holiday Monday. U.S. stocks slipped. Oil pulled back slightly in early Asian trading after a 15% jump the previous session. The dollar maintained gains against peers. Saudi Aramco now faces weeks or months before the majority of output is restored at the giant Abqaiq processing plant. Futures on Australia’s S&P/ASX 200 Index dipped 0.2%. Hong Kong’s Hang Seng Index futures were down 0.2%. Futures on the S&P 500 ticked higher 0.1% as of 7:53 a.m. in Tokyo. The S&P 500 Index fell 0.3%.  

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

• Chevron Can Resume Saudi-Kuwait Oil Field Quickly If Needed: CEO.

• Wall Street May Get $40 Billion Reprieve From Trump Regulators.

• Disrepair of U.S. Oil Reserve May Hamper Its Value in a Crisis.

Wall Street Journal:   

• U.S. Tells Saudi Arabia Iran Launched Oil Attacks .

• Amazon Changed Search Algorithm in Ways That Boost Its Own Products.

• UAW Strike Could Cost GM $100 Million a Day.

• The Assault on the Supreme Court.

• Antitrust Enforcers Signal Discord Over Probes of Big Tech.

• China’s Economy Aches All Over as Beijing Seeks Trade Fix With the U.S.

Fox News:

• Kavanaugh attacks see top Republicans lash out; McConnell claims 'this is not normal'.

• California adds this state to 'travel ban' over refusal to fund gender transitions.

CNBC:

• Trump says he’s in no rush to respond to the attacks on Saudi oil facilities

• Expectations suddenly are rising that the Fed might not cut interest rates this week.

• Investigation finds illegal synthetic marijuana in vape and edible products sold as CBD.

• Jim Cramer explains how the market was able to virtually shrug off a major oil shock.

Zero Hedge:

• Something Just Snapped: Chaos Hits Repo Market As "Dollar Funding Storm" Makes Thunderous Landfall.

• Explosion Hits Russia's Largest Virus Lab Which Houses Plague, Smallpox, Ebola And Other Deadly Viruses.

• WeWork IPO To Be Delayed Until October "At Earliest" As Roadshow Halted.

• DOJ Sued For Docs On FBI/CIA Informant Who Spearheaded Trump Tower Moscow Scheme.

• What Does The Threat Of Middle East War Mean For The Fed's Decision.

• Deescalation: Trump Doesn't Want "War With Anyone", Wants "Definitive Proof" Iran Behind Attacks.

• Oilmageddon: Surveying The Aftermath.

Business Insider: 

• College is more expensive than ever, but 'almost no one' is paying sticker price.

Night Trading 

• Asian equity indices are -.25% to +.5% on average.

• Asia Ex-Japan Investment Grade CDS Index 56.0 +.5 basis point.

• China Sovereign CDS 38.75 +1.0 basis point.

• Bloomberg Emerging Markets Currency Index  65.92 +.01%.

• FTSE 100 futures n/a.

• S&P 500 futures +.13%.

• NASDAQ 100 futures +.14%.

Morning Preview Links 

Earnings of Note 
Company/Estimate

Before the Open:

• (APOG)/.65

• (CBRL)/2.49

After the Close:

• (ADBE)/1.97

• (CHWY)/-.10

• (FDX)/3.17

Economic Releases
9:15 am EST

• Industrial Production MoM for August is estimated to rise +.2% versus a -.2% decline in July.

• Manufacturing Production MoM for August is estimated to rise +.2% versus a -.4% decline in July.

• Capacity Utilization is estimated to rise to 77.6% versus 77.5% in July.

10:00 am EST

• The NAHB Housing Market Index for Sept. is estimated at 66.0 versus 66.0 in August.
  

4:00 pm EST

• Net Long-Term TIC Flows for July.
  

Upcoming Splits

• None of note

Other Potential Market Movers

• The German ZEW index, weekly US retail sales reports, BofA Merrill Healthcare Conference, Goldman Sachs Communacopia Conference, BMO Real Estate Conference, (CACI) investor day, (MAS) investor day, (BRKS) Investor Day, (VMC) Aggregates Day and the (KLAC) investor day could also impact trading today.

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