Bear Radar

Style Underperformer:

• Mid-Cap Growth +.1%

Sector Underperformers:

• 1) Tobacco -1.0% 2) Disk Drives -.8% 3) Gaming -.6%

Stocks Falling on Unusual Volume: 

• X, FBM, FNKO, SCPL, LE, STX, EIDX, CGC, GRUB, ZS, UNFI, AAWW, CRON and NCR

Stocks With Unusual Put Option Activity:

• 1) CAG 2) CELG 3) FSLR 4) KKR 5) M

Stocks With Most Negative News Mentions:

• 1) X 2) SCPL 3) MNK 4) GRUB 5) CHKP

Charts:

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

Bull Radar

Style Outperformer:

• Small-Cap Growth +.6%

Sector Outperformers:

• 1) Gold & Silver +1.9% 2) Alt Energy +1.6% 3) Software +1.1%

Stocks Rising on Unusual Volume:

• MLHR, CBPO, GSHD, STNE, TIGO, LGND and NAV

Stocks With Unusual Call Option Activity:

• 1) CDEV 2) CL 3) MDR 4) MS 5)EXPE

Stocks With Most Positive News Mentions:

• 1) EROS 2) MLHR 3) LCTX 4) I 5) DGLY

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running -5.4% Below 100-Day Average
• 10 Sectors Rising, 1 Sector Declining
• 67.8% of Issues Advancing, 29.3% Declining
• 78 New 52-Week Highs, 5 New Lows
• 61.2% of Issues Above 200-day Moving Average
• Average 14-Day RSI 51.1%
• Vix 13.6 -2.7%
• Total Put/Call 1.13 +11.9%
• TRIN/Arms 1.66 +16.0%

Thursday Watch

Evening Headlines

Bloomberg: 

• The Political Will to Avert a No-Deal Brexit Is Ebbing Fast.

• Trump Seeks New Iran Sanctions as Pompeo Consults Saudi Arabia.

• Asia Stocks to Start Mixed; Dollar Climbs on Fed. Stocks in Asia looked set for a mixed start as Federal Reserve policy makers cast doubt on the need for further easing. The dollar advanced. Equity futures in Japan and Australia pointed higher while Hong Kong contracts slipped. The S&P 500 ended the day flat after wiping out earlier losses and short-dated Treasuries fell as the lack of Fed unity implied the central bank may hold off after lowering their main interest rate for a second time this year. Futures on the S&P 500 Index were flat as of 8 a.m. in Tokyo. The underlying measure closed was little changed. Futures on Japan’s Nikkei 225 rose 0.5%. Hang Seng futures earlier fell 0.4%. Futures on Australia’s S&P/ASX 200 Index rose 0.1%.  

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

• Powell Stresses Solid U.S. Outlook After Fed Cuts Rates Again.

• Bond Traders Are Still Leaning Toward Another 2019 Fed Rate Cut. 

• Jittery Repo Market Has Calmed, But Fed Plans to Intervene Again.

• Short-Term Spending Agreement Reached to Avert Oct. 1 Shutdown.

Wall Street Journal:

• Trump Steers Clear of War Footing Toward Iran.

• AT&T Considering Split With DirecTV.

• The Democrats’ Stoning of Brett Kavanaugh.

• Index Funds Are the New Kings of Wall Street.

• Netanyahu Facing Uphill Battle After Israel Vote.

• U.S. Abortion Rate Drops to Lowest Level Since 1973.

Fox News:

• Biden drops to new low in 2020 Dem primary race, Fox News Poll reveals.

MarketWatch.com:   

• Opinion: Five stocks to consider buying as the industrial sector stages a rebound.

• This state is home to nearly half of all people living on the streets in the U.S.

• Here’s how Beyond Meat can lose the lead in the plant-based meat category to Tyson.

CNBC:

• CBS, WarnerMedia, Viacom drop all e-cigarette advertising, including from market leader Juul.

• Fed approves quarter-point rate cut but is divided on further action this year.

• FAA chief says he won’t certify the Boeing 737 Max until he flies the plane himself.

Zero Hedge:

• Bank Stocks Bounce Hard On QE4 Hints But Bonds & Bullion Rebuff Powell Promise.

• DOJ Sued For Records Of FBI Agent Who Helped Circulate Steele Dossier.

• NY Fed Announces Third Consecutive Repo Operation On Thursday At 8:15am.

• Microsoft Announces $40 Billion Buyback, Remains Biggest Market Cap Company In The World.

• US Navy Admits Leaked 'UFO Tapes' Are Real And Should Never Have Been Released.

• Powell Confirms QE4 Is Coming, Just Not Today.

• Bonds, Stocks, & Bullion Battered As Powell Shrugs Off Liquidity Crisis.

• Outraged Trump Slams "Terrible Communicator" Powell: "He Failed Again".

Business Insider: 

• WeWork CEO Adam Neumann reportedly smoked weed with friends on a private jet to Israel — and the flight crew later found a 'sizable chunk' in a cereal box and recalled the plane.

Night Trading 

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

• Asia Ex-Japan Investment Grade CDS Index 54.0 -.5 basis point.

• China Sovereign CDS 38.25 -1.0 basis point.

• Bloomberg Emerging Markets Currency Index  65.86 -.01%.

• FTSE 100 futures n/a.

• S&P 500 futures -.06%.

• NASDAQ 100 futures -.13%.

Morning Preview Links 

Earnings of Note 
Company/Estimate

Before the Open:

• (DRI)/1.36

After the Close:

• (SCHL)/-1.80

• (scs)/.43

Economic Releases
8:30 am EST

• The 2Q Current Account Balance is estimated at -$127.4B versus -$130.4B in 1Q.

• The Philly Fed Business Outlook Index for September is estimated to fall to 10.5 versus 16.8 in August. 

• Initial Jobless Claims for last week are estimated to rise to 213K versus 204K the prior week.

• Continuing Claims are estimated to rise to 1672K versus 1670K prior.

10:00 am EST

• The Leading Index for August is estimated to fall -.1% versus a +.5% gain in July.

• Existing Home Sales for August is estimated to fall to 5.38M versus 5.42M in July.
  

Upcoming Splits

• None of note

Other Potential Market Movers

• The deputy level trade talks between US/China begin, BofE meeting, weekly Bloomberg Consumer Comfort Index, Bloomberg US Economic Expectations Index for Sept., weekly EIA natural gas inventory report, Citi Growth Conference, (ORCL) financial analyst meeting, (POOL) investor day and the (STX) analyst meeting could also impact trading today.

BOTTOM LINE: Asian indices are mostly 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 100% net long heading into the day.

Stocks Reversing Slightly Higher into Final Hour on US Economic Optimism, FOMC Commentary, Short-Covering, Financial/Homebuilding Sector Strength

 Broad Equity Market Tone:

• Advance/Decline Line: Lower
  

• Sector Performance: Most Sectors Declining
  

• Volume: Around Average

• Market Leading Stocks: Performing In Line

Equity Investor Angst:

• Volatility(VIX) 15.1 +4.5%

• Euro/Yen Carry Return Index 124.10 -.14%

• Emerging Markets Currency Volatility(VXY) 8.23 +.61%

• S&P 500 Implied Correlation 37.82 +3.99%

• ISE Sentiment Index 89.0 unch.
  

• Total Put/Call 1.03 +24.1%

• NYSE Arms 1.90 +4.4%

Credit Investor Angst:

• North American Investment Grade CDS Index 51.89 +.97%
  

• America Energy Sector High-Yield CDS Index 369.0 +2.39%

• European Financial Sector CDS Index 57.75 -1.35%

• Italian/German 10Y Yld Spread 138.5 -1.0 basis point
  

• Asia Ex-Japan Investment Grade CDS Index 54.05 -1.45%
  

• Emerging Market CDS Index 203.53 -.72%
  

• iBoxx Offshore RMB China Corporate High Yield Index 165.63 +.08%

• 2-Year Swap Spread -3.25 -1.5 basis points

• TED Spread 21.0 +5.75 basis points

• 3-Month EUR/USD Cross-Currency Basis Swap -11.0 -2.25 basis points

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 65.81 -.09%
• 3-Month T-Bill Yield 1.94% -4.0 basis points

• Yield Curve .08 unch.

• China Iron Ore Spot 91.75 USD/Metric Tonne -.73%

• Citi US Economic Surprise Index 38.80 +12.7 points

• Citi Eurozone Economic Surprise Index -27.70 -1.6 points

• Citi Emerging Markets Economic Surprise Index -8.6 -.2 point

• 10-Year TIPS Spread 1.60 -6.0 basis points
• 64.0% chance of Fed rate cut at Dec. 11th meeting, 79.7% chance of cut at Jan. 29th meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating -48 open in Japan 
• China A50 Futures: Indicating -44 open in China

• DAX Futures: Indicating +10 open in Germany

Portfolio:

• Slightly Lower: On losses in my retail/tech sector longs

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

• Market Exposure: Moved to 100% Net Long

Bear Radar

Style Underperformer:

• Small-Cap Growth -1.3%

Sector Underperformers:

• 1) Gold & Silver -2.6% 2) Oil Service -1.9% 3) Steel -1.8%

Stocks Falling on Unusual Volume: 

• PTCT, ADBE, FDX, ACAD, APA, CHNG, OSTK, CHWY, PTCT and ROKU

Stocks With Unusual Put Option Activity:

• 1) APA 2) FDX 3) CLVS 4) CAG 5) AIG

Stocks With Most Negative News Mentions:

• 1) ROKU 2) ALXN 3) NPTN 4) REAL 5)FTCN

Charts:

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