Mid-Day Market Internals

NYSE Composite Index:

• Volume Running +7.0% Above 100-Day Average
• 6 Sectors Rising, 5 Sectors Declining
• 41.6% of Issues Advancing, 55.2% Declining
• 32 New 52-Week Highs, 96 New Lows
• 49.7% of Issues Above 200-day Moving Average
• Average 14-Day RSI 41.8%
• Vix 19.8 -3.8%
• Total Put/Call 1.43 +12.6%
• TRIN/Arms .89 -44.7%

Thursday Watch

Evening Headlines

Bloomberg:           

• Police Call for Hong Kong Curfew as Shooting of Protester Sparks Fury.

• U.S. to Put Tariffs on Europe Planes, Whiskies After WTO Ruling. 

• Stocks Slide, Bonds Rise as Slowdown Fears Grow. Asian stocks declined after a fall in U.S. equities following disappointing American data that increased concerns about a global slowdown. Treasuries ticked higher. Japan’s Topix index dropped 1.7% at the open, with Australian shares also lower. Stock markets in China and South Korea are closed. Earlier, the S&P 500 suffered its first back-to-back drops of more than 1% this year as private payrolls fell short of estimates a day after a manufacturing gauge slumped to the lowest in a decade. The hiring numbers pushed the 10-year Treasury yield lower to 1.59%. Gold traded above $1,500 an ounce. Japan’s Topix lost 1.8% as of 9:03 a.m. in Tokyo. Futures on the S&P 500 Index added 0.2%. The underlying gauge fell 1.8% on Wednesday. Australia’s S&P/ASX 200 Index lost 0.8%.  

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

• U.S. to Put Tariffs on EU, Jokowi Vows Reform: Eco Day.  

• Oil Extends Decline on Rising U.S. Stockpiles and Slowdown Fears.

• Jeep Dealer’s $50,000 Sticker Shock Captures Auto Sales Stress.  

• Slumping Data May Force Powell to Move to Third Cut.

Wall Street Journal:

• Democrats Lost in Ukrainia.

• The Whistleblower Executive.

• FanDuel Owner Buys PokerStars in $6 Billion Deal.

• USA Swimming Faces Probe Into Sex-Abuse Claims, Business Practices.

Fox News:

• Ex-Ukraine prosecutor was told to drop probe of Biden-linked firm, files reveal.

• INGRAHAM: How deep are Schiff's Ukraine ties, and where's the media?

MarketWatch.com:     

• Here are the 25 S&P 500 stocks that ended higher on Wall Street’s worst day in 6 weeks.

CNBC:

• ‘Toxic chemical fumes,’ not oils, may be causing vaping illness, Mayo Clinic researchers find. “It seems to be some kind of direct chemical injury, similar to what one might see with exposures to toxic chemical fumes, poisonous gases and toxic agents,” said Dr. Brandon Larsen, a surgical pathologist at Mayo Clinic Arizona and a lead author of the study. “Based on what we have seen in our study, we suspect that most cases involve chemical contaminants, toxic byproducts or other noxious agents within vape liquids.”

• Trump administration to slap tariffs on EU aircraft and agricultural products.

• Bed Bath & Beyond(BBBY) boosts store closure estimates, says 60 stores may close by end of 2019.

• Kroger(KR) to lay off hundreds, as questions about its turnaround plan linger.

• Stocks making the biggest moves after hours: Tesla, Bed Bath & Beyond, GoPro and more.

Zero Hedge:

• Schiff And NYT Do Damage Control Over Sneak Peek At CIA Whistleblower Complaint; Trump Says Schiff Wrote It.

• Red-State Democrats Worry Impeachment Will Backfire.

• US To Slap Tariffs On European Airplanes, Cheese, Wine, Scotch And Coffee.

• "The Press Has Gone Crazy": Trump Mocks NYT Report That He Wanted 'Moat Stuffed With Alligators'.

• Solomon Hits Back With Receipts After MSM Denies DNC-Ukraine Collusion Attempt In 2016.

• Another Narrative Collapse: Eating Meat Is Not Ritualistic Suicide.

• Tesla Stock Tumbles After Disappointing Q3 Deliveries.

• Markets 'Feel The Bern' As Global Growth Scare Accelerates. 

Night Trading 

• Asian equity indices are -2.0% to -1.0% on average.

• Asia Ex-Japan Investment Grade CDS Index 79.75 +2.75 basis points.

• China Sovereign CDS 50.0 +1.0 basis point.

• Bloomberg Emerging Markets Currency Index  65.16 -.01%.

• FTSE 100 futures -.16%.

• S&P 500 futures +.27%.

• NASDAQ 100 futures +.25%.

Morning Preview Links 

Earnings of Note 
Company/Estimate

Before the Open:

• (ANGO)/.04

• (STZ)/2.62

• (PEP)/1.51

After the Close:

• (COST)/2.56

Economic Releases
7:30 am EST

• Challenger Job Cuts YoY report for Sept.

8:30 am EST

• Initial Jobless Claims for last week are estimated to rise to 215K versus 213K the prior week.

• Continuing Claims are estimated to rise to 1654K versus 1650K prior.
  

10:00 am EST

• The ISM Non-Manufacturing Index for Sept. is estimated to fall to 55.1 versus 56.4 in Aug.

• Factory Orders for Aug. is estimated to fall -.2% versus a +1.4% gain in July.
  

Upcoming Splits

• None of note

Other Potential Market Movers

• The Fed's Clarida speaking, Eurozone PMI report, weekly EIA natural gas inventory report, Berenberg US Stockpicker Conference, (TOT) investor day, (INTU) investor day, (VRA) investor day and the (HPQ) analyst meeting could also impact trading today.

BOTTOM LINE: Asian indices are lower, weighed down by commodity 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 50% net long heading into the day.

Stocks Falling Substantially into Final Hour on Global Growth Fears, Brexit Concerns, Impeachment Talk, Financial/Retail Sector Weakness

 Broad Equity Market Tone:

• Advance/Decline Line: Substantially Lower
  

• Sector Performance: Almost Every Sector Declining
  

• Volume: Above Average

• Market Leading Stocks: Performing In Line

Equity Investor Angst:

• Volatility(VIX) 20.4 +9.8%

• Euro/Yen Carry Return Index 121.97 -.28%

• Emerging Markets Currency Volatility(VXY) 8.12 unch.

• S&P 500 Implied Correlation 49.40 +9.1%

• ISE Sentiment Index 48.0 -23.3%
  

• Total Put/Call 1.29 +17.3%

• NYSE Arms 1.07 -45.9%

Credit Investor Angst:

• North American Investment Grade CDS Index 62.76 +3.99%
  

• America Energy Sector High-Yield CDS Index 514.0 +11.6%

• European Financial Sector CDS Index 67.14 +4.78%

• Italian/German 10Y Yld Spread 144.75 +2.5 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 78.28 +2.58%
  

• Emerging Market CDS Index 213.44 +1.54%
  

• iBoxx Offshore RMB China Corporate High Yield Index 166.05 +.03%

• 2-Year Swap Spread 3.5 +1.0 basis points

• TED Spread 32.5 +2.5 basis points

• 3-Month EUR/USD Cross-Currency Basis Swap -29.25 +3.0 basis points

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 65.15 +.18%
• 3-Month T-Bill Yield 1.75% -2.0 basis points

• Yield Curve .11 +2.0 basis points

• China Iron Ore Spot 88.10 USD/Metric Tonne -.74%

• Citi US Economic Surprise Index 33.10 +2.9 points

• Citi Eurozone Economic Surprise Index -69.30 +1.1 points

• Citi Emerging Markets Economic Surprise Index -9.0 -1.5 points

• 10-Year TIPS Spread 1.50 -2.0 basis points
• 90.3% chance of Fed rate cut at Dec. 11th meeting, 95.5% chance of cut at Jan. 29th meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating -413 open in Japan 
• China A50 Futures: Indicating -124 open in China

• DAX Futures: Indicating +11 open in Germany

Portfolio:

• Slightly Higher: On gains in my index hedges and emerging market shorts

• Disclosed Trades: Added to my (IWM)/(QQQ) hedges and to my emerging market shorts

• Market Exposure: Moved to 25% Net Long

Bear Radar

Style Underperformer:

• Large-Cap Growth -1.8%

Sector Underperformers:

• 1) Steel -3.2% 2) Airlines -3.1% 3) Retail -2.6%

Stocks Falling on Unusual Volume: 

• THO, TALO, GM, TNDM, EHTH, AAL, WLK, NRZ, AXDX, UAL, WWE, DAL, HRI, RDFN, HCAT, GO, USM, X, TDOC, NUAN, SFIX, AYI and LNTH

Stocks With Unusual Put Option Activity:

• 1) NLY 2) AABA 3) HIG 4) MAC 5) SYMC

Stocks With Most Negative News Mentions:

• 1) AAL 2) WLK 3) ETFC 4) AMTD 5) ETN

Charts:

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

Bull Radar

Style Outperformer:

• Small-Cap Value -1.3%

Sector Outperformers:

• 1) Gold & Silver +1.4% 2) Education +1.1% 3) Homebuilders -.3%

Stocks Rising on Unusual Volume:

• ZYXI, AIMT, ANAB, APLS, OSTK, CHRS, IMMU, AXSM, ALNY and GTHX

Stocks With Unusual Call Option Activity:

• 1) EIX 2) COG 3) ARQL 4) AMTD 5) VMC

Stocks With Most Positive News Mentions:

• 1) TSG 2) GPRO 3) LEN 4) GLDD 5) RPM

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running +18.4% Above 100-Day Average
• 0 Sectors Rising, 11 Sectors Declining
• 18.2% of Issues Advancing, 79.2% Declining
• 19 New 52-Week Highs, 83 New Lows
• 53.7% of Issues Above 200-day Moving Average
• Average 14-Day RSI 45.4%
• Vix 20.9 +12.8%
• Total Put/Call 1.41 +28.2%
• TRIN/Arms .96 -50.5%