Bear Radar

Style Underperformer:

• Small-Cap Growth -1.3%

Sector Underperformers:

• 1) Medical Equipment -2.2% 2) Semis -2.0% 3) Gaming -2.0%

Stocks Falling on Unusual Volume: 

• IPG, PD, OKTA, ZM, PZZA, EWBC, AVYA, ARLP, PKI, AXTA, ZYXI, TMO, EHTH, BSX, AKCA, AZZ, BSX, LAUR, BIO, ARVN, JAZZ, PKI, ANDE, AMEH, SE, WAT, ANDE, NTLA, AMBA and NKTR

Stocks With Unusual Put Option Activity:

• 1) ARNC 2) CBS 3) CHK 4) OPK 5) COST

Stocks With Most Negative News Mentions:

• 1) QGEN 2) NKTR 3) SDC 4) PBYI 5) JMIA

Charts:

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

Bull Radar

Style Outperformer:

• Large-Cap Growth -.8%

Sector Outperformers:

• 1) Gold & Silver +1.4% 2) Homebuilding +.7% 3) Airlines +.6%

Stocks Rising on Unusual Volume:

• HA, DPZ and CYRX

Stocks With Unusual Call Option Activity:

• 1) DPZ 2) AMBA 3) XEC 4) RRC 5) APC

Stocks With Most Positive News Mentions:

• 1) NIO 2) DPZ 3) SSY 4) LXRP 5) TGT

Charts:

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

Mid-Day Market Internals

NYSE Composite Index:

• Volume Running -2.8% Below 100-Day Average
• 0 Sectors Rising, 11 Sectors Declining
• 22.7% of Issues Advancing, 75.4% Declining
• 56 New 52-Week Highs, 83 New Lows
• 51.3% of Issues Above 200-day Moving Average
• Average 14-Day RSI 44.2%
• Vix 19.5 +9.1%
• Total Put/Call 1.07 -.9%
• TRIN/Arms 1.27 +2.4%

Tuesday Watch

Evening Headlines

Bloomberg:        

• U.S. Blacklists Eight Chinese Tech Companies on Rights Violations.

• Trump Whipsaws on Turkey as Threat Follows Green Light on Syria.  

• Boris Johnson Preparing for Brexit Talks to Collapse: Spectator.

• World Bank Joins Warning About Dimming Global Growth Prospects.

• Asia Stocks Look Mixed as China Trade Talks Near. Asian stocks look likely to trade mixed after a weak U.S. session as investors mulled the upcoming U.S.-China trade talks. Treasuries slipped and the dollar gained. Futures in Japan pointed higher and were little changed in South Korea. S&P 500 contracts were little changed in early Asian trading. Investor focus will be on Chinese markets, which reopen after a weeklong holiday, as well as those in Hong Kong after escalating violence in the city. U.S. stocks ended the day lower after bouncing between small gains and losses in light volume. After the close of New York markets, the U.S. placed eight Chinese technology companies on a blacklist because of alleged human-rights violations, a move that may add to tensions between the countries. Nikkei 225 futures fell 0.2% in Chicago. Australia’s S&P 200 Index contracts rose 0.4%. S&P 500 futures were flat as of 8:11 a.m. in Tokyo.

• Five Things You Need to Know to Start Your Day 

• Trump’s Turkey Threat, U.S.-China Talks, Embracing MMT: Eco Day

• Crude Steady as Nerves Set In Ahead of U.S.-China Trade Talks

• Boeing Sued by Southwest Pilots on ‘Rush’ to Sell Unsafe Max.

• Hedge Funds Post the Best Performance This Year Since 2013.

• Juul Accused by School Districts of Creating Vaping ‘Nuisance’.

Wall Street Journal:

• Teens Ignored Vaping Warnings for Years. Now, Some Are Scared.

• McConnell Urges Trump to Keep Syria Troops as Bipartisan Criticism Mounts.

• Houston, We Have a China Problem.

• The NBA Responded. U.S. Politicians Roared. Now It’s China’s Move.

Fox News:

• IG couldn't explain window between Ukraine call and whistleblower complaint, sources reveal.

• Dem congresswoman on why official vote on impeachment hasn't happened.

CNBC:

• Researchers find e-cigarettes cause lung cancer in mice in first study tying vaping to cancer.

• Charles Schwab says he would never buy the money-losing companies going public these days.

• Senators pile on the NBA for yielding to China over Rockets GM’s pro-Hong Kong tweet.

• Trump’s updated China blacklist slams shares of chipmaker Ambarella.

• Stocks making the biggest moves after hours: American Airlines, Qiagen, Ambarella and more.

Zero Hedge:   

• China De-Dollarization Pushes Into Hyperdrive, Adds 100 Tons Of Gold Amid Trade War Chaos.

• Student, Car Loans Surge Most In Three Years.

• Willie Brown Stiffs Kamala Harris; Says Hillary Clinton The Only One Who Can Beat Trump.

• Erdogan's Syria Invasion Begins: Turkish Jets Filmed Bombing Kurdish Targets.

• Taibbi Trounces Ukraine-Gate Protagonist As "Insult To Real Whistleblowers".

• FBI Data Shows 5 Times More People Killed By Knives Than Rifles Last Year.

• Stocks Chop On Repo Ramp, Kudlow Comments, Trade Trouble, & Warren Woosh.

Night Trading 

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

• Asia Ex-Japan Investment Grade CDS Index 78.5 -.25 basis point.

• China Sovereign CDS 50.25 +1.25 basis points.

• Bloomberg Emerging Markets Currency Index  65.27 -.02%.

• FTSE 100 futures n/a.

• S&P 500 futures -.02%.

• NASDAQ 100 futures +.03%.

Morning Preview Links 

Earnings of Note 
Company/Estimate

Before the Open:

• (AZZ)/.56

• (DPZ)/2.08

• (HELE)/1.96

After the Close:

• (LEVI)/.28

Economic Releases
6:00 am EST

• The NFIB Small Business Optimism Index for Sept. is estimated to fall to 102.0 versus 103.1 in Aug.

8:30 am EST

• The PPI Final Demand MoM for Sept. is estimated to rise +.1% versus a +.1% gain in Aug.

• PPI Ex Food and Energy MoM for Sept. is estimated to  rise +.2% versus a +.3% gain in Aug.
  

Upcoming Splits

• None of note

Other Potential Market Movers

• The Fed's Powell speaking, China Loan Data report, $38B 3Y T-Note auction, weekly US retail sales reports, (FEYE) analyst day and the (STZ) investor presentation could also impact trading today.

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

Stocks Slightly Lower into Final Hour on China Trade Tensions, Emerging Markets Debt Angst, Less Dovish FOMC Commentary, Metals & Mining/Gaming Sector Weakness

 Broad Equity Market Tone:

• Advance/Decline Line: Slightly Lower
  

• Sector Performance: Most Sectors Declining
  

• Volume: Below Average

• Market Leading Stocks: Performing In Line

Equity Investor Angst:

• Volatility(VIX) 17.6 +3.5%

• Euro/Yen Carry Return Index 122.27 +.32%

• Emerging Markets Currency Volatility(VXY) 8.12 +1.37%

• S&P 500 Implied Correlation 42.54 +1.09%

• ISE Sentiment Index 82.0 +12.3%
  

• Total Put/Call .95 -5.34%

• NYSE Arms 1.28 +39.1%

Credit Investor Angst:

• North American Investment Grade CDS Index 60.78 -.11%
  

• America Energy Sector High-Yield CDS Index 492.0 -.71%

• European Financial Sector CDS Index 67.68 -.90%

• Italian/German 10Y Yld Spread 142.75 +1.0 basis point
  

• Asia Ex-Japan Investment Grade CDS Index 78.47 -.63%
  

• Emerging Market CDS Index 213.35 +1.87%
  

• iBoxx Offshore RMB China Corporate High Yield Index 166.21 +.07%

• 2-Year Swap Spread 2.75 unch.

• TED Spread 34.0 -1.25 basis points

• 3-Month EUR/USD Cross-Currency Basis Swap -23.75 +3.25 basis points

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 65.67 +.29%
• 3-Month T-Bill Yield 1.70% +1.0 basis point

• Yield Curve .13 +1.0 basis point

• China Iron Ore Spot 88.60 USD/Metric Tonne +.12%

• Citi US Economic Surprise Index 20.90 -2.3 points

• Citi Eurozone Economic Surprise Index -77.70 -1.0 point

• Citi Emerging Markets Economic Surprise Index -10.80 -1.4 points

• 10-Year TIPS Spread 1.51 +1.0 basis point
• 88.5% chance of Fed rate cut at Dec. 11th meeting, 95.1% chance of cut at Jan. 29th meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating +140 open in Japan 
• China A50 Futures: Indicating -54 open in China

• DAX Futures: Indicating -16 open in Germany

Portfolio:

• Slightly Higher: On gains in my biotech/tech sector longs and emerging market shorts

• Disclosed Trades: None

• Market Exposure: 50% Net Long

Bear Radar

Style Underperformer:

• Mid-Cap Growth -.2%

Sector Underperformers:

• 1) Gold & Silver -.9% 2) Social Media -.5% 3) Video Gaming -.4%

Stocks Falling on Unusual Volume: 

• SPWR, FSLR, RTLR, CYRX, AXNX, SRPT, RDUS and XENT

Stocks With Unusual Put Option Activity:

• 1) ARNC 2) CBS 3) CHK 4) OPK 5) COST

Stocks With Most Negative News Mentions:

• 1) ZENT 2) TRGP 3) FSLR 4) NKTR 5) GVA

Charts:

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