Tuesday Watch

Evening Headlines

Bloomberg:    

• China Detains Australian TV Anchor With Government-Run Station.
• Melbourne Drives Australian House Prices Lower.   
• Facebook Threatens to Cut Off Australians From Sharing News.
• South Korea Plans Record 2021 Bond Sales to Fund Stimulus. 
• India Is Becoming the World’s New Virus Epicenter.
• Asia Stocks Set to Retreat; U.S. Tech Shares Gain: Markets Wrap. Asian stocks looked set to pull back at the start of a new month after most U.S. equities retreated even though technology shares extended gains.Futures pointed to modest losses in Japan, Australia and Hong Kong. S&P 500 futures dipped. The U.S. benchmark notched a fifth consecutive monthly advance in August despite edging lower Monday. The dollar declined for a fifth month in a row. Treasuries advanced, with 10-year yields slipping to just above 0.70%. The Dow Jones Industrial Average led losses after its components were revamped, with Microsoft Corp. and Walmart Inc. slumping on concern China could block a possible sale of the video app TikTok. Apple Inc.’s surge as the stock split 4-for-1 lifted the Nasdaq 100 past 12,000 for the first time. S&P 500 futures ticked down 0.2% as of 8:26 a.m. in Tokyo. The S&P 500 Index fell 0.2%. Nikkei 225 futures fell 0.3% in Singapore Australia’s S&P/ASX 200 Index futures dropped 1%. Hong Kong’s Hang Seng Index futures fell 0.4%.  
• Oil Edges Higher With U.S. Crude Stockpiles Seen Falling Further.
• New Yorkers Flee for Florida and Texas as Mobility Surges.
• U.S. Cases Top 6 Million; AstraZeneca Trial Begins: Virus Update.
  
• Ford to Cut 1,000 North America Salaried Jobs Amid Overhaul.
  
• Amid Spike in Opioid Overdoses, Momentum for Reform Wavers.  
• Stocks in ‘Euphoric Land’ With Nasdaq 100 Surging Past 12,000.

Wall Street Journal:

• Portland’s Half-Century of Ruinous Leadership.
• Individual Investors Reshape the Market.
• Amazon Gets U.S. Approval for Drone Fleet for Deliveries.
• The Democratic State Budget Scare.
• Covid-19 Vaccines: What’s Coming and When?
• Portland Shooting Suspect Identified as Antifa Supporter.
• M.B.A. Job Offers Dry Up.
  

Fox News:

• Trump defends teen charged in shootings; decries Biden, ‘political violence’ before Kenosha visit.
• McEnany calls out Lemon, Cuomo for 'downplaying' earlier violence.
• Texas AG alleges election laws are being broken in lawsuit.  
  
• Slain Portland man's friend says he lost life for having wrong views.
  

CNBC.com:

• Zoom shares soar after revenue more than quadruples from last year.
• The next four weeks could give investors a scare, strategist Lindsey Bell warns.
• Coronavirus cases rising again across more than half of the U.S.
• Stocks making the biggest moves after hours: Zoom Video, Eastman Kodak, Tesla & more.
• Delta, American drop domestic change fees, following move by United.

MarketWatch.com:            

• Here are the big winners among U.S. stocks during a sizzling August.
  
• An ‘extreme’ August on the stock market might be telling us something about the November election.
  
• Trump re-election momentum could shock stock-market investors betting on Biden win, says star analyst.

Zero Hedge: 

• Kolanovic Says Trump Re-Election Odds Are Soaring, Prompting Nate Silver To Melt Down On Twitter.
• MIT Debunks Musk's Neuralink As "Neuroscience Theater" In Scathing Critique.
• California's Radical Brainwashing Curriculum Soon To Be Mandatory.
• "Quartet" Of Tropical Disturbances Brewing In The Atlantic.
• New Jersey Is Becoming The Most Hated State As Households Flee In Record Numbers.
• Watch As Democrats Spend Four Years Fantasizing About Riots, Assassination And Violent Chaos.
• As US Warship Again Transits Taiwan Strait, Taipei & Beijing Warn Each Other: 'Risk Of Accidental Conflict Likely'.
• "This Is Real... There's Going To Be A F**king War In November" - Dem Operative Admits Voter Fraud.
• J.C. Penney On Verge Of Liquidation After Mall Talks Collapse.
• Polling Firm Rasmussen Warns About "National Poll Suppression" As Biden Lead Slumps To Just 2Pts.
• New Jersey Governor "Very Seriously" Considering Tax On High-Frequency Trades.
• White House Plans To Target More Chinese Tech Firms After TikTok, WeChat, Navarro Warns.
• Stocks & Silver Soar For 5th Straight Month, Bonds & Dollar Dumped.

Business Insider:  

• Robinhood, TDAmeritrade, and other online stock-trading platforms all experienced issues on Monday.

The Epoch Times:

• US Firms Move Supply Chains Out of China, Explore Options Closer to Home.
• CCP Scrubs State Media Report Raising Concerns Over COVID-19 Vaccine From Internet.
  

Digital Blackboard:

• Daily New Cases by Region.

Worldometer:

• New Cases/Deaths by state.

Rt Covid-19:

• How fast virus is growing by state.

KFF:

• State Data(Tests/Hospitalizations).

Night Trading 

• Asian equity indices are -1.0%  to -.25% on average.

• Asia Ex-Japan Investment Grade CDS Index 61.0 -1.0 basis point.

• China Sovereign CDS 33.75 -1.5 basis points.

• Bloomberg Emerging Markets Currency Index 60.68 +.03%.
• Bloomberg Global Risk-On/Risk Off Index 412.0 +21.0 points.
• Volatility Index(VIX) futures 33.20 -.08%
• FTSE 100 futures -.53%.

• S&P 500 futures -.03%.

• NASDAQ 100 futures +.18%.

Morning Preview Links

Earnings of Note 
Company/Estimate

Before the Open:

• None of note
  

After the Close:

• (HOME)/1.31
• (HRB)/.33
• (SCVL)/.62
  

Economic Releases

10:00 am EST

• ISM Manufacturing for August is estimated to rise to 54.6 versus 54.2 in July.
• ISM Prices Paid for August is estimated to rise to 54.3 versus 53.2 in July.
• Construction Spending MoM for July is estimated to rise 1.0% versus a -.7% decline in July.
  

Afternoon:

• Wards Total Vehicle Sales for August is estimated to fall to 14.9M versus 14.5M in July.

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Fed's Brainard speaking, Treasury's Mnuchin testifying on COVID-19 response, Eurozone PMI report, German Unemployment report,  weekly US retail sales reports, Jefferies Semi/IT Hardware/Communications Summit and the (NVDA) special event could also impact trading today.

Market Hours
Normal:

• 9:30 am - 4:00 pm EST
  

BOTTOM LINE: Asian indices are mostly lower, weighed down by financial and commodity 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 Higher into Final Hour on Falling Biden Presidency Odds, Global Stimulus Hopes, Momentum Chasing, Tech/Biotech Sector Strength

 Broad Equity Market Tone:

• Advance/Decline Line: Lower
  

• Sector Performance: Most Sectors Declining
  

• Volume: Below Average

• Market Leading Stocks: Underperforming
  

Equity Investor Angst:

• Volatility(VIX) 24.8 +8.0%
• Bloomberg Global Risk On/Risk Off Index 548.0 -72.0 points

• Euro/Yen Carry Return Index 130.97 +.76%

• Emerging Markets Currency Volatility(VXY) 11.14 +.91%

• S&P 500 Implied Correlation 41.8 +16.9%

• ISE Sentiment Index 102.0 -22.0 points

• Total Put/Call .77 +.10%

• NYSE Arms 1.11 +80.3%

Credit Investor Angst:

• North American Investment Grade CDS Index 67.12 -1.22%
  

• US Energy High-Yield OAS 760.65 +.07%

• European Financial Sector CDS Index 61.42 +.2%

• Italian/German 10Y Yld Spread 145.5 +2.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index  61.16 -1.5%
  

• Emerging Market CDS Index 172.08 -1.66%
  

• iBoxx Offshore RMB China Corporate High Yield Index 177.82 +.13%

• 2-Year Swap Spread 8.75 -.25 basis point

• TED Spread 14.5 -1.5 basis points

• 3-Month EUR/USD Cross-Currency Basis Swap -5.25 -.75 basis point
  
• MBS  5/10 Treasury Spread  92.0 -1.5 basis points
  
• IHS Markit CMBX BBB- 6 68.25 unch.

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 60.66 -.36%
• 3-Month T-Bill Yield .10% unch.

• Yield Curve 60.0 -1.5 basis points
  

• China Iron Ore Spot 118.74 USD/Metric Tonne +.34%

• Citi US Economic Surprise Index 242.50 -31.7 points

• Citi Eurozone Economic Surprise Index 132.6 -19.3 points

• Citi Emerging Markets Economic Surprise Index 9.1 -15.9 points

• 10-Year TIPS Spread 1.79 +2.0 basis points
• 100.0% chance of no change at Nov. 5th meeting, 100.0% chance of no change at Dec. 16th meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating +11 open in Japan 
• China A50 Futures: Indicating -174 open in China

• DAX Futures: Indicating +17 open in Germany

Portfolio:

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

• Disclosed Trades: None

• Market Exposure: 50% Net Long

 

Bear Radar

Style Underperformer:

• Small-Cap Value -1.3%

Sector Underperformers:

• 1) Airlines -3.4% 2) Energy -2.3% 3) Banks -2.1%

Stocks Falling on Unusual Volume: 

• SPWR, BMCH, MGP, OLLI, FSLY, NARI, LRCX, AXSM, BLDR, PEN, PLT, BPYU, W, FSLR, LEVI, BE, AMSWA, UCTT, PLCE, CALM, MBUU, CNK, BIG, CELH, ACHO, VVI, RUTH, FHC, LL, PRTS, CWH, ODT, BIGC, OSTK, DK, CALX and CHEF
  

Stocks With Unusual Put Option Activity:

• 1) XLB 2) EAT 3) TSLA 4) USB 5) FSLR
  

Stocks With Most Negative News Mentions:

• 1) CACC 2) NPTN 3) KGJI 4) UAL  5) FSLY
  

Charts:

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

Bull Radar

Style Outperformer:

• Large-Cap Growth +.7%

Sector Outperformers:

• 1) Gold & Silver +2.1% 2) Biotech +1.9% 3) Computer Hardware +.9%

Stocks Rising on Unusual Volume:

• AIMT, AKCA, WKHS, RYTM, RXT, RXPI, ALXN, PASG, PSNL, EXAS and TRNE
  

Stocks With Unusual Call Option Activity:

• 1) RST 2) ALXN 3) GNW 4) TSCO 5) CALX

Stocks With Most Positive News Mentions:

• 1) AFIB 2) GME 3) ZM 4) CASA 5) IONS

Charts:

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

 

Mid-Day Market Internals

NYSE Composite Index:

• Volume Running -27.9% Below 100-Day Average
• 4 Sectors Rising, 7 Sectors Declining
• 32.9% of Issues Advancing, 64.8% Declining
• 59 New 52-Week Highs, 7 New Lows
• 49.9% of Issues Above 200-day Moving Average
• Average 14-Day RSI 51.2% 
• Bloomberg Global Risk-On/Risk-Off Index 534.0 -86.0 points
• Vix 24.9 +8.5%
• Total Put/Call .75 +7.1%
• TRIN/Arms 1.45 +137.7%

 

Monday Watch

Today's Headlines

Bloomberg:    

• China’s Mega Banks Post Worst Profit Slump on Bad Debt Wave.  
• Australia Says Victoria Jobless Surges as Lockdown Cuts Spending.    
• India’s Economy Faces Worst Quarterly Slump Ever After Lockdown.
• Saudi Aramco Discovers Two Oil, Gas Fields in North of Kingdom.
• TikTok Assets Can’t Be Sold Without China’s Approval.
• U.S., China Signal Progress on Trade Deal as Relations Fray. 
• U.S. Cases Near 6 Million; N.Z. Ends Lockdown: Virus Update.
• S&P 500 Futures Push Higher; Yen Pares Friday Gain. U.S. and Asian futures started the week stronger, suggesting the rally that lifted equities to fresh highs still has legs. The yen pared some of Friday’s gains as Japan looks for a new prime minister. Contracts pointed higher in Japan and Hong Kong, though slipped in Australia. The S&P 500 closed at an all-time high for a sixth consecutive trading session Friday, while the Nasdaq Composite also reached a record. Chinese manufacturing data will give the latest reading on how the world’s second-largest economy is emerging from the coronavirus shutdown. In Japan, the race to replace Prime Minister Shinzo Abe, who stepped down for health reasons, gets underway. The dollar steadied near a two-year low against major peers. Treasuries rose Friday. S&P 500 futures rose 0.2% as of 7:19 a.m. in Tokyo. S&P 500 Index rose 0.7% Friday. Nikkei 225 futures rose 0.2% as of Friday. Australia’s S&P/ASX 200 Index futures fell 0.7% as of Friday. Hong Kong’s Hang Seng Index futures rose 0.2% as of Friday.
• Fed Low Rate Spreads, India Slump, Two-Speed Australia: Eco Day.
• Oil Holds Near $43 as Laura’s Passing Brings Virus Back in Focus.
• Colleges With Covid Outbreaks Advised to Keep Students on Campus.  
• Jack Ma’s Ant Fuels Tech IPO Frenzy Not Seen Since Dotcom Bubble.
• Demand for Online Doctors Forges $39 Billion Sony-Backed Titan.
• Reflation Trades Face Reality Check With Fed’s New Goal in Doubt.
• U.S. Jobless Rate Set to Return to Single Digits.  
• American Air Cuts October Capacity 55% After Dropping 15 Cities.  
• Trump Unleashes Twitter Storm After Portland Protest Death.  
• Trump Raises $76 Million During Convention, Topping Democrats.

Wall Street Journal:

• Trump Surveys Damage From Laura as Cleanup Begins.
• Revamped Dow’s Gap With S&P 500 Is Set to Widen.
• As Trash Piles Up During Covid-19, Residents Raise a Stink
• Companies Rush to Shore Up Covid-19 Testing Ahead of Flu Season..
• Coronavirus Has Left Banks With Lots of Cash and Little to Do With It.
• Activision Does its Duty.
• California Is Coming for You.
• California’s Radical Indoctrination.
• The Portland Clashes.
• Fearing Hong Kong’s Fate, Taiwan Moves to Bolster Its Military Against China.

Fox News:

• ‘Within minutes’ Congress leaked classified info, forcing end to election intel, Ratcliffe tells Fox News.
• 1 dead in clashes between pro-Trump, BLM groups as violence rages.   
  
• This state OKs task force to consider compensation for slavery.
• Ratcliffe coordinating with Durham on investigation of FBI, declassification of documents”.

CNBC:

• S&P 500′s record rally faces near-term trouble, market bull Art Hogan warns.
• Berkshire Hathaway buys stakes in Japan’s five leading trading companies.
• FDA willing to fast track coronavirus vaccine before phase three trials end.
• Coronavirus cases climb in the Midwest as more states report growing outbreaks    
• Retailers are reporting record online sales during the pandemic. But it won’t last forever.
  

Zero Hedge:

• Trump Slams "Do Nothing Democrat Mayor Of Portland" After Wheeler Blames President For Violence.
• Dem Convention Made No Mention Of Russiagate Or Impeachment, Because Those Were Fake Things.
• US Passes 6 Million Confirmed Coronavirus Cases: Live Updates.  
• Pinterest Pays $89.5 Million To Abandon Upcoming Lease In San Francisco.
• Trump Goes After Failed Democrat-Run Cities As Violence Erupts In Chicago And NYC.
• Half-Dozen Democrat Mayors In Minnesota Endorse Trump, Say Biden 'Did Nothing' For Working Class.
• Devastating Consumer Financial Cliff Coming Right Up.
• What's Behind Last Week's Unprecedented Meltup In The VIX? Citadel Explains.
• Rapper 50 Cent: Cancel Culture Is "Unfair" And "Targets Straight Men".
• Suddenly Fear Of Social Unrest Is Everywhere.
• These People Want To Convince Everyone That Looting Is A-Okay.
• Cloward-Piven Strategy To Destroy America Resurgent Amid BLM/Antifa-Led Riots.
• 'The Saker' Asks: Will Hillary & The Dems Get The Civil War They Are Trying To Provoke?
• Kenosha Or Kosovo? Shocking Images Reveal Destruction After Race Riots Leave Buildings In Ruins.
• Sovereign Wealth Funds Shun US Stocks As Valuation Concerns Mount.
• 'I'm Not Sad That A Fu*king Fascist Died Tonight': Left-Wing Portland Protesters Celebrate Murder Of Trump Supporter.
• Greenwald: America's Social Fabric Is Fraying Severely... If Not Unravelling.
  
• $16 Billion Ohio Police & Fire Pension Fund Approves A 5% Allocation For Gold.
• New Jersey Hikes Gas Tax By 22.5%, Bringing Total Increase Since 2016 To 250%.
• Tesla 'Losing Ground' In Europe's Biggest EV Market As July Registrations Crash .
• China's 'Debt-Trap' Diplomacy With Third-World Nations.
• Weaponized Drone Swarms Should Be Declared As "WMD".

  MarketWatch.com: 

• Three things you need to know the Apple stock split that takes effect at Monday’s opening bell.  
• 5 things to know about Tesla ahead of its 5-for-1 stock split.

Business Insider:

• Michael Moore warned that Trump's support among his base is 'off the charts', and he is on course to win the presidential election.

The Epoch Times:

• Taiwanese Government Continues to Remove CCP Infiltration.
• CCP Controls Public Opinion by Fabricating Events and Discussions Online.
  

Digital Blackboard:

• Daily New Cases by Region.

Worldometer:

• New Cases/Deaths by state.

Rt Covid-19:

• How fast virus is growing by state.

KFF:

• State Data(Tests/Hospitalizations).

Night Trading

• Asian indices are -.25% to +.75% on average.
• Asia Ex-Japan Investment Grade CDS Index 62.0 -.75 basis point.
• China Sovereign CDS 35.25 -.5 basis point.
• Bloomberg Emerging Markets Currency Index 60.89 +.03%.
• Bloomberg Global Risk-On/Risk Off Index 640.0 +20.0 points.
• Volatility Index(VIX) futures 26.65 -1.11%. 
• Euro Stoxx 50 futures +.78%.
• S&P 500 futures +.47%.
• NASDAQ 100 futures +.68%.

Morning Preview Links

Earnings of Note

Company/Estimate

Before the Open:

• None of note
  

After the Close:

• (ZM)/.45
• (SCSC)/.21
  

Economic Releases
10:30 am EST

• The Dallas Fed Manufacturing Activity Index for Aug. is estimated to rise to 0.0 versus -3.0 in July.
  

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The China Manufacturing PMI and the German Inflation Data report could also impact trading today.

Market Hours
Normal:

• 9:30 am - 4:00 pm EST

BOTTOM LINE: Asian indices are mostly higher, boosted by technology and consumer 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 week.