Thursday Watch

Evening Headlines

Bloomberg:   

• New Zealand Economy Shrinks The Most Since Great Depression.  
• Food Exports From Australia Menaced by China Backlash and Virus. 
• Biden Warns of Brexit Impact on Chances of U.K.-U.S. Trade Deal.
• Bank of England Confronts Darkening Outlook: Decision Day Guide.
• New Zealand Economy Plunges; Trump Rebuts Doctors: Virus Update.
• Asia Stocks Open With Caution After Fed; Yuan Dips. Asian stocks began Thursday in cautious fashion after Federal Reserve Chair Jerome Powell highlighted the uncertainty of an economic rebound without further stimulus, and U.S. shares retreated. Shares in Japan and Australia opened flat, while South Korean equities dipped. S&P 500 contracts were little changed. The U.S. benchmark erased gains on Wednesday to end the session lower after Powell said he’s not sure if the faster-than-expected recovery will continue. A tumble in tech giants such as Apple Inc. and Facebook Inc. also weighed on the index. The Treasury yield curve steepened as Powell stopped short of offering new specifics on the Fed’s approach to the monthly bond purchases that have buttressed markets. Some traders may have been expecting signals regarding plans to target longer maturities. The dollar was little changed and the offshore yuan slipped. S&P 500 futures were little changed as of 9:02 a.m. in Tokyo. The gauge fell 0.5% on Wednesday. Japan’s Topix index was little changed. South Korea’s Kospi index dropped 0.2%. Australia’s S&P/ASX 200 Index was little changed.
• Lilly Says Antibody Therapy May Lower Covid Hospitalizations.  
• Revlon Lenders Want Expert to Look at Citi’s $900 Million Error.  
• Oracle Would Get Access to TikTok Code in Proposed Deal.  
• JPMorgan Says $200 Billion May Flow Out of Stocks This Quarter.

Wall Street Journal:

• The Real Cost of Biden’s Plans.
• The Higher Wages of Growth.
• Democrat Madness.
• CDC Chief Predicts Covid-19 Vaccine May Not Be Generally Available Until Next Summer.
• Barr Tells Prosecutors to Consider Charging Violent Protesters With Sedition.
  

Fox News:

• Moderate Dems turning on Pelosi over COVID bill impasse.
• Woman seen keeping suspected arsonist at bay.
• Minneapolis City Council stunned by crime surge.
  

CNBC.com:

• Fed picks its side in inflation debate and sends market a message — no rate hikes for years.
• Airlines, unions again push for another $25 billion in federal aid as job cuts next month loom.
• Only 17% of Americans fully trust the stock market — here’s the No. 1 reason why.

MarketWatch.com:      

• Snowflake IPO surge makes it the priciest tech stock by a mile.
  
• ‘You may never see it as good as it is now’: How some wealthy Americans are prepping their finances for a possible Joe Biden presidency.  
• Oracle bid for TikTok hasn't eased security concerns from Trump administration: report.  
• Sony’s new PlayStation 5 goes on sale Nov. 12 for $500.

Zero Hedge:    

• Facebook Censors Tucker Carlson's Interview With "Rogue" Chinese Scientist.
• "Where Are The Police?" After Voting To Defund Cops, Minneapolis City Council Baffled Over Recent Crime Wave.
• The Portland Riots Just Stopped... Why?
• Trump Opposes TikTok-Oracle Deal, Demands Majority US Ownership.
• OECD Raises Global Economic Outlook, Boxing-In 'Easy-Money'-Promoting Policy-Makers.
• Chris Rock Slams Pelosi For 'Letting The Pandemic Come In' During Impeachment Charade.
• JPMorgan Ends Free Uber Rides For Junior Bankers As Traders Ordered To Return To The Office.
• ActBlue Raises Millions In Suspicious Gift Card Donations.
• CA Wildfires Emit Record Amounts Of Carbon Dioxide As Smoke Reaches NYC.
• Sacrifice For Thee, But None For Me.
• Foreigners Dump Record $54BN In Corporate Debt As Japan Treasury Holdings Surge To All Time High.
• US COVID Herd Immunity Calculated At 12% Of The Population.
• Stocks Pump'n'Dump On Fed Financial Stability Fears.

The Epoch Times:

• China Installs Cameras Inside People’s Homes, Expanding Its Surveillance Network.
  

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 -.75% to unch. on average.

• Asia Ex-Japan Investment Grade CDS Index 57.0 unch.

• China Sovereign CDS 35.5 -.75 basis point.

• Bloomberg Emerging Markets Currency Index 60.80 -.12%.
• Bloomberg Global Risk-On/Risk Off Index 337.0 +8.0 points.
• Volatility Index(VIX) futures 30.75 +.74%
• FTSE 100 futures -.35%.

• S&P 500 futures -.5%.

• NASDAQ 100 futures -.71%.

Morning Preview Links

Earnings of Note 
Company/Estimate

Before the Open:

• (APOG)/.29

After the Close:

• (CMD)/-.01

Economic Releases

8:30 am EST:

• Initial Jobless Claims for last week are estimated to fall to 850K versus 884K the prior week.
• Continuing Claims are estimated to fall to 13000K versus 13385K prior.
• Housing Starts for August is estimated to fall to 1483K versus 1496K in July.
• Building Permits for August is estimated to rise to 1517K versus 1495K prior.
• Philly Fed Business Outlook for Sept. is estimated to fall to 15.0 versus 17.2 in Aug.
  

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Joe Biden CNN Town Hall, BoE Rate Decision, UK Retail Sales report, ECB Inflation report, weekly Bloomberg Consumer Comfort Index, Bloomberg Economic Expectations Index for Sept., weekly EIA natural gas inventory report, Citi Small/Mid-Cap Growth Conference and the (BOX) Investor Breakout could also impact trading today.

Market Hours
Normal:

• 9:30 am - 4:00 pm EST
  

BOTTOM LINE: Asian indices are modestly lower, weighed down by technology and financial shares in the region. I expect US stocks to open modestly lower and to maintain losses into the afternoon. The Portfolio is 25% net long heading into the day.

Stocks Mostly Higher into Final Hour on Dovish FOMC Commentary, Vaccine Hopes, Oil Gain, Energy/Financial Sector Strength

 Broad Equity Market Tone:

• Advance/Decline Line: Substantially Higher
  

• Sector Performance: Most Sectors Rising
  

• Volume: Below Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 25.3 -1.3%
• Bloomberg Global Risk On/Risk Off Index 376.0 -10.0 points

• Euro/Yen Carry Return Index 128.57 -.66%

• Emerging Markets Currency Volatility(VXY) 11.21 -.09%

• S&P 500 Implied Correlation 50.4 -1.7%

• ISE Sentiment Index 141.0 +15.0 points

• Total Put/Call .74 +5.7%

• NYSE Arms .52 -66.2%

Credit Investor Angst:

• North American Investment Grade CDS Index 66.98 -1.21%
  

• US Energy High-Yield OAS 812.62 -.85%

• European Financial Sector CDS Index 61.26 -1.78%

• Italian/German 10Y Yld Spread 151.25 n/a
  

• Asia Ex-Japan Investment Grade CDS Index  56.71 -1.42%
  

• Emerging Market CDS Index 163.82 -.3%
  

• iBoxx Offshore RMB China Corporate High Yield Index 178.03 +.02%

• 2-Year Swap Spread 8.0 -.25 basis point

• TED Spread 13.5 -1.75 basis points

• 3-Month EUR/USD Cross-Currency Basis Swap -3.75 +1.0 basis point
  
• MBS  5/10 Treasury Spread  93.5 +.25 basis point
  
• IHS Markit CMBX BBB- 6 66.5 -.25 basis point

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 60.88 +.22%
• 3-Month T-Bill Yield .10% -1.0 basis point

• Yield Curve 53.5 +.25 basis point
  

• China Iron Ore Spot 118.0 USD/Metric Tonne -3.12%

• Citi US Economic Surprise Index 177.1 -.9 point

• Citi Eurozone Economic Surprise Index 79.6 -3.6 points

• Citi Emerging Markets Economic Surprise Index 48.4 -1.2 points

• 10-Year TIPS Spread 1.70 +2.0 basis points
• 100.0% chance of no change at Dec. 16th meeting, 100.0% chance of no change at Jan. 27th meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating -105 open in Japan 
• China A50 Futures: Indicating -36 open in China

• DAX Futures: Indicating +3 open in Germany

Portfolio:

• Slightly Higher: On gains in my biotech/industrial/consumer staple sector longs
  

• Disclosed Trades: None
  

• Market Exposure: 50% Net Long

 

Bear Radar

Style Underperformer:

• Large-Cap Growth -.7%

Sector Underperformers:

• 1) Gaming -2.1% 2) Paper -1.0% 3) Software -.6%

Stocks Falling on Unusual Volume: 

• SNA, VRM, ADBE, KNX, LVS, TPX, BWA, CBRL, WGO, NEE, MDLA, THO, BLFS, ILMN, IPOB, SYNH, CWH and FRTA
  

Stocks With Unusual Put Option Activity:

• 1) MAT 2) FDX 3) VGK 4) ILMN 5) ASHR
  

Stocks With Most Negative News Mentions:

• 1) LVS 2) MGM 3) LX 4) FB  5) REGN
  

Charts:

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

Bull Radar

Style Outperformer:

• Small-Cap Growth +1.6%

Sector Outperformers:

• 1) Oil Service +4.7% 2) Energy +3.5% 3) Homebuilding +3.4%

Stocks Rising on Unusual Volume:

• ARWR, INO, AMCX, AXGN, GOGO, VECO, MRSN, APPS, DKNG, NFE, SCS, OXY, BYND, UCTT, MLHR, FDX, EXEL, HSC, AVTR, NKLA, SGMS, L and SWTX
  

Stocks With Unusual Call Option Activity:

• 1) A 2) XPO 3) CLNY 4) TPR 5) IMMU

Stocks With Most Positive News Mentions:

• 1) ARWR 2) DKNG 3) TPR 4) KOPN 5) OSTK

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running -16.6% Below 100-Day Average
• 8 Sectors Rising, 3 Sectors Declining
• 70.2% of Issues Advancing, 26.5% Declining
• 59 New 52-Week Highs, 3 New Lows
• 49.0% of Issues Above 200-day Moving Average
• Average 14-Day RSI 46.8% 
• Bloomberg Global Risk-On/Risk-Off Index 309.0 -78.0 points
• Vix 26.5 +3.6%
• Total Put/Call .75 +7.1%
• TRIN/Arms .91 -40.9%

Wednesday Watch

Night Trading 

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

• Asia Ex-Japan Investment Grade CDS Index 57.0 -1.0 basis point.

• China Sovereign CDS 36.25 unch.

• Bloomberg Emerging Markets Currency Index 60.73 -.03%.
• Bloomberg Global Risk-On/Risk Off Index 410.0 +22.0 points.
• Volatility Index(VIX) futures 30.6 +.58%
• FTSE 100 futures -.70%.

• S&P 500 futures -.11%.

• NASDAQ 100 futures -.30%.

Morning Preview Links

Earnings of Note 
Company/Estimate

Before the Open:

• (BRC)/.52

After the Close:

• (MLHR)/.30

Economic Releases

8:30 am EST:

• Retail Sales Advance MoM for Aug. is estimated to rise +1.0% versus a +1.2% gain in July.
• Retail Sales Ex Autos MoM for Aug. is estimated to rise +1.0% versus a +1.9% gain in July.
• Retail Sales Ex Autos and Gas for Aug. is estimated to rise +.9% versus a +1.5% gain in July.
  

10:00 am EST

• Business Inventories for July is estimated to rise +.1% versus a -1.1% decline in June.
• The NAHB Housing Market Index for Sept. is estimated at 78.0 versus 78.0 in Aug.
  

10:30 am EST

• Bloomberg consensus estimates call for a weekly crude oil inventory gain of +1,453,2000 barrels versus a +2,033,000 barrel gain the prior week. Gasoline supplies are estimated to fall by -1,059,400 barrels versus a -2,954,000 barrel decline the prior week. Distillate inventories are estimated to fall by -227,700 barrels versus a -1,675,000 barrel decline the prior week. Finally, Refinery Utilization is estimated to rise +1.46% versus a -4.9% decline prior.

2:00 pm EST

• The FOMC is expected to leave the benchmark Fed Funds Rate at 0.0-.25%.
  

4:00 pm EST

• Net Long-Term TIC Flows for July.

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The FOMC press conference, UK inflation data report, weekly MBA Mortgage Applications report, Wells Fargo Consumer Conference, Morgan Stanley Autos/Industrials Conference and the (NTAP) analyst day 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 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.