Thursday Watch

Night Trading 

• Asian equity indices are -1.5% to -.75% on average.

• Asia Ex-Japan Investment Grade CDS Index 75.5 +.75 basis point.

• China Sovereign CDS 46.25 +1.0 basis point.

• Bloomberg Emerging Markets Currency Index 59.22 -.01%.
• Bloomberg Global Risk-On/Risk Off Index 23.0 -3.0 points.
• Volatility Index(VIX) futures 32.5 +.08%
• FTSE 100 futures -.94%.

• S&P 500 futures -.21%.

• NASDAQ 100 futures -.45%.

Morning Preview Links

Earnings of Note 
Company/Estimate

Before the Open:

• (ACN)/1.73
• (BB)/.02
• (KMX)/1.07
• (DRI)/.05
• (FDS)/2.53
• (JBL)/.67
• (RAD)/.14
  

After the Close:

• (AIR)/-.05
• (COST)/2.80
• (JEF)/.34
• (SCHL)/-1.74
• (MTN)/-3.53
  

Economic Releases

8:30 am EST

• Initial Jobless Claims for last week are estimated to fall to 840K versus 860K the prior week.
• Continuing Claims are estimated to fall to 12300K versus 12628K prior.
  

10:00 am EST

• New Home Sales for Aug. is estimated to fall to 890K versus 901K in July.
  

11:00 am EST

• Kansas City Fed Manufacturing Activity for Sept. is estimated at 14.0 versus 14.0 in Aug.

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Fed's Kaplan speaking, Fed's Bostic speaking, Fed's Barkin speaking, Fed's Evans speaking, Fed's Bullard speaking, Germany IFO Guidance, weekly Bloomberg Consumer Comfort Index, $50B 7Y T-Note auction, weekly EIA natural gas inventory report, (MIK) investor day and the (BAM) investor day 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 commodity and technology shares in the region. I expect US stocks to open mixed and to weaken into the afternoon, finishing modestly lower. The Portfolio is 25% net long heading into the day.

 

Stocks Reversing Lower into Afternoon on Global Coronavirus Worries, Diminished US Stimulus Hopes, US Election Uncertainties/Biden Tax-Hike Proposals, Homebuilding/Commodity Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Lower
  

• Sector Performance: Almost Every Sector Declining
  

• Volume: Below Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 27.3 +1.7%
• Bloomberg Global Risk On/Risk Off Index 121.0 -20.0 points

• Euro/Yen Carry Return Index 127.57 +.17%

• Emerging Markets Currency Volatility(VXY) 11.97 +2.1%

• S&P 500 Implied Correlation 59.5 +3.4%

• ISE Sentiment Index 125.0 +28.0 points

• Total Put/Call .78 -10.3%

• NYSE Arms .99 -13.2%

Credit Investor Angst:

• North American Investment Grade CDS Index 56.44 +7.45%
  

• US Energy High-Yield OAS 855.09 +1.07%

• European Financial Sector CDS Index 76.76 -1.8%

• Italian/German 10Y Yld Spread 136.0 -1.0 basis point
  

• Asia Ex-Japan Investment Grade CDS Index 73.06 -2.71%
  

• Emerging Market CDS Index 244.78 +5.31%
  

• iBoxx Offshore RMB China Corporate High Yield Index 178.29 +.03%

• 2-Year Swap Spread 8.75 +.5 basis point

• TED Spread 13.25 -.75 basis point
  

• 3-Month EUR/USD Cross-Currency Basis Swap -3.0 -.5 basis point
  
• MBS  5/10 Treasury Spread  95.0 -.5 basis point
  
• IHS Markit CMBX BBB- 6 66.5 -.5 basis point

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 59.31 -.82%
• 3-Month T-Bill Yield .09% unch.

• Yield Curve 53.5 -1.0 basis point
  

• China Iron Ore Spot 111.90 USD/Metric Tonne -3.13%

• Citi US Economic Surprise Index 164.2 -.8 point

• Citi Eurozone Economic Surprise Index 47.30 -.5 point

• Citi Emerging Markets Economic Surprise Index 49.7 unch.

• 10-Year TIPS Spread 1.62 +1.0 basis point
• 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 -156 open in Japan 
• China A50 Futures: Indicating -134 open in China

• DAX Futures: Indicating -41 open in Germany

Portfolio:

• Slightly Higher: On gains in my (IWM)/(QQQ) hedges and my emerging market shorts
  

• Disclosed Trades: Added to my (IWM)/(QQQ) hedges
  

• Market Exposure: Moved to 25% Net Long

Bear Radar

Style Underperformer:

• Large-Cap Growth -.9%

Sector Underperformers:

• 1) Gold & Silver -4.6% 2) Oil Service -2.8% 3) Homebuilding -1.9%

Stocks Falling on Unusual Volume: 

• FEAC, EXEL, ARVN, FCX, WLL, PPD, HCAC, SPR, NGM, CNK, PDCO, CWH, SBE, MBUU, OSTK, SPAQ, NSA, KBH, PLT, TSLA, VSTO, ACEL, WKHS, KNL, DPHC, VIRT, SCS, RAPT, ALB, SFIX, ZGNX and NKLA
  

Stocks With Unusual Put Option Activity:

• 1) NKE 2) SFIX 3) FEYE 4) MYL 5) GNW
  

Stocks With Most Negative News Mentions:

• 1) ACB 2) ALB 3) DISCA 4) GOOG  5) COG
  

Charts:

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

 

Bull Radar

Style Outperformer:

• Mid-Cap Growth -.2%

Sector Outperformers:

• 1) Restaurants +.9% 2) Social Media +.7% 3) Pharma +.6%

Stocks Rising on Unusual Volume:

• HTH, NKE, TWTR, WDC, APOG, ZM, ODT, LGND and ZI
  

Stocks With Unusual Call Option Activity:

• 1) FNF 2) KMX 3) NAV 4) NKE 5) VIRT

Stocks With Most Positive News Mentions:

• 1) CCL 2) MR 3) EBAY 4) AEP 5) ALV

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running -18.4% Below 100-Day Average
• 3 Sectors Rising, 8 Sectors Declining
• 39.3% of Issues Advancing, 58.0% Declining
• 27 New 52-Week Highs, 28 New Lows
• 41.2% of Issues Above 200-day Moving Average
• Average 14-Day RSI 40.7% 
• Bloomberg Global Risk-On/Risk-Off Index 175.0 +34.0 points
• Vix 26.5 -1.5%
• Total Put/Call .77 -11.5%
• TRIN/Arms 1.18 +3.5%

Wednesday Watch

Night Trading 

• Asian equity indices are unch. to +.75% on average.

• Asia Ex-Japan Investment Grade CDS Index 74.75 +.25 basis point.

• China Sovereign CDS 45.25 +.25 basis point.

• Bloomberg Emerging Markets Currency Index 59.80 +.01%.
• Bloomberg Global Risk-On/Risk Off Index 95.0 -46.0 points.
• Volatility Index(VIX) futures 31.25 -.40%
• FTSE 100 futures +.8%.

• S&P 500 futures +.09%.

• NASDAQ 100 futures -.28%.

Morning Preview Links

Earnings of Note 
Company/Estimate

Before the Open:

• (CTAS)/2.12
• (GIS)/.82
• (JKS)/.75
• (WB)/.46
• (WOR)/.44
  

After the Close:

• (CMTL)/.06
• (FUL)/.70
  

Economic Releases

9:00 am EST

• The FHFA House Price Index MoM for July is estimated to rise +.5% versus a +.9% gain in June.
  

9:45 am EST

• The Markit US Manufacturing PMI report for Sept. is estimated to rise to 53.5 versus 53.1 in Aug.
• The Markit US Services PMI report for Sept. is estimated to fall to 54.5 versus 55.0 in Aug.
  

10:30 am EST

• Bloomberg consensus estimates call for a weekly crude oil inventory decline of -2,471,910 barrels versus a -4,389,000 barrel decline the prior week. Gasoline supplies are estimated to fall by -749,800 barrels versus a -381,000 barrel decline the prior week. Distillate inventories are estimated to rise by +1,081,110 barrels versus a +3,461,000 barrel gain the prior week. Finally, Refinery Utilization is estimated to rise by +.18% versus a +4.0% gain prior.

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Fed's Powell testimony to House, Fed's Evans speaking, Fed's Rosengren speaking, Fed's Bostic speaking, FEd's Quarles speaking, Fed's Mester speaking, Spain GDP report, Eurozone PMI report, weekly MBA Mortgage Applications report, $53B 5Y T-Note auction and the (INTU) investor day could also impact trading today.

Market Hours
Normal:

• 9:30 am - 4:00 pm EST
  

BOTTOM LINE: Asian indices are modestly higher, boosted by commodity and consumer shares in the region. I expect US stocks to open modestly lower and to rally into the afternoon, finishing mixed. The Portfolio is 50% net long heading into the day.