Mid-Day Market Internals

NYSE Composite Index:

• Volume Running -10.4% Below 100-Day Average 
• 8 Sectors Rising, 3 Sectors Declining
• 44.3% of Issues Advancing, 51.2% Declining
• 87 New 52-Week Highs, 25 New Lows
• 80.6% of Issues Above 200-day Moving Average
• Average 14-Day RSI 46.3%
  
• Bloomberg Global Risk-On/Risk-Off Index 3,075.0 -17.0 points
• Russell 1000: Growth/Value 17,578 +.53%
  
• Vix 16.6 -3.3%
• Total Put/Call .81 unch.
• TRIN/Arms 1.16 +5.5%

Wednesday Watch

Evening Headlines

Bloomberg:                 

• Biden’s Sharp-Elbows China Policy Hints at More Trump-Style Pain.
• Obscure Cyber Agency Becomes Nemesis of China's Tech Giants.  
• China GDP to Be Scrutinized for Signs of Post-Pandemic Slowdown.  
• Korea Adds More Jobs Before New Outbreaks Force Seoul Curbs.  
• Iranian Official Charged in Plot to Kidnap U.S. Citizen.  
• Canadian Retail Foot Traffic Jumps in Sign of Pent-Up Demand.  
• British Companies Accelerate Hiring as Economy Unlocks.
• Asian Stocks Eye Mixed Start, Yields Up After CPI: Markets Wrap.
• U.S. Inflation Spurt, China GDP Scrutiny, Hunger Crisis: Eco Day.  
• U.S. Oil Consumption Surging With Industry Firing at Full Blast.
• Meme Euphoria Fades as Losses Mount With 23% Drop From June Peak.  
• Small-Caps Lose Year’s Edge Over Tech With Bearish Bets Rising.
• LA County Passes Record $527 Million for Soaring Homeless Crisis.

Wall Street Journal:

• Joe Biden, Jim Crow and Texas Voting.
• Critical Race Theory Is a Hustle.
• Airbus Soars Past Boeing by Showing Little Mercy to Struggling Customers.
• Customers Are Back at Bars, but Workers Have Moved On.

Fox News:

• Biden ripped for injecting race in to election law speech as battle lines are drawn in Texas.
• Chick-fil-A could be banned from rest stops and guess who you can thank.
  

CNBC.com:

• Investors buy tech stocks to hedge inflation, Fed rate hike, Jim Cramer says.
• Surging prices for used cars, gasoline and food are driving jump in inflation.

 MarketWatch.com:    

• Apple reportedly planning buy-now, pay-later option; Affirm and Afterpay shares drop.

Zero Hedge:

• Democrat Groups Plan To "Fact Check" Private Text Messages.
• Fed President Blames Neverending QE On High Incarceration Rates Of Blacks And Latinos.
• Border Situation "Worst I've Ever Seen": Rep. Williams.
• Judicial Watch Asks Court To Order USPS To Disclose Social Media Snooping Documents.
• US Coast Guard To Cubans In Crisis: "Please Don't Take To The Sea".
• Yellen Urges Development Banks To Stop Fossil Fuel Funding.
• Cuba Accused Of Using Chinese Tech Systems To Block Internet Access Amid Protests.
• Goldman Says Economic Impact From Delta Will Likely Be "Modest".
• Trump Releases Letter From Ex-US Attorney Alleging Barr Pressured Him Not To Probe Voter Fraud Claims.
• "It Needs To Be Hard For People To Remain Unvaccinated": Making The Case For COVID Challenges.
• WTI Slides From 33-Month Highs After Inventory Data.
• Raging Inflation Sparks Bond Bloodbath, Slams Stocks As Dollar Spikes.

TheGatewayPundit.com: 

• Feds Arrest 5 Members of Same Texas Family For Walking Through Capitol on Jan. 6 – Leaving Behind One Minor Child Alone and Parentless.
• WTH? Jill Biden Appears on Sesame Street to Promote “Race Literacy” to Little Children.
• Joe Biden Says Trump Supporters Are Worse Than Slave-Owning Confederates in Divisive PA Speech (VIDEO).
  
• China Forces US Warship Out of Disputed Seas — As US Navy Continues to Focus on Diversity and Promote Drag Shows.

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 -.25% to +.25% on average.

• Asia Ex-Japan Investment Grade CDS Index 88.0 unch.

• China Sovereign CDS 38.0 +.25 basis point.
  

• Bloomberg Emerging Markets Currency Index 59.83 -.03%.
• Bloomberg Global Risk-On/Risk Off Index 3,084.0 -8.0 points.
• Volatility Index(VIX) futures 20.0 -.08%.
• FTSE 100 futures +.07%.

• S&P 500 futures -.02%.

• NASDAQ 100 futures -.04%. 

Morning Preview Links

Earnings of Note 
Company/Estimate 

 

Before the Open: 

• (BAC)/.76
• (BLK)/9.38
• (C)/1.91
• (DAL)/-1.40
• (PNC)/2.38
• (WFC)/.92
  

After the Close:

• None of note
  

Economic Releases

8:30 am EST

• PPI Final Demand MoM for June is estimated to rise +.6% versus a +.8% gain in May.
• PPI Ex Food & Energy MoM for June is estimated to rise +.5% versus a +.7% gain in May.
  

10:30 am EST

• Bloomberg consensus estimates call for a weekly crude oil inventory decline of -4,357,000 barrels versus a -6,866,000 barrel decline the prior week. Gasoline supplies are estimated to fall by -2,092,360 barrels versus a -6,075,000 barrel decline the prior week. Distillate inventories are estimated to rise by +864,550 barrels versus a +1,616,000 barrel gain the prior week. Finally, Refinery Utilization is estimated to rise by +.28% versus a -.7% decline prior.

2:00 pm EST

• US Fed Beige Book release.

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Fed's Powell testifying to House and the weekly MBA Mortgage Applications report could also impact global trading today.

US Equity Market Hours

• 9:30 am - 4:00 pm EST
  

BOTTOM LINE: Asian indices are slightly lower, weighed down by financial and transportation shares in the region. I expect US stocks to open modestly lower and to rally into the afternoon, finishing mixed. The Portfolio is 75% net long heading into the day.

Stocks Lower into Final Hour on Rising Long-Term Rates, Dollar Strength, Technical Selling, Alt Energy/Homebuilding Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Lower
  

• Sector Performance: Most Sectors Declining
  

• Volume: Below Average

• Market Leading Stocks: Underperforming
  

Equity Investor Angst:

• Volatility(VIX) 16.7 +3.3%
• Bloomberg Global Risk On/Risk Off Index 3,149.0 -22.0 points

• Euro/Yen Carry Return Index 134.56 -.43%

• Emerging Markets Currency Volatility(VXY) 8.70 -.34%

• S&P 500 Implied Correlation 48.51 +1.7%

• ISE Sentiment Index 87.0  -18.0 points
  

• Total Put/Call .79 -10.2%

• NYSE Arms .88 -27.9%

Credit Investor Angst:

• North American Investment Grade CDS Index 48.4 +1.24%
  

• US Energy High-Yield OAS 377.27 -.83%

• European Financial Sector CDS Index 53.91 -.19%

• Italian/German 10Y Yld Spread 101.0 -2.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 88.82 -.21%
  

• Emerging Market CDS Index 162.70 +1.8%
  

• China Corp. High-Yield Bond USD ETF(KCCB) 38.92 -.1%

• 2-Year Swap Spread 7.75 +.25 basis point

• TED Spread 8.5 unch.
  

• 3-Month EUR/USD Cross-Currency Basis Swap -4.75 unch.
  
• MBS  5/10 Treasury Spread  68.5 -1.75 basis points
  
• IHS Markit CMBX BBB- 6 73.75 +.25 basis point
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 59.86 -.25%
• 3-Month T-Bill Yield .05% unch.
  

• Yield Curve 114.0 +2.0 basis points
  

• China Iron Ore Spot 210.75 USD/Metric Tonne +.25%

• Citi US Economic Surprise Index 20.8 +24.0 points

• Citi Eurozone Economic Surprise Index 82.20 -1.3 points
  

• Citi Emerging Markets Economic Surprise Index 63.5 +5.1 points

• 10-Year TIPS Spread 2.37 +4.0 basis points
• 100.0% chance of no change at Nov. 3rd meeting, 100.0% chance of no change at Dec. 15th meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating -178 open in Japan 
• China A50 Futures: Indicating -90 open in China

• DAX Futures: Indicating -27 open in Germany

Portfolio:

• Slightly Lower: On losses in my commodity/industrial/tech/biotech sector longs
  

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

• Market Exposure: Moved to 75% Net Long
  

Bear Radar

 Style Underperformer:

• Small-Cap Value -1.4%

Sector Underperformers:

• 1) Shipping -2.2% 2) Homebuilding -2.2% 3) Airlines -1.8%

Stocks Falling on Unusual Volume: 

• PSAC, BA, AFIB, APO, FNB, DYN, CAG, ASO, FGEN, OLMA, LTCH, QSI, WBT, AMEH, SHLS, ACMR, GATO and VIVO
  

Stocks With Unusual Put Option Activity:

• 1) CAG 2) Z 3) NCR 4) EWH 5) JACK
  

Stocks With Most Negative News Mentions:

• 1) MMAT 2) BTCM 3) RLX 4) TME 5) PCT
  

Charts:

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

Bull Radar

Style Outperformer:

• Large-Cap Growth +.6%

Sector Outperformers:

• 1) Gold & Silver +2.7% 2) Social Media +1.6% 3) Software +1.2%

Stocks Rising on Unusual Volume:

• CLDX, UPWK, NRXP, OSTK, PLAB, CRCT, MIDD and ORMP
  

Stocks With Unusual Call Option Activity:

• 1) MRIN 2) JNPR 3) PEP 4) BHC 5) VEEV

Stocks With Most Positive News Mentions:

• 1) CLSH 2) PLXP 3) DPW 4) LAZY 5) SOTK
  

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running -18.7% Below 100-Day Average 
• 4 Sectors Rising, 7 Sectors Declining
• 30.7% of Issues Advancing, 65.1% Declining
• 82 New 52-Week Highs, 10 New Lows
• 82.6% of Issues Above 200-day Moving Average
• Average 14-Day RSI 48.6%
  
• Bloomberg Global Risk-On/Risk-Off Index 3,166.0 -8.0 points
• Russell 1000: Growth/Value 17,553 +1.01%
  
• Vix 16.2 +.3%
• Total Put/Call .54 -38.6%
• TRIN/Arms 1.08 -11.5%