Stocks Reversing Slightly Higher into Afternoon on Stable Long-Term Rates, Sector Rotation, Technical Buying, Tech/Biotech Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Lower
  

• Sector Performance: Mixed
  

• Volume: Below Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 15.6 -2.7%
• Bloomberg Global Risk On/Risk Off Index 2,965.0 +3.0 points

• Euro/Yen Carry Return Index 133.93 -.01%

• Emerging Markets Currency Volatility(VXY) 8.93 unch.

• S&P 500 Implied Correlation 48.5 -3.2%

• ISE Sentiment Index 78.0  -34.0 points
  

• Total Put/Call .90 -9.1%

• NYSE Arms 1.2 +38.4%

Credit Investor Angst:

• North American Investment Grade CDS Index 49.12 -1.7%
  

• US Energy High-Yield OAS 440.0 -.68%

• European Financial Sector CDS Index 53.1 -1.5%

• Italian/German 10Y Yld Spread 100.0 -3.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 86.82 -1.32%
  

• Emerging Market CDS Index 161.69 -2.2%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 38.23 unch.

• 2-Year Swap Spread 9.25 unch.

• TED Spread 7.75 -.25 basis point
  

• 3-Month EUR/USD Cross-Currency Basis Swap -2.5 +.5 basis point
  
• MBS  5/10 Treasury Spread  71.75 -1.5 basis points
  
• IHS Markit CMBX BBB- 6 73.5 unch.
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 59.69 +.23%
• 3-Month T-Bill Yield .05% unch.
  

• Yield Curve 113.0 +1.75 basis points
  

• China Iron Ore Spot 157.45 USD/Metric Tonne -1.12%

• Citi US Economic Surprise Index -11.6 -1.1 points

• Citi Eurozone Economic Surprise Index 12.8 -1.7 points
  

• Citi Emerging Markets Economic Surprise Index 40.7 +3.2 points

• 10-Year TIPS Spread 2.43 +3.0 basis points
• 100.0% chance of no change at Nov. 3rd meeting, 100.0% chance of no change at Dec. 15th meeting

US Covid-19:

• 258 new infections/100K people(last 7 days total) n/a
• 48% of Jan. 7th, 2021 peak(highest daily avg. new infections) n/a
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +65 open in Japan 
• China A50 Futures: Indicating -152 open in China

• DAX Futures: Indicating +8 open in Germany

Portfolio:

• Slightly Higher: On gains in my biotech/medical/tech sector longs
  

• Disclosed Trades: None
  

• Market Exposure: 100% Net Long
  

Bear Radar

 Style Underperformer:

• Small-Cap Value -.4%

Sector Underperformers:

• 1) Airlines -2.5% 2) Disk Drives -2.4% 3) Gold & Silver -2.2%

Stocks Falling on Unusual Volume: 

• ONTF, CWK, EHTH, SDGR, CRTX, PTRA, MU, BLNK, WDC, COHU, MVST, AZPN, RVMD, MQ, RXT, STEM, GRWG, SLQT, VRM, ATCX, DIBS and LFST
  

Stocks With Unusual Put Option Activity:

• 1) EGHT 2) SESN 3) GRWG 4) NRZ 5) EWT
  

Stocks With Most Negative News Mentions:

• 1) AEYE 2) AZPN 3) GOCO 4) RXT 5) MU
  

Charts:

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

Bull Radar

Style Outperformer:

• Large-Cap Growth +.4%

Sector Outperformers:

• 1) Shipping +1.4% 2) Software +.9% 3) Medical Equipment +.8%

Stocks Rising on Unusual Volume:

• XONE, KNBE, OPEN, SAVA, DOCS, PLTR, OGN, AZEK, CANO, PCT, FOSL, SKYT, GXO, ARRY, VIR, GDRX, COO, BMBL, MSP, UPST, ARCT, SGFY, ALIT, SONO, COO, MCFE, LEGO, CORE, DVAX, DDS and ACM
  

Stocks With Unusual Call Option Activity:

• 1) EGHT 2) IAA 3) GRWG 4) SESN 5) FL

Stocks With Most Positive News Mentions:

• 1) OPEN 2) MGIC 3) PLTR 4) CLOV 5) DOCS
  

Charts:

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

Mid-Day Market Internals

NYSE Composite Index:

• Volume Running -17.5% Below 100-Day Average 
• 5 Sectors Rising, 6 Sectors Declining
• 42.0% of Issues Advancing, 54.0% Declining
• 126 New 52-Week Highs, 28 New Lows
• 76.2% of Issues Above 200-day Moving Average
• Average 14-Day RSI 51.0%
  
• Bloomberg Global Risk-On/Risk-Off Index 2,950.0 -13.0 points
• Russell 1000: Growth/Value 17,343 +.42%
  
• Vix 15.5 -3.2%
• Total Put/Call .92 -7.1%
• TRIN/Arms 1.11 +30.2%

Thursday Watch

Night Trading 

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

• Asia Ex-Japan Investment Grade CDS Index 87.0 -1.0 basis point.

• China Sovereign CDS 38.0 unch.
  

• Bloomberg Emerging Markets Currency Index 59.56 +.01%.
• Bloomberg Global Risk-On/Risk Off Index 2,951.0 -12.0 points.
• Volatility Index(VIX) futures 19.9 +.85%.
• FTSE 100 futures +.22%.

• S&P 500 futures -.03%.

• NASDAQ 100 futures -.13%. 

Morning Preview Links

Earnings of Note 
Company/Estimate 

 

Before the Open: 

• (BIDU)/13.36
• (DDS)/1.69
  

After the Close:

• (ABNB)/-.23
• (COHR)/1.65
• (DASH)/.04
• (DIS)/.55
  

Economic Releases

8:30 am EST

• Initial Jobless Claims for last week are estimated to fall to 375K versus 385K the prior week.
• Continuing Claims are estimated to fall to 2900K versus 2930K prior.
• PPI Final Demand MoM for July is estimated to rise +.6% versus a +1.0% gain in June.
• PPI Ex Food and Energy MoM for July is estimated to rise +.5% versus a +1.0% gain in June.

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The UK GDP report, Eurozone Industrial Production report, $27B 30Y T-Bond auction, weekly Langer Consumer Comfort Index, (IDXX) investor day and the (FEYE) August investor briefing could also impact global trading today.

US Equity Market Hours

• 9:30 am - 4:00 pm EST
  

BOTTOM LINE: Asian indices are mostly higher, boosted by industrial and technology shares in the region. I expect US stocks to open modestly lower and to rally into the afternoon, finishing mixed. The Portfolio is 100% net long heading into the day.

Evening Headlines

Bloomberg: 

• Work From Home Is Driving U.K. Property Price Surge, BOE Says.
• Nervous S&P 500 Traders Bet the Market’s Best Days Are Behind It.
• Consumer Borrowing in U.S. Surged in June by Most on Record.  
• Florida Hits Record; JPMorgan, Amazon Mask Up: Virus Update.
• Robinhood Adopts Meme Stocks Mantle and Their Violent Swings.
• Wall Street’s Hottest Commodity: College Grads With Excel Skills.
  
• Hawaii, Masked and Vaccinated, Still Falls Prey to Delta Strain.  
• Melinda French Gates Now Owns $5.7 Billion in Stock Post-Divorce.  
• Crop Giant Cargill Reports Biggest Profit in 156-Year History.  
• Charting the Global Economy: Labor Market in U.S. Charges Ahead.  
• Fed’s Kaplan Calls for Gradual, Balanced Bond Tapering Soon.

Wall Street Journal:

• Democrats Reboot Stalled Election-Law Push.
• Why I’m Suing Over My Employer’s Vaccine Mandate.
• Amazon to Require Masks for Warehouse Workers as Delta Variant Surges.
• Could a Conservative Replace Gavin Newsom?
• Biden’s Eviction Ban Goes Back to Court.
• Does the U.S. Want the Lab-Leak Truth?
• New York’s Capital Is Crazytown.
• An Ohio Factory’s Test: Will Higher Wages Help More Than They Hurt?
• Walmart Gives Bonuses, Raises to Keep Warehouse Workers.

CNBC:

• Dow rises 100 points, closes at record high after jobs report shows strong economic recovery.
• Google billionaire Larry Page has been granted New Zealand residency.
• Afghan war has entered ‘deadlier and more destructive phase,’ UN says.
• U.S. is concerned about China’s growing nuclear arsenal, Blinken tells Southeast Asian officials.
• July’s strong jobs report could prepare the Federal Reserve to dial back its bond-buying program.
• 70% of NY voters say Gov. Cuomo should resign, majority believes he should be charged with crime.

IG:

• Weekend Markets Trading Live.

MarketWatch.com:        

• Don’t expect unemployment benefits if you don’t comply with your employer’s vaccine requirement.
• Nasdaq will require public companies to disclose boards’ diversity after SEC approval.
  
• Big Tech is suffering from a ‘Great Resignation’ of workers, who say ‘It’s a good time to leave’.

Fox News:  

• Another major link between Cuomo's defense and #MeToo group exposed.

Zero Hedge:

• "No": Biden Admin Has 'No Concern' Over 'Emotional, Academic And Psychological Effects' Of Forcing Kids To Wear Masks.
• Quebec Becomes First Canadian Province To Introduce Vaccine Passports.
• Hezbollah Launches 20 Rockets On Israel As Border Fighting Escalates. 
• Biden Administration Drops Lawsuit Protecting Pro-Life Nurses.
• 65% Of American Workers Would Take A 5% Pay Cut To Be Able To Permanently Work From Home.
• Wuhan's 'Bat Lady' Warns Of Coming Covid-19 Mutants.
• 'Did I Miss The Investigation?': Biden Sexual Assault Accuser Claps Back After Psaki Says Claims Were 'Heavily Litigated'.
• Brace For Astronomical Shipping Costs As China Goes Into Lockdown Mode.
• The Unvaccinated: The New COVID Scapegoats.
• Big Jobs Beat Batters Bonds & Commodities; Crypto & Stocks Bounce.

TheGatewayPundit.com:

• “My Kindergartener Says She Could Wear a Mask All Day” – Psaki When Asked About Psychological Effects of Masking Children (VIDEO).
• Heartbreaking Interview with Father of Jake Lang: He Saved Trump Supporter Philip Anderson’s Life on Jan. 6 from Capitol Police — Now He’s a Political Prisoner in Washington DC.
• Poll Shows Democrat Governor Newsom Losing Recall Election by Double Digits.
• DeSantis Responds to Biden’s “Governor Who?” Jab with a Zinger: ‘I’m Not Surprised Biden Doesn’t Remember Me… What Else Has He Forgotten?’ (VIDEO).

The Epoch Times:

• Chinese Regime Has Stolen Enough Data to Compile ‘Dossier’ on All Americans: Former Official.

Covid-19(Data, Maps, Graphs):

• Our World in Data:  New Global Covid-19 Cases(7-day rolling average graphs). New US Covid Hospital Admissions/ICU Admissions/Deaths
  
• FT.com:  Fully Vaccinated by Country(graph). Global Lockdown Stringency Index(map).
  
• NYTimes.com:  County Trends and Clusters.
  
• Brown School of Public Health:  Covid Severity by State/County(map).  US Hospital Capacity.
  
• CovidActNow:  Covid Severity/Infection Rate by Metro Area.
  
• KFF:  US Vaccinations by Race/Ethnicity.
  
• Carnegie Mellon: Covid-Like Symptoms in Community. Covid Symptom Searches on Google. Covid-Related Dr.Visits.  Restaurant Visits. Wearing Masks. (graphs)
  
• Safegraph.com:  Commerce Patterns(graphs).