Wednesday Watch

Evening Headlines

Bloomberg:       

• UN Chief’s Dire Warning; EU Migrant Worries: Afghanistan Update.
• Afghan Pullout May Prove Bigger Problem for Europe Than U.S.  
• The Up and Down History of Afghan Women’s Rights.  
• Worst-Hit Virus Markets in Asia Surge Back on Re-Opening Trades.
  
• Xi Tests ‘Common Prosperity’ Policies in Alibaba’s Home Province.
  
• Asia Stocks Set to Dip on Recovery, Stimulus Risks: Markets Wrap.
  
• OPEC+ Meets With No Sign of Deviating From Planned Output Hikes.
• ‘Forever Changed’: CEOs Are Dooming Business Travel — Maybe for Good.  
• Zoom-Call Gaffes Led to Someone Getting Axed, 1 in 4 Bosses Say.
• Wall Street Traders Driving S&P 500 Records Loaded Up on Hedges.
• Doge NFT Rides Into Fractional Ownership With $DOG Tokens.

Wall Street Journal:  

• No, Trump Didn’t Force Biden’s Withdrawal.
• Taliban Cheer U.S. Exit, Vow to Enforce Islamic Rule.
• Ida Leaves Residents Without Power Amid Punishing Heat.
• Storm Could Cause Over $15 Billion in Insured Losses.
• A Dishonest Afghanistan Accounting.
• China’s Videogame Limits Signal Move to Regulate Private Lives, Shape Next Generation.

Fox News:

• Biden had chance to speak to nation in pain on the world stage but slammed for doing opposite.
• War vet says Biden doesn't deserve to be president and doesn't stop there.
• House Republicans call for Afghanistan accountability and demand Biden resign.
  

CNBC.com: 

• Stocks making the biggest moves after hours: CrowdStrike, Ambarella, PVH and more.
• These charts show which states will get the most money from Biden’s infrastructure bill.
• Two more factors have popped up that add to the Fed’s inflation worries.
• Restaurant owners say hiring is increasingly challenging and delta could spoil recovery. 
  

MarketWatch.com:            

• Social Security to become unable to pay full benefits sooner than previously estimated.
  
• Opinion: Forget short-term market fads and just buy these 5 rocketing tech stocks.
  
• 30 stocks that shined in the pandemic are still poised for huge growth through 2024.
  
• Ambarella says sales could hit highest total in five years, stock jumps.

Zero Hedge:

• 24 Students, 3-Year-Old California Boy Among Americans Stranded In Afghanistan.
• Two Senior FDA Officials Stepping Down Over Reported Disagreements With White House Over Booster Shots.
• California Port Pileup Shatters Record And Imports Still Haven’t Peaked.
• New Orleans Mayor Orders Citywide Curfew To Prevent Mass Looting.
• 90 Retired Generals Pen Scathing Letter Calling For Austin And Milley To Resign Immediately.
• Did A Fake Banksy NFT Just Sell For $336,000?
• Americans Face A Nightmare Scenario: Record High Home Prices, Record High Rents... And OER Is About To Explode.
• Wells Tumbles On Report Troubled Bank Faces New Regulatory Sanctions.
• CDC Director To Restart Gun Research Amid Spate Of Mass Shootings.
• Pentagon Spox Issues Carefully Worded Statement On Stranded Service Dogs.
• Stocks End Seven Straight Months Of Gains With A Whimper.

Newsmax:  

• Fallen Marine's Mom Hits Instagram for Deleting Her Account.
• Dad of Marine Killed in Kabul: Biden Bristled When Told to 'Learn' Victims' Stories.
• Biden Faces Congressional Probes Over Evacuation Debacle.
  

TheGatewayPundit.com:

• Biden Calls His Disastrous Withdrawal from Afghanistan that Resulted in 13 Dead US Service Members and Stranded Americans an “Extraordinary Success” (VIDEO).
• Sacramento High School Teacher CAUGHT on UNDERCOVER VIDEO Bragging About Indoctrinating Students to Become ANTIFA “Revolutionaries;” Views American Children as “Martyrs for a Cause” – (Video).
• Democrats Block Legislation to Rescue Americans Stranded in Afghanistan.
• Lt. Col. Stuart Scheller Submits Resignation Letter Following Disastrous Afghanistan Exit – Blames “Lack of Trust and Confidence” in Leadership.
• EXCLUSIVE: Obama/Biden Reinstituting Program of Bringing Non-Vetted Illegals Into the US and Using ‘Non-Profits’ to Move Them Around the US.
• Joe Biden Leaves Interpreter Stranded in Afghanistan who Saved His Life in 2008 Snowstorm.
• 780 Generals, Admirals, Ambassadors and Senior National Security Directors Supported Biden Before the 2020 Election – Here is a Short List of These Dummies Who Couldn’t Have Been More Wrong. 
• Pelosi Blocks Names of 13 US Service Members From Being Read on House Floor.

The Epoch Times:

• NY Times Pulled Ad Calling CCP to Account for Pandemic.
• Chinese Acquisition of Semiconductor Firm Poses Security Risks, US Treasury Warns.

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).
• Bloomberg.com:  International Travel Restrictions.  Case Graphs by State.
  
• NYTimes.com:  County Trends and Clusters. Local ICU Occupancy.
  
• Brown School of Public Health:  Covid Severity by State/County(map).  US Hospital Capacity(region).
  
• 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).

Night Trading 

• Asian equity indices are -.25% to +.75% on average.

• Asia Ex-Japan Investment Grade CDS Index 65.75 -1.75 basis points.

• China Sovereign CDS 32.75 +.25 basis point.
  

• Bloomberg Emerging Markets Currency Index 60.46 unch.
• Bloomberg Global Risk-On/Risk Off Index 2,961.0 +29.0 points.
• Volatility Index(VIX) futures 20.9 -.13%.
• FTSE 100 futures +.27%.

• S&P 500 futures+.18%

• NASDAQ 100 futures +.11%. 

Morning Preview Links

Earnings of Note 
Company/Estimate 

 

Before the Open: 

• (BF/B)/.40
• (CPB)/.47
• (DY)/.75
• (VRA)/.33
  

After the Close:

• (AI)/-.28
• (CHPT)/-.12
• (CHWY)/-.01
• (FIVE)/1.12
• (OKTA)/-.33
• (SWBI)/1.26
  

Economic Releases

8:15 am EST

• The ADP Employment Change for Aug. is estimated to rise to 638K versus 330K.
  

10:00 am EST

• Construction Spending MoM for July is estimated to rise +.2% versus a +.1% gain in June.
• ISM Manufacturing for Aug. is estimated to fall to 58.5 versus 59.5 in July.
• ISM Prices Paid for Aug. is estimated to fall to 84.0 versus 85.7 in July.
  

10:30 am EST

• Bloomberg consensus estimates call for a weekly crude oil inventory decline of -2,926,890 barrels versus a -2,980,000 barrel decline the prior week. Gasoline supplies are estimated to fall by -1,368,880 barrels versus a -2,241,000 barrel decline the prior week. Distillate inventories are estimated to fall by -809,380 barrels versus a +645,000 barrel gain the prior week. Finally, Refinery Utilization is estimated to fall by -.35% versus a +.2% gain prior.

Afternoon:

• Wards Total Vehicle Sales for Aug. is estimated to fall to 14.5M versus 14.75M in July.

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Eurozone PMI report, German retail sales report, weekly MBA Mortgage Applications report, (ADSK) investor day and the (COST) August sales results 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 technology and industrial shares in the region. I expect US stocks to open mixed and to rally into the afternoon, finishing modestly higher. The Portfolio is 100% net long heading into the day.

Stocks Finish Slightly Lower on US Economic Data, Oil Decline, Profit-Taking, Tech/Retail Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Higher
  

• Sector Performance: Mixed
  

• Volume: Below Average

• Market Leading Stocks: Outperforming
  

Equity Investor Angst:

• Volatility(VIX) 16.8 +4.0%
• Bloomberg Global Risk On/Risk Off Index 2,920.0 +76.0 points

• Euro/Yen Carry Return Index 134.04 +.16%

• Emerging Markets Currency Volatility(VXY) 8.52 -.23%

• S&P 500 Implied Correlation 49.6 unch.

• ISE Sentiment Index 99.0  -23.0 points
  

• Total Put/Call .87 +14.5%

• NYSE Arms .80 -36.5%

Credit Investor Angst:

• North American Investment Grade CDS Index 46.51 +.6%
  

• US Energy High-Yield OAS 413.63 -.85%

• European Financial Sector CDS Index 51.93 -.74%

• Italian/German 10Y Yld Spread 109.0 +4.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 66.45 -2.2%
  

• Emerging Market CDS Index 152.03 +.15%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 38.52 unch.

• 2-Year Swap Spread 9.25 unch.

• TED Spread 8.25 +.75 basis point
  

• 3-Month EUR/USD Cross-Currency Basis Swap -3.0 unch.
  
• MBS  5/10 Treasury Spread  74.5 +.75 basis point
  
• IHS Markit CMBX BBB- 6 72.5 unch.
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 60.46 +.52%
• 3-Month T-Bill Yield .04% unch.
  

• Yield Curve 107.0 -1.0 basis point
  

• China Iron Ore Spot 147.35 USD/Metric Tonne -4.7%

• Citi US Economic Surprise Index -56.3 -5.6 points

• Citi Eurozone Economic Surprise Index -10.8 -6.1 points
  

• Citi Emerging Markets Economic Surprise Index 20.1 -3.5 points

• 10-Year TIPS Spread 2.34 -3.0 basis points
• 100.0% chance of no change at Nov. 3rd meeting, 98.2% chance of no change at Dec. 15th meeting

US Covid-19:

• 339 new infections/100K people(last 7 days total) +6/100K people
• 64% of Jan. 7th, 2021 peak(highest daily avg. new infections) +2.0 percentage points
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +16 open in Japan 
• China A50 Futures: Indicating -36 open in China

• DAX Futures: Indicating -9 open in Germany

Portfolio:

• Slightly Lower: On losses in my consumer discretionary/industrial sector longs
  

• Disclosed Trades: None
  

• Market Exposure: 100% Net Long
  

Mid-Day Market Internals

NYSE Composite Index:

• Volume Running -15.2% Below 100-Day Average 
• 6 Sectors Rising, 5 Sectors Declining
• 53.1% of Issues Advancing, 42.7% Declining
• 120 New 52-Week Highs, 27 New Lows
• 70.2% of Issues Above 200-day Moving Average
• Average 14-Day RSI 50.0%
  
• Bloomberg Global Risk-On/Risk-Off Index 2,928.0 +87.0 points
• Russell 1000: Growth/Value 17,834 -.24%
  
• Vix 16.8 +4.0%
• Total Put/Call .88 +15.8%
• TRIN/Arms .71 -43.7%

Tuesday Watch

Evening Headlines

Bloomberg:             

• Bombing in Kabul Stokes Fear of Jihadi Revival.  
• Calls for a Covid Probe Plunged Australia Into a Hacking Nightmare.  
• U.K. Companies Boost Wages and Prices Amid Reopening Boom.
  
• UN Votes to Demand Continued Safe Passage: Afghanistan Update.
• Asian Stocks Dip as Traders Mull U.S. Rally, China: Markets Wrap.
  
• Oil Poised for Monthly Loss on Eve of OPEC+ Production Meeting.
• Powell’s Tough Spot, World-Beating Growth, China Skills: Eco Day.
• New Orleans Escapes Floods But Faces Days Without Power.  
• Progressives Urge Biden Not to Nominate Powell as Fed Chair.  
• Apple Plans to Add Satellite Features to iPhones for Emergencies. 
• Ethereum Weathers Bug That Underlines Possible Blockchain Risks.  
• Cracks Are Emerging in the Fed’s Floor as Key Target Rate Slides.  
• Rails Brace for Gridlock After Ida Hammers New Orleans Hub.

Wall Street Journal:

• Kids Head Back to School—and Bring Covid-19’s Mental-Health Scars With Them.
• You Are Living in the Golden Age of Stupidity.
• Louisiana Assesses Storm Damage After Ida Slams State.
• EU Recommends Halting Nonessential Travel From U.S. Over Covid-19.
• U.S. Investigates Airstrike; Family Members Say 10 Civilians Killed.
• Latest Afghanistan Updates.  
• The Covid Civil-Rights Mask.  
• Joe Biden Bets on Cynicism.
• Oil Industry Surveys Damage.
• Aluminum Hits Decade Highs on Soaring Demand, Snarled Supply.

Fox News:

• How Biden refers to Black adviser raises eyebrows for wrong reasons.
• House-to-house executions begin after Biden leaves stranded Americans in hands of killers, source.
• US Gen. McKenzie says Taliban were 'helpful and useful' in final hours of evacuation.
• Biden national security adviser reveals stunning claim about US terror attacks.
• How billions of American dollars could get into Taliban’s hands.
  

CNBC.com: 

• CDC scientist says there’s limited data to evaluate Covid booster doses for general population.
• These overlooked, ‘Fed-proof’ August laggards could be due for a bounce. 
  

MarketWatch.com:             

• FTC to investigate retail gas market for ‘collusive’ schemes to raise prices.
• The S&P 500 hasn’t seen a year-to-date rally this strong since 1997. What’s next?   
• Zoom Video logs first billion-dollar quarter, but the stock is still falling.
• If you’ve got the stock market jitters, here are 20 companies in two defensive sectors.

Zero Hedge:

• Wait! The Taliban Offered Control Of Kabul To US Forces... And We Turned Them Down?
• Beijing's Big Tech Crackdown Causes Private Deal Flow To Dry Up In August.
• Chase Bank Cancels General Mike Flynn's Credit Cards.
• Our Afghan Nightmare: Tanks For Nothin'.
• China Introduces "Xi Jinping Thought" Into School Curriculum For All Age Groups.
• Justified Shooting Or Fair Game? Shooter Of Ashli Babbitt Makes Shocking Admission.
• The FDA's Credibility Problem.
• Why So Many Americans Reject Legal Due Process In The Age Of COVID.
• School Board Members Quitting Over "Toxic" Parents Who Oppose Mask Mandates, Vaccines, And CRT.
• Robinhood Tumbles As SEC's Gensler Says Payment-For-Order Flow Ban Is "On The Table".
• San Diego Proposal On Combatting COVID "Misinformation" Triggers Free Speech Concerns.
• Crypto & Tech Stocks Soar As 'Soft' Data Slumps To 18-Month Lows.

Newsmax:  

• Ida Damages Louisiana Grain Terminal, Disrupts Exports.
  

TheGatewayPundit.com:

• 84% of Americans Say Wait to Leave Kabul Until All Americans Are Evacuated — Biden Regime Disagrees and Will Leave Hundreds of Americans Behind.
• They Openly Mock Us Now: Taliban Hangs “Traitor” by the Throat From US Helicopter in Kandahar Left Behind by Joe Biden (VIDEO).
• US Contract Working Dogs Abandoned at Kabul Airport After Last Plane Left.
• It Begins. Al-Qaeda Leader Reemerges in Afghanistan Surrounded by Taliban Security as US Military Abandons the Country.
• Retired US Soldiers Attempted to Save Americans in Afghanistan But the US State Department Stopped Them.
• U.S. Truckers Plan Nationwide Protest Against Mandatory Vaccines: “On August 31st, On Tuesday, We’re Asking That Everybody Not Go To Work… This Truck Is Shut Down Officially” (VIDEO).
• BREAKING: 43,000 Dekalb County, Georgia Absentee Ballots Violated Chain of Custody Rule.

The Epoch Times:

• Beijing Says Sino–US Cooperation on Afghanistan Conditional on Washington’s ‘Attitude Toward China’.

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).
• Bloomberg.com:  International Travel Restrictions.  Case Graphs by State.
  
• NYTimes.com:  County Trends and Clusters. Local ICU Occupancy.
  
• Brown School of Public Health:  Covid Severity by State/County(map).  US Hospital Capacity(region).
  
• 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).

Night Trading 

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

• Asia Ex-Japan Investment Grade CDS Index 67.50 -3.25 basis points.

• China Sovereign CDS 32.5 -.75 basis point.
  

• Bloomberg Emerging Markets Currency Index 60.16 +.02%.
• Bloomberg Global Risk-On/Risk Off Index 2,828.0 -16.0 points.
• Volatility Index(VIX) futures 18.8 +.3%.
• FTSE 100 futures -.07%.

• S&P 500 futures+.03%

• NASDAQ 100 futures -.01%. 

Morning Preview Links

Earnings of Note 
Company/Estimate 

 

Before the Open: 

• (AMWD)/1.55
• (NTES)/6.11
  

After the Close:

• (AMBA)/.25
• (PLAN)/-.13
• (CAL)/.54
• (CRWD)/.09
• (HRB)/-.37
• (PVH)/1.20
  

Economic Releases

9:00 am EST

• The FHFA House Price Index MoM for June is estimated to rise +1.9% versus a +1.7% gain in May.
• S&P CoreLogic CS 20-City MoM for June is estimated to rise +1.8% versus a +1.81% gain in May.
  

9:45 am EST

• The MNI Chicago PMI for August is estimated to fall to 68.0 versus 73.4 in July.

10:00 am EST

• The Conference Board Consumer Confidence Index for August is estimated to fall to 123.0 versus 129.1 in July.

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The German Import/Export report, weekly US retail sales reports, Stifel Transport Conference and the Jefferies Semi/IT Hardware/Communications Infra Conference could also impact global trading today.

US Equity Market Hours

• 9:30 am - 4:00 pm EST
  

BOTTOM LINE: Asian indices are mostly lower, weighed down by energy and financial 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.