Morning Market Internals

NYSE Composite Index:

• Volume Running -20.0% Below 100-Day Average 
• 0 Sectors Declining, 11 Sectors Rising
• 77.6% of Issues Advancing, 18.8% Declining
• 13 New 52-Week Highs, 35 New Lows
• 26.3% of Issues Above 200-day Moving Average
• Average 14-Day RSI 38.2% 
• Bloomberg Global Risk-On/Risk-Off Index 41.5 +.7%
  
• Russell 1000: Growth/Value 15,524.5 -.16%
  
• Vix 23.8 -7.1%
• Total Put/Call 1.07 +4.9%
• TRIN/Arms 1.08 +44.0% 

Friday Watch

Night Trading 

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

• Asia Ex-Japan Investment Grade CDS Index 144.0 +1.25 basis points. 

• China Sovereign CDS 74.0 -.75 basis point.
  

• Bloomberg Emerging Markets Currency Index 48.5 -.01%.  
• Bloomberg Global Risk-On/Risk Off Index 42.1 +2.0%. 
• Bloomberg US Financial Conditions Index -.38 +2.0 basis points
  
• Volatility Index(VIX) futures 26.8 +.3%
• Euro Stoxx 50 futures +.87%.

• S&P 500 futures -.20%.

• NASDAQ 100 futures -.17%  

Morning Preview Links

Earnings of Note 
Company/Estimate 

 

Before the Open: 

• None of note
  

After the Close:

• None of note
  

Economic Releases

8:30 am EST

• The Change in Non-Farm Payrolls for Aug. is estimated at 298K versus 528K in July.
• The Unemployment Rate for Aug. is estimated to rise +3.5% versus a +3.5% gain in July.
• Average Hourly Earnings MoM for Aug. is estimated to rise +.4% versus a +.5% gain in July.  Average Hourly Earnings YoY for Aug. is estimated to rise +5.3% versus a +5.2% gain in July.
• Labor Force Participation Rate for Aug. is estimated to rise to 62.2% versus 62.1% in July.

10:00 am EST

• Factory Orders for July is estimated to rise +.2%versus a +2.0% gain in June.
• Factory Orders Ex Transports for July is estimated to rise +.4% versus a +1.4% gain in June.

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Fed's Bostic speaking and the Eurozone PPI report 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 industrial 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 Lower into Afternoon on US Policy-Induced Stagflation Fears, China Hard Landing Worries, Earnings Outlook Jitters, Tech/Commodity Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Lower Lower
  

• Sector Performance: Almost Every Sector Declining
  

• Volume:  Around Average

• Market Leading Stocks: Underperforming
  

Equity Investor Angst:

• Volatility(VIX) 26.6 +2.7%
• DJIA Intraday % Swing .75% -35.6%
  
• Bloomberg Global Risk On/Risk Off Index 40.4 +.3%

• Euro/Yen Carry Return Index 143.46 -.26%

• Emerging Markets Currency Volatility(VXY) 11.7 +.6%

• CBOE S&P 500 Implied Correlation Index 46.4 +2.4% 

• ISE Sentiment Index 92.0 -6.0 points
  

• Total Put/Call .99 -9.2%

• NYSE Arms 1.01 +11.0%

Credit Investor Angst:

• North American Investment Grade CDS Index 92.73 +.6%
  

• US Energy High-Yield OAS 430.94 +1.7%
• Bloomberg TRACE # Distressed Bonds Traded 383.0 +19.0
  

• European Financial Sector CDS Index 131.42 +.9%

• Italian/German 10Y Yld Spread 237.0 basis points +2.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 144.40 +3.7%
  

• Emerging Market CDS Index 329.87 +.9%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 26.51 -.33%

• 2-Year Swap Spread 34.75 basis points -2.0 basis points
  

• TED Spread 15.25 basis points -2.75 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -16.0 basis points -1.5 basis points
  
• MBS  5/10 Treasury Spread  147.0 +6.0 basis points
  
• iShares CMBS ETF 47.17 -.38%
• Avg. Auto ABS OAS .74 -5.0 basis points
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 48.50 -.47%
• 3-Month T-Bill Yield 2.93% +2.0 basis points
  

• Yield Curve -26.0 basis points (2s/10s) +6.0 basis points
  

• China Iron Ore Spot 95.2 USD/Metric Tonne -5.3%
• Dutch TTF Nat Gas(European benchmark) 252.0 euros/megawatt-hour +5.0%

• Citi US Economic Surprise Index -20.9 +6.7 points

• Citi Eurozone Economic Surprise Index -17.6 +7.8 points
  

• Citi Emerging Markets Economic Surprise Index 12.0 +3.2 points
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 237.16 +.10:  Growth Rate +16.0% unch., P/E 16.6 -.2 point
  
• Bloomberg US Financial Conditions Index -.36 +5.0 basis points
  
• US Atlanta Fed GDPNow Forecast +2.59% +102.0 basis points
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +4.62% unch.: CPI YoY +8.24% unch.
  
• 10-Year TIPS Spread 2.46 -5.0 basis points
  
• Highest target rate probability for November 2nd FOMC meeting: 75.3%(+13.3 percentage points) chance of 3.5%-3.75%. Highest target rate probability for December 14th meeting: 70.0%(+8.0 percentage points) chance of 3.75%-4.0%.
  

US Covid-19:

• 182 new infections/100K people(last 7 days total). 10.5%(+.5 percentage point) of 1/14/22 peak(1,740) +7/100K people from prior report.
  
• New Covid-19 patient hospital admissions per 100K population -76.3%(-.8 percentage point) from peak 7-day avg. of 1/9/22 - 1/15/22
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -26 open in Japan 
• China A50 Futures: Indicating +6 open in China

• DAX Futures: Indicating +63 open in Germany

Portfolio:

• Slightly Higher:  On gains in my medical sector longs, emerging market shorts and index hedges
  

• Disclosed Trades:  Covered some of my (IWM)/(QQQ) hedges
  

• Market Exposure:  Moved to 50% Net Long
  

Bear Radar

Style Underperformer:

• Small-Cap Growth -2.8%

Sector Underperformers:

• 1) Alt Energy -5.4% 2) Cybersecurity -5.0% 3) Semis -4.8%

Stocks Falling on Unusual Volume: 

• SJT, PSTG, PLNT, NSTG, XPER, NVRO, PCOR, CWAN, DOMO, MFA, CRC, BROS, PDCO, AVID, SNPS, PATH, CRDO, ALB, AVAV, WOLF, HRL, NFE, ESTC, MRVL, ATRC, MXL, POWI, TWLO, CRWD, ACLS, TRUP, SITM, CELH, ASTS, SNOW, NEOG, SMAR, PLAB, AEHR, SMG, SLAB, CHPT, AMRK, DDOG, MPWR, CIEN, AMBA, NCNO, PD, CLFD, NVDA, SGRY, VICR, S, BASE, VEEV, LE, GTLB, IOT, AI, MDB, SMTC and OKTA
  

Stocks With Unusual Put Option Activity:

• 1) OKTA 2) ARCC 3) IJR 4) MDB 5) EFA
  

Stocks With Most Negative News Mentions:

• 1) AI 2) NVDA 3) MSTR 4) U 5) BBBY
  

Charts:

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

Bull Radar

Style Outperformer:

• Large-Cap Value -.8%

Sector Outperformers:

• 1) Utilities +1.0% 2) Pharma +.5% 3) Insurance -.1%

Stocks Rising on Unusual Volume:

• FMTX, NTNX, AGIO, CLAR, FIVE and DXC
  

Stocks With Unusual Call Option Activity:

• 1) OKTA 2) MPC 3) MDLZ 4) BSM 5) MPW

Stocks With Most Positive News Mentions:

• 1) NTNX 2) TWIN 3) AGIO 4) BKE 5) BF/B
  

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running -6.0% Below 100-Day Average 
• 11 Sectors Declining, 0 Sectors Rising
• 12.7% of Issues Advancing, 84.0% Declining
• 5 New 52-Week Highs, 219 New Lows
• 27.7% of Issues Above 200-day Moving Average
• Average 14-Day RSI 39.7% 
• Bloomberg Global Risk-On/Risk-Off Index 39.9 -1.0%
  
• Russell 1000: Growth/Value 15,497.6 -.55%
  
• Vix 27.4 +5.7%
• Total Put/Call 1.08 -.9%
• TRIN/Arms 1.27 +39.6%