Morning Market Internals

NYSE Composite Index:

• Volume Running -25.2% Below 100-Day Average 
• 1 Sector Declining, 10 Sectors Rising
• 64.1% of Issues Advancing, 31.3% Declining
• 14 New 52-Week Highs, 131 New Lows
• 26.6%(+2.6%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 39.0 +1.0
  
• Bloomberg Global Risk-On/Risk-Off Index 46.2 +.1%
  
• Russell 1000: Growth/Value 15,454.50 -.12%
  
• Vix 26.6 -2.1%
• Total Put/Call 1.0 +4.1%
• TRIN/Arms 1.70 +4.9% 

Wednesday Watch

Night Trading 

• Asian equity indices are -1.0% to -.5% on average.

• Asia Ex-Japan Investment Grade CDS Index 141.75 +3.75 basis points. 

• China Sovereign CDS 85.5 +9.5 basis points.
  

• Bloomberg Emerging Markets Currency Index 48.12 -.06%.  
• Bloomberg Global Risk-On/Risk Off Index 46.4 +.7%. 
• Bloomberg US Financial Conditions Index -.62 -5.0 basis points
  
• Volatility Index(VIX) futures 27.2 -.5%
• Euro Stoxx 50 futures -.14%.

• S&P 500 futures +.16%.

• NASDAQ 100 futures +.20%  

Morning Preview Links

Earnings of Note 
Company/Estimate 

 

Before the Open: 

• (GIS)/1.00
  

After the Close:

• (FUL)/1.04
• (KBH)/2.67
• (LEN)/4.87
• (SCS)/.13

Economic Releases

10:00 am EST

• Existing Home Sales for Aug. is estimated to fall to 4.69M versus 4.81M in July.
  

10:30 am EST

• Bloomberg consensus estimates call for a weekly crude oil inventory gain of +2,592,800 barrels versus a +2,442,000 barrel gain the prior week. Gasoline supplies are estimated to fall by -846,600 barrels versus a -1,768,000 barrel decline the prior week. Distillate inventories are estimated to fall by -505,200 barrels versus a +4,219,000 barrel gain the prior week. Finally, Refinery Utilization is estimated to fall by -.1% versus a +.6% gain prior.

2:00 pm EST

• The FOMC is expected to raise the benchmark Fed Funds Rate +75.0 basis points to 3.0-3.25%.

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The FOMC Press Conference, Canada CPI report, weekly MBA Mortgage Applications report, (TECK) investor day and the (CRM) investor day could also impact global trading today.

US Equity Market Hours

• 9:30 am - 4:00 pm EST
  

BOTTOM LINE: Asian indices are lower, weighed down by commodity and technology shares in the region. I expect US stocks to open modestly higher and to weaken into the afternoon, finishing modestly lower. The Portfolio is 25% net long heading into the day.

Stocks Falling Substantially into Final Hour on US Policy-Induced Stagflation Fears, Fed "Behind the Curve" Worries, European Energy Crisis Concerns, Consumer Discretionary/Transport Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Lower
  

• Sector Performance: Almost Every Sector Declining
  

• Volume:  Below Average

• Market Leading Stocks: Underperforming
  

Equity Investor Angst:

• Volatility(VIX) 27.6 +7.1%
• DJIA Intraday % Swing 1.38%
  
• Bloomberg Global Risk On/Risk Off Index 45.5 +1.8%

• Euro/Yen Carry Return Index 147.46 -.27%

• Emerging Markets Currency Volatility(VXY) 11.5 -.35%

• CBOE S&P 500 Implied Correlation Index 49.9 +4.7% 

• ISE Sentiment Index 106.0 +31.0 points
  

• Total Put/Call .86 -8.5%

• NYSE Arms 1.40 +194.0%

Credit Investor Angst:

• North American Investment Grade CDS Index 98.67 +13.3% (new series)
  

• US Energy High-Yield OAS 400.84 +.43%
• Bloomberg TRACE # Distressed Bonds Traded 332.0 -9.0
  

• European Financial Sector CDS Index 131.71 +8.5% (new series)
  

• Italian/German 10Y Yld Spread 227.0 basis points -1.0 basis point
  

• Asia Ex-Japan Investment Grade CDS Index 140.25 +8.23% (new series)
  

• Emerging Market CDS Index 291.07 -6.75% (new series)
  

• China Corp. High-Yield Bond USD ETF(KHYB) 26.69 -.45%

• 2-Year Swap Spread 39.0 basis points +1.75 basis points
  

• TED Spread 32.5 basis points -14.75 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -21.5 basis points -2.75 basis points
  
• MBS  5/10 Treasury Spread  155.0 -2.0 basis points
  
• iShares CMBS ETF 46.65 +.24%
• Avg. Auto ABS OAS .68 +2.0 basis points
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 48.13 -.32%
• 3-Month T-Bill Yield 3.23% +13.0 basis points
  

• Yield Curve -40.75 basis points (2s/10s) +6.25 basis points
  

• China Iron Ore Spot 95.4 USD/Metric Tonne -3.5%
• Dutch TTF Nat Gas(European benchmark) 199.50 euros/megawatt-hour +9.5%

• Citi US Economic Surprise Index 6.1 +2.5 points

• Citi Eurozone Economic Surprise Index 9.40 +8.2 points
  

• Citi Emerging Markets Economic Surprise Index 0.0 +1.8 points
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 236.63 -.97:  Growth Rate +16.1% +.2 percentage point, P/E 16.2 -.1
  
• Bloomberg US Financial Conditions Index -.61 +19.0 basis points
  
• US Atlanta Fed GDPNow Forecast +.31% -21.0 basis points
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +4.68% unch.: CPI YoY +8.19% -2.0 basis points
  
• 10-Year TIPS Spread 2.39 +6.0 basis points
  
• Highest target rate probability for November 2nd FOMC meeting: 61.6%(-.2 percentage point) chance of 3.75%-4.0%. Highest target rate probability for December 14th meeting: 44.8%(-.9 percentage point) chance of 4.25%-4.5%.
  

US Covid-19:

• 119 new infections/100K people(last 7 days total). 6.8%(-.0 percentage point) of 1/14/22 peak(1,740) -0/100K people from prior report.
  
• New Covid-19 patient hospital admissions per 100K population -80.9%(+1.2 percentage points) from peak 7-day avg. of 1/9/22 - 1/15/22
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -553 open in Japan 
• China A50 Futures: Indicating -48 open in China

• DAX Futures: Indicating -83 open in Germany

Portfolio:

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

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

• Market Exposure:  Moved to Market Neutral
  

Bear Radar

Style Underperformer:

• Mid-Cap Value -1.5%
  

Sector Underperformers:

• 1) Gold & Silver -3.7% 2) Oil Service -3.0% 3) Steel -3,0%

Stocks Falling on Unusual Volume: 

• CINC, IT, MSTR, COLD, CE, CARG, NKE, PLYM, OMC, NCR, SPWR, UTHR, SHYF, HUN, LII, SITE, LOVE, OMF, PFSI, VFC, PKG, SBOW, NWL, ESTE, PCH, GM, KNTK, IIPR, DAWN, IP, LPX, WLK, ESTC, GNRC, DAN, TWKS, WY, OLN, HIBB, CC, DBRG, TROX, VSTO, IRM, BPT, LPSN and F
  

Stocks With Unusual Put Option Activity:

• 1) CIM 2) EWC 3) MET 4) WU 5) PRU
  

Stocks With Most Negative News Mentions:

• 1) PGY 2) F 3) TELL 4) VIRI 5) WY
  

Charts:

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

Bull Radar

Style Outperformer:

• Large-Cap Growth -.5%

Sector Outperformers:

• 1) Shipping +.3% 2) Gambling +.3% 3) Digital Health -.2%

Stocks Rising on Unusual Volume:

• AMPX, CGNX, OXM, CHNG, WYNN and LVS
  

Stocks With Unusual Call Option Activity:

• 1) REI 2) LVS 3) TFC 4) DD 5) TELL

Stocks With Most Positive News Mentions:

• 1) VRAX 2) BLUE 3) SBLK 4) CGNX 5) MTEX
  

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running -16.5% Below 100-Day Average 
• 11 Sectors Declining, 0 Sectors Rising
• 16.9% of Issues Advancing, 80.1% Declining
• 9 New 52-Week Highs, 278 New Lows
• 25.4%(-7.5%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 38.0 -1.0
  
• Bloomberg Global Risk-On/Risk-Off Index 46.9 +5.2%
  
• Russell 1000: Growth/Value 15,494.7 +.7%
  
• Vix 26.6 +3.2%
• Total Put/Call .89 -5.3%
• TRIN/Arms .96 +90.0%