Mid-Day Market Internals

NYSE Composite Index:

• Volume Running +2.7% Above 100-Day Average 
• 10 Sectors Declining, 1 Sector Rising
• 41.5% of Issues Advancing, 54.5% Declining
• 13 New 52-Week Highs, 627 New Lows
• 16.7%(+7.5%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 24.0 -2.0
  
• Bloomberg Global Risk-On/Risk-Off Index 48.3 +4.7%
  
• Russell 1000: Growth/Value 15,710.7 +.25%
  
• Vix 33.4 +3.6%
• Total Put/Call 1.04 +10.6%
• TRIN/Arms 1.13 +14.4% 

Tuesday Watch

Evening Headlines

Bloomberg:                 

• EU Countries Plan to Delay Russian Oil Price Cap Amid Divisions.  
• Japan’s 20-Year Yield Rises Above 1% for First Time Since 2015.  
• China Ratings Startup Challenges System Where Even AAAs Default.
  
• Yuan Plunge Nears 14-Year Low, Inviting Aggressive PBOC Pushback.  
• Australia’s Firms Sell Record Amount of Local Bonds This Year.
  
• UK’s Pound Under Siege With Mounting Bets It Will Drop Below $1.
  
• Asia Faces Continued Pressure on Riskier Assets: Markets Wrap.  
• Oil Holds Near Lowest Since January With Demand Outlook Dimming.
• Consumer Debt Hits Record for Most Americans, Except the Wealthy.
• Everything-Selloff on Wall Street Deepens on 98% Recession Odds.
  
• Fed’s Mester Says More Restrictive Policy Needed for Longer.
  
• Remote Work Drove Over 60% of House-Price Surge, Fed Study Finds.
• Treasury Yields Surge in Worst Selloff Since March 2020 Crash.
• Cities’ Retirement Costs to Surge as Pensions Take Market Beating.

Wall Street Journal:

• China Reins In Its Belt and Road Program, $1 Trillion Later.
• Small Businesses Get Creative as They Struggle With Hiring.
• Bank of England Says It Stands Ready to Lift Rates.

Fox News:

• 300,000 Americans told time to leave is now as monster Hurricane Ian intensifies, stalks US coast.
• Baseball team's name, celebration questioned during White House briefing.

CNBC.com:

• Biogen to pay $900 million to settle prescription drug kickback allegations.
• Biden’s student loan relief could cost $400 billion, Congressional Budget Office says.
• 2 in 5 Americans say inflation will change their holiday shopping habits this year.
  

MarketWatch:     

• ‘They’re waiting to see if home prices fall’: Home buyers are backing out of contracts in the Sun Belt at a record rate.
• The Dow just joined the S&P 500 in a bear market: What investors need to know  .
• Surging U.S. dollar is creating an ‘untenable situation’ for the stock market, warns Morgan Stanley’s Wilson.  
• High rents and Fed’s inflation fight to push key mortgage rate above 7%: BofA Global.  
• Are you tempted to buy AMC’s new APEs? Be prepared to lose everything, the company warns.  
• Global bonds are in first bear market in 76 years based on two centuries of data, says Deutsche Bank.  
• Fed’s Mester says inflation is going to remain hard to predict.  
• Bed Bath & Beyond’s turnaround plan leaves ‘questions that have really not been answered to any degree’.

Zero Hedge:

• $400 Billion!? Biden Student Loan Forgiveness To Cost Far More Than Initial Estimate.
• Psaki Admits Democrats Will Lose If Midterms Are A 'Referendum' On Biden.
• Morgan Stanley: Something Is About To Break. 
• California To Ban Natural Gas Heaters By 2030.
• Just 1.5% Of Eligible People Have Gotten Updated COVID Booster.
• $1 Million Yale University Research Project To Combat Racist Video Game Hair.
• US stocks and treasuries declined as dollar strength persisted in the fallout from GBP/USD's flash crash to record lows - Newsquawk Asia-Pac Market Open.
• Things are MOVE(ing).
• The Latest Preposterously Unsustainable Policy.
• Cable hits all-time lows sub-1.04 while bond rout extends - Newsquawk US Market Wrap.
• Peter Schiff: Biden Putting America At Risk To Prop Up His Own Image.
• 'Black' Monday 2.0.
• Sullivan Vows Decisive Response, Catastrophic Consequences If Russia Uses Nuclear Weapons.
• Is It Time To Buy Sterling?
• DeSantis Declares "State Of Emergency," Activates National Guard Ahead Of Hurricane Ian.
• Markets Crash As Monetary Laughing Gas Fades.

TheGatewayPundit.com:

• Pennsylvania Department of Education Publishes Toolkit for Teachers to Host ‘Gender Neutral Day’ for Third Graders.
• BEYOND SICK! Drag Queen Dances While Little Girl Repeatedly Rubs Her Hand Up and Down the Crotch of “Little Mermaid” Costume While Another Drag Queen Spreads Legs Wide Open On Stage For Toddlers [VIDEO].
• Muslims, Christians and Jews UNITE To Demand Removal of Explicit Books From Dearborn, MI Public School Libraries [VIDEO].
• China Doubles Down on Fossil Fuel Usage Despite Its Commitment to Globalist Elites and Useful Idiots Like John Kerry.
• Canada Removes All COVID Border Requirements for All Travelers Including Proof of Vaccination and Suspends Plane and Train Mask Requirements.
• Fake ‘Meat’ Sales Down Sharply – High Prices and ‘Wokeness’ Turning Off Shoppers.
• Surprise! Green Group Behind Biden’s Radical Green Agenda Has Deep Ties to Communist China.
  

The Epoch Times:

• CCP Cleans House as World Focus on Forced Organ Harvesting Continues.

OpenVAERS:

• VAERS US COVID Vaccine Adverse Event Reports. 867,627 Reports(+2,042 from prior week) Through September 16th, 2022.

SKirsch.com:

• Using the MGH numbers with our own VAERS queries, we have 247 cases per million doses from the MGH study divided by 5.97 cases per million doses from VAERS. 247/5.97 = 41. This suggests that the VAERS under-reporting factor (URF) is 41X.

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 +.5% on average.

• Asia Ex-Japan Investment Grade CDS Index 179.0 +13.5 basis points. 

• China Sovereign CDS 110.0 +5.5 basis points.
  

• Bloomberg Emerging Markets Currency Index 47.21 +.09%.  
• Bloomberg Global Risk-On/Risk Off Index 46.94 +1.61%. 
• Bloomberg US Financial Conditions Index -1.20 -9.0 basis points
  
• Volatility Index(VIX) futures 30.6 -1.0%
• Euro Stoxx 50 futures +.42%.

• S&P 500 futures +.46%.

• NASDAQ 100 futures +.55%  

Morning Preview Links

Earnings of Note 
Company/Estimate 

 

Before the Open: 

• (CBRL)/1.38
• (JBL)/2.14
• (UNFI)/1.26
  

After the Close:

• (BB)/-.07
• (CALM)/2.55
• (PRGS)/.97
  

Economic Releases

8:30 am EST

• Durable Goods Orders for Aug. is estimated to fall -.3% versus a -.1% decline in July.
• Durables Ex Transports for Aug. is estimated to rise +.2% versus a +.2% gain in July.
• Cap Goods Orders Non-Defense Ex-Air for Aug. is estimated to rise +.2% versus a +.3% gain in July.
  

9:00 am EST

• The FHFA House Price Index MoM for July is estimated unch. versus a +.1% gain in June.
• The S&P CoreLogic CS 20-City MoM SA for July is estimated to rise +.2% versus a +.44% gain in June.
• The S&P CoreLogic CS 20-City YoY NSA for July is estimated to rise +17.1% versus an +18.65% gain in June.
  

10:00 am EST

• The Conference Board Consumer Confidence Index for Sept. is estimated to rise to 104.5 versus 103.2 in Aug.
• The Richmond Fed Manufacturing Index for Sept. is estimated to fall to -10 versus -8 in Aug.
• New Home Sales for Aug. is estimated to fall to 500K versus 511K in July.

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Fed's Bullard speaking, Eurozone Money Supply report, 5Y T-Note auction weekly US retail sales reports and the (AFRM) Fireside Chat could also impact global trading today.

US Equity Market Hours

• 9:30 am - 4:00 pm EST
  

BOTTOM LINE: Asian indices are slightly higher, boosted by industrial and consumer shares in the region. I expect US stocks to open modestly higher and to weaken into the afternoon, finishing mixed. The Portfolio is 25% Net Long heading into the day.

Stocks Lower into Final Hour on US Policy-Induced Stagflation Fears, Escalating Currency Crisis Worries, Surging European/Emerging Markets/US High-Yield Debt Angst, Airline/REIT Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Lower
  

• Sector Performance: Almost Every Sector Declining
  

• Volume:  Around Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 32.4 +8.2%
• DJIA Intraday % Swing 1.6%
  
• Bloomberg Global Risk On/Risk Off Index 46.1 +5.3%

• Euro/Yen Carry Return Index 143.24 +.11%

• Emerging Markets Currency Volatility(VXY) 12.1 +2.6%

• CBOE S&P 500 Implied Correlation Index 52.4 +4.7% 

• ISE Sentiment Index 105.0 +38.0 points
  

• Total Put/Call 1.11 -17.8%

• NYSE Arms 1.03 -18.3%

Credit Investor Angst:

• North American Investment Grade CDS Index 108.93 +3.4%
  

• US Energy High-Yield OAS 411.70 +.76%
• Bloomberg TRACE # Distressed Bonds Traded 393.0 +13.0
  

• European Financial Sector CDS Index 147.83 +3.7%
  

• Italian/German 10Y Yld Spread 245.0 basis points +13.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 162.40 +7.9%
  

• Emerging Market CDS Index 328.64 +3.5%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 26.3 -.08%

• 2-Year Swap Spread 35.25 basis points -5.25 basis points
  

• TED Spread 44.75 basis points -.5 basis point
  

• 3-Month EUR/USD Cross-Currency Basis Swap -27.5 basis points -3.0 basis points
  
• MBS  5/10 Treasury Spread  179.0 +16.0 basis points
  
• iShares CMBS ETF 45.85 -.58%
• Avg. Auto ABS OAS .62 unch.
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 47.15 -.96%
• 3-Month T-Bill Yield 3.24% +5.0 basis points
  

• Yield Curve -44.5 basis points (2s/10s) +6.5 basis points
  

• China Iron Ore Spot 96.4 USD/Metric Tonne +.2%
• Dutch TTF Nat Gas(European benchmark) 173.0 euros/megawatt-hour -6.8%

• Citi US Economic Surprise Index 10.9 unch.

• Citi Eurozone Economic Surprise Index -4.6 -8.7 points
  

• Citi Emerging Markets Economic Surprise Index -.7 -2.0 points
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 236.23 unch.:  Growth Rate +15.8% unch., P/E 15.5 -.1
  
• Bloomberg US Financial Conditions Index -1.15 -13.0 basis points
  
• US Atlanta Fed GDPNow Forecast +.31% unch.
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +4.68% unch.: CPI YoY +8.19% unch.
  
• 10-Year TIPS Spread 2.34 -2.0 basis points
  
• Highest target rate probability for December 14th FOMC meeting: 71.1%(+.5 percentage point) chance of 4.25%-4.5%. Highest target rate probability for February 1st meeting: 68.8%(+2.2 percentage points) chance of 4.5%-4.75%.
  

US Covid-19:

• 112 new infections/100K people(last 7 days total). 6.4%(-0.0 percentage point) of 1/14/22 peak(1,740) -0/100K people from prior report.
  
• New Covid-19 patient hospital admissions per 100K population -83.4%(-1.8 percentage point) from peak 7-day avg. of 1/9/22 - 1/15/22
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -101 open in Japan 
• China A50 Futures: Indicating +15 open in China

• DAX Futures: Indicating +7 open in Germany

Portfolio:

• Slightly Higher:  On gains in my index hedges and emerging market shorts
  

• Disclosed Trades:  None
  

• Market Exposure:  25% Net Long
  

Bear Radar

Style Underperformer:

• Mid-Cap Value -1.9%
  

Sector Underperformers:

• 1) REITs -3.6% 2) Airlines -3.3% 3) Utilities -3.1%

Stocks Falling on Unusual Volume: 

• CRK, ARCC, PAG, ORCC, PTY, CC, TSLX, PDI, RA, FDX, MPW, TCPC, ET, SPG, SLRC, KREF, OHI, ABR, PLD, MAIN, LBRDK, FSK, GSBD, VNT, BXMT, STWD, RRC, IP, NHI, RQI, RC, HTGC, FEAM, DX, OPI, GNL, STOK, MFIC, CIO, FSK, EFC, NLY, CHTR, NOG, FR, DEI, YETI, TPVG, SD, ALLY, OLPX, ABR, DRE, PEB and EXLS
  

Stocks With Unusual Put Option Activity:

• 1) STWD 2) VRAY 3) RITM 4) EWU 5) BKLN
  

Stocks With Most Negative News Mentions:

• 1) LITM 2) PAGS 3) AMC 4) ENOB 5) FDX
  

Charts:

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

Bull Radar

Style Outperformer:

• Large-Cap Growth -.7%

Sector Outperformers:

• 1) Gambling +3.1% 2) Cyber Security -.2% 3) Networking -.4%

Stocks Rising on Unusual Volume:

• WYNN, LVS, LESL, SAVA, DSGN, HLIT, TRUP and TEN
  

Stocks With Unusual Call Option Activity:

• 1) MAR 2) AGNC 3) RITM 4) SD 5) RLMD

Stocks With Most Positive News Mentions:

• 1) MLCO 2) LVS 3) WYNN 4) LESL 5) ADTN
  

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running -2.8% Above 100-Day Average 
• 9 Sectors Declining, 2 Sectors Rising
• 31.4% of Issues Advancing, 65.0% Declining
• 4 New 52-Week Highs, 600 New Lows
• 17.1%(+1.3%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 26.0 -1.0
  
• Bloomberg Global Risk-On/Risk-Off Index 46.4 +6.0%
  
• Russell 1000: Growth/Value 15,645.2 +1.1%
  
• Vix 31.3 +4.5%
• Total Put/Call .96 -28.9%
• TRIN/Arms 1.17 -7.1%