Morning Market Internals

NYSE Composite Index:

• Volume Running -5.3% Below 100-Day Average 
• 9 Sectors Declining, 2 Sectors Rising
• 35.8% of Issues Advancing, 60.2% Declining
• 21 New 52-Week Highs, 90 New Lows
• 24.7%(-1.1%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 46.0 +1.0
  
• Bloomberg Global Risk-On/Risk-Off Index 48.1 -.4%
  
• Russell 1000: Growth/Value 15,511.20 +.36%
  
• Vix 29.4 +2.8%
• Total Put/Call .93 +5.7%
• TRIN/Arms 1.03 +19.8% 

Thursday Watch

Evening Headlines

Bloomberg:          

• Secretive Chip Startup May Help Huawei Circumvent US Sanctions.
• North Korea Test-Fires Missile After Criticizing US Carrier Move.  
• UK’s Credit Outlook Cut to Negative by Fitch on Fiscal Risk.
• Liz Truss’s Tax Measures Set to Cost Millions of UK Workers More.
• Stocks Retreat, Dollar Gains as Uncertainty Looms: Markets Wrap.
  
• OPEC+ Rebuked by US After Cutting Output to Keep Prices High.
  
• Wall Street Warns Wishful Thinking on Fed Won’t End Bear Market.
• One Big Option Trade Fueled S&P 500’s Midday Jump.
  
• Ford Hikes Price of Electric F-150 Pickup Again on Rising Supply Costs.
  
• Fed’s Daly Sets High Bar for Slowing Pace of Policy Tightening.  
• BlackRock Faces More ESG Fallout as Louisiana Pulls $794 Million.
• Junk Market Is Only Open to Familiar Firms Offering High Yields.

Wall Street Journal:

• Fauci’s Parting Gift to the EcoHealth Alliance. The outfit that worked with the Wuhan virology lab gets more NIH cash despite its virus failures.
• The Climate-Change Censorship Campaign. The left is demanding that social media shut down debate even on solutions.
• Markets Break When Interest Rates Rise Fast: Here Are the Cracks.
• WTO Sees Sharp Slowdown in Global Trade.
• U.S. to Ease Venezuela Sanctions, Enabling Chevron to Pump Oil.
• Inflation, Consumer Pessimism Push U.K. Firms to Close Their Doors.
• Top European Union Official Backs Calls for Price Cap on Natural Gas.

Fox News:

• Democrat in toss-up House race backpedals after once calling to 'immediately' end gas, oil extraction.
• Pelosi-backed candidate who attacked US as 'AmeriKKKa' and called to 'deconstruct' police wins Dem primary.
• OPEC cuts are 'really bad news' for American consumers, says API president.
• Democrats blaming climate change for Hurricane Ian at odds with science, experts say.

CNBC.com:

• OPEC+ to cut oil production by 2 million barrels per day to shore up prices, defying U.S. pressure.
• Drug companies in opioid crisis donated $27,000 to Ohio Rep. Tim Ryan.
  

MarketWatch:               

• Fan who caught Aaron Judge’s 62nd home run offered $2 million for ball.
  
• This stock-market strategist says the coming recession could be the biggest ever: ‘I recommend prayer’ .
• What’s next for oil prices after OPEC+ delivers a big production cut.

Zero Hedge:

• NYT 'Right Wing Conspiracy Theory' Comes True In Less Than 24 Hours.
• Biden Blasts "Short-Sighted" OPEC+ Cut, Blames US Energy Firms For Surging Pump Prices.
• National Guard Gives Service Members COVID-19 Vaccine Instead Of Influenza Shot.
• US National Debt Blows Past $31 Trillion.
• "World Risks Living With Oil Shortage For A While," Warns Occidental CEO.
• LNG Shipping Rates "Shooting For The Stars" At $500,000 Per Day.
• Chinese Communist Party's National Congress To Set Leaders, Agenda For Next 5 Years.
• 2 More Launches Tonight Push North Korea Missile Tests To Record High In 2022.
• Gasoline Prices Keep Climbing, But Retail Gas Station Margins Plunge, With Many Now 'Under Water'.
• North Korea Blasts US Carrier Presence As "Threat" To Regional Stability.
• US stocks snapped the firm 2-day rally but closed well off their lows - Newsquawk Asia-Pac Market Open.
• Newsom Calls For Taxing Oil Companies During Fuel Crisis.
• Unchanged...
• Americans Just "Lost" $300 Billion In Savings Due To An Excel Spreadsheet Revision.
• We Blew It: Malinvestment & The Plundering Of Productive Assets.
• Dollar & Yields clawback recent downside while Services PMI offers glimpse of hope ahead of Friday's NFP - Newsquawk US Market Wrap.
• "Please Don't Panic Buy": France Taps Strategic Reserve After Gas Stations Run Out Of Fuel.
• Black Gold & Bond Yields Jump As Stocks Dump'n'Pump.
• 'Betrayed' Twitter Staff Resume Exorcist-Like Tantrums After Musk Deal Back On.

Newsmax:  

• Rep. Cammack: Politicizing Storm Will Backfire on Biden.
• Rep. Bishop: Biden's Puerto Rico Trip Had 'Political Overtones'.

TheGatewayPundit.com:

• US Veteran Working on the Ground in Ukraine: There Is NO EVIDENCE of the Billions in US Dollars Sent to Ukraine – Not Seeing Any Relief (AUDIO).
• WATCH: Large Garbage Bag Used To Transfer Stacks of Absentee Ballots From Detroit Drop Box…Is This What SOS Benson Means When She Says MI Elections Were “Most secure in history”?
• Marxist Democrat Doubles-Down on Defunding the Police as Crime Soars in Democrat-Run Cities Across the Country (VIDEO).
• Joe Biden Caught on a Hot Mic Speaking to Fort Myers Beach Mayor: “No One F*cks with a Biden” (VIDEO).
• Chicago Man Arrested for 15th Time This Year, One Week after 14th Arrest! Arrested 41 Times Since 2014!
• Alec Baldwin Reaches Settlement with ‘Rust’ Shooting Victim’s Family as Santa Fe District Attorney Weighs Charges.
  

The Epoch Times:

• China’s Global Police Centers Raise Red Flags: Expert.
• Election Software CEO Arrested Over Data Theft, Storing Data on Servers in China.
• US Gave Almost $29 Million to Chinese Entities for Joint Research Since 2015: Report.

Twitter: 

• @TPostMillennial - BREAKING: CEO of US election software firm Konnech arrested for storing data on servers in China.

OpenVAERS:

• VAERS US COVID Vaccine Adverse Event Reports. 871,837 Reports(+4,210 from prior week) Through September 23rd, 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 +.75% on average.

• Asia Ex-Japan Investment Grade CDS Index 171.0 +1.5 basis points. 

• China Sovereign CDS 97.75 +2.5 basis points.
  

• Bloomberg Emerging Markets Currency Index 47.47 +.11%   
• Bloomberg Global Risk-On/Risk Off Index 48.05 -.6%. 
• Bloomberg US Financial Conditions Index -.97 unch.
  
• Volatility Index(VIX) futures 28.7 -1.1%
• Euro Stoxx 50 futures n/a.

• S&P 500 futures +.46%.

• NASDAQ 100 futures +.61%  

Morning Preview Links

Earnings of Note 
Company/Estimate 

 

Before the Open: 

• (ANGO)/-.02
• (CAG)/.52
• (STZ)/2.81
• (MKC)/.73
  

After the Close:

• (LEVI)/.37
• (ACCD)/-.50
  

Economic Releases

7:30 am EST

• Challenger Job Cuts YoY for Sept.
  

8:30 am EST

• Initial Jobless Claims for last week are estimated to rise to 203K versus 193K the prior week.
• Continuing Claims are estimated to rise to 1350K versus 1347K prior.
  

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Fed's Cook speaking, Fed's Waller speaking, German Factory Orders report, weekly EIA natural gas inventory report, (NUVA) investor day and the ROTH Capital Healthcare Conference 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 commodity shares in the region. I expect US stocks to open modestly higher and to maintain gains into the afternoon. The Portfolio is 50% Net Long heading into the day.

Stocks Slightly Lower into Final Hour on US Policy-Induced Stagflation Fears, European/Emerging Markets/US High-Yield Debt Angst, Dollar Strength, Telecom/Alt Energy Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Lower
  

• Sector Performance: Most Sectors Declining
  

• Volume:  About Average

• Market Leading Stocks: Underperforming
  

Equity Investor Angst:

• Volatility(VIX) 29.0 -.1%
• DJIA Intraday % Swing 1.52%
  
• Bloomberg Global Risk On/Risk Off Index 48.0 +9.2%

• Euro/Yen Carry Return Index 147.29 -.72%

• Emerging Markets Currency Volatility(VXY) 12.3 +1.3%

• CBOE S&P 500 Implied Correlation Index 49.2 +.16% 

• ISE Sentiment Index 87.0 -8.0 points
  

• Total Put/Call .91 -5.2%

• NYSE Arms .74 +131.2%

Credit Investor Angst:

• North American Investment Grade CDS Index 97.84 -.96%
  

• US Energy High-Yield OAS 415.89 -2.44%
• Bloomberg TRACE # Distressed Bonds Traded 464.0 -2.0
  

• European Financial Sector CDS Index 142.41 +2.57% 
• Credit Suisse Subordinated 5Y Credit Default Swap 477.61 +16.1%
  

• Italian/German 10Y Yld Spread 244.0 basis points +13.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 172.55 -3.99%
  

• Emerging Market CDS Index 305.22 +2.0%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 25.63 -.06%

• 2-Year Swap Spread 29.5 basis points +1.0 basis point
  

• TED Spread 36.75 basis points -4.5 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -63.5 basis points +3.25 basis points
  
• MBS  5/10 Treasury Spread  167.0 unch.
  
• iShares CMBS ETF 45.99 -.22%
• Avg. Auto ABS OAS .71 unch.
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 47.40 -.57%
• 3-Month T-Bill Yield 3.37% +2.0 basis points
  

• Yield Curve -39.5 basis points (2s/10s) +8.5 basis points
  

• China Iron Ore Spot 93.50 USD/Metric Tonne -.3%
• Dutch TTF Nat Gas(European benchmark) 175.40 euros/megawatt-hour +8.31%

• Citi US Economic Surprise Index 7.50 +1.2 points

• Citi Eurozone Economic Surprise Index 2.8 +3.0 points
  

• Citi Emerging Markets Economic Surprise Index -3.9 +.5 point
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 236.25 -.11:  Growth Rate +15.8% unch., P/E 16.0 unch.
  
• Bloomberg US Financial Conditions Index -.96 +20.0 basis points
  
• US Atlanta Fed GDPNow Forecast +2.70% +42.0 basis points
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +5.11% unch.: CPI YoY +8.20% unch.
  
• 10-Year TIPS Spread 2.21 -3.0 basis points
  
• Highest target rate probability for December 14th FOMC meeting: 67.5%(+2.9 percentage points) chance of 4.25%-4.5%. Highest target rate probability for February 1st meeting: 54.2%(+2.4 percentage points) chance of 4.5%-4.75%.
  

US Covid-19:

• 91 new infections/100K people(last 7 days total). 5.2%(-.4 percentage point) of 1/14/22 peak(1,740) -7/100K people from prior report.
  
• New Covid-19 patient hospital admissions per 100K population -83.9%(unch.) from peak 7-day avg. of 1/9/22 - 1/15/22
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -50 open in Japan 
• China A50 Futures: Indicating +465 open in China

• DAX Futures: Indicating +92 open in Germany

Portfolio:

• Higher:  On gains in my tech/medical/commodity sector longs and index hedges
  

• Disclosed Trades:  Covered some of my (IWM)/(QQQ) hedges, then added them back
  

• Market Exposure:  50% net long
  

Bear Radar

Style Underperformer:

• Small-Cap Value -1.7%
  

Sector Underperformers:

• 1) Alt Energy -3.8% 2) Telecom -3.1% 3) REITs -2.6%

Stocks Falling on Unusual Volume: 

• RQI, HTZ, HOG, STWD, EPAM, CUZ, LOVE, SGH, RC, CCRN, BXMT, EFC, MPW, OPI, SLG, IVR, PDM, KRTX, NLY, SQSP and BLNK
  

Stocks With Unusual Put Option Activity:

• 1) PTEN 2) COF 3) CAR 4) EWT 5) SWK
  

Stocks With Most Negative News Mentions:

• 1) SHC 2) ENPH 3) VNO 4) CCL 5) BBBY
  

Charts:

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

Bull Radar

Style Outperformer:

• Large-Cap Growth -.7%

Sector Outperformers:

• 1) Oil Service +2.7% 2) Energy +1.54% 3) Computer Hardware +.6%

Stocks Rising on Unusual Volume:

• BHVN, CHWY, SLB and LW
  

Stocks With Unusual Call Option Activity:

• 1) PR 2) TWTR 3) RITM 4) PBF 5) DRIP

Stocks With Most Positive News Mentions:

• 1) XCPL 2) TOPS 3) BHVN 4) BBRW 5) ABOS
  

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running +.1% Above 100-Day Average 
• 10 Sectors Declining, 1 Sector Rising
• 13.5% of Issues Advancing, 84.1% Declining
• 19 New 52-Week Highs, 75 New Lows
• 23.0%(-9.0%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 45.0 -3.0
  
• Bloomberg Global Risk-On/Risk-Off Index 47.0 +7.0%
  
• Russell 1000: Growth/Value 15,366.44 -.27%
  
• Vix 30.0 +3.2%
• Total Put/Call 1.14 +18.8%
• TRIN/Arms 1.09 +240.6%