Morning Market Internals

NYSE Composite Index:

• Volume Running +13.2% Above 100-Day Average 
• 1 Sector Declining, 10 Sectors Rising
• 80.2% of Issues Advancing, 16.7% Declining
• 26 New 52-Week Highs, 34 New Lows
• 24.8%(+16.6%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 50.0 +2.0
  
• Bloomberg Global Risk-On/Risk-Off Index 47.7 -1.8%
  
• Russell 1000: Growth/Value 15,163.4 +.07%
  
• Vix 31.0 -1.1%
• Total Put/Call .86 -13.1%
• TRIN/Arms .96 +209.6% 

Tuesday Watch

Evening Headlines

Bloomberg:             

• Blinken Says China Wants to Seize Taiwan on ‘Much Faster Timeline’.  
  
• Yen Traders on Alert for Intervention as Currency Extends Slide.
  
• UK Consumers Rein In Luxury Spending as Energy Bills Rise 48%.
• Asian Stocks to Rise After UK Reversal, S&P Rally: Markets Wrap.
• Oil Edges Higher as Tight Supply Vies With Slowdown Concerns.
• Forecast for Recession in Next 12 Months Hits 100% in Blow to Biden.
  
• Mark Mobius Warns US Interest Rates Will Hit 9% If Inflation Persists.
• Bear Market in US Stocks Still in Its Infancy Versus History.
• Credit Suisse Mulls US Asset-Management Sale, Meissner to Exit.
• California to End Covid-19 Emergency in Shift Back to Normal.  
• The Extraordinary Rise and Fall of the Covid Billionaires.  
• US Regulators Probing Bankrupt Crypto Hedge Fund Three Arrows Capital.

Wall Street Journal:

• Xi Jinping’s Ideological Ambition Darkens China’s Economic Prospects.
• Heard on the Street: Funding Worries Are Hitting Some Banks More Than Others.
• Chinese Leader Urges Tech Self-Reliance.
• Kyiv Hit by Drone Attacks as Russia Targets Infrastructure.

Fox News:

• Saudi prince makes 'jihad' threat after Biden warns of 'consequences' following oil production decision.
• Ghislaine Maxwell comes clean about the 'greatest mistake' of her life.
• Singer dead at 41 after collapsing during performance in Paris.

CNBC.com:

• Why smartphones are getting cheaper while everything else is skyrocketing, according to the CPI.
• Apple to launch a foldable iPad rather than iPhone in 2024, analyst predicts.
• Mississippi River water woes, retail overstock trailers: Latest supply chain stresses for economy.
• Trucking company XPO releases some quarterly results ahead of brokerage spinoff.
  

MarketWatch:          

• Investor demand for energy stocks will soon increase ‘dramatically,’ analyst says.  
• One of Wall Street’s biggest bulls just cut their year-end S&P 500 target to 4,000.  
• ‘Material risk’ looms over stocks as investors face bear market’s ‘second act,’ warns Morgan Stanley.  
• Bitcoin-linked funds are hurting as crypto prices tank.

Zero Hedge:

• Boston University Creates COVID Strain With 80% Mortality In Mice. 
• Central Bank Digital Currencies Would Let Governments Control What People Spend Money On: IMF Official Admits.
• Will James Comey & Robert Mueller Be Prosecuted For Lies John Durham Uncovered?
• 'They Will Come After You': GOP Attack Ads Warn Of Weaponized IRS.
• Watch: 'Real Life Grand Theft Auto' On Chicago Highway As Man With Rifle Hijacks Car.
• Hiding Hunter's Laptop: "Right Out Of The Soviet Playbook".
• States Seek To Depose Fauci, Other Top Officials In Big Tech–Government Censorship Case.
• US stocks rallied amid UK fiscal U-turn and encouraging US bank earnings - Newsquawk Asia-Pac Market Open.
• Trump Beats Biden In 2024 Hypothetical And Barely Anyone Cares About Jan. 6: Harvard Poll.
• Japanese Jawboning Won't Stop Yen's "Explosive" Downward Spiral From Testing 150/Dollar.
• Extreme Cold May Trigger Power Blackouts Across New England.
• Sell low, buy high.
• The Trump Subpoena: Why The Jan 6 Committee's Timing Is Both Terrible And Telling.
• What Everybody Knows No Longer Matters.
• Dollar slides amid risk rally after UK's fiscal U-turn - Newsquawk US Market Wrap.
• Stocks Soar On Big Negative Delta Squeeze (Or Because "Our Economy Is Strong As Hell"?).

Newsmax:    

• Democrats' Fixation on Abortion Sending Independent Women to GOP.
• Rep. Cline: Americans 'Feeling the Heat' of High Inflation.

TheGatewayPundit.com:

• FLASHBACK: Will Dangerous Wuhan Institute of Virology Experiments Now be Done in Downtown Boston?
• BREAKING BIG: EcoHealth Whistleblower Dr. Andrew Huff Provides Evidence that COVID-19 Was Created in Wuhan Lab – Worked for and Reported to Dr. Daszak at EcoHealth.
• Canadian Doctor Urges Canadian Medical Association to Investigate the Unusual Death of 80 Young Doctors Since Vaccine Rollout – 800% Above Baseline/Expected Number.
• Karine Jean-Pierre Accidentally Admits Joe Biden’s Tax-and-Spend Policies Created Inflation Crisis (VIDEO).
• BREAKING EXCLUSIVE: New Evidence Suggests Konnech’s Eugene Yu was at the Very Least Affiliated with China’s Largest Election Firm with Direct Ties to US Cities.
• Press Conference Tomorrow: Risking Careers, Active-Duty Military Officers Will Call For an End to Unlawful DOD Vaccine Mandates.
  

The Epoch Times:

• ‘Goal Is Total Dominance:’ Republican Lawmakers React to Xi’s Speech, Taiwan Remarks.
• Almost 1 Million People in Chinese City Near iPhone Factory Under Lockdown.

OpenVAERS:

• VAERS US COVID Vaccine Adverse Event Reports. 880,882 Reports(+5,890 from prior week) Through October 7th, 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 +1.0% to +1.5% on average.

• Asia Ex-Japan Investment Grade CDS Index 209.75 +4.75 basis points. 

• China Sovereign CDS 115.25 +.25 basis point.
  

• Bloomberg Emerging Markets Currency Index 46.48 +.06%   
• Bloomberg Global Risk-On/Risk Off Index 48.9 +.54%. 
• Bloomberg US Financial Conditions Index -1.31 +10.0 basis points.
  
• Volatility Index(VIX) futures 30.6 -1.0%
• Euro Stoxx 50 futures +.32%.

• S&P 500 futures +.75%.

• NASDAQ 100 futures +.81%  

Morning Preview Links

Earnings of Note 
Company/Estimate 

 

Before the Open: 

• (ACI)/.65
• (GS)/7.51
• (HAS)/1.60
• (HTLD)/.31
• (JNJ)/2.49
• (LMT)/6.62
• (STT)/1.78
• (TFC)/1.23
  

After the Close:

• (IBKR)/.95
• (ISRG)/1.12
• (JBHT)/2.46
• (NFLX)/2.17
• (OMC)/1.71
• (PNFP)/1.90
• (UAL)/2.28
  

Economic Releases

9:15 am EST

• Industrial Production MoM for Sept. is estimated to rise +.1% versus a -.2% decline in Aug.
• Capacity Utilization for Sept. is estimated at 80.0% versus 80.0% in Aug.
• Manufacturing Production for Sept. is estimated to rise +.3% versus a +.1% gain in Aug.
  

10:00 am EST

• The NAHB Housing Market Index for Oct. is estimated to fall to 43.0 versus 46.0 in Sept.
  

4:00 pm EST

• Net Long-Term TIC Flows for Aug.

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The China GDP report, weekly US retail sales reports and the (ADBE) analyst meeting could also impact global trading today.

US Equity Market Hours

• 9:30 am - 4:00 pm EST
  

BOTTOM LINE: Asian indices are higher, boosted by financial and commodity shares in the region. I expect US stocks to open modestly higher and to weaken into the afternoon, finishing mixed. The Portfolio is 50% Net Long heading into the day.

Stocks Sharply Higher into Afternoon on Less European/Emerging Markets/US High-Yield Debt Angst, Option Expiration Week, Short-Covering, Tech/Gambling Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Higher
  

• Sector Performance: Every Sector Rising
  

• Volume:  Around Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 30.8 -3.8%
• DJIA Intraday % Swing 1.0%
  
• Bloomberg Global Risk On/Risk Off Index 49.1 -.4%

• Euro/Yen Carry Return Index 151.0 +1.2%

• Emerging Markets Currency Volatility(VXY) 12.6 +.6%

• CBOE S&P 500 Implied Correlation Index 51.6 +.12% 

• ISE Sentiment Index 106.0 +19.0 points
  

• Total Put/Call .95 +4.4%

• NYSE Arms .42 -74.9%

Credit Investor Angst:

• North American Investment Grade CDS Index 99.96 -3.6%
  

• US Energy High-Yield OAS 409.81 -2.1%
• Bloomberg TRACE # Distressed Bonds Traded 427.0 -18.0
  

• European Financial Sector CDS Index 139.23 -4.2% 
• Credit Suisse Subordinated 5Y Credit Default Swap 408.0 -4.9%
  

• Italian/German 10Y Yld Spread 239.0 basis points -5.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 211.57 +4.1%
  

• Emerging Market CDS Index 326.50 -2.3%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 24.99 unch.

• 2-Year Swap Spread 37.5 basis points +1.0 basis point
  

• TED Spread 49.75 basis points +13.75 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -68.5 basis points +1.25 basis points
  
• MBS  5/10 Treasury Spread  175.0 -2.0 basis points
  
• iShares CMBS ETF 45.16-.22%
• Avg. Auto ABS OAS .85 +2.0 basis points
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 46.45 +.37%
• 3-Month T-Bill Yield 3.76% +4.0 basis points
  

• Yield Curve -45.75 basis points (2s/10s) +2.75 basis points
  

• China Iron Ore Spot 92.7 USD/Metric Tonne -.1%
• Dutch TTF Nat Gas(European benchmark) 123.2 euros/megawatt-hour -13.3%

• Citi US Economic Surprise Index 19.40 +2.0 points

• Citi Eurozone Economic Surprise Index 9.4 +3.7 points
  

• Citi Emerging Markets Economic Surprise Index -7.0 -3.3 points
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 234.95 -.20:  Growth Rate +15.3% -.2 percentage point, P/E 15.7 +.4
  
• Bloomberg US Financial Conditions Index -1.40 -15.0 basis points
  
• US Atlanta Fed GDPNow Forecast +2.81% -8.0 basis points
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +5.16% unch.: CPI YoY +8.13% unch.
  
• 10-Year TIPS Spread 2.46 +7.0 basis points
  
• Highest target rate probability for December 14th FOMC meeting: 66.7%(-3.1 percentage points) chance of 4.5%-4.75%. Highest target rate probability for February 1st meeting: 53.7%(-.5 percentage point) chance of 4.75%-5.0%.
  

US Covid-19:

• 77 new infections/100K people(last 7 days total). 4.4%(-.4 percentage point) of 1/14/22 peak(1,740) +0/100K people from prior report.
  
• New Covid-19 patient hospital admissions per 100K population -86.1%(-1.3 percentage points) from peak 7-day avg. of 1/9/22 - 1/15/22
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +280 open in Japan 
• China A50 Futures: Indicating +61 open in China

• DAX Futures: Indicating -2 open in Germany

Portfolio:

• Slightly Lower:  On losses in my index hedges and emerging market shorts
  

• Disclosed Trades:  Covered some of my (IWM)/(QQQ) hedges and some of my emerging market shorts
  

• Market Exposure:  Moved to 50% Net Long
  

Bear Radar

Style Underperformer:

• Large-Cap Value +2.2%
  

Sector Underperformers:

• 1) Foods +.9% 2) I-Banking +1.2% 3) Electric Vehicles +1.3%

Stocks Falling on Unusual Volume: 

• ACLX, EPC, SCHW, SM, DICE, DAWN, FOX, VRDN and FOXA
  

Stocks With Unusual Put Option Activity:

• 1) RITM 2) CNK 3) MDGL 4) CTRA 5) SWKS
  

Stocks With Most Negative News Mentions:

• 1) NERV 2) SMIT 3) CANO 4) FOXA 5) NKLA
  

Charts:

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

Bull Radar

Style Outperformer:

• Mid-Cap Growth +3.1%

Sector Outperformers:

• 1) Internet +4.9% 2) Video Gaming +4.5% 3) Gambling +4.1%

Stocks Rising on Unusual Volume:

• LFG, RBLX, APPS, AVXL, RETA, CLR, APPN, SPLK, INSP, BAC, FRC, TVTX, AVEO, NWSA, HASI, NABL and NWS
  

Stocks With Unusual Call Option Activity:

• 1) RITM 2) DBX 3) R 4) CLNE 5) VNQ

Stocks With Most Positive News Mentions:

• 1) INPX 2) RBLX 3) SRG 4) CLNE 5) MNTK
  

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running +4.3% Above 100-Day Average 
• 0 Sectors Declining, 11 Sectors Rising
• 89.2% of Issues Advancing, 8.4% Declining
• 25 New 52-Week Highs, 39 New Lows
• 23.9%(+12.4%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 48.0 +6.0
  
• Bloomberg Global Risk-On/Risk-Off Index 48.6 -1.3%
  
• Russell 1000: Growth/Value 15,100.77 +.64%
  
• Vix 31.1 -2.9%
• Total Put/Call .98 +7.7%
• TRIN/Arms .50 -69.5%