Bear Radar

Style Underperformer:

• Small-Cap Value -1.1%
  

Sector Underperformers:

• 1) Road & Rail -3.9% 2) Alt Energy -2.5% 3) Insurance -2.5%

Stocks Falling on Unusual Volume: 

• POOL, URI, ITCI, CROX, SFM, SAIA, TFC, DHR, WSO, WHR, RF, NSC, WING, BTU, JBHT, SKX, MRVI, SNA, RGEN, WST, NEE, KNX, RUN, KMI, KNX, VLY, PPG, PNFP, LAD, BX, FITB, CSL, EFX, UNP, CATY, CDMO, TSLA, VICR, WU, EWBC, BANC, GSHD, HRI, TRUP, SNV, PLL, PGTI, TCBI and ALL
  

Stocks With Unusual Put Option Activity:

• 1) ACWI 2) T 3) XLI 4) EWI 5) WHR
  

Stocks With Most Negative News Mentions:

• 1) ALL 2) WDFC 3) THG 4) TSLA 5) AZRE
  

Charts:

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

Bull Radar

Style Outperformer:

• Large-Cap Growth -.1%

Sector Outperformers:

• 1) Steel +2.5% 2) Computer Services +1.8% 3) Computer Hardware +1.7%

Stocks Rising on Unusual Volume:

• VRT, SMCI, T, LRCX, LVS, AA, DGX, IBM, WBS and APPN
  

Stocks With Unusual Call Option Activity:

• 1) REI 2) ACWI 3) R 4) WU 5) MPLX

Stocks With Most Positive News Mentions:

• 1) AREB 2) MCRI 3) KALU 4) IBM 5) JBLU
  

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running +6.4% Above 100-Day Average 
• 5 Sectors Declining, 6 Sectors Rising
• 64.0% of Issues Advancing, 33.6% Declining
• 27 New 52-Week Highs, 138 New Lows
• 25.8%(+3.1%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 49.0 +1.0
  
• Bloomberg Global Risk-On/Risk-Off Index 50.2 +3.3%
  
• Russell 1000: Growth/Value 15,220.7 +.41%
  
• Vix 30.2 -1.7%
• Total Put/Call 1.02 +.99%
• TRIN/Arms .61 -35.5% 

Thursday Watch

Night Trading 

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

• Asia Ex-Japan Investment Grade CDS Index 196.25 -2.5 basis points. 

• China Sovereign CDS 111.75 +4.25 basis points.
  

• Bloomberg Emerging Markets Currency Index 46.15 -.25%   
• Bloomberg Global Risk-On/Risk Off Index 49.0 +.8%. 
• Bloomberg US Financial Conditions Index -1.02 +1.0 basis point.
  
• Volatility Index(VIX) futures 30.6 +.5%
• Euro Stoxx 50 futures n/a.

• S&P 500 futures -.28%.

• NASDAQ 100 futures -.56%  

Morning Preview Links

Earnings of Note 
Company/Estimate 

 

Before the Open: 

• (ABB)/.36
• (ALK)/2.39
• (AAL)/.56
• (T)/.62
• (BKU)/1.04
• (BX)/.99
• (DHR)/2.25
• (DOW)/1.17
• (FITB)/.98
• (FCX)/.27
• (GPC)/2.05
• (HTLD)/.31
• (KEY)/.59
• (MAN)/2.17
• (NUE)/6.42
• (PM)/1.36
• (POOL)/4.61
• (DGX)/2.18
• (SNA)/3.86
• (TSCO)/2.07
• (UNP)/3.07
  

After the Close:

• (BJRI)/-.28
• (SAM)/3.17
• (CSX)/.50
• (RHI)/1.65
• (SNAP)/-.01
• (SIVB)/7.01
• (THC)/1.22
• (WHR)/5.35
  

Economic Releases

8:30 am EST

• Philly Fed Business Outlook for Oct. is estimated to rise to -5.0 versus -9.9 in Sept.
• Initial Jobless Claims for last week are estimated to rise to 232K versus 228K the prior week.
• Continuing Claims are estimated to rise to 1380K versus 1368K prior.
  

10:00 am EST

• Existing Home Sales for Sept. is estimated to fall to 4.7M versus 4.8M in Aug.
• The Leading Index for Sept. is estimated to fall -.3% versus a -.3% decline in Aug.
  

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Fed's Jefferson speaking, Fed's Cook speaking, Fed's Bowman speaking, Eurozone PPI report, weekly EIA natural gas inventory report, (WU) investor day and the (ORCL) financial analysts meeting could also impact global trading today.

US Equity Market Hours

• 9:30 am - 4:00 pm EST
  

BOTTOM LINE: Asian indices are modestly lower, weighed down by consumer and financial 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 Reversing Lower into Final Hour on US Policy-Induced Stagflation Fears, Fed "Behind the Curve" Worries, Earnings Outlook Jitters, Consumer Discretionary/Biotech Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Lower
  

• Sector Performance: Almost Every Sector Declining
  

• Volume:  Around Average

• Market Leading Stocks: Underperforming
  

Equity Investor Angst:

• Volatility(VIX) 31.5 +3.3%
• DJIA Intraday % Swing 1.4%
  
• Bloomberg Global Risk On/Risk Off Index 48.4 -.9%

• Euro/Yen Carry Return Index 150.96 -.53%

• Emerging Markets Currency Volatility(VXY) 12.6 +1.7%

• CBOE S&P 500 Implied Correlation Index 52.3 +2.0% 

• ISE Sentiment Index 99.0 +21.0 points
  

• Total Put/Call .98 +3.2%

• NYSE Arms 1.05 +82.8%

Credit Investor Angst:

• North American Investment Grade CDS Index 96.91 +2.1%
  

• US Energy High-Yield OAS 396.86 -.18%
• Bloomberg TRACE # Distressed Bonds Traded 441.0 +14.0
  

• European Financial Sector CDS Index 137.94 +.8% 
• Credit Suisse Subordinated 5Y Credit Default Swap 349.9 +1.2%
  

• Italian/German 10Y Yld Spread 240.0 basis points -1.0 basis point
  

• Asia Ex-Japan Investment Grade CDS Index 204.82 -.47%
  

• Emerging Market CDS Index 323.2 +1.64%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 24.71 -.28%

• 2-Year Swap Spread 36.5 basis points unch.
  

• TED Spread 27.0 basis points -3.25 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -58.5 basis points +5.0 basis points
  
• MBS  5/10 Treasury Spread  172.0 +1.0 basis point
  
• iShares CMBS ETF 45.19 -.35%
• Avg. Auto ABS OAS .90 +2.0 basis points
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 46.24 -.48%
• 3-Month T-Bill Yield 3.97% +11.0 basis points
  

• Yield Curve -43.0 basis points (2s/10s) unch.
  

• China Iron Ore Spot 91.70 USD/Metric Tonne -.38%
• Dutch TTF Nat Gas(European benchmark) 118.0 euros/megawatt-hour +4.2%

• Citi US Economic Surprise Index 23.5 +1.2 points

• Citi Eurozone Economic Surprise Index 18.6 +5.1 points
  

• Citi Emerging Markets Economic Surprise Index -7.3 -.3 point
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 234.61 -.21:  Growth Rate +15.3% +.1 percentage point, P/E 15.7 -.2
  
• Bloomberg US Financial Conditions Index -1.07 +12.0 basis points
  
• US Atlanta Fed GDPNow Forecast +2.85% +4.0 basis points
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +5.16% unch.: CPI YoY +8.14% +1.0 basis point
  
• 10-Year TIPS Spread 2.42 unch.
  
• Highest target rate probability for December 14th FOMC meeting: 75.0%(+10.7 percentage points) chance of 4.5%-4.75%. Highest target rate probability for February 1st meeting: 52.2%(-2.1 percentage points) chance of 4.75%-5.0%.
  

US Covid-19:

• 77 new infections/100K people(last 7 days total). 4.4%(-.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 -84.9%(+.3 percentage point) from peak 7-day avg. of 1/9/22 - 1/15/22
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -272 open in Japan 
• China A50 Futures: Indicating -90 open in China

• DAX Futures: Indicating -7 open in Germany

Portfolio:

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

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

• Market Exposure:  Moved to 25% Net Long
  

Bear Radar

Style Underperformer:

• Small-Cap Growth -2.7%
  

Sector Underperformers:

• 1) Homebuilding -6.1% 2) Retail -4.0% 3) Banks -3.7%

Stocks Falling on Unusual Volume: 

• HP, WYNN, SBNY, ELS, EFX, TMO, CG, FITB, AN, CHRW, SILK, CARG, PNFP, SILK, OMF, VTYX, ZION, KMX, EWCZ, PII, WSO, WST, LPI, ALLY, POOL, ABT, NABL, LAD, CMA, RUN, PTCT, TREE, NTRS, THO, WGO, DNLI, MTB, RGEN, TCDA, INSM, CVNA and GNRC
  

Stocks With Unusual Put Option Activity:

• 1) GNRC 2) BK 3) THO 4) EWT 5) SNAP
  

Stocks With Most Negative News Mentions:

• 1) ESTA 2) GNRC 3) NIO 4) OLPX 5) FBK
  

Charts:

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