Morning Market Internals

NYSE Composite Index:

• Volume Running +14.2% Above 100-Day Average 
• 1 Sector Declining, 10 Sectors Rising
• 81.5% of Issues Advancing, 15.6% Declining
• 47 New 52-Week Highs, 66 New Lows
• 29.9%(+9.9%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 56.0 +5.0
  
• Bloomberg Global Risk-On/Risk-Off Index 47.9 -4.0%
  
• Russell 1000: Growth/Value 15,299.98 +.33%
  
• Vix 29.2 -2.3%
• Total Put/Call .76 -20.8%
• TRIN/Arms 1.17 +18.2% 

Tuesday Watch

Evening Headlines

Bloomberg:                                 

• China Stocks Crumble in US as Worry Over Xi Spurs Record Selloff.  
• China’s Plunging Market Has Become a High-Risk Bet on Xi Jinping.  
• Vulnerable Yen’s Bigger Problem Now Importers Not Speculators.
• More Britons Forced on Pay-as-you-go Energy Meters as Costs Soar.
• Era of Negative-Yielding Debt Close to End as Japan Yields Rise.
• Biden Team Works on Setting Up Xi Meeting as Chinese Leader Tightens Grip.
• Global Stocks Set to Extend Gains, China to Fall: Markets Wrap.
• Oil Edges Higher as Market Tightness Outweighs Slowdown Concerns.
• US Business Activity Contracts for Fourth Month, Orders Shrink.
• Renters Hit Breaking Point in a Sudden Reversal for Landlords.  
• Consumers At Risk From “Predatory” Big Tech Firms Report Warns.
  
• Americans Fall Further Behind on Retirement Savings as Inflation Bites.  
• Dove, Other Unilever Dry Shampoos Recalled Over Cancer Risk.
• Amazon Workers Abandon California Union Election Plan After Loss.

Wall Street Journal:

• The Bivalent Booster Boondoggle. Washington spends billions on shots nobody wants.
• Sunak to Face U.K. Economic Tumult as Prime Minister.
• U.S.-Saudi Relations Buckle, Driven by Animosity Between Biden and Mohammed bin Salman.
• Kathy Hochul Is No Crime Fighter. The New York Governor is scared straight by challenger Lee Zeldin, but it’s too late to change her record. 
• Shares in Chinese Companies Crash After Xi Stacks Party With Allies.
• Intel CEO Calls U.S. Restrictions on Chip Exports to China Inevitable.
• Global Economic Growth Weighed Down by Inflation, Rising Interest Rates.
• Banks Are Offering 4.5% CDs—Just Not to Everyone.

Fox News:

• Biden bungles Harris’ title while wishing her happy birthday during speech — and it’s not the first time.

CNBC.com:

• Inflation is dominating the conversation on earnings calls. Here’s what execs are saying.
• Stocks making the biggest moves after hours: Qualtrics, W.R. Berkley, Discover Financial and more.
• Republican gains in key states signal bad news for Democrats ahead of midterms, new polls show.
  

MarketWatch:          

• ‘From Bambi to Godzilla.’ Strategist Rosenberg skewers the Fed, seeing a 30% hit to home prices and the S&P 500 back to early 2020 low.
• Tesla isn’t immune to a spending slowdown, Morgan Stanley says while cutting price target.  
• SEC charges cannabis company Cronos and former executive with accounting fraud.  
• Weber stock jumps 25% after largest shareholder makes acquisition offer for grill maker.  
• Why investors are fleeing Chinese assets as Xi tightens grip on power.

Zero Hedge:

• 30 House Dems Urge Dramatic Shift In Biden's Ukraine Policy: 'Get Serious About Diplomacy Or Risk Nuclear Miscalculation'. 
• Democrats In Panic Mode As Midterm Momentum Favors GOP. 
• Ex-Treasury Secretary Warns Of Deficit "Doom Loop", Says Fiscal Debates Need To Be "Back On The Table".
• Amid European Energy Crisis, US Pipeline Capacity Pushes Permian NatGas Prices Near Zero.
• Cheney Says She'll Do "Whatever It Takes", Including Presidential Run, To Stop Trump In 2024.
• China's Coming Clash With Economic Reality.
• American Students Have A Math Problem.
• Illegal Immigrant Arrests At Border Soar In September, Set New Fiscal Year Record.
• US Oil Industry Mocks Biden Offer To Refill SPR At $72 As "Inadequate To Lift Oil Output".
• Johnstone: The US Government Sees Silicon Valley As Part Of Its Propaganda Machine.
• US stocks were bid across the board although small caps underperformed - Newsquawk Asia-Pac Market Open.
• US Gasoline Prices Go Haywire As Stockpiles Crater... But Here Comes China To The Rescue.
• Amazon Shares Dump After Reported Hiring Freeze In AWS Division.
• China on my mind.
• Stocks bid ahead of earnings bombardment while China tech stocks dive - Newsquawk US Market Wrap.
• Barges On Drought-Stricken Mississippi River "Dead In The Water", Causing Severe Supply Chain Issues.
• Tax Cuts Do Not Cause Inflation. Printing Does...
• US Stocks & UK Bonds Soar As China Chunders, Yen-tervention Fails.

TheGatewayPundit.com:

• WTH? Garland and Wray Hijack Your Monday to Announce Arrests of Chinese Double Agents Harassing Chinese Nationals in US — BUT NOTHING ON KONNECH CEO?
• WATCH LIVE: Cochise County AZ To Vote On 100% Hand Count In Midterm Election After Bogus Lawsuit Threat From Katie Hobbs.
• BREAKING: Audit Results of Primary Election in Torrance County, New Mexico Show Differences Between Hand Counts and SOS Records of Up to 25%.
• “Democrats Run on Division, Hatred, Anger, Fear” – Charles Payne from FOX Business on the Democrats’ Response to the Horrible Economy.
• Look What’s Happening in Sweden! After Decades of Failed Globalism, New Government Puts the Citizens First.
• WWE Hall of Famer Kevin Nash Reveals 26-Year-Old Son Dies from Cardiac Arrest.
• ‘Will & Grace’ Star Leslie Jordan Dead at 67 After ‘Suffering a Medical Emergency’ and Crashing His BMW Into Building.
• VIOLENT LEFTISTS BRUTALLY ATTACK Marco Rubio Canvasser – Beat Him Causing Internal Bleeding and Broken Jaw. 
• Joe Biden Says the Quiet Part Out Loud: Republicans in Congress Still Preventing Funding We Need to Stay Vigilant Ahead of the NEXT VIRUS (VIDEO).
• Fetterman Campaign Pre-Debate Spin for Brain Damaged Candidate: “Human Error” by Closed-Caption Transcribers May Cause “Errors in Exchanges Between the Moderators and the Candidates”.
• Let Kids Choose: Joe Biden Slams Republicans for Banning Sex Changes for Little Children (VIDEO).
  

The Epoch Times:

• US Charges 10 CCP Agents in Alleged Plots to Recruit US Spies for China, Obstruct Criminal Prosecution, Forcibly Repatriate Dissidents.
• Hong Kong Stocks Head for Worst Slide Since 2008 as Xi’s Tighter Grip on Power Alarms Investors.
• Meet the 7 Men Who Will Rule China.

OpenVAERS:

• VAERS US COVID Vaccine Adverse Event Reports. 884,059 Reports(+3,177 from prior week) Through October 14th, 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 +.5% to +1.0% on average.

• Asia Ex-Japan Investment Grade CDS Index 228.0 +24.0 basis points. 

• China Sovereign CDS 132.0 +18.0 basis points.
  

• Bloomberg Emerging Markets Currency Index 46.22 +.05%   
• Bloomberg Global Risk-On/Risk Off Index 50.4 +1.1%. 
• Bloomberg US Financial Conditions Index -1.27 -4.0 basis points.
  
• Volatility Index(VIX) futures 29.3 -.18%
• Euro Stoxx 50 futures +.17%.

• S&P 500 futures +.12%.

• NASDAQ 100 futures +.12%  

Morning Preview Links

Earnings of Note 
Company/Estimate 

 

Before the Open: 

• (MMM)/2.59
• (ADM)/1.41
• (BIIB)/4.12
• (CLF)/.51
• (KO)/.64
• (GLW)/.51
• (GE)/.49
• (GM)/1.88
• (HAL)/.56
• (HUBB)/2.71
• (ITW)/2.25
• (JBLU)/.24
• (KMB)/1.45
• (MCO)/2.04
• (NVR)/121.71
• (PCAR)/1.98
• (PII)/2.78
• (PHM)/2.81
• (RTX)/1.14
• (SAP)/1.25
• (SHW)/2.57
• (TRN)/.32
• (UPS)/2.85
• (VLO)/6.95
  

After the Close:

• (GOOG)/1.26
• (BXP)/1.87
• (BYD)/1.33
• (CMG)/9.19
• (CB)/2.61
• (FFIV)/2.52
• (FE)/.79
• (JNPR)/.50
• (MANH)/.57
• (MAT)/.74
• (MSFT)/2.31
• (NCR)/.78
• (TER)/1.04
• (TXN)/2.42
• (V)/1.87
• (WH)/1.03
  

Economic Releases

9:00 am EST

• The FHFA House Price Index MoM for Aug. is estimated to fall -.6% versus a -.6% decline in July.
• The S&P CoreLogic CS 20-City MoM SA for Aug. is estimated to fall -.8% versus a -.44% decline in July.
• The S&P CoreLogic CS 20-City YoY NSA for Aug. is estimated to rise +14.1% versus a +16.1% gain in July.
  

10:00 am EST

• The Conference Board Consumer Confidence Index for Oct. is estimated to fall to 105.9 versus 108.0 in Sept.
• The Richmond Fed Manufacturing Index for Oct. is estimated to fall to -5.0 versus 0.0 in Sept.
  

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The German IFO Guidance report, the US weekly retail sales reports and the 2Y T-Note auction could also impact global trading today.

US Equity Market Hours

• 9:30 am - 4:00 pm EST
  

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

Stocks Higher into Final Hour on Less Hawkish Fed Hopes, Flight to Safety from Emerging Markets, Bargain-Hunting, Financial/Transport Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Lower
  

• Sector Performance: Mixed
  

• Volume:  Above Average

• Market Leading Stocks: Underperforming
  

Equity Investor Angst:

• Volatility(VIX) 30.5 +2.6%
• DJIA Intraday % Swing 1.2%
  
• Bloomberg Global Risk On/Risk Off Index 49.4 -4.1%

• Euro/Yen Carry Return Index 151.62 +.91%

• Emerging Markets Currency Volatility(VXY) 12.9 +2.3%

• CBOE S&P 500 Implied Correlation Index 53.3 -1.0% 

• ISE Sentiment Index 105.0 +5.0 points
  

• Total Put/Call .92 -2.1%

• NYSE Arms 1.35 +181.2%

Credit Investor Angst:

• North American Investment Grade CDS Index 93.32 -1.7%
  

• US Energy High-Yield OAS 386.54 -1.1%
• Bloomberg TRACE # Distressed Bonds Traded 444.0 +18.0
  

• European Financial Sector CDS Index 132.44 -2.6% 
• Credit Suisse Subordinated 5Y Credit Default Swap 355.57 -.31%
  

• Italian/German 10Y Yld Spread 226.0 basis points -7.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 228.81 +5.4%
  

• Emerging Market CDS Index 311.86 -.69%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 24.26 -1.44%

• 2-Year Swap Spread 36.5 basis points -1.75 basis points
  

• TED Spread 43.25 basis points +4.25 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -59.75 basis points +3.0 basis points
  
• MBS  5/10 Treasury Spread  174.0 +2.0 basis points
  
• iShares CMBS ETF 44.93 -.08%
• Avg. Auto ABS OAS .92 +1.0 basis point
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 46.19 -.52%
• 3-Month T-Bill Yield 4.0% +4.0 basis points
  

• Yield Curve -27.75 basis points (2s/10s) +.25 basis point
  

• China Iron Ore Spot 90.60 USD/Metric Tonne -.07%
• Dutch TTF Nat Gas(European benchmark) 96.50 euros/megawatt-hour -15.0%

• Citi US Economic Surprise Index 9.6 -11.1 points

• Citi Eurozone Economic Surprise Index 22.3 +1.3 points
  

• Citi Emerging Markets Economic Surprise Index 1.4 +7.8 points
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 233.60 -.66:  Growth Rate +14.8% -.3 percentage point, P/E 16.2 +.3
  
• Bloomberg US Financial Conditions Index -1.22 -5.0 basis points
  
• US Atlanta Fed GDPNow Forecast +2.85% unch.
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +5.16% unch.: CPI YoY +8.14% unch.
  
• 10-Year TIPS Spread 2.60 +4.0 basis points
  
• Highest target rate probability for December 14th FOMC meeting: 52.6%(+7.0 percentage points) chance of 4.5%-4.75%. Highest target rate probability for February 1st meeting: 50.3%(+2.8 percentage points) chance of 4.75%-5.0%.
  

US Covid-19:

• 77 new infections/100K people(last 7 days total). 4.4%(-2.8 percentage points) of 1/14/22 peak(1,740) -51/100K people from prior report.
  
• New Covid-19 patient hospital admissions per 100K population -86.1%(-.8 percentage point) from peak 7-day avg. of 1/9/22 - 1/15/22
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +105 open in Japan 
• China A50 Futures: Indicating -33 open in China

• DAX Futures: Indicating +34 open in Germany

Portfolio:

• Higher:  On gains in my tech/industrial/medical sector longs and emerging market shorts
  

• Disclosed Trades:  None
  

• Market Exposure:  75% Net Long
  

Bear Radar

Style Underperformer:

• Small-Cap Growth unch.
  

Sector Underperformers:

• 1) Steel -3.0% 2) -3.0% 3) Social Media -3.0%

Stocks Falling on Unusual Volume: 

• TSLA, TSM, SLAB, ASAI, GPRE, NTR, ATHM, HELE, FFIN, DX, WYNN, VALE, BAK, SBUX, BGNE, HOLI, YY, INSM, DQ, EWCZ, JKS, DUOL, PBR, NTES, PUK, MAXN, FUTU, NVCR, WB, YUMC, LVS, BIDU, BABA, TCOM, JD, HKD, HTHT, LI, EDU, ZLAB, ZTO, GDS, BZ and PDD
  

Stocks With Unusual Put Option Activity:

• 1) KWEB 2) MRO 3) EWH 4) FXI 5) UPS
  

Stocks With Most Negative News Mentions:

• 1) NIO 2) BIDU 3) BABA 4) PDD 5) LVS
  

Charts:

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

Bull Radar

Style Outperformer:

• Large-Cap Value +.9%

Sector Outperformers:

• 1) Road & Rail +2.1% 2) Pharma +1.6% 3) Healthcare Providers +1.4%

Stocks Rising on Unusual Volume:

• PCVX, CECE, SCHL, WMG, WAL, BHVN, WFRD, AXON, THC and AEHR
  

Stocks With Unusual Call Option Activity:

• 1) RITM 2) MULN 3) HBAN 4) SNAP 5) PACB

Stocks With Most Positive News Mentions:

• 1) MYOV 2) AMGN 3) HBT 4) BMRC 5) STLA
  

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running +26.5% Above 100-Day Average 
• 2 Sectors Declining, 9 Sectors Rising
• 46.9% of Issues Advancing, 49.4% Declining
• 48 New 52-Week Highs, 231 New Lows
• 26.4%(-1.5%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 51.0 +5.0
  
• Bloomberg Global Risk-On/Risk-Off Index 49.6 -3.6%
  
• Russell 1000: Growth/Value 15,151.2 -.48%
  
• Vix 30.3 +2.1%
• Total Put/Call .99 +5.3%
• TRIN/Arms 1.45 +202.0%