Thursday Watch

Night Trading 

• Asian equity indices are +.25% to +.75% on average.

• Asia Ex-Japan Investment Grade CDS Index 220.0 -4.5 basis points. 

• China Sovereign CDS 117.50 -3.0 basis points.
  

• Bloomberg Emerging Markets Currency Index 46.6 +.02%.  
• Bloomberg Global Risk-On/Risk Off Index 48.1 +1.6%. 
• Bloomberg US Financial Conditions Index -1.14 +1.0 basis point.
  
• Volatility Index(VIX) futures 27.3 -.61%
• Euro Stoxx 50 futures -.39%.

• S&P 500 futures +.47%.

• NASDAQ 100 futures +.47%  

Morning Preview Links

Earnings of Note 
Company/Estimate 

 

Before the Open: 

• (MO)/1.30
• (AMT)/2.59
• (BUD)/.74
• (ARCH)/9.10
• (AN)/6.27
• (BAX)/.62
• (BWA)/1.03
• (BC)/2.65
• (CAT)/3.16
• (CBRE)/1.30
• (CMCSA)/.90
• (FCN)/2.04
• (HTZ)/1.08
• (HON)/2.15
• (IP)/1.20
• (KDP)/.46
• (LH)/4.68
• (MA)/2.58
• (MCD)/2.58
• (MDC)/2.24
• (MRK)/1.71
• (NOC)/6.11
• (OSK)1.18
• (BTU)/1.80
• (RS)/6.19
• (SHOP)/-.07
• (LUV)/.42
• (SWK)/.70
• (WDC)/.39
• (XEL)/1.22
  

After the Close:

• (AMZN)/.21
• (AAPL)/1.27
• (COF)/5.04
• (CUZ)/.66
• (DECK)/3.70
• (EW)/.62
• (FSLR)/-.26
• (GILD)/1.43
• (INTC)/.33
• (LHX)/3.40
• (MHK)/3.34
• (PXD)/7.26
• (SKYW)/.75
• (X)/1.99
• (WY)/.37
• (ZEN)/.21
  

Economic Releases

8:30 am EST

• 3Q GDP Annualized QoQ is estimated to rise +2.4% versus a -.6% decline in 2Q. 
• 3Q Personal Consumption is estimated to rise +1.0% versus a +2.0% gain in 2Q.
• 3Q GDP Price Index is estimated to rise +5.3% versus a +9.0% gain in 2Q.
• Durable Goods Orders for Sept. is estimated to rise +.6% versus a -.2% decline in Aug.
• Durables Ex Transports for Sept. is estimated to rise +.2% versus a +.3% gain in Aug.
• Cap Goods Orders Non-Defense Ex-Air for Sept. is estimated to rise +.3% versus a +1.4% gain in Aug.
• Initial Jobless Claims for last week is estimated to rise to 220K versus 214K the prior week. 
• Continuing Claims is estimated to rise to 1390 versus 1385K prior.
  

11:00 am EST

• Kansas City Fed Manufacturing Activity for Oct. is estimated to fall to -2 versus 1 in Sept.
  

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The ECB rate decision, 7Y T-Note auction, (CS) investor day and the (SCHW) business update 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 technology and commodity 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.

Wednesday Watch

Evening Headlines

Bloomberg:                                 

• Australia Sees Higher Debt, Deficits Even as Spending Curbed.
• Hong Kong Rout Threatens $15 Billion Derivatives Held by Koreans.  
• New Zealand Inflation Expectations Jump Back Above 6%, ANZ Says.
• Tailwind for Asian Stocks Weakens on Tech Giants: Markets Wrap.
• Oil Slips as Industry Report Points to Jump in US Stockpiles.
• Google Parent Alphabet Drops as Earnings, Sales Miss Estimates.
  
• Tech Stocks’ Big Day Tarnished as Microsoft, Alphabet Disappoint.
  
• Texas Instruments’ Forecast Signals Chip Demand Slump Is Spreading.  
• Microsoft Plunges on Forecast for Lackluster Azure Growth.
• Hedge-Fund Managers Worry About Another Archegos Blow-Up.  
• Meta Slams Apple for ‘Undercutting Others’ With Ad Policy.  
• New Covid Boosters Aren’t Better Than Old Ones, Study Finds. 
• Wall Street Bankers See Darker Economic Outlook, Political Risks.
• Housing Market Hits Brakes as US Prices Fall Most Since 2009.

Wall Street Journal:

• Russian Oligarchs Obscure Wealth Through Secretive Isle of Man Network.
• Intel Prices IPO for Self-Driving Car Unit Mobileye.
• How China Abuses U.S. Diplomats. Emails and diplomatic cables show how Beijing uses Covid protocols to harass and monitor Americans. 
• Fatal Fungi Threaten Global Health, WHO Says.
• Surging Rents Push More Americans to Live With Roommates or Parents.
• House Democrats Retract Ukraine Letter After Backlash.

Fox News:

• Voters weigh in as candidates in America's fiercest Senate race go head-to-head.
• Dem Whitmer says Michigan kids were only out of school for 'three months'.

CNBC.com:

• YouTube’s shrinking ad business is an ominous sign for the battered online ad market.
• ‘Mr. Yen’ says the currency could plunge even further to 170 next year.
• Spotify shares dip after third-quarter earnings report.
• Crypto winter is hurting Google’s ad empire.
• Stocks making the biggest moves after hours: Alphabet, Microsoft, Texas Instruments and more.
• Home prices cooled at a record pace in August, S&P Case-Shiller says. 
  

MarketWatch:            

• Public schools ‘unable to compete’ with private sector as thousands of K-12 staffers quit during back-to-school season. 
  
• Chipotle continues growth but says it’s seeing fewer lower-income customers as prices rise.
  
• COVID pandemic triggers historic learning setbacks for American kids.
  
• It looks like China’s Xi ‘installed a war cabinet’ and removed the reformers, says Kyle Bass.  
• TikTok will use your data to fuel its multibillion-dollar shopping mall — whether you know it or not.  
• Depleting strategic oil reserves could prove ‘painful in the months to come’: Saudi energy minister.

Zero Hedge:

• "Progressive" Democrats Formally Retract Call For Diplomacy As Ukraine War Hawks Steamroll Dissent.
• GOP Could Gain Up To 7 Seats In Senate, 50 Seats In House, Gingrich Says.
• Watch Live: Oz-Fetterman Pennsylvania Senate Race Debate.
• China's Congress Is Over: Has PBOC Just Let The Yuan Go?
• Elon Musk Tweeted Neuralink "Show & Tell" Event Delayed.
• Military Whistleblowers Sound Alarm On 'Devastating' Consequences Of Pentagon’s Vaccine Mandate.
• Adidas Terminates Kanye West Partnership; GAP Removes Yeezy Shoes From Stores.
• 'Woke' Businesses, Meet The New Republican Congress.
• Passenger Plane Nearly Collides With Drone At 16,000 Feet.
• Microsoft Extends Losses On Cloud Margins, Weak Q2 Guidance.
• New Email Reveals Answer To Establishment's Efforts To Oust Trump.
• In Striking Reversal, Renters Finally Hit "Breaking Point" Forcing Landlords To Slash Prices.
• US stocks rose across the board and cyclicals outperformed although futures dipped after GOOG and MSFT - Newsquawk Asia-Pac Market Open.
• Price Of Crash Protection Set To Rise As Fed Hawkishness Peaks.
• What's Going On: Japan FinMin Says FX Intervention "Coordinated" With US; Yellen Says No Idea What He Is Talking About.
• Midterms Just Bump In The Road For Mainstream Propagandists.
• WTI Holds Gains Despite API Reporting Unexpectedly Large Crude Build.
• Dash out of cash as stocks, bonds, and commodities spike higher - Newsquawk US Market Wrap.
• Now That Housing Is Rolling Over, Is That Fixer-Upper A Deal?
• Alphabet Plunges After Missing Across The Board, Drags Nasdaq Lower After Hours.
• Surging Crypto, Swap-Spreads, Bonds, & Stocks Signal "Something's Afoot".

Newsmax:   

• Democrats Fear Low Black Voter Turnout.
• Dozens of Crist Ex-colleagues Endorse DeSantis in Fla.

TheGatewayPundit.com:

• “I Now Truly 100% Believe It was Because of the [Vaccine]” – Grieving Mother Vows to Bring Justice Following the Sudden Death of Her “Healthy and Athletic” 18-Year-Old Daughter.
• Ye: “The CIA Backs Pixar And Disney Films”.
• KJP on Biden’s Claim of “Jim Crow 2.0” As Georgia Sees Record Voter Turnout: “High Turnout and Voter Suppression Can Take Place at the Same Time” (VIDEO).
• RINO Paul Ryan Continues Out of Touch Anti-Trump Diatribe On Varney & Co.
• Mitch McConnell Censured By Alaska GOP Over Attack Ads Against Trump-Backed Candidate.
• EXCLUSIVE: Residents of Gwinnett County, Georgia Ask Three Gwinnett County Board of Elections Members to Step Down Due to Being Complicit in 2022 Election Crimes.
• ACLU Sue Nye County Nevada for Counting Ballots by Hand and Not Using Questionable Voting Machines.
• Biden One Month After Declaring the Covid Pandemic is Over: Covid is Still a “Global Health Emergency” (VIDEO).
• BREAKING: Project Veritas Action Releases Undercover Video Of Mark Kelly Staffer Deceiving Independent Voters By Lying About His Radical Left Views On Gun Control, The Border, And Abortion.
• White House Tries to Terrorize Americans into Getting Annual COVID Shots with ‘Spooky’ Video.
• Failed NY Gov. Hochul Dismisses New Yorkers Very Real Concerns on Rampant Crime.
  

The Epoch Times:

• Tesla Cuts China Prices by Up to 9 Percent as Analysts Warn of ‘Price War’.
• Russia Claims Ukraine Plans to Detonate ‘Dirty Bomb’; CCP Prepares for War.

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 unch. to +.5% on average.

• Asia Ex-Japan Investment Grade CDS Index 230.75 +2.75 basis points. 

• China Sovereign CDS 130.50 -1.5 basis points.
  

• Bloomberg Emerging Markets Currency Index 46.34 -.02%   
• Bloomberg Global Risk-On/Risk Off Index 49.1 +.96%. 
• Bloomberg US Financial Conditions Index -1.15 +2.0 basis points.
  
• Volatility Index(VIX) futures 28.8 +2.3%
• Euro Stoxx 50 futures -.45%.

• S&P 500 futures -1.12%.

• NASDAQ 100 futures -2.3%  

Morning Preview Links

Earnings of Note 
Company/Estimate 

 

Before the Open: 

• (ADP)/1.79
• (BA)/.07
• (BSX)/.44
• (BMY)/1.83
• (BG)/2.56
• (CME)/1.94
• (EXP)/3.58
• (GD)/3.16
• (HOG)/1.39
• (HES)/1.89
• (HLT)/1.24
• (KBR)/.63
• (KHC)/.56
• (EDU)/.33
• (NSC)/3.60
• (ODFL)/3.08
• (OTIS)/.78
• (PAG)/4.35
• (R)/3.66
• (STX)/.72
• (TMO)/4.82
• (WING)/.36
  

After the Close:

• (AEM)/.43
• (ALGN)/2.17
• (BOOT)/.90
• (CACI)/4.25
• (CP)/1.00
• (CYH)/-.02
• (DLR)/1.68
• (EQT)/1.07
• (F)/.30
• (FWRD)/1.90
• (GGG)/.64
• (KLAC)/6.23
• (META)/1.89
• (OII)/.14
• (OLN)/1.82
• (ORLY)/8.50
• (PTEN)/.17
• (PPC)/.78
• (RJF)/2.00
• (NOW)/1.85
• (SAVE)/-.08
• (TDOC)/-.49
• (URI)/9.06
• (VFC)/.73
• (VMI)/3.41

Economic Releases

8:30 am EST

• Advance Goods Trade Deficit for Sept. is estimated at -$87.5B versus -$87.3B in Aug.
• Wholesale Inventories MoM for Sept. is estimated to rise +1.0% versus a +1.3% gain in Aug.
• Retail Inventories MoM for Sept. is estimated to rise +1.2% versus a +1.4% gain in Aug. 

10:00 am EST

• New Home Sales for Sept. is estimated to fall to 580K versus 685K in Aug.
  

10:30 am EST

• Bloomberg consensus estimates call for a weekly crude oil inventory build of +462,570 barrels versus a -1,725,000 barrel decline the prior week. Gasoline supplies are estimated to fall by -1,033,860 barrels versus a -114,000 barrel decline the prior week. Distillate inventories are estimated to fall by -646,860 barrels versus a +124,000 barrel gain the prior week. Finally, Refinery Utilization is estimated to rise by +.2% versus a -.4% decline prior.

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Australia CPI report, 5-Y T-Note auction, weekly MBA Mortgage Applications report and the ThinkEquity 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 transport and consumer staple shares in the region. I expect US stocks to open lower and to maintain losses into the afternoon. The Portfolio is 50% Net Long heading into the day.

Stocks Rising into Final Hour on Senate Political Pressure on Fed, Dollar Decline, Less European/Emerging Market/US High-Yield Debt Angst, Consumer Discretionary/Alt Energy Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Higher
  

• Sector Performance: Almost Every Sector Rising
  

• Volume:  Above Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 28.7 -3.8%
• DJIA Intraday % Swing 1.2%
  
• Bloomberg Global Risk On/Risk Off Index 48.2 -3.3%

• Euro/Yen Carry Return Index 152.19 +.25%

• Emerging Markets Currency Volatility(VXY) 13.0 +1.0%

• CBOE S&P 500 Implied Correlation Index 53.0 -.4% 

• ISE Sentiment Index 93.0 -12.0 points
  

• Total Put/Call .82 -14.6%

• NYSE Arms 1.15 +18.2%

Credit Investor Angst:

• North American Investment Grade CDS Index 91.40 -2.2%
  

• US Energy High-Yield OAS 382.69 -.29%
• Bloomberg TRACE # Distressed Bonds Traded 445.0 +1.0
  

• European Financial Sector CDS Index 130.6 -1.4% 
• Credit Suisse Subordinated 5Y Credit Default Swap 347.14 -2.2%
  

• Italian/German 10Y Yld Spread 221.0 basis points -5.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 231.62 +2.3%
  

• Emerging Market CDS Index 303.45 -2.5%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 24.21 -.33%

• 2-Year Swap Spread 36.0 basis points -.5 basis point
  

• TED Spread 35.5 basis points -6.75 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -57.5 basis points +2.25 basis points
  
• MBS  5/10 Treasury Spread  171.0 -3.0 basis points
  
• Bloomberg US Agg CMBS Avg OAS 124.0 +2.0 basis points
  
• Avg. Auto ABS OAS .97 +5.0 basis points
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 46.37 +.37%
• 3-Month T-Bill Yield 4.0% unch.
  

• Yield Curve -37.5 basis points (2s/10s) -9.25 basis points
  

• China Iron Ore Spot 89.50 USD/Metric Tonne -2.1%
• Dutch TTF Nat Gas(European benchmark) 100.0 euros/megawatt-hour +.8%

• Citi US Economic Surprise Index 16.3 -4.4 points

• Citi Eurozone Economic Surprise Index 10.3 +.7 point
  

• Citi Emerging Markets Economic Surprise Index 4.5 +3.1 points
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 233.50 -.10:  Growth Rate +14.7% -.1 percentage point, P/E 16.5 +.3
  
• Bloomberg US Financial Conditions Index -1.15 +8.0 basis points
  
• US Atlanta Fed GDPNow Forecast +2.85% unch.
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +5.16% unch.: CPI YoY +8.11% -3.0 basis points
  
• 10-Year TIPS Spread 2.53 -7.0 basis points
  
• Highest target rate probability for December 14th FOMC meeting: 50.5%(-4.4 percentage points) chance of 4.5%-4.75%. Highest target rate probability for February 1st meeting: 49.5%(-.9 percentage point) chance of 4.75%-5.0%.
  

US Covid-19:

• 70 new infections/100K people(last 7 days total). 4.0%(-.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 -85.0%(+1.1 percentage points) from peak 7-day avg. of 1/9/22 - 1/15/22
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +255 open in Japan 
• China A50 Futures: Indicating +52 open in China

• DAX Futures: Indicating +17 open in Germany

Portfolio:

• Higher:  On gains in my tech/industrial/medical/commodity sector longs
  

• Disclosed Trades:  Covered some of my (IWM)/(QQQ) hedges
  

• Market Exposure:  Moved to 75% Net Long
  

Bear Radar

Style Underperformer:

• Large-Cap Value +1.0%
  

Sector Underperformers:

• 1) Insurance -1.2% 2) Energy -.8% 3) Airlines -.2%

Stocks Falling on Unusual Volume: 

• LBRT, DAR, CVS, MC, IMVT, CADE, HXL, AWI, GLW, CDNS, DCGO, HSBC, FBP, ASAI, WRB, ST, FA, CLF, FFWM, BRO, XRX and CCK
  

Stocks With Unusual Put Option Activity:

• 1) HOG 2) DFS 3) PACB 4) GLW 5) UPS
  

Stocks With Most Negative News Mentions:

• 1) CCK 2) MMM 3) BRO 4) CLF 5) GLW
  

Charts:

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

Bull Radar

Style Outperformer:

• Small-Cap Growth +2.6%

Sector Outperformers:

• 1) Alt Energy +5.4% 2) Homebuilding +4.4% 3) Retail +3.4%

Stocks Rising on Unusual Volume:

• MEDP, ARI, CALX, NOTV, ADTN, XM, CNC, PCVX, IQV, ISRG, HASI, GPK, DV, THC, SWAV, AJRD, ZION, SIVB and VVV
  

Stocks With Unusual Call Option Activity:

• 1) RITM 2) ROST 3) GNUS 4) AXP 5) UPS

Stocks With Most Positive News Mentions:

• 1) MEDP 2) CALX 3) PDD 4) ISRG 5) LKFN
  

Charts:

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