Morning Market Internals

NYSE Composite Index:

• Volume Running -4.3% Below 100-Day Average 
• 8 Sectors Declining, 3 Sectors Rising
• 34.8% of Issues Advancing, 62.0% Declining
• 29 New 52-Week Highs, 26 New Lows
• 42.1%(-4.0%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 63.0 -3.0
  
• Bloomberg Global Risk-On/Risk-Off Index 47.4 -3.0%
  
• Russell 1000: Growth/Value 14,664.94 -.11%
  
• Vix 24.1 -1.7%
• Total Put/Call .89 +7.2%
• TRIN/Arms 2.23 +109.3% 

Wednesday Watch

Evening Headlines

Bloomberg:            

• Three Million UK Households Owe More as Energy Debt Deepens.  
• UK Pay Rises Aren’t Keeping Up With Inflation.  
• Xi’s Crackdowns Drive Chinese Billionaires to Booming Singapore.
• Apple Prepares to Get Made-in-US Chips in Pivot From Asia.
• Poland Says Russian-Made Rocket Caused Blast Near Ukraine Border.  
• Ukraine Latest: Poland Says Russian-Made Missile Hit Village.  
• NATO’s Crucial Question: Was Poland Missile Strike Deliberate?   
• Stocks Fall, Dollar Steadies on Rocky Geopolitics: Markets Wrap.
  
• Oil Extends Gain After Poland Struck by Russian-Made Missile.  
• Potential Biden Plan to Stock Up On Diesel May Bring Price Surge.
• Tesla Tells US of New Fatal Crashes Involving Automated Driving.    
• Estee Lauder to Buy Designer Brand Tom Ford in $2.8 Billion Deal.  
• Taxi Fares Are Going Up 23% in New York City.
• Fed Officials See More Hikes Needed Though News on Prices Better.
• Mortgage Rates Could Tank Home Prices by 20%, Fed Study Finds.

Wall Street Journal:

• The New Woke Discrimination Demands a New Law. Expand the Civil Rights Act to protect employees from being fired for their political beliefs.
• GOP Nears House Control; McCarthy Gets Party Backing in Speaker Bid.
• Missile Hits Polish Territory Near Ukrainian Border.
• U.S. Struggles to Wean Itself From Chinese Solar Power.
• Judge Strikes Down Policy Used to Expel Migrants.
• Tech Firms Dump Office Space as They Downsize.
• Lack of Bond Buyers Pushes Mortgage Rates Higher.

Fox News:

• Hunter Biden interview goes south after host gets honest about what happens ‘behind the scenes’.
• Financial ties between scandal-plagued crypto king and Pelosi's likely successor.
• How a recount in Arizona's gubernatorial race might play out.

CNBC.com:

• From $32 billion to criminal investigations: How Sam Bankman-Fried’s empire vanished overnight.
• Household debt soars at fastest pace in 15 years as credit card use surges, Fed report says.
• Microsoft, Meta and others face rising drought risk to their data centers.
• Electric vehicles are less reliable because of newer technologies, Consumer Reports finds.
  

MarketWatch:                  

• Icahn loads up on Twitter, oil and gas in third quarter, dumps Welbilt.
• Even JPMorgan’s bullish strategist Kolanovic says markets are getting ahead of themselves. Here’s what he and a Goldman strategist say to do now.  
• House prices will fall in 2023, but affordability will be at its worst since 1985, says Capital Economics.
  
• Credit-card balances just experienced the biggest annual jump in more than 20 years, Fed says.

Zero Hedge:

• Biden Unveils $37BN More In Emergency Ukraine Aid On Heels Of Polish Border 'Attack'.
• Relationship Among FTX, Ukraine, And Democrats Sparks Speculation. 
• Here Come "Programmable Dollars": New York Fed And 12 Banking Giants Launch Digital Dollar Test. 
• Biden On Democrats' Effort To Codify Roe v. Wade: 'I Don’t Think There’s Enough Votes'. 
• NBC Pushes 'Tripledemic' Fear Mongering – Claims Children At Risk During The Holidays.
• Poland's President Says "No Evidence" Who Fired On Border Village.
• US, Japan To Start Large-Scale War Games On Heels Of Xi-Biden Meeting.
• "Invasion Clause" Triggered In Texas As Migrants Overwhelm Border.
• Planned Amazon Layoffs Could Hamper E-Commerce, Logistics.
• Getting there (soon).
• Nickel Jumps As Tesla-Backed Miner Sparks Supply Fears.
• PPI optimism was juxtaposed with Polish casualties near the Ukraine border - Newsquawk Asia-Pac Market Open.
• Supply Hell: Wait Times For Tesla Model 3 And Model Y Just Evaporated Down To One Week, At Minimum.
• Softer PPI party tempered by Polish deaths on Ukraine border - Newsquawk US Market Wrap.
• Americans To See Highest Thanksgiving Gasoline Prices Ever.
• Spoos Shake Off Rollercoaster Session, "Article 5" Panic, To Close Above 4000.
• FTX Founder Sam Bankman-Fried Faces 'Trip' For Questioning In US.

Newsmax:  

• Rick Scott Challenges McConnell to Lead Senate GOP. 
• GOP Votes McCarthy 188-31 in First Step to Be Speaker.

TheGatewayPundit.com:

• McConnell’s Approval Sinks To New Low In New Poll.
• Hunter Biden Interview Goes Sideways After Caller Asks About Former FTX CEO Sam Bankman-Fried’s Mega Donations to Democrat Party (AUDIO).
• Breaking: House GOP Votes in Liberal RINO Tom Emmer for House Whip Who Was in Charge of Electing Republicans This Cycle for NRCC.
• Ditch Mitch? Florida Senator Rick Scott Announces Challenge to GOP Senate Leader McConnell.
• G20 Panel Calls for a Global Digital Health Certificate Acknowledged by WHO to Track Vaccination Status (VIDEO).
• Kari Lake Speaks Out On Election: “Arizonans Know BS When They See It”.
• Texas Gov. Abbott Declares Invasion on Border; Invokes US and Texas Constitutions to Deploy Guard Troops to Repel Illegal Immigrants.
• “The World Will Look Differently After We Have Gone Through This Transition” – WEF’s Klaus Schwab on the Great Reset to World Leaders at G20 Summit (VIDEO).
• EXCLUSIVE: FTX Donations to Democrats from Foreign Entities Like Ukraine Are in Violation of Executive Order 13848 Signed by President Trump and Biden.

The Epoch Times:

• Fauci’s Pandemic Leadership Needs to Be Investigated: Dr. Scott Atlas.

Twitter: 

• @MrAndyNgo - The Taliban has ordered Afghan judges to impose Sharia punishments in line with Islamic teachings that include public amputations and stoning.
• @bennyjohnson - Citadel CEO Ken Griffin: "On the balance sheet of FTX is a line called 'Trump lose' and Sam was the second biggest donor to Democratic candidates." (video)
  

OpenVAERS:

• VAERS US COVID Vaccine Adverse Event Reports. 894,850 Reports(+3,243 from prior week) Through November 4th, 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 -.75% to +.25% on average.

• Asia Ex-Japan Investment Grade CDS Index 140.75 unch. 

• China Sovereign CDS 76.25 +.25 basis point.
  

• Bloomberg Emerging Markets Currency Index 47.51 -.12%.
• Bloomberg Global Risk-On/Risk Off Index 48.6 -.5%. 
• Bloomberg US Financial Conditions Index -.73 + basis points.
  
• Volatility Index(VIX) futures 25.94 +.74%.
• Euro Stoxx 50 futures -1.13%.

• S&P 500 futures -.39%.

• NASDAQ 100 futures -.47%  

Morning Preview Links

Earnings of Note 
Company/Estimate 

 

Before the Open: 

• (LOW)/3.09
• (ONON)/.11
• (TGT)/2.18
• (TJX)/.80
  

After the Close:

• (BBWI)/.20
• (CSCO)/.84
• (CPRT)/.56
• (HP)/.48
• (HI)/1.01
• (KLIC)/.98
• (NVDA)/.70
• (SONO)/-.33
  

Economic Releases

8:30 am EST

• Retail Sales Advance MoM for Oct. is estimated to rise +1.0% versus unch. in Sept.
• Retail Sales Ex Autos MoM for Oct. is estimated to rise +.5% versus a +.1% gain in Sept.
• Retail Sales Ex Autos and Gas for Oct. is estimated to rise +.2% versus a +.3% gain in Sept.
• The Import Price Index MoM for Oct. is estimated to fall -.4% versus a -1.2% decline in Sept.
• The Import Price Index Ex Petrol MoM for Oct. is estimated to fall -.4% versus a -1.2% decline in Sept.
• The Import Price Index YoY for Oct. is estimated to rise +4.1% versus a +6.0% gain in Sept.
  
• The Export Price Index MoM for Oct. is estimated to fall -.3% versus a -.8% decline in Sept.
• The Export Price Index YoY for Oct. is estimated to rise +7.1% versus a +9.5% gain in Sept.
  

9:15 am EST

• Industrial Production MoM for Oct. is estimated to rise +.1% versus a +.4% gain in Sept.
• Capacity Utilization for Oct. is estimated to rise to 80.4% versus 80.3% in Sept.
• Manufacturing Production for Oct. is estimated to rise +.2% versus a +.4% gain in Sept.
  

10:00 am EST

• Business Inventories for Sept. is estimated to rise +.5% versus a +.8% gain in Aug.
• The NAHB Housing Market Index for Nov. is estimated to fall to 36.0 versus 38.0 in Oct.

10:30 am EST

• Bloomberg consensus estimates call for a weekly crude oil inventory decline of -1,240,000 barrels versus a +3,925,000 barrel gain the prior week. Gasoline supplies are estimated to rise by +60,000 barrels versus a -900,000 barrel decline the prior week. Distillate inventories are estimated to fall by -640,000 barrels versus a -521,000 barrel decline the prior week. Refinery Utilization is estimated to rise +.26% versus a +1.5% gain prior.

4:00 pm EST

• Net Long-Term TIC Flows for Sept.

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Fed's Williams speaking, Fed's Barr speaking, Fed's Waller speaking, UK PPI report, weekly MBA Mortgage Applications report, 20Y T-Bond auction, BofA Consumer/Retail Conference, BofA Energy Conference, (JLL) investor briefing, (ROK) investor meeting and the Morgan Stanley Tech/Media/Communications Conference could also impact global trading today.

US Equity Market Hours

• 9:30 am - 4:00 pm EST
  

BOTTOM LINE: Asian indices are mostly lower, weighed down by healthcare and technology shares in the region. I expect US stocks to open modestly lower and to rally into the afternoon, finishing mixed. The Portfolio is 50% net long heading into the day.

Stocks Higher into Final Hour on Less Hawkish Fed Hopes, Diminished Earnings Outlook Fears, Short-Covering, Consumer Discretionary/Tech Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Higher
  

• Sector Performance: Most Sectors Rising
  

• Volume:  Above Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 25.8 +8.8%
• DJIA Intraday % Swing 1.99%
  
• Bloomberg Global Risk On/Risk Off Index 48.3 -1.9%

• Euro/Yen Carry Return Index 148.3 -.63%

• Emerging Markets Currency Volatility(VXY) 12.2 -.8%

• CBOE S&P 500 Implied Correlation Index 46.9 +3.9% 

• ISE Sentiment Index 98.0 +5.0 points
  

• Total Put/Call .79 -9.2%

• NYSE Arms .99 -13.2%

Credit Investor Angst:

• North American Investment Grade CDS Index 82.9 -.6%
  

• US Energy High-Yield OAS 361.55 -.41%
• Bloomberg TRACE # Distressed Bonds Traded 406.0 -71
  

• European Financial Sector CDS Index 102.60 -2.7% 
• Credit Suisse Subordinated 5Y Credit Default Swap 328.8 -1.6%
  

• Italian/German 10Y Yld Spread 195.0 basis points -8.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 141.64 -1.4%
  

• Emerging Market CDS Index 240.66 -1.0%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 25.7 +.8%

• 2-Year Swap Spread 33.25 basis points -2.25 basis points
  

• TED Spread 42.75 basis points -2.25 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -52.25 basis points -1.25 basis points
  
• MBS  5/10 Treasury Spread  146.0 unch.
  
• Bloomberg US Agg CMBS Avg OAS 132.0 unch.
  
• Avg. Auto ABS OAS 1.22 unch.
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 47.55 -.01%
• 3-Month T-Bill Yield 4.15% -2.0 basis points
  

• Yield Curve -57.5 basis points (2s/10s) -3.5 basis points
  

• China Iron Ore Spot 96.1 USD/Metric Tonne +1.1%
• Dutch TTF Nat Gas(European benchmark) 121.5 euros/megawatt-hour +6.9%

• Citi US Economic Surprise Index 10.8 +2.4 points

• Citi Eurozone Economic Surprise Index 17.6 +5.1 points
  

• Citi Emerging Markets Economic Surprise Index -.4 -3.7 points
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 230.71 -.16:  Growth Rate +11.4% -.2 percentage point, P/E 17.3 unch.
  
• Bloomberg US Financial Conditions Index -.87 -10.0 basis points
  
• US Atlanta Fed GDPNow Forecast +4.0% unch.
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +5.02% unch.: CPI YoY +7.60% -2.0 basis points
  
• 10-Year TIPS Spread 2.37 -2.0 basis points
  
• Highest target rate probability for Feb. 1st FOMC meeting: 50.7%(+3.2 percentage points) chance of 4.5%-4.75%. Highest target rate probability for March 22nd meeting: 47.7%(+1.2 percentage points) chance of 4.75%-5.0%.
  

US Covid-19:

• 84 new infections/100K people(last 7 days total). 4.8%(+.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 -84.4%(+.6 percentage point) from peak 7-day avg. of 1/9/22 - 1/15/22
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +45 open in Japan 
• China A50 Futures: Indicating +57 open in China

• DAX Futures: Indicating -94 open in Germany

Portfolio:

• Slightly Higher:  On gains in my tech/commodity/industrial/medical 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%
  

Sector Underperformers:

• 1) Road & Rail -1.9% 2) Healthcare Providers -1.1% 3) Pharma -1.0%

Stocks Falling on Unusual Volume: 

• MCK, HUM, ARCT, ATEN, HQY, HRMY, KURA, RNA, UNP, PCRX, ESTA, BLMN, WWW, FLNG, CSWC, BOWL, BX, SYF, ACLX, FNA, PLL, LTHM, NKTX, MSGE, DWAC, WGO, COF, ALB, VOD, SGML, PTLO, CRSR, RXRX, REPL, MASS, SI, TMCI and TWST
  

Stocks With Unusual Put Option Activity:

• 1) URA 2) BX 3) WMT 4) ASHR 5) ALB
  

Stocks With Most Negative News Mentions:

• 1) TWST 2) POWW 3) CALA 4) BRDS 5) CHRW
  

Charts:

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

Bull Radar

Style Outperformer:

• Small-Cap Growth +2.4%

Sector Outperformers:

• 1) Video Gaming +3.6% 2) Alt Energy +2.6% 3) Digital Health +2.2%

Stocks Rising on Unusual Volume:

• AZTA, SHLS, FDMT, TTD, FOUR, MGNI, U, AQUA, APPS, SBNY, PARA, AMKR, WMT, ALGM, VVV, EXFY and BERY
  

Stocks With Unusual Call Option Activity:

• 1) RWT 2) IMGN 3) COF 4) FL 5) RAD

Stocks With Most Positive News Mentions:

• 1) SHLS 2) PARA 3) AZTA 4) TME 5) ACGX
  

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running +14.1% Above 100-Day Average 
• 2 Sectors Declining, 9 Sectors Rising
• 83.3% of Issues Advancing, 14.2% Declining
• 39 New 52-Week Highs, 13 New Lows
• 44.6%(+6.1%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 66.0 unch.
  
• Bloomberg Global Risk-On/Risk-Off Index 49.5 +.6%
  
• Russell 1000: Growth/Value 14,756.1 +.94%
  
• Vix 23.5 -.8%
• Total Put/Call .70 -19.5%
• TRIN/Arms .98 -14.0%