Tuesday, August 22, 2023

Wednesday Watch

Evening Headlines

Bloomberg:

Zero Hedge:

CNBC.com:
Fox News:
TheGatewayPundit.com:
The Epoch Times:  
Twitter: 
OpenVAERS:
SKirsch.com:
Night Trading 
  • Asian equity indices are unch. to +.5% on average.
  • Asia Ex-Japan Investment Grade CDS Index 131.5 -4.25 basis points. 
  • China Sovereign CDS 81.25 -2.75 basis points.
  • China Iron Ore Spot 110.9 USD/Metric Tonne +.15%.
  • Bloomberg Emerging Markets Currency Index 42.4 -.01%.
  • Bloomberg Global Risk-On/Risk Off Index 70.7 +1.3%. 
  • Bloomberg US Financial Conditions Index 12.0 -1.0 basis point.
  • Volatility Index(VIX) futures 17.8 -.56%.
  • Euro Stoxx 50 futures +.02%.
  • S&P 500 futures +.16%.
  • NASDAQ 100 futures +.22%.  
Morning Preview Links

BOTTOM LINE: Asian indices are mostly higher, boosted by industrial and consumer shares in the region. I expect US stocks to open mixed and to rally into the afternoon, finishing modestly higher.  The Portfolio is 75% net long heading into the day.

Stocks Modestly Lower into Final Hour on Earnings Outlook Worries, Bank Credit Downgrades, Technical Selling, Financial/Retail Sector Weakness

Broad Equity Market Tone:

  • Advance/Decline Line: Lower
  • Sector Performance: Mixed
  • Volume: Around Average
  • Market Leading Stocks: Performing In Line
Equity Investor Angst:
  • Volatility(VIX) 17.3 +.7%
  • DJIA Intraday % Swing .83%
  • Bloomberg Global Risk On/Risk Off Index 69.6 -.98%
  • Euro/Yen Carry Return Index 167.5 -.66%
  • Emerging Markets Currency Volatility(VXY) 9.0 -1.6%
  • CBOE S&P 500 Implied Correlation Index 23.4 -1.6% 
  • ISE Sentiment Index 114.0 +12.0 points
  • Total Put/Call .97 +6.6%
  • NYSE Arms 1.29 +67.5%
Credit Investor Angst:
  • North American Investment Grade CDS Index 69.45 -.42%
  • US Energy High-Yield OAS 332.13 -.88%
  • Bloomberg TRACE # Distressed Bonds Traded 363.0 +6.0
  • European Financial Sector CDS Index 87.56 -1.84% 
  • Deutsche Bank Subordinated 5Y Credit Default Swap 263.17 -1.39%
  • Italian/German 10Y Yld Spread 166.0 basis points -3.0 basis points
  • Asia Ex-Japan Investment Grade CDS Index 132.0 -3.31%
  • Emerging Market CDS Index 217.79 -1.6%
  • China Corp. High-Yield Bond USD ETF(KHYB) 24.6 unch.
  • 2-Year SOFR Swap Spread -12.5 basis points -.75 basis point
  • TED Spread 23.0 basis points +1.5 basis points
  • 3-Month EUR/USD Cross-Currency Basis Swap -13.5 -.75 basis point
  • MBS  5/10 Treasury Spread 183.0 -1.0 basis point
  • Bloomberg CMBS Investment Grade Bbb Average OAS 748.0 unch.
  • Avg. Auto ABS OAS 70.0 unch.
Economic Gauges:
  • Bloomberg Emerging Markets Currency Index 42.37 +.01%
  • 3-Month T-Bill Yield 5.41% -3.0 basis points
  • China Iron Ore Spot 110.8 USD/Metric Tonne +.11%
  • Dutch TTF Nat Gas(European benchmark) 42.9 euros/megawatt-hour +5.2%
  • Citi US Economic Surprise Index 69.2 -3.2 points
  • Citi Eurozone Economic Surprise Index -52.2 -2.4 points
  • Citi Emerging Markets Economic Surprise Index 3.0 -.1 point
  • S&P 500 Current Quarter EPS Growth Rate YoY(475 of 500 reporting) -7.3%  unch.
  • S&P 500 Blended Forward 12 Months Mean EPS Estimate 235.53 +.77:  Growth Rate +7.3% +.4 percentage point, P/E 18.7 +.1
  • S&P 500 Current Year Estimated Profit Margin 12.18% +8.0 basis points
  • NYSE FANG+ Current Quarter EPS Growth Rate YoY(8 of 10 reporting) +17.0% unch.
  • NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 234.10 +.51: Growth Rate +42.7% +.3 percentage point, P/E 32.0 +.3
  • Bloomberg US Financial Conditions Index .22 -4.0 basis points
  • Bloomberg Euro-Zone Financial Conditions Index -.02 +15.0 basis points
  • US Yield Curve -70.5 basis points (2s/10s) -4.75 basis points
  • US Atlanta Fed 2Q GDPNow Forecast +5.76% unch.
  • Cleveland Fed Inflation Nowcast Core PCE YoY +4.23% unch.: CPI YoY +3.83% +1.0 basis point
  • 10-Year TIPS Spread 2.35 +1.0 basis point
  • Highest target rate probability for Nov. 1st FOMC meeting: 54.6%(-.8 percentage point) chance of 5.25%-5.5%. Highest target rate probability for Dec. 13th meeting: 53.3%(-2.4 percentage points) chance of 5.25%-5.5%.
Overseas Futures:
  • Nikkei 225 Futures: Indicating -52 open in Japan 
  • China A50 Futures: Indicating -107 open in China
  • DAX Futures: Indicating +41 open in Germany
Portfolio:
  • Slightly Higher:  On gains in my industrial/medical sector longs and emerging  market shorts
  • Disclosed Trades: None
  • Market Exposure: 75% Net Long

Bear Radar

Style Underperformer:

  • Small-Cap Value -.6%
Sector Underperformers:
  • 1) Retail -2.8% 2) Regional Banks -2.7% 3) Alt Energy -1.2%
Stocks Falling on Unusual Volume: 
  • BJ, S, ZBH, CLDX, SE, FWRD, ASO, CSIQ, M and DKS
Stocks With Unusual Put Option Activity:
  • 1) VLY 2) DKS 3) TAL 4) JCI 5) FL
Stocks With Most Negative News Mentions:
  • 1) DKS 2) SE 3) IEP 4) M 5) SCHW
Charts:

Bull Radar

Style Outperformer:

  • Large-Cap Growth unch.
Sector Outperformers:
  • Steel +1.0% 2) Homebuilding +.8% 3) Gambling +.4%
Stocks Rising on Unusual Volume:
  • NSSC, ASLE, AGTI, HDSN, HASI, HAS, ASAN, SPHR, SLRN, FORG, ACMR, AXSM, MTSI, QDEL, SPR, MRVI, CRNX, LOW, KVUE, MRNA, TASK, PAR and ALKT
Stocks With Unusual Call Option Activity:
  • 1) DKS 2) PCT 3) PR 4) WYNN 5) LOW
Stocks With Most Positive News Mentions:
  • 1) VFS 2) FN 3) NVAX 4) CSTF 5) RVIV

Tomorrow's Earnings/Economic Releases of Note; Market Movers

Earnings of Note 
Company/Estimate 

Before the Open:
  • (AAP)/1.69
  • (BBWI)/.33
  • (DY)/1.66
  • (PTON)/-.40
  • (WSM)/2.71 
  • (FL)/.04
  • (ADI)/2.52
  • (KSS)/.23
  • (ANF)/.17
After the Close: 
  • (SNOW)/.10
  • (ZUO)/.04
  • (ADSK)/1.73
  • (SPLK)/.46
  • (GES)/.40
  • (NVDA)/2.08
Economic Releases   
9:45 am EST
  • The S&P Global US Manufacturing PMI for Aug. is estimated at 49.0 versus 49.0 in July.
  • The S&P Global US Services PMI for Aug. is estimated to fall to 52.0 versus 52.3 in July.
  • The S&P Global US Composite PMI for Aug. is estimated to fall to 51.5 versus 52.0 in July.
10:00 am EST
  • New Home Sales for July is estimated to rise to 704K versus 697K in June.
10:30 am EST
  • Bloomberg consensus estimates call for a weekly crude oil inventory decline of -2,873,000 barrels versus a -5,960,000 barrel decline the prior week. Gasoline supplies are estimated to fall by -715,500 barrels versus a -262,000 barrel decline the prior week. Distillate inventories are estimated to rise by +566,500 barrels versus a +296,000 barrel gain the prior week. Finally, Refinery Utilization is estimated to rise by +.38% versus a +.9% gain prior.

Upcoming Splits 

  • None of note
Other Potential Market Movers
  • The Eurozone Services PMI report, 20Y T-Bond auction and weekly MBA Mortgage Applications report could also impact global trading tomorrow.
US Equity Market Hours
  • 9:30 am - 4:00 pm EST

Mid-Day Market Internals

NYSE Composite Index:

  • NYSE Volume Running -9.8% Below 100-Day Average 
  • Nasdaq/NYSE Volume Ratio 10.2 +.7
  • 5 Sectors Declining, 6 Sectors Rising
  • 48.1% of Issues Advancing, 48.3% Declining
  • 26 New 52-Week Highs, 65 New Lows
  • 45.0%(+.9%) of Issues Above 200-day Moving Average
  • Average 14-Day RSI 34.0 +1.0
  • Bloomberg Global Risk-On/Risk-Off Index 69.8 -.6%
  • Russell 1000: Growth/Value 17,418.2 +.56%
  • 1-Day Vix 12.6 -21.9%
  • Vix 17.1 -.06%
  • Total Put/Call .95 +4.4%
  • TRIN/Arms 1.48 +92.2%