Stocks Slightly Higher into Final Hour on Lower Long-Term Rates, US Economic Soft-Landing Hopes, Technical Buying, Tech/Utility Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Lower
  

• Sector Performance: Most Sectors Declining
  

• Volume: Below Average

• Market Leading Stocks: Underperforming
  

Equity Investor Angst:

• Volatility(VIX) 13.5 -4.9%
• DJIA Intraday % Swing .48%
  
• Bloomberg Global Risk On/Risk Off Index 72.4 +.01%

• Euro/Yen Carry Return Index 167.99 +.06%

• Emerging Markets Currency Volatility(VXY) 8.6 -.23%

• CBOE S&P 500 Implied Correlation Index 19.7 -3.7% 

• ISE Sentiment Index 87.0 +3.0 points
  

• Total Put/Call 1.01 +6.3%

• NYSE Arms 1.28 +82.9%

Credit Investor Angst:

• North American Investment Grade CDS Index 63.39 -1.1%
  

• US Energy High-Yield OAS 309.71 +.38%
• Bloomberg TRACE # Distressed Bonds Traded 363.0 +24
  

• European Financial Sector CDS Index 81.0 -1.5% 
• Deutsche Bank Subordinated 5Y Credit Default Swap 271.9 +.47%
  

• Italian/German 10Y Yld Spread 180.0 basis points +4.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 117.2 -1.4%
  

• Emerging Market CDS Index 202.17 -1.5%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 24.91 -.08%

• 2-Year SOFR Swap Spread -10.0 basis points +.5 basis point
  

• TED Spread 23.0 basis points -2.25 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -10.0 +.75 basis point
  
• MBS  5/10 Treasury Spread 163.0 -5.0 basis points
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 923.0 +57.0 basis points
  
• Avg. Auto ABS OAS 76.0 +1.0 basis point
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 42.3 +.04%
• 3-Month T-Bill Yield 5.44% -2.0 basis points
  

• China Iron Ore Spot 119.2 USD/Metric Tonne -.23%
• Dutch TTF Nat Gas(European benchmark) 36.8 euros/megawatt-hour +6.1%

• Citi US Economic Surprise Index 59.5 +2.3 points

• Citi Eurozone Economic Surprise Index -72.1 -3.7 points

• Citi Emerging Markets Economic Surprise Index 11.1 +.6 point
• S&P 500 Current Quarter EPS Growth Rate YoY(497 of 500 reporting) -5.8%  -.2 percentage point
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 238.88 +.04:  Growth Rate +8.7% unch., P/E 18.7 unch.
  
• S&P 500 Current Year Estimated Profit Margin 12.14% unch.
  
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(10 of 10 reporting) +25.4% unch.
  
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 246.92 +.26: Growth Rate +48.9% +.1 percentage point, P/E 31.8 -.1
  
• Bloomberg US Financial Conditions Index .49 +17.0 basis points
  
• Bloomberg Euro-Zone Financial Conditions Index .26 +6.0 basis points
  
• US Yield Curve -73.75 basis points (2s/10s) +.25 basis point
  
• US Atlanta Fed 2Q GDPNow Forecast +5.57% unch.
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +3.95% -8.0 basis points: CPI YoY +3.66% -16.0 basis points
  
• 10-Year TIPS Spread 2.34 unch.
  
• Highest target rate probability for Nov. 1st FOMC meeting: 61.4%(+5.6 percentage points) chance of 5.25%-5.5%. Highest target rate probability for Dec. 13th meeting: 56.1%(+.9 percentage point) chance of 5.25%-5.5%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -50 open in Japan 
• China A50 Futures: Indicating +12 open in China

• DAX Futures: Indicating -33 open in Germany

Portfolio:

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

• Disclosed Trades: None
  

• Market Exposure: 50% Net Long
  

Bear Radar

Style Underperformer:

• Small-Cap Value -.5%
  

Sector Underperformers:

• 1) Airlines -2.8% 2) Oil Service -2.3% 3) Regional Banks -1.3%

Stocks Falling on Unusual Volume: 

• BGS, CRNX, BCYC, RBLX, APA, AAL, VIRT, CBRE and SBOW
  

Stocks With Unusual Put Option Activity:

• 1) STEM 2) FFIE 3) ACB 4) HTZ 5) LITE
  

Stocks With Most Negative News Mentions:

• 1) U 2) PATH 3) AAL 4) VIRT 5) FOUR
  

Charts:

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

Bull Radar

Style Outperformer:

• Large-Cap Growth +.6%
  

Sector Outperformers:

• 1) Utilities +1.7% 2) Disk Drives +1.1% 3) Semis +1.1%

Stocks Rising on Unusual Volume:

• RCKT, SGML, PACB, HAIN, CRS, MDGL, RVNC, GPCR, CRTO, CYRX, ARCH, MRNA, JBHT, ARCB, BRKR, BLBD, RGNX, BTU, MUSA, FRHC, YPF and LMB
  

Stocks With Unusual Call Option Activity:

• 1) ARCC 2) CNQ 3) DLR 4) FRO 5) FITB

Stocks With Most Positive News Mentions:

• 1) RCKT 2) MYNZ 3) CDXS 4) CRS 5) JBHT
  

Charts:

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

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

Earnings of Note 
Company/Estimate 

Before the Open:

• None of note
  

After the Close: 

• (ADBE)/3.98
• (CPRT)/.32
• (LEN)/3.52
  

Economic Releases  

8:30 am EST

• Retail Sales Advance MoM for Aug. is estimated +.1% versus a +.7% gain in July.
• Retail Sales Ex Autos MoM for Aug. is estimated to rise +.4% versus a +1.0% gain in July.
• Retail Sales Ex Autos and Gas for Aug. is estimated to fall -.1% versus a +1.0% gain in July.
• Initial Jobless Claims for last week is estimated to rise to 225K versus 216K the prior week. 
• Continuing Claims is estimated to rises to 1693K versus 1679K the prior week.
• PPI Final Demand MoM for Aug. is estimated to rise +.4% versus a +.3% gain in July.
• PPI Ex Food & Energy MoM for Aug. is estimated to rise +.2% versus a +.3% gain in July.
  

10:00 am EST

• Business Inventories for July is estimated to rise +.1% versus unch. in June.
  

Upcoming Splits 

• None of note
  

Other Potential Market Movers

• The ECB decision, Japan Industrial Production report, weekly EIA natural gas inventory report, B. Riley Consumer Conference, (STAA) investor day, (BRO) investor day, (BMY) R&D Day, UBS Fintech Leaders Conference and the (LH) investor day 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 -16.0% Below 100-Day Average 
• Nasdaq/NYSE Volume Ratio 11.1 -.1
  
• 4 Sectors Declining, 7 Sectors Rising
• 44.2% of Issues Advancing, 53.0% Declining
• 42 New 52-Week Highs, 68 New Lows
• 43.5%(-.%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 50.0 -2.0
  
• Bloomberg Global Risk-On/Risk-Off Index 72.0 -.7%
  
• Russell 1000: Growth/Value 17,692.0 +.6%
• 1-Day Vix 9.6 -30.1%
  
• Vix 13.5 -5.2%
  
• Total Put/Call 1.0 +7.4%
• TRIN/Arms 1.17 +67.1%
  

Wednesday Watch

Evening Headlines

Bloomberg:

• China’s Housing Rebound Fades Fast in Big Cities After Stimulus.
• China Property Jumps to Top Credit Risk in Bank of America Global Survey.
• Bankers’ 40% Pay Cuts Show the China Dream Fading in Its Richest Cities.
• Asia Stocks Set for Cautious Open; Oil Holds Gains: Markets Wrap.
• Here Are the Key Takeaways From Apple’s iPhone, Smartwatch Event.
• Wall Street Bosses Lash Out Over Proposals for Higher Capital.
• Explainer: Why Bigger ‘Capital Cushions’ Have Banks On Edge.
• Binance US CEO Departs as Crypto Platform Cuts Third of Staff. 
• Arm Is Expected to Price IPO at Top End of Range or Higher.
• Net Zero Watchdog Targeted by GOP Revamps Its Organization.
• What Rising Rates and Surging Insurance Prices Are Doing to Real Estate. 
• Here Are the Latest Inflation Buzzwords You Need to Know.
• ADHD Drug Shortages Worsen as Makers Say Production Is Maxed Out.

Zero Hedge:

• CIA Bribed Analysts To Change Lab-Leak Conclusions: 'Senior-Level' Whistleblower
• McCarthy Launches Biden Impeachment Inquiry
• Americans Are Making 'Huge Mistake' to Believe Certain 'Booming' Economy Narratives: Jamie Dimon
• Locked Items, Self-Checkouts & Disappearing Staff: Rising Theft And Slowing Sales Eat Away At Retail.
• Parents Should Not Post Children's Photos Online, Warn Safety Experts.
• 'Medicane' Breaks Dams, Floods Eastern Libya: Up to 10,000 Feared Dead.
• California Leaders' Virtue-Signaling Is Mainly Gaslighting.
• Record Rotation Out Of China Into The US: These Are The Top Conviction Trades On Wall Street Right Now.
• Renewed Forced-Labor Cloud Darkens Solar's Moment In The Las Vegas Sun.
• Tech led the declines stateside after Apple event disappointment - Newsquawk Asia-Pac Market Open.
• Visualizing The 25 Worst Stocks By Shareholder Wealth Destruction Since 1926.
• Three Deep State Admissions On Ukraine To Emerge This Week...
• RFK Jr. As Third Party Candidate Will Make It Harder For Democrats To 'Cheat': Kari Lake.
• "This Is Philadelphia": A Shocking Video Of Yet Another Democrat City Imploding.
  
• Blinken OKs Attacks On Russia With US Missiles.
• WTI Dips Off 10-Month Highs After API Reports Unexpected Crude Build.
• Tech leads losses after disappointing AAPL event with bonds and Dollar choppy into CPI - Newsquawk US Market Wrap.
• New Mexico Sheriff Defies Governor's Emergency Gun Ban Order.
• Bitcoin, Banks, & Black Gold Bid As Tech Stocks Tumble Ahead Of CPI.

Wall Street Journal:

• BP CEO Bernard Looney Resigns.
• Banks Amass Risky ‘Hot’ Deposits.
• Why More Baby Boomers Are Sliding Into Homelessness.
• Amateurs Pile Into 24-Hour Options: ‘It’s Just Gambling’.
• Colorado’s Back-Door Tax Hike. A ballot measure called Proposition HH disguises a revenue grab as a property-tax cut.
• The Democratic Party Rigs the Primaries. To help Joe Biden, New Hampshire is shunted aside and superdelegates return. 
• Elon Musk’s Lessons From Hell: Five Commandments for Business.
• Birkenstock Files for IPO.

CNBC.com:

• Co-founder of $4 billion crypto fraud gets 20 years in prison, ‘Cryptoqueen’ partner still at large.
• Everything Apple just announced at its 2023 event: iPhone 15 models, new Apple Watch, updated AirPods.
• Salesforce CEO says Slack will play a prominent role in AI.
• Amazon says it’s boosting pay for contract delivery drivers.
• Decongestant found in popular cold, allergy medicines doesn’t actually work, FDA advisors say.
• Elizabeth Warren calls for an investigation into Musk and Starlink in Ukraine after biography claim.

MarketWatch.com:

• OpenAI’s Sam Altman tells Salesforce’s Marc Benioff that AI ‘hallucinations’ are more feature than bug.
• Investors should avoid Arm IPO, New Constructs says.
• Here’s everything you need to know about Apple’s new iPhone and Watch lineups.
• Google spent billions to build an illegal monopoly, Justice Department says as trial gets under way.
• U.S. stocks are facing a triple threat that could lead to more losses ahead.
• Here’s what DoubleLine’s Jeffrey Gundlach thinks about Bill Gross’s ‘bond king’ slap down.

Newsmax:

• CDC Panel Urges Broad Use of Updated COVID Vaccines.
• MSNBC Columnist: Trump 'Must Die in Prison'.

Fox News:

• Marxist California mayor doesn't believe police have 'any effect' on crime.
• Biden admin's secretive plan for illegal immigrants exposed in internal emails.

TheGatewayPundit.com:

• Instagram Censors Teen ‘Detransitioner’ Chloe Cole for Grotesque Reason.
• BREAKING: TYRANNY TAKES HOLD IN AMERICA! Reporter Owen Shroyer Sentenced to 60 DAYS IN PRISON for Speech Crimes! – DOJ Says “Shroyer Helped Create January 6” Through his Speech!
• “I Couldn’t Take it Anymore. I Just Couldn’t Take Standing There With Them” – Rudy Giuliani Walks Out on 9-11 Ceremony After Kamala Disgraces Memory of the 2,977 Victims (VIDEO).
• WATCH: Senator John Kennedy Forces the Illinois Secretary of State to Make a Brutal Admission After Kennedy Reads Passages from Two Pornographic LGBTQ Books Available to Children.
• Reporter Confronts State Dept. Spokesman Matt Miller for Stonewalling on USAID’s Funding of Gain-of-Function Research on COVID.
• BPro/KNOWiNK’s Uncertified, Internet-Connected, Cloud-Based Election Systems Are Foreign Influenced and Used to Illegally Process Election Results.
• CNN Host Stuns New Mexico’s Democrat Governor, Reads State Constitution Live on Air to Push Back on Her Gun Grab (VIDEO).
• SAFE AND EFFECTIVE: Dr. Fauci Now Admits COVID Vaccines Cause Myocarditis (VIDEO).
• FDA Panel Rules That Popular Decongestant Found in Cold Medicines Does Not Work – Benadryl, Sudafed, and Several More Drugs Face Removal from Stores.
• REVEALED: Joe Biden Used a Fourth Alias to Communicate While He Was Vice President.
• CIA Whistleblower Exposes Agency’s Action to Manipulate COVID-19 Origin Investigation, Offers “Significant Monetary Incentive” to Discredit Wuhan Lab Theory.
• President Trump Responds to Joe Biden’s Latest Multi-Billion Dollar Payoff to Iranian Regime – Urges Congress to Call Out 25th Amendment and Remove Incompetent Joe from Office.

The Epoch Times: 

• Canada Has Taken 'Very Few Steps' in the Year Since Release of Chinese Secret Police Station Report: Analyst.

OpenVAERS:

• VAERS US COVID Vaccine Adverse Event Reports. 983,973 Reports(+1,886 from prior week) Through August 25th, 2023.

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.

Night Trading 

• Asian equity indices are -.5% to +.25% on average.

• Asia Ex-Japan Investment Grade CDS Index 118.75 -2.25 basis points. 

• China Sovereign CDS 71.75 unch.
  
• China Iron Ore Spot 118.5 USD/Metric Tonne -.5%.

• Bloomberg Emerging Markets Currency Index 42.3 unch.
• Bloomberg Global Risk-On/Risk Off Index 73.5 +1.1%. 
• Bloomberg US Financial Conditions Index 32.0 -1.0 basis point.
  
• Volatility Index(VIX) futures 15.9 -.06%.
• Euro Stoxx 50 futures -.12%.

• S&P 500 futures -.01%.

• NASDAQ 100 futures +.01%.  

Morning Preview Links

BOTTOM LINE: Asian indices are mostly lower, weighed down by technology and industrial 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.