Stocks Rising into Final Hour on US Economic "Soft-Landing" Hopes, Loosening US Financial Conditions, Short-Covering, Commodity/Consumer Discretionary Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Higher
  

• Sector Performance: Almost Every Sector Rising
  

• Volume: Below Average

• Market Leading Stocks: Outperforming
  

Equity Investor Angst:

• Volatility(VIX) 13.0 -3.8%
• DJIA Intraday % Swing .72%
  
• Bloomberg Global Risk On/Risk Off Index 72.2 -.2%

• Euro/Yen Carry Return Index 166.5 -.9%

• Emerging Markets Currency Volatility(VXY) 8.5 -1.4%

• CBOE S&P 500 Implied Correlation Index 18.9 -3.3% 

• ISE Sentiment Index 94.0 +4.0 points
  

• Total Put/Call 1.09 -15.5%

• NYSE Arms .89 -32.1%

Credit Investor Angst:

• North American Investment Grade CDS Index 62.4 -1.9%
  

• US Energy High-Yield OAS 306.0 -1.3%
• Bloomberg TRACE # Distressed Bonds Traded 374.0 +11
  

• European Financial Sector CDS Index 79.1 -2.5% 
• Deutsche Bank Subordinated 5Y Credit Default Swap 269.9 -1.5%
  

• Italian/German 10Y Yld Spread 175.0 basis points -5.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 115.5 -1.5%
  

• Emerging Market CDS Index 200.9 -1.3%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 25.0 +.29%

• 2-Year SOFR Swap Spread -10.75 basis points -.75 basis point
  

• TED Spread 21.0 basis points -2.0 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -10.25 -.25 basis point
  
• MBS  5/10 Treasury Spread 163.0 unch.
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 923.0 unch.
  
• Avg. Auto ABS OAS 78.0 +2.0 basis points
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 42.3 -.14%
• 3-Month T-Bill Yield 5.46% +2.0 basis points
  

• China Iron Ore Spot 121.5 USD/Metric Tonne +.8%
• Dutch TTF Nat Gas(European benchmark) 35.5 euros/megawatt-hour -3.5%

• Citi US Economic Surprise Index 61.4 +1.9 points

• Citi Eurozone Economic Surprise Index -70.6 +1.5 points

• Citi Emerging Markets Economic Surprise Index 10.8 -.3 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 238.93 +.05:  Growth Rate +8.7% unch., P/E 18.8 +.1
  
• 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 247.13 +.21: Growth Rate +49.o0% +.1 percentage point, P/E 31.9 +.1
  
• Bloomberg US Financial Conditions Index .57 +7.0 basis points
  
• Bloomberg Euro-Zone Financial Conditions Index .26 unch.
  
• US Yield Curve -73.0 basis points (2s/10s) +.75 basis point
  
• US Atlanta Fed 2Q GDPNow Forecast +4.94% -63.0 basis points
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +3.95% unch.: CPI YoY +3.66% unch.
  
• 10-Year TIPS Spread 2.34 unch.
  
• Highest target rate probability for Nov. 1st FOMC meeting: 66.7%(+9.3 percentage points) chance of 5.25%-5.5%. Highest target rate probability for Dec. 13th meeting: 59.3%(+5.5 percentage points) chance of 5.25%-5.5%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +82 open in Japan 
• China A50 Futures: Indicating +28 open in China

• DAX Futures: Indicating +70 open in Germany

Portfolio:

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

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

• Market Exposure: Moved to 75% Net Long
  

Bear Radar

Style Underperformer:

• Mid-Cap Growth +.6%
  

Sector Underperformers:

• 1) Digital Health -.5% 2) Education +.1% 3) Healthcare Providers +.3%

Stocks Falling on Unusual Volume: 

• GCT, PTCT, CBRL, SBOW, TH, AMAM, VTLE, COCO, ALNY and IE
  

Stocks With Unusual Put Option Activity:

• 1) CBRL 2) EMB 3) BILI 4) KBH 5) DM
  

Stocks With Most Negative News Mentions:

• 1) LAW 2) RLGT 3) HPQ 4) PATH 5) ALNY
  

Charts:

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

Bull Radar

Style Outperformer:

• Small-Cap Value +1.6%
  

Sector Outperformers:

• 1) Steel +3.6% 2) Alt Energy +2.4% 3) Retail +2.1%

Stocks Rising on Unusual Volume:

• MODV, SBGI, CVNA, RCKT, FOUR, CECO, WW, PENN, GDOT, RUN, RIOT, MIRM, SMTC, MCFT, LNTH, NXST, ARIS, AMR, GPCR, SLRN, HCC, VIRT, MRNA, SSYS, SAH, CUK, APP, CEIX, BRKR, ARCH, MTCH, GPK, FYBR, CRNX, BGS, CLF, GNL, ONTO, TTMI, ETSY, AAN, DXC, BIPC and CRS
  

Stocks With Unusual Call Option Activity:

• 1) IOVA 2) RCL 3) USB 4) TECK 5) IGT

Stocks With Most Positive News Mentions:

• 1) NKLA 2) LVO 3) LODE 4) MYTE 5) VALE
  

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: 

• None of note
  

Economic Releases  

8:30 am EST

• The Import Price Index MoM for Aug. is estimated to rise +.3% versus a +.4% gain in July.
• The Import Price Index ex Petrol MoM for Aug. is estimated unch. versus unch. in July.
• The Export Price Index MoM for Aug. is estimated to rise +.4% versus a +.7% gain in July.
• Empire Manufacturing for Sept. is estimated to rise to -10.0 versus -19.0 in Aug.
  

9:15 am EST

• Industrial Production MoM for Aug. is estimated to rise +.1% versus a +1.0% gain in July.
• Capacity Utilization for Aug. is estimated at 79.3% versus 79.3% in July.
• Manufacturing Production for Aug. is estimated to rise +.1% versus a +.5% gain in July.
  

10:00 am EST

• The Univ. of Mich. Consumer Sentiment Index for Sept. is estimated to fall to 69.0 versus 69.5 in Aug.
• Univ. of Mich. 1Y Inflation Expectations for Sept. is estimated at +3.5% versus an estimate of +3.5% in Aug.
  

Upcoming Splits 

• None of note
  

Other Potential Market Movers

• The China Industrial Production 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 -10.8% Below 100-Day Average 
• Nasdaq/NYSE Volume Ratio 10.6 -.5
  
• 0 Sectors Declining, 11 Sectors Rising
• 77.7% of Issues Advancing, 25.0% Declining
• 54 New 52-Week Highs, 54 New Lows
• 44.5%(+5.1%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 57.0 +7.0
  
• Bloomberg Global Risk-On/Risk-Off Index 72.3 -.12%
  
• Russell 1000: Growth/Value 17,638.2 -.33%
• 1-Day Vix 9.9 -10.3%
  
• Vix 13.0 -3.4%
  
• Total Put/Call .99 -23.3%
• TRIN/Arms .94 -28.2%
  

Thursday Watch

Night Trading 

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

• Asia Ex-Japan Investment Grade CDS Index 116.0 -2.75 basis points. 

• China Sovereign CDS 69.75 -2.0 basis points.
  
• China Iron Ore Spot 119.4 USD/Metric Tonne -.06%.

• Bloomberg Emerging Markets Currency Index 42.3 +.01%.
• Bloomberg Global Risk-On/Risk Off Index 72.9 +.7%. 
• Bloomberg US Financial Conditions Index 50.0 -1.0 basis points.
  
• Volatility Index(VIX) futures 15.6 -.4%.
• Euro Stoxx 50 futures -.19%.

• S&P 500 futures +.13%.

• NASDAQ 100 futures +.18%.  

Morning Preview Links

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