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

Broad Equity Market Tone:

• Advance/Decline Line: Lower
  

• Sector Performance: Mixed
  

• Volume: Below Average

• Market Leading Stocks: Underperforming
  

Equity Investor Angst:

• Volatility(VIX) 14.0 +1.2%
• DJIA Intraday % Swing .95%
  
• Bloomberg Global Risk On/Risk Off Index 73.0 -.16%

• Euro/Yen Carry Return Index 167.5 +.04%

• Emerging Markets Currency Volatility(VXY) 8.4 -.71%

• CBOE S&P 500 Implied Correlation Index 20.8 +1.5% 

• ISE Sentiment Index 115.0 +16.0 points
  

• Total Put/Call .99 -2.0%

• NYSE Arms 1.47 +75.0%

Credit Investor Angst:

• North American Investment Grade CDS Index 63.0 +.14%
  

• US Energy High-Yield OAS 309.17 +.72%
• Bloomberg TRACE # Distressed Bonds Traded 355.0 -7
  

• European Financial Sector CDS Index 79.4 -.11% 
• Deutsche Bank Subordinated 5Y Credit Default Swap 265.5 +1.54%
  

• Italian/German 10Y Yld Spread 180.0 basis points +1.0 basis point
  

• Asia Ex-Japan Investment Grade CDS Index 117.3 +1.5%
  

• Emerging Market CDS Index 204.3 +.38%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 25.0 -.01%

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

• TED Spread 21.0 basis points -1.5 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -9.0 +1.25 basis points
  
• MBS  5/10 Treasury Spread 164.0 -2.0 basis points
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 909.0 -13.0 basis points
  
• Avg. Auto ABS OAS 77.0 -1.0 basis point
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 42.3 +.06%
• 3-Month T-Bill Yield 5.46% +1.0 basis point
  

• China Iron Ore Spot 121.6 USD/Metric Tonne -.13%
• Dutch TTF Nat Gas(European benchmark) 34.5 euros/megawatt-hour -5.5%

• Citi US Economic Surprise Index 59.6 -5.2 points

• Citi Eurozone Economic Surprise Index -61.8 -7.1 points

• Citi Emerging Markets Economic Surprise Index 13.2 -2.0 points
• S&P 500 Current Quarter EPS Growth Rate YoY(3 of 500 reporting) +7.2% unch.
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 239.13 +.13:  Growth Rate +8.8% +.1 percentage point, P/E 18.7 -.2
  
• S&P 500 Current Year Estimated Profit Margin 12.13% -1.0 basis point
  
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(0 of 10 reporting) n/a
  
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 247.54 +.25: Growth Rate +49.3% +.2 percentage point, P/E 31.1 -.2
  
• Bloomberg US Financial Conditions Index .50 -1.0 basis point
  
• Bloomberg Euro-Zone Financial Conditions Index .46 -1.0 basis point
  
• US Yield Curve -74.5 basis points (2s/10s) -3.0 basis points
  
• US Atlanta Fed 2Q GDPNow Forecast +4.94% unch.
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +3.95% unch.: CPI YoY +3.66% unch.
  
• 10-Year TIPS Spread 2.36 +1.0 basis point
  
• Highest target rate probability for Nov. 1st FOMC meeting: 69.0%(-3.3 percentage points) chance of 5.25%-5.5%. Highest target rate probability for Dec. 13th meeting: 58.1%(-2.7 percentage points) chance of 5.25%-5.5%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -448 open in Japan 
• China A50 Futures: Indicating -18 open in China

• DAX Futures: Indicating +139 open in Germany

Portfolio:

• Higher:  On gains in my tech/medical/industrial/commodity sector longs, index hedges and emerging market shorts
  

• Disclosed Trades: None
  

• Market Exposure: 50% Net Long
  

Bear Radar

Style Underperformer:

• Small-Cap Value -.5%
  

Sector Underperformers:

• 1) Regional Banks -1.6% 2) Alt Energy -1.6% 3) Retail -1.3%

Stocks Falling on Unusual Volume: 

• M, MITK, GDOT, TGT, PLNT, CWH, AX, NTGR, BASE, MSGE, SHOP, INCY, VFC, SAVA, AMRC, FVRR, UPWK, CRSP, NUVL, VKTX, NOVA, TCMD, OCFC, KRTX, MNSO, U, GPS, PTCT, MRNA and W
  

Stocks With Unusual Put Option Activity:

• 1) NTR 2) SAVE 3) KO 4) RUM 5) TSLL
  

Stocks With Most Negative News Mentions:

• 1) TLRY 2) EVA 3) INCY 4) LYFT 5) PACW
  

Charts:

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

Bull Radar

Style Outperformer:

• Large-Cap Growth +.3%
  

Sector Outperformers:

• 1) Defense +1.6% 2) Homebuilding +1.1% 3) Insurance +.9%

Stocks Rising on Unusual Volume:

• CABA, GRPN, MDRX, KN, CCCS, ZIM, SA, ESAB, AYX, GPCR, EURN, AFRM, BGNE, PRO, FRO, APP, ROL, OLED, RIOT, TYL and MBLY
  

Stocks With Unusual Call Option Activity:

• 1) NWL 2) SGML 3) MAT 4) SFIX 5) MDLZ

Stocks With Most Positive News Mentions:

• 1) SQL 2) IOVA 3) AVGR 4) AYX 5) CCCS
  

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:

• (APOG)/1.12
• (AZO)/45.17
  

After the Close: 

• (SCS)/.20
  

Economic Releases  

8:30 am EST

• Housing Starts for Aug. is estimated to fall to 1439K versus 1452K in July.
• Building Permits for Aug. is estimated to fall to 1440K versus 1443K in July.
  

Upcoming Splits 

• None of note
  

Other Potential Market Movers

• The Japan Industrial Production report, 20Y T-Bond auction, weekly US retail sales reports, (MYGN) investor day, (PINS) investor day, (INTC) Innovation 2023 and the (FTS) 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 -25.5% Below 100-Day Average 
• Nasdaq/NYSE Volume Ratio 11.9 +6.1
  
• 3 Sectors Declining, 8 Sectors Rising
• 32.0% of Issues Advancing, 68.0% Declining
• 40 New 52-Week Highs, 85 New Lows
• 43.7%(-.6%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 51.0 -1.0
  
• Bloomberg Global Risk-On/Risk-Off Index 73.02 +.02%
  
• Russell 1000: Growth/Value 17,482.7 +.09%
• 1-Day Vix 8.5 -19.6%
  
• Vix 14.0 +1.2%
  
• Total Put/Call .90 -10.9%
• TRIN/Arms 1.45 +72.6%
  

Monday Watch

Night Trading

• Asian indices are -.5% to unch. on average.
• Asia Ex-Japan Investment Grade CDS Index 115.75 +.5 basis point.
  
• China Sovereign CDS 70.0 +.5 basis point.
• China Iron Ore Spot 120.9 USD/Metric Tonne -1.7%.
  
• Bloomberg Emerging Markets Currency Index 42.3 +.03%.
• Bloomberg Global Risk-On/Risk Off Index 73.15 +.02%.
• Bloomberg US Financial Conditions Index .50 -1.0 basis point. 
  
• Volatility Index(VIX) futures 15.7 -.46%. 
• Euro Stoxx 50 futures -.09%.
• S&P 500 futures +.17%.
• NASDAQ 100 futures +.14%.

Morning Preview Links

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