Thursday Watch

Night Trading 

• Asian equity indices are +.5% to +1.5% on average.

• Asia Ex-Japan Investment Grade CDS Index 131.75 -5.75 basis points.

• China Sovereign CDS 77.75 -3.0 basis points.
  
• China Iron Ore Spot 121.1 USD/Metric Tonne -.31%.

• Bloomberg Emerging Markets Currency Index 41.40 +.09%.
• Bloomberg Global Risk-On/Risk Off Index 65.4 +1.0%. 
• Bloomberg US Financial Conditions Index -.12 unch.
  
• Volatility Index(VIX) futures 17.8 -.3%.
• Euro Stoxx 50 futures +.68%.

• S&P 500 futures +.24%.

• NASDAQ 100 futures +.35%.  

Morning Preview Links

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

Stocks Modestly Higher into Final Hour on Falling Fed Rate-Hike Odds, Diminished Mid-East Regional War Fears, Earnings Outlook Optimism, Tech/Homebuilding Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Lower
  

• Sector Performance: Mixed
  

• Volume: Around Average

• Market Leading Stocks: Underperforming
  

Equity Investor Angst:

• Volatility(VIX) 17.4 -4.0%
• DJIA Intraday % Swing .82% +10.9%
  
• Bloomberg Global Risk On/Risk Off Index 63.4 +1.0%

• Euro/Yen Carry Return Index 169.8 -.8%

• Emerging Markets Currency Volatility(VXY) 8.07 -1.5%

• CBOE S&P 500 Implied Correlation Index 29.3 -2.4% 

• ISE Sentiment Index 123.0 +33.0
  

• Total Put/Call .94 -13.8%

• NYSE Arms 1.54 +60.4%

Credit Investor Angst:

• North American Investment Grade CDS Index 77.45 -2.3%
  

• US Energy High-Yield OAS 355.9 -.20%
• Bloomberg TRACE # Distressed Bonds Traded 388 +21
  

• European Financial Sector CDS Index 96.46 -2.4% 
• Deutsche Bank Subordinated 5Y Credit Default Swap 279.47 -2.81%
  

• Italian/German 10Y Yld Spread 196.0 basis points +4.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 135.5 -1.7%
  

• Emerging Market CDS Index 223.3 -2.2%
• Israel Sovereign CDS 136.47 -.93%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 24.61 +.08%

• 2-Year SOFR Swap Spread -12.0 basis points -.5 basis point
  

• TED Spread 18.5 basis points +1.0 basis point
  

• 3-Month EUR/USD Cross-Currency Basis Swap -23.75 +1.25 basis points
  
• MBS  5/10 Treasury Spread 178.0 -5.0 basis points
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 923.0 +2.0 basis points
  
• Avg. Auto ABS OAS 97.0 +1.0 basis point
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 41.31 +.08%
• 3-Month T-Bill Yield 5.46% unch.
  

• China Iron Ore Spot 120.8 USD/Metric Tonne -.6%
• Dutch TTF Nat Gas(European benchmark) 47.8 euros/megawatt-hour -.5%

• Citi US Economic Surprise Index 54.4 -9.0 points

• Citi Eurozone Economic Surprise Index -46.5 -1.0 point

• Citi Emerging Markets Economic Surprise Index 23.2 -3.1 points
• S&P 500 Current Quarter EPS Growth Rate YoY(310 of 500 reporting) +2.9% +.4 percentage point
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 240.31 -.23:  Growth Rate +9.4% unch., P/E 17.5 +.2
  
• S&P 500 Current Year Estimated Profit Margin 12.18% +4.0 basis points
  
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(6 of 10 reporting) +51.9% unch.
  
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 272.94 +.29: Growth Rate +61.0% +.1 percentage point, P/E 26.9 +.5
  
• Bloomberg US Financial Conditions Index -.13 -2.0 basis points
  
• Bloomberg Euro-Zone Financial Conditions Index .55 +6.0 basis points
  
• US Yield Curve -19.25 basis points (2s/10s) +.5 basis point
  
• US Atlanta Fed 3Q GDPNow Forecast +2.26% unch.
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +3.63% unch.: CPI YoY +3.28% unch.
  
• 10-Year TIPS Spread 2.40 -2.0 basis points
  
• Highest target rate probability for Jan. 31st FOMC meeting: 68.5%(+9.5 percentage points) chance of 5.25%-5.5%. Highest target rate probability for March 20th meeting: 65.0%(+8.2 percentage points) chance of 5.25%-5.5%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +85 open in Japan 
• China A50 Futures: Indicating +25 open in China

• DAX Futures: Indicating +82 open in Germany

Portfolio:

• Slightly Lower:  On losses in my index hedges and emerging market shorts
  

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

• Market Exposure: Moved to 50% Net Long
  

Bear Radar

Style Underperformer:

• Small-Cap Growth -.8%
  

Sector Underperformers:

• 1) Networking -2.4% 2) Alt Energy -2.1% 3) Telecom -1.6%

Stocks Falling on Unusual Volume: 

• LBTYA, CDAY, ABR, GSK, ZI, LTHM, VC, AEIS, MODG, ALGM, GT, CLH, LSCC, ENPH, OI, EQR, CTLT, TECH, FYBR, HUM, ALB, ADP, ARRY, PWR, EQH, SYNA, DD, PCTY, DGII, BMBL, SKY, AGL, GOOS, SLAB, DIN, DBRG, VFC, XPOF, UNM, PYCR, FDP, SITE, SSRM, TRMB, STVN, EXTR, EL, MTCH, YUMC, MTZ and PAYC
  

Stocks With Unusual Put Option Activity:

• 1) XME 2) SABR 3) GT 4) SPLK 5) EL
  

Stocks With Most Negative News Mentions:

• 1) WE 2) PAYC 3) MTZ 4) YUMC 5) EL
  

Charts:

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

Bull Radar

Style Outperformer:

• Large-Cap Growth +.6%
  

Sector Outperformers:

• 1) Homebuilding +1.7% 2) Steel +.9% 3) Computer Hardware +.9%

Stocks Rising on Unusual Volume:

• TGTX, SMG, CHEF, FTDR, GNRC, SRPT, AIZ, PSN, AMD, APO, BLDR, GVA, ESTA, W, MTH, LPX and ANET
  

Stocks With Unusual Call Option Activity:

• 1) HR 2) BALY 3) WE 4) IBRX 5) MTCH

Stocks With Most Positive News Mentions:

• 1) MCY 2) TGTX 3) TT 4) GRMN 5) ESAB
  

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:

• (ADT)/.03
• (ATI)/.53
• (AEP)/1.70
• (APTV)/1.23
• (BAXC)/.67
• (BWA)/.94
• (CARS)/.35
• (COP)/2.10
• (CROX)/3.10
• (CMI)/4.70
• (DUK)/1.92
• (LLY)/-.20
• (EXC)/.67
• (FSS)/.66
• (FOXA)/1.00
• (H)/.59
• (ICE)/1.39
• (IRM)/.99
• (ITRI)/.50
• (ITT)/1.27
• (JLL)/2.01
• (MAR)/2.10
• (MRNA)/-1.93
• (TAP)/1.56
• (MUR)/1.42
• (PZZA)/.57
• (PHI)/5.32
• (PTON)/-.34
• (PENN)/.37
• (PBI)/-.02
• (PWR)/2.11
• (REGN)/10.73
• (ROK)/3.47
• (SEE)/.63
• (SHAK)/.09
• (SHOP)/.15
• (SWI)/.18
• (SO)/1.32
• (SBUX)/.97
• (STRA)/.81
• (TPX)/.81
• (CI)/6.68
• (WEN)/.25
• (ZTS)/1.36
  

After the Close: 

• (AAPL)/1.39
• (BILL)/.50
• (SQ)/.47
• (BKNG)/67.78
• (BOOT)/.88
• (CHUY)/.36
• (CRUS)/1.54
• (NET)/.10
• (COIN)/-.55
• (ED)/1.61
• (DKNG)/-.69
• (DBX)/.49
• (LOCO)/.19
• (EOG)/2.97
• (EXPE)/5.00
• (FTNT)/.36
• (PODD)/.40
• (LYV)/1.26
• (MNST)/.40
• (PLTR)/.06
• (PXD)/5.58
• (RMAX)/.36
• (RDFN)/-.23
• (SWKS)/2.10
• (SYK)/2.43
• (OLED)/1.01
• (YELP)/.34
  

Economic Releases

7:30 am EST

• Challenger Job Cuts YoY for Oct.
  

8:30 am EST

• 3Q Non-Farm Productivity is estimated to rise +4.3% versus a +3.5% gain in 2Q.
• 3Q Unit Labor Costs is estimated to rise +.4% versus a +2.2% gain in 2Q.
• Initial Jobless Claims for last week is estimated at 210K versus 210K the prior week.
• Continuing Claims is estimated to rise to 1800K versus 1790K prior.
  

10:00 am EST

• Factory Orders for Sept. is estimated to rise +2.3% versus a +1.2% gain in Aug.
• Factory Orders Ex Transports for September is estimated to rise +.8% versus a +1.4% gain in Aug.
• Durable Goods Orders revisions for Sept.
  

Upcoming Splits 

• None of note
  

Other Potential Market Movers

• The Fed's Balance Sheet report, weekly EIA nat gas inventory report, (SBUX) reinvention update, (STZ) investor day, (TPR) annual meeting and the (COTY) annual meeting 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 -1.5% Below 100-Day Average 
• Nasdaq/NYSE Volume Ratio 7.5 -.3
  
• 4 Sectors Declining, 7 Sectors Rising
• 59.8% of Issues Advancing, 38.2% Declining
• 22 New 52-Week Highs, 99 New Lows
• 27.5%(+1.3%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 41.0 +4.0
  
• Bloomberg Global Risk-On/Risk-Off Index 64.6 +1.4%
  
• Russell 1000: Growth/Value 17,991.4 +.54%
  
• 1-Day Vix 17.5 -3.7%
  
• Vix 17.5 -3.6%
  
• Total Put/Call .88 -19.3%
• TRIN/Arms 1.55 +61.5%