Friday Watch

Evening Headlines

Bloomberg:

• Biden Says Israel and Hamas Should ‘Pause’ for Hostage Release.
• China’s EV Makers Want Top Oil Producing Nations to Go Electric.
• Foxconn Makes Your iPhone. Now It Wants to Make Your Electric Car.
• China’s Grip on Africa’s Minerals Sparks a US Response. 
• These Five Countries Are Key Economic ‘Connectors’ in a Fragmenting World.
• Asia Stocks Rise, Apple Sales Weigh US Futures: Markets Wrap.
• Oil Heads for Second Weekly Drop as Israel War Still Contained.
• Bankman-Fried Found Guilty of Fraud at FTX Criminal Trial.
• Nothing Worries CEOs Right Now as Much as Geopolitics.
• Harvard, Yale Warned by Top Law Firms About Antisemitism.
• Apple Warns of Sluggish Holiday Quarter After China Slowdown.
• The US Housing Market Has Become an Impossible Mess.
• Goldman Sachs Managing Director Class Shrinks 5% From 2021 Level. 
• UAW President Is Ready to Take on Tesla and Beat Elon Musk.
• Franklin Templeton, Citadel Securities Curb Bond Optimism.
• Nascar Accused of Bias Against White Men in Its Diversity Efforts. 
• Powell Touts Tight Financial Conditions, Causing Them to Loosen.

Zero Hedge:

• Sam Bankman-Fried Found Guilty On All Counts, Faces Over 100 Years In Prison.
• Bridgeport Election Overturned After City Official Pleads 5th To Ballot Harvesting.
• China's Largest Memory Chip Maker Forced To Raise Capital Due To U.S. Blacklists. 
• "People With Cervices": IU Med-School Doubles-Down On Gender Ideology.
• RFK Jr Scores 22% Vs Biden, Trump - Is Top Choice Among Independents: Quinnipiac.
• Waste Of The Day: $800,000 To Texas Organization That Distributes Crack Pipes.
• US Mulling 'Day After' Hamas, Including An International Peacekeeping Force In Gaza.
• OPEC Oil Production Remains Relatively Flat In October.
• Albert Edwards: "Will The BOJ Fiasco Be The Straw That Breaks The Back Of US Debt".
• House Passes $14.3 Billion Israel Aid Package, Which Will Promptly Die In The Senate.
• Keep calm and risk on.
• Victor Davis Hanson: One Sick War.
• Democratic 'Sanctuary City' Mayors Beg Biden For Bailout Amid Worsening Migrant Crisis.
• US stocks gained and yields declined as Labour Cost data added to the dovish impulse - Newsquawk Asia-Pac Market Open.
• Israeli Army Has Gaza City Surrounded, But Hamas Tunnels Remain Serious Problem.
• Traders Buy Middle East Crude At Premiums Amid Rising Geopolitical Risk.
• Apple Slides After Revenues Drop For 4th Straight Quarter; Unexpectedly Weak Guidance.
• Hezbollah Escalates Rocket Attacks Amid Reports Russia Could Supply Anti-Air System.
• We're Eating Our Seed Corn.
• Bank Bailout Fund Hits New Record High As Stocks Recouple With Fed Reserves.
• Post-Fed Stock rally continues, aided by dovish US data and BoE on hold - Newsquawk US Market Wrap. 
• 'Face-Ripping' Squeeze Sends Stocks Soaring As Yield Curve & The Dollar Dump.

Wall Street Journal:

• How Hamas Won Hearts and Minds on the American Left. For 30 years, the terror organization has made a concerted effort to appeal to Western intellectuals.
• A Warning to the Law Schools on Anti-Semitism. Major law firms tell deans to protect students and resist anti-Semitism.
• Apple Sales Decline as China Market Weighs on Results.
• Democrats Have an Anti-Semitism Problem. The party never expected Jew-hatred to be a feature of its coalition. Now it is.
• National Association of Realtors’ CEO Stepping Down.
• Fake Nudes of Real Students Cause an Uproar at a New Jersey High School.
• Fight Over Return-to-Office Is Becoming a Disability Dispute.
• Adam Neumann Wounded WeWork. An Office-Market Bust Finished It Off.
• FBI Searches Home of Fundraiser for New York City Mayor.

CNBC.com:

• Sam Bankman-Fried found guilty on all seven criminal fraud counts.
• The ‘biggest threat to global order since the 1930s’ is underway and every CEO is talking about it.
• Atlassian sinks despite better-than-expected results and in-line forecast.
• FedEx CEO warned of ‘worldwide recession’ a year ago. Here’s what he sees now.

 MarketWatch.com:

• Opinion: Apple’s grim streak of revenue declines could continue into the holidays.
• Apple’s stock falls as earnings show another revenue decline, China pressure.
• Starbucks wants to have 55,000 stores by 2030 — and expects to pay its workers more long before then.
• Ray Dalio likens U.S. restrictions on China tech exports to embargo before Pearl Harbor
• Block’s stock soars as company sets big earnings goal, launches buyback program.
• Fortinet’s stock slides after earnings as guidance misses the mark yet again.
• Cloudflare’s stock drops after earnings as forecast comes up a bit shy.
• Bill.com’s stock tumbles nearly 30% on weaker forecast.
• DraftKings’ stock pops on narrowing loss, raised fiscal year revenue guidance.

Newsmax:

• Israeli Volunteer Testifies Hamas Baked Baby to Death.
• Sen. Cruz: Biden's Call for Israel Pause 'Obscene'.
• Alina Habba: Trump Prosecutions Geared to Block '24 Run.

 Fox News:

• House Republicans pass $14.3 billion Israel aid bill offset by IRS funding cuts.
• Americans rally around House speaker after report claims he lives paycheck to paycheck.

TheGatewayPundit.com:

• House Approves $14.3 Billion Israel Aid Package, Slashes IRS Budget – Biden Regime Threatens to Veto the Bill.
• Report: Congress Sneaks Through $34,000 Pay Raise for Itself.
• Enormous Development: Colorado Prosecutors Caught in Major Lie in Court Case to Remove President Trump from Ballot – With Video Evidence.
• Minnesota Supreme Court Chief Justice Dresses Down Leftist Lawyer Working to Keep Trump Off 2024 Ballot (VIDEO).
• BREAKING: FBI Raids Home of Eric Adams’ Fundraising Chief, Brianna Suggs.
• Miss Israel Goes Viral After Video Exposing Atrocities by Hamas.
• MTG Lashes Out at 22 RINOs Who Voted to Table the Motion to Censure Antisemite Rashida Tlaib: “American People are So Disgusted with Republicans Who Never Do a Damn Thing to Stop the Injustices”.
• ‘No One is Disputing the Fact the Bidens were Influence Peddling Now’.
• Leftist Takeover of South America: Chilean Conservative Kast Throws in with Globalists.
• U.S. Infant Mortality Rate Sees Largest Increase in 20 Years, Says CDC.
• Elon Musk Says Ventilators, Not COVID-19 Virus, Responsible for Millions of Deaths (VIDEO).
• RFK Jr. Explains Why He Went on Jeffrey Epstein’s Private Jet in 1993.
• Feckless Republicans Voted Against Censuring Pro-Terrorist Rashida Tlaib – Here are the 22 RINOS Who Sided with Democrats.
• Mayors from Sanctuary Cities New York, Los Angeles, Houston, Denver, and Chicago Appeal for $5 Billion Aid from Biden Regime Amidst Invasion.

The Epoch Times:

• Beijing’s Heavy Hand in Hong Kong Has Added to China’s Economic Woes.
• Yellen Assures No US–China Decoupling, Setting Stage for Biden–Xi Meeting.

Twitter:

• @FinanceLancelot - BREAKING: Critical infrastructure operators in the U.S. are stepping up security for "potential onslaught" of Iranian cyberattacks - Politico (video)
• @sentdefender - The Islamic Resistance in Iraq has just announced that next week they will be beginning a New Phase in their Operation to Fight for the People in Palestine and in Confronting the Enemies (Israel and the United States); they state that this Phase will be much more Severe and Widespread against the Bases of the Enemies in the Region.
• @TheNewsSpark - ALERT: The pro-Iranian militias in Iraq announce their entry into the campaign against Israel starting Sunday.
• @EndWokeness - A judge in Connecticut just overturned an election over a video showing 2 people stuffing ballot boxes. Trump was arrested in Georgia for trying to make this happen in 2020 This is a video from Georgia in 2020 after poll watchers were forced out over a mysterious “water pipe burst”. They literally pulled suitcases of ballots from under the table and ran them through the machines for hours unsupervised. (video)

OpenVAERS:

• VAERS US COVID Vaccine Adverse Event Reports. 988,705 Reports(+1,488 from prior week) Through September 29th, 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 +1.0% on average.

• Asia Ex-Japan Investment Grade CDS Index 127.75 -4.0 basis points.

• China Sovereign CDS 75.5 -1.25 basis points.
  
• China Iron Ore Spot 122.2 USD/Metric Tonne -.32%.

• Bloomberg Emerging Markets Currency Index 41.5 -.06%.
• Bloomberg Global Risk-On/Risk Off Index 65.7 unch. 
• Bloomberg US Financial Conditions Index .00 +4.0 basis points.
  
• Volatility Index(VIX) futures 17.5 +.6%.
• Euro Stoxx 50 futures +.36%.

• S&P 500 futures -.13%.

• NASDAQ 100 futures -.31%.  

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 lower and to rally into the afternoon, finishing mixed.  The Portfolio is 75% net long heading into the day.

Stocks Surging into Final Hour on Falling Long-Term Rates, Earnings Outlook Optimism, Short-Covering, Alt Energy/Regional Bank Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Higher
  

• Sector Performance: Every Sector Rising
  

• Volume: Above Average

• Market Leading Stocks: Outperforming
  

Equity Investor Angst:

• Volatility(VIX) 16.0 -5.3%
• DJIA Intraday % Swing .70% -14.5%
  
• Bloomberg Global Risk On/Risk Off Index 65.2 +.5%

• Euro/Yen Carry Return Index 170.6 +.7%

• Emerging Markets Currency Volatility(VXY) 7.91 -2.0%

• CBOE S&P 500 Implied Correlation Index 27.1 -5.1% 

• ISE Sentiment Index 90.0 -12.0
  

• Total Put/Call .91 -4.1%

• NYSE Arms 1.02 -36.7%

Credit Investor Angst:

• North American Investment Grade CDS Index 72.6 -5.4%
  

• US Energy High-Yield OAS 331.1 -6.9%
• Bloomberg TRACE # Distressed Bonds Traded 409 +21
  

• European Financial Sector CDS Index 91.45 -5.2% 
• Deutsche Bank Subordinated 5Y Credit Default Swap 264.76 -5.3%
  

• Italian/German 10Y Yld Spread 191.0 basis points -5.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 130.2 -3.7%
  

• Emerging Market CDS Index 211.3 -4.2%
• Israel Sovereign CDS 139.6 -2.6%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 24.7 +.37%

• 2-Year SOFR Swap Spread -13.5 basis points -1.5 basis points
  

• TED Spread 21.0 basis points -1.5 basis point
  

• 3-Month EUR/USD Cross-Currency Basis Swap -22.5 +1.25 basis points
  
• MBS  5/10 Treasury Spread 172.0 -6.0 basis points
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 926.0 +3.0 basis points
  
• Avg. Auto ABS OAS 98.0 +1.0 basis point
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 41.48 +.29%
• 3-Month T-Bill Yield 5.42% -4.0 basis points
  

• China Iron Ore Spot 122.6 USD/Metric Tonne +.16%
• Dutch TTF Nat Gas(European benchmark) 48.6 euros/megawatt-hour +1.7%

• Citi US Economic Surprise Index 56.4 +2.0 points

• Citi Eurozone Economic Surprise Index -47.7 -1.2 points

• Citi Emerging Markets Economic Surprise Index 24.0 +.8 point
• S&P 500 Current Quarter EPS Growth Rate YoY(377 of 500 reporting) +1.7% -1.2 percentage points
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 240.50 +.19:  Growth Rate +9.5% +.1 percentage point, P/E 17.9 +.4
  
• S&P 500 Current Year Estimated Profit Margin 12.17% -1.0 basis point
  
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(6 of 10 reporting) +51.9% unch.
  
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 273.29 +.35: Growth Rate +61.2% +.2 percentage point, P/E 27.4 +.5
  
• Bloomberg US Financial Conditions Index -.10 +3.0 basis points
  
• Bloomberg Euro-Zone Financial Conditions Index .60 +5.0 basis points
  
• US Yield Curve -31.0 basis points (2s/10s) -11.75 basis points
  
• US Atlanta Fed 3Q GDPNow Forecast +1.24% -1.02 percentage points
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +3.63% unch.: CPI YoY +3.28% unch.
  
• 10-Year TIPS Spread 2.40 unch.
  
• Highest target rate probability for Jan. 31st FOMC meeting: 70.4%(-1.0 percentage point) chance of 5.25%-5.5%. Highest target rate probability for March 20th meeting: 61.8%(-1.4 percentage points) chance of 5.25%-5.5%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +400 open in Japan 
• China A50 Futures: Indicating +79 open in China

• DAX Futures: Indicating +116 open in Germany

Portfolio:

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

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

• Market Exposure: Moved to 100% Net Long
  

Bear Radar

Style Underperformer:

• Small-Cap Growth +1.5%
  

Sector Underperformers:

• 1) Insurance +.5% 2) Healthcare Providers +.5% 3) Computer Services +.5%

Stocks Falling on Unusual Volume: 

• NFE, H, GMAB, PRGS, AVT, SMCI, SSRM, QRVO, ALTR, EG, Z, ZG, ALGT, BMRN, CMP, HSIC, KW, CROX, AXS, RNR, WSC, SEDG, NVST, TPX, ACA, MRNA, RCM, LAUR, CORT, APTV, VAC, GKOS, TNDM, CRTO, BWA, KBR, BDC, RRX, TENB, PCOR, NARI, OMCL, STAA, RELY and CFLT
  

Stocks With Unusual Put Option Activity:

• 1) EZU 2) DPST 3) SABR 4) AIG 5) ROKU
  

Stocks With Most Negative News Mentions:

• 1) TNDM 2) WE 3) MRNA 4) SEDG 5) GCI
  

Charts:

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

Bull Radar

Style Outperformer:

• Small-Cap Value +2.5%
  

Sector Outperformers:

• 1) Alt Energy +5.1% 2) Regional Banks +4.5% 3) Gambling +4.0%

Stocks Rising on Unusual Volume:

• LMND, SBGI, ALPN, ROKU, PLTR, VERV, INFA, ACLX, FROG, ERII, DASH, FSLY, SDGR, SCI, PK, LAMR, ALKT, SBUX, CWH, PRMW, SWI, PH, RUN, EL, CLX, NGVT, SPGI, AX, PYPL, TRGP, EPAM, PTLO, KAR, SIX, QCOM, TGTX, IMGN, KTB, CCS, IQV, ITCI, PEB, SITE, PTY, AIG, PCTY, ATRC, KYMR, DSL, PFG, PDO, NRG and PAYC
  

Stocks With Unusual Call Option Activity:

• 1) CFLT 2) ACI 3) IYR 4) FEZ 5) LMND

Stocks With Most Positive News Mentions:

• 1) ROKU 2) PLTR 3) AFRM 4) SHOP 5) FSLY
  

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:

• (AXL)/-.01
• (BLMN)/.41
• (CAH)/1.40
• (CBOE)/1.86
• (CHD)/.69
• (D)/.76
• (FLR)/.56
• (IT)/1.96
• (PAA)/.25
• (SRE)/1.01 
• (AES)/.54
• (BABA)/15.31
  

After the Close: 

• (MCHP)/1.62

Economic Releases

8:30 am EST

• The Change in Non-Farm Payrolls for Oct. is estimated to fall to 180K versus 336K in Sept.
• Average Hourly Earnings MoM for Oct. is estimated to rise +.3% versus a +.2% gain in Sept.
• The Unemployment Rate for Oct. is estimated at 3.8% versus 3.8% in Sept.
  

9:45 am EST

• S&P Global US PMI for Oct. revisions.
  

10:00 am EST

• ISM Services for Oct. is estimated to fall to 53.0 versus 53.6 in Sept.
• ISM Services Price Paid for for Oct. is estimated to fall to 56.6 versus 58.9 in Sept.
  

Upcoming Splits 

• None of note
  

Other Potential Market Movers

• The Fed's Barr speaking, Baker Hughes Oil Rig count, CFTC speculative net positioning and the Society of Immunotherapy of Cancer 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 +30.1% Above 100-Day Average 
• Nasdaq/NYSE Volume Ratio 8.1 +.6
  
• 0 Sectors Declining, 10 Sectors Rising
• 59.8% of Issues Advancing, 38.2% Declining
• 58 New 52-Week Highs, 42 New Lows
• 31.7%(+13.2%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 52.0 +11.0
  
• Bloomberg Global Risk-On/Risk-Off Index 65.2 +.6%
  
• Russell 1000: Growth/Value 18,086.3 -.08%
  
• 1-Day Vix 12.2 -17.1%
  
• Vix 16.0 -5.1%
  
• Total Put/Call .92 -6.1%
• TRIN/Arms 1.14 -29.2%