Stocks Slightly Higher into Final Hour on Earnings Outlook Optimism, Loosening US Financial Conditions, Technical Buying, Tech/Pharma Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Lower
  

• Sector Performance: Most Sectors Declining
  

• Volume: Around Average

• Market Leading Stocks: Underperforming
  

Equity Investor Angst:

• Volatility(VIX) 15.5 +3.6%
• DJIA Intraday % Swing .39% -39.0%
  
• Bloomberg Global Risk On/Risk Off Index 65.7 +1.3%

• Euro/Yen Carry Return Index 171.7 +.35%

• Emerging Markets Currency Volatility(VXY) 7.89 +.90%

• CBOE S&P 500 Implied Correlation Index 25.6 +1.5% 

• ISE Sentiment Index 102.0 -6.0
  

• Total Put/Call 1.07 +17.6%

• NYSE Arms 1.35 +10.7%

Credit Investor Angst:

• North American Investment Grade CDS Index 71.20 +.76%
  

• US Energy High-Yield OAS 325.41 -.54%
• Bloomberg TRACE # Distressed Bonds Traded 378 -13
  

• European Financial Sector CDS Index 90.42 +1.0% 
• Deutsche Bank Subordinated 5Y Credit Default Swap 262.15 +.54%
  

• Italian/German 10Y Yld Spread 191.0 basis points +4.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 122.18 -3.9%
  

• Emerging Market CDS Index 212.82 +3.15%
• Israel Sovereign CDS 131.1 -8.0%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 24.82 unch.

• 2-Year SOFR Swap Spread -14.25 basis points -1.25 basis points
  

• TED Spread 25.0 basis points +.5 basis point
  

• 3-Month EUR/USD Cross-Currency Basis Swap -20.25 +.25 basis point
  
• MBS  5/10 Treasury Spread 171.0 +2.0 basis points
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 907.0 -16.0 basis points
  
• Avg. Auto ABS OAS 98.0 +1.0 basis point
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 41.8 +.1%
• 3-Month T-Bill Yield 5.42% +1.0 basis point
  

• China Iron Ore Spot 123.6 USD/Metric Tonne -.19%
• Dutch TTF Nat Gas(European benchmark) 44.8 euros/megawatt-hour -6.7%

• Citi US Economic Surprise Index 50.5 -.7 point

• Citi Eurozone Economic Surprise Index -43.4 +4.5 points

• Citi Emerging Markets Economic Surprise Index 23.0 +1.3 points
• S&P 500 Current Quarter EPS Growth Rate YoY(408 of 500 reporting) +3.0% +.8 percentage point
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 240.42 -.14:  Growth Rate +8.7% -.2 percentage point, P/E 18.2 +.1
  
• S&P 500 Current Year Estimated Profit Margin 12.14% -6.0 basis points
  
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(7 of 10 reporting) +38.4% unch.
  
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 273.89 +.47: Growth Rate +61.6% +.3 percentage point, P/E 27.9 +.4
  
• Bloomberg US Financial Conditions Index .08 +6.0 basis points
  
• Bloomberg Euro-Zone Financial Conditions Index .04 -62.0 basis points
  
• US Yield Curve -27.25 basis points (2s/10s) +1.25 basis points
  
• US Atlanta Fed 3Q GDPNow Forecast +1.24% unch.
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +3.63% unch.: CPI YoY +3.28% unch.
  
• 10-Year TIPS Spread 2.41 +3.0 basis points
  
• Highest target rate probability for Jan. 31st FOMC meeting: 82.9%(-8.3 percentage points) chance of 5.25%-5.5%. Highest target rate probability for March 20th meeting: 65.6%(-2.5 percentage points) chance of 5.25%-5.5%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -138 open in Japan 
• China A50 Futures: Indicating -14 open in China

• DAX Futures: Indicating +58 open in Germany

Portfolio:

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

• Disclosed Trades: None
  

• Market Exposure: 75% Net Long
  

Bear Radar

Style Underperformer:

• Small-Cap Value -1.7%
  

Sector Underperformers:

• 1) Alt Energy -3.8% 2) Airlines -3.4% 3) Digital Health -2.4%

Stocks Falling on Unusual Volume: 

• DDOG, FTNT, APTV, ROKU, ABR, PCTY, EQH, PYCR, FND, INFA, OGN, APLS, BMBL, SFWL, APPN, ARLP, LMND, BILL, TH, AGL, ALB, SEDG, AYX, HGV, PARA, THS, TRUP, ALPN, TGLS, AMRC, SPHR, KRYS, OLMA, RILY, MLTX, ZNTL and SATS
  

Stocks With Unusual Put Option Activity:

• 1) HUYA 2) MAR 3) BMBL 4) LAZR 5) DISH
  

Stocks With Most Negative News Mentions:

• 1) DISH 2) SATS 3) MLTX 4) PCT 5) XXII
  

Charts:

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

Bull Radar

Style Outperformer:

• Large-Cap Value unch.
  

Sector Outperformers:

• 1) Electric Vehicles +2.5% 2) Pharma +1.2% 3) Restaurants +.3%

Stocks Rising on Unusual Volume:

• FRPT, CLDX, KNF, NARI and ALKT
  

Stocks With Unusual Call Option Activity:

• 1) NRG 2) PPC 3) CNK 4) FITB 5) VTNR

Stocks With Most Positive News Mentions:

• 1) NSSC 2) SWAG 3) FRPT 4) KNF 5) CLDX
  

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:

• (APD)/3.11
• (BLUE)/-.67
• (BCO)/1.79
• (CHH)/1.85
• (CNHI)/.43
• (DHI)/3.94
• (DDOG)/.34
• (EMR)/1.31
• (EXPD)/1.28
• (HAIN)/-.06
• (PLNT)/.55
• (SAGE)/-2.68
• (UBER)/.07
• (WAT)/2.55
• (ZBH)/1.60
  

After the Close: 

• (AKAM)/1.50
• (ANDE)/.62
• (CARG)/.26
• (CAVA)/-.01
• (DVA)/2.01
• (DVN)/1.56
• (EBAY)/1.00
• (GILD)/1.92
• (HRB)/-1.12
• (IAC)/-.64
• (JKHY)/1.32
• (MOS)/.75
• (OXY)/.88
• (PETQ)/.02
• (HOOD)/-.10
• (TOST)/.04

Economic Releases

8:30 am EST

• The Trade Balance for Sept. is estimated to widen to $59.8B versus -$58.3B in Aug.
  

3:00 pm EST

• Consumer Credit for Sept. is estimated at $9.5B versus -$15.62B in Aug.
  

Upcoming Splits 

• None of note
  

Other Potential Market Movers

• The Fed's Williams speaking, Fed's Weller speaking, Fed's Barr speaking, Fed's Logan speaking, 3Y T-Note auction, weekly US retail sales reports, API Weekly Crude Oil Stock, IBD/TIPP Economic Optimism Index, EIA Short-Term Energy Outlook, Baird Industrials Conference, (STRA) investor day, (LRCX) annual meeting and the Truist Healthcare Conference 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 -7.6% Below 100-Day Average 
• Nasdaq/NYSE Volume Ratio 8.2 +.7
  
• 8 Sectors Declining, 3 Sectors Rising
• 22.7% of Issues Advancing, 75.0% Declining
• 32 New 52-Week Highs, 17 New Lows
• 35.8%(-3.8%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 56.0 -2.0
  
• Bloomberg Global Risk-On/Risk-Off Index 65.5 +1.0%
  
• Russell 1000: Growth/Value 18,152.2 +.7%
  
• 1-Day Vix 10.3 -22.7%
  
• Vix 15.2 +2.2%
  
• Total Put/Call 1.04 +14.3%
• TRIN/Arms 1.31 +7.4%
  

Monday Watch

Today's Headlines

Bloomberg:

• Israel Latest: Military Intensifies Assault, Isolating Gaza City.
• Israel Says Hamas Is Using Hospitals to Conceal Military Activity.
• Bank of Korea May Keep Policy Tight Another Year, Ex-Member Says.
• South Korean Stocks Jump After Regulator Bans Short Selling.
• Pimco, JPMorgan Are Gearing Up for Long Winter in China Markets.
• Canon’s Advanced Chip Machines to Cost a Fraction of ASML’s Best.
• Asia Stocks Gain on Bullish Tailwind From US Rally: Markets Wrap.
• Oil Edges Higher After Saudis and Russians Reaffirm Supply Cuts.
• The Price of Money Is Going Up, and It’s Not Only Because of the Fed.
• Efforts to Bump Trump Off the 2024 Ballot Raise Fears of Election Chaos.
• Ackman Urges Suspensions at Harvard to Tackle Antisemitism.

Zero Hedge:

• "Positioning Has Shifted Dramatically": Goldman PB Stunned By Huge Reversal Below Market Surface.
• Kamala Harris' Stepdaughter Helps Raise $8M For Gaza While Mom's Admin Pushing Billions For Israel.
• Trump Campaign Fights For Place On Michigan Ballot.
• Netanyahu's 'Political Days Are Numbered': White House.
• Appeals Court Freezes Trump Gag Order Issued By Out-Of-Control Woke Judge.
• Tverberg: Today's Energy Bottleneck May Bring Down Major Governments.
• Blinken Tells Abbas He Asked Israel To Use 'Smaller Bombs' On Gaza.
• Democrats Rattled After NYT Poll Shows Trump Beating Biden In Majority Of Swing States.
• Weekend News Round Up - Newsquawk Asia-Pac Market Open.
• Police Find No Evidence That Israel Supporter Attack UNC Muslim Student With Knife.
• US Rolls Out 50th Weapons Package For Ukraine.
• What A Fire!
• Gateway Project Rail Tunnel Between NY And NJ Breaks Ground After Decades Of Red Tape.
• FDA Responds After Being Urged To Recall Pfizer's Vaccine Over DNA Fragments.
• Congress Sneaks In Stealth $34,000 Pay Raise; Gaetz, AOC Among More Than 200 Lawmakers To Benefit.
• The Bond Market's Bearish Message For Stocks.
• Turkey Recalls Ambassador To Israel, Holds Netanyahu Personally Responsible For Gaza Atrocities.
• 'Greenies' Are All About The Green.
• Chat GPT, CFA?
• Queers For Palestine: Identity Politics At Its Most Absurd.
• Armed Man Storms Hamburg Airport With 'Possible Explosives' As Hostage Situation On Tarmac Ongoing.
• Majority Support For Muslim Migration Ban As 3 In 4 Germans Say Newcomers Hate Western Society.
• TME Weekend: Duration has no friends until the data dumps.
• The Great Reset, Part 1: The Four Horsemen Of The Apocalypse.
• The World's Largest Biometric Digital ID System, India's Aadhaar, Just Suffered Its Biggest Ever Data Breach.
• "Allahu Akbar, Fu*k Joe Biden!": Enraged Pro-Palestinian Protesters Gather Outside White House.
• Don't Fall For Biden's Latest Talking Point.

Wall Street Journal:

• Why Stanford’s Leaders Tolerate Anti-Semitism. Recall how Marc Tessier-Lavigne was ousted as president after bucking leftist orthodoxies.
• Boycotting the Jews Reaches the West Bank of the Delaware. Philadelphia officials shrink from criticizing a boycott of restaurants owned by ‘Zionists.’
• Escalating Militia Attacks on U.S. Troops Risk Washington-Tehran Confrontation.
• Blinken Rushes to Reassure Arab Allies in Surprise Trips.
• Live Updates: Militants Fire Rockets Across Israel.
• U.S. and Israel Split Over Gaza Goals, Muddying Endgame.
• Breaking Down the Best Earnings Quarter in a Year.
• Tesla Raises Wages for German Workers Amid Union Pressure.
• The Fun Things in Life Are Giving Us Buyer’s Remorse.
• LGBT Issues Galvanize Democrats’ Push for School Board Control.
• Charles Schwab’s Rocky Year.
• Big Western Brands Are Getting Squeezed by Chinese Belt-Tightening.

CNBC:

• Elon Musk debuts ‘Grok’ AI bot to rival ChatGPT, others.
• Washington Post appoints William Lewis as CEO; to reduce headcount by 10%.

Reuters:

• Japan service activity posts slowest growth this year - PMI.

MarketWatch.com:

• Saudi Arabia to extend 1 million-barrel-a-day oil production cut through December.
• AI could spark the next financial crisis, SEC Chair Gary Gensler says.
• The Dow ripped higher last week. Why doubters ‘don’t believe in this rebound.’

NewsMax:

• Netanyahu: No Gaza Cease-Fire Until Hostages Returned.
• Obama Links Hamas Attacks with ‘Unbearable’ Israeli Occupation.
• IDF: Hamas Using Kids as 'Human Shields,' Staging in Playgrounds.
• Graham, Blumenthal Pairing for Bipartisan Iran Warning.
• Iran: US 'Will be Hit Hard' If No Cease-Fire in Gaza.

 Fox News:

• Evidence shows how Hamas terrorists exploit hospitals as part of jihadi war machine.
• Americans are sticking weird stuff in weird places, according to the CDC.

TheGatewayPundit.com:

• Bill Ackman’s Brutal Letter to Harvard President “I Have Lost Confidence That You and the University Will Do What is Required”.
• NEW POLICE VIDEO RELEASED from the Slaughter of Innocents at Israeli Nova Dance Party by Hamas – Death Toll at Nova Concert Rises to Nearly 300 (VIDEO).
• “No Major Incidents Reported” – DC Police After Pro-Hamas Mob Attacks White House Gates, Defaces Statues, Damages Police Vehicles – Conservatives Respond.
• Bill Maher’ “Democrats Are Now the Ones Carrying the Tiki Torches” (Video).
• Group of Progressive Teachers in Washington Trying to Ban ‘To Kill a Mockingbird’ in Schools.
• Fetterman Takes Swipe at Newsom, Says He is Running For President But Doesn’t Have the ‘Guts’ To Announce.
• SHOCKING VIDEO: THOUSANDS of Angry Pro-Gaza Muslims Storm Incirlik US Base in Adana, Turkey – VIDEO.
• BRUTAL: ABC Panel Openly Discusses Throwing Biden in the Garbage and Replacing Him with Another Democrat After NYT Poll Shows Trump Landslide (VIDEO).
• APOCALYPTIC! Joe Biden’s Intentional Destruction of America: Cartels Cut Holes Through Border Wall, Hundreds of Illegals from Africa and Syria Rush In (VIDEO).
• Three Years Ago Today America Woke Up to a Stolen 2020 Presidential Election.
• Watch: Pro-Palestinian Protesters Breach US Military Supply Ship They Think Is Heading for Israel.
• Chicago Secretly Renews Contract with Covid Staffing Firm to Staff Migrant Shelters-Some Staff on Track to Make $800K Per Year.
• NYT Poll: Shifting Support Among Black Voters Spurs Trump’s Lead in Key Battleground States Ahead of 2024 Election.
• Killer Jab: Nearly a Quarter of Americans Say They Know Someone Who Died From COVID-19 Shot.
• VIDEO: Radical Pro-Palestinian Protestors Deface and Vandalize Statues in Washington DC – Spray Paint White House Fence.
• Major Shift in Western Propaganda on Ukraine.
• NATIONAL SUICIDE: Inside the Democrats’ Plan to Allow Non-Citizens to Vote. 
• TYPICAL: Obama Says ‘All of Us’ Are to Blame for the Conflict Unfolding in Gaza (VIDEO).
• House Speaker Mike Johnson on Securing the Border: ‘We’re Going to Force the Issue’ (VIDEO).

The Epoch Times:

• House Republican Raises Concerns about China’s Logistics Management Platform.

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 indices are +.75% to +1.75% on average.
• Asia Ex-Japan Investment Grade CDS Index 124.25 -3.5 basis points.
  
• China Sovereign CDS 82.5 -3.0 basis points.
• China Iron Ore Spot 123.7 USD/Metric Tonne +.6%.
  
• Bloomberg Emerging Markets Currency Index 41.77 +.15%.
• Bloomberg Global Risk-On/Risk Off Index 65.5 +.9%.
• Bloomberg US Financial Conditions Index .03 +1.0 basis point. 
  
• Volatility Index(VIX) futures 16.9 -.07%. 
• Euro Stoxx 50 futures -.07%.
• S&P 500 futures +.01%.
• NASDAQ 100 futures unch.

Morning Preview Links

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