Mid-Day Market Internals

NYSE Composite Index:

• Volume Running +25.6% Above 100-Day Average 
• Nasdaq/NYSE Volume Ratio 8.3 +.5
  
• 2 Sectors Declining, 9 Sectors Rising
• 60.7% of Issues Advancing, 37.1% Declining 
• TRIN/Arms .76 -17.4% 
• Non-Block Money Flow +$81.2M
  
• 84 New 52-Week Highs, 6 New Lows
• 46.0%(+7.1%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 65.0 +2.0

Other:

• Bloomberg Global Risk-On/Risk-Off Index 67.3 +4.6%
  
• Russell 1000: Growth/Value 18,591.0 -.60%
  
• 1-Day Vix 10.6 -22.7%
  
• Vix 14.2 +.3%
  
• Total Put/Call .76 -20.8%

Wednesday Watch

Evening Headlines

Bloomberg:

• Israeli Forces Begin ‘Targeted Operation’ at Gaza Hospital.
• US Is Quietly Sending Israel More Ammunition, Missiles. 
• Xi’s Arrival in US Brings Protesters and Fans Onto Streets.
• China Curbs on Australian Beef May End Next Month, Minister Says.
• China Credit Market Calm Belies Risks From Property Debt Crisis. 
• Japan Economy Shrinks More Than Expected, Supporting BOJ Easing.
• Hedge Funds Copy Citadel Fee Model in Fight for Top Asia Traders.
• Asian Stocks Rally as Fed Rate Hikes Seen Over: Markets Wrap.
• Oil Steady With Differing Views From IEA, OPEC Clouding Outlook.
• House Speaker Mike Johnson Endorses Trump for President.
• US Shutdown Risk Drops as Democrats Back GOP Speaker’s Plan.
• Ken Griffin Sees Miami Possibly Replacing NYC as Finance Capital.
• JPMorgan’s Dimon Says Inflation ‘Might Not Go Away That Quickly’.
• Investors Are Covering Their Short Bets, Sending Stocks Higher.

Zero Hedge:

• "We Can Finish It Here": US Senator Challenges Teamsters President To Fight During Congressional Hearing.
• Empty Words? Biden Tells Family Members Of US Hostages In Gaza: "Hang In There, We're Coming".
• Speculator Or Investor? What’s The Difference?
• Russell 2000 Call Volumes Explode To All Time High In Short-Crushing Ripfest.
• Doug Casey On The Imminent Bankruptcy Of The US Government.
• Luxury Bust Worsens: Rolex, Patek Prices Hit Two-Year Lows.
• The Debt Reaper.
• Wall Street Bonuses Set For Another Year Of Declines.
• House Funding Bill Passes Thanks To Democrats, Averting Government Shutdown.
• A Trump-Tucker Ticket?
• Strip Clubs, D*ck Pics & Booze: FDIC Revealed As Misogynistic Free-For-All In New Expose.
• At Least 4 More Attacks On US Forces Since Latest US Airstrikes In Syria.
• US stocks and treasuries surged after softer-than-expected US inflation - Newsquawk Asia-Pac Market Open.
• 100 State Dept Officials Sign Dissent Memo Saying Biden "Complicit In Genocide" In Gaza.
• Donald Trump Jr. Testimony Kicks Off Trump Defense In NY Fraud Trial.
• Market rips after soft CPI sends yields and Dollar tumbling - Newsquawk US Market Wrap.
• Stocks Soar, Yields And Dollar Crash As Fed's Tightening Cycle Dies, Countdown To Cuts Begins.
• Upside panic - shorts carried out on stretchers.

Wall Street Journal:

• Cooling Inflation Likely Ends Fed Rate Hikes.
• ‘What the Hell Is Going On at the FDIC?’ Lawmakers Grill Agency Chairman.
• The Global Toll of Biden’s Green Enthusiasm. The energy shift will drive inflation and affect living standards around the world.
• Israel Dominates Battlefield With Technological Advantage.
• Earnings Estimates Are Falling. These Two Companies Are Taking the Blame.
• With Interest Rates Above 9%, Small Businesses Slam the Brakes.
• ‘Zen’ Is at the Center of This $45 Million Los Angeles Spec Home.

CNBC.com:

• Here’s the inflation breakdown for October 2023 — in one chart.
• Alphabet pays Apple 36% of Safari search revenue, Sundar Pichai confirms.
• House passes bill to avoid government shutdown, Senate to vote next
• Here’s why the UAW’s record deals with automakers aren’t getting full support from members

MarketWatch.com:

• The Magnificent Seven add more than $200 billion to their market caps.
• Mutant Ape Planet NFT creator pleads guilty to stealing $2.9 million in ‘rug-pull’ fraud.
• How financial conditions might play into Fed’s thinking after October’s CPI.
• Fed credibility at risk if it cuts interest rates too soon, says Citadel’s Ken Griffin.
• Fed’s Goolsbee: ‘We still have a long way to go’ to get to 2% target.

Newsmax:

• Jewish Students Sue NYU, Alleging Antisemitism.
• Israel Raids Gaza's Pivotal Al Shifa Hospital, Urges Hamas to Surrender.
• Rep. Owens: Rethink Federal Funding for Colleges.

Fox News:

• Emergency room nurse lost to suicide leaves letter behind about US health care system
• Israeli forces launch ‘targeted operation’ against Hamas inside Gaza hospital in search of hostages.
• Miss Universe files for bankruptcy after accepting transgender contestants,
• Mayor warns parents may be needed in schools as migrant crisis engulfs New York City.

TheGatewayPundit.com:

• Joe Biden Gifts Another $10 Billion to Iran – His Total Funding to Iran Now Comes to $80 Billion Since He Entered Office- And This is One Month After Iran-Backed Hamas Slaughtered 1,400 Jews in Israel.
• Jay Valentine: When Citizens Have Better Computer Technology Than Their Government – Minnesota Investigation finds 172,000+ Voter Issues.
• Soros-Funded Loudoun County Commonwealth Attorney Buta Biberaj Defeated by Bob Anderson, by Only 300 Votes.
• Dysfunctional Sweden: Gang-Related Crime Epidemic Now Targeting Crypto Owners for Brutal Robberies.
• Missouri Attorney General’s Report Exposes Soros-Funded Prosecutor Kim Gardner: Over 25,000 Cases Dismissed, Misuse of Taxpayer Funds, and Rights Violations.
• HORROR: Man Stabs 4 Women at Louisiana Tech Campus – University Claims “Random Act of Violence”.
• WAYNE ROOT: Fire Ronna McDaniel. Here’s Your “Model:” Study What Texas A&M and Mississippi State Football Teams Did This Past Weekend.
• Czech Television Crew Robbed at Gunpoint During APEC Summit in Crime-Ridden San Francisco.
• Joe Biden as World Teeters on WWIII: Climate Change is the “Ultimate Threat to Humanity” (VIDEO).
• Vigilant Fox: OB-GYN Drops Alarming Miscarriage Data Before Congress: “I’ve Never Seen This Before”.
• WATCH: Brave Female Pool Player Elects to FORFEIT Final Match Rather than Face Trans Opponent as Crowd Erupts in Applause and Cheers.
• “We Are Supposed to be in the USA, We have a Constitution, How Is This Happening?” – Marine Corps Veteran, Father, Husband J6 Political Prisoner Zach Rehl Update.
• SICK PEOPLE: Singer Pink and PEN America Will Hand Out Banned Porn Books for Kids at Her Florida Concert.

The Epoch Times:

• China Training and Equipping Foreign Militaries to Undermine US: Report.
• Beijing’s War Plans for Taiwan Keep Evolving.

Twitter:

• @TheTranscript_ - More reshoring talk: (graph)
• @crushthemarket - Last time this occurred was 2009. Look at the pace of the slump in credit growth collapsing at a similar pace to 09 as well. A year from now they will tell everyone, the recession started in 2023. (graph)
  

OpenVAERS:

• VAERS US COVID Vaccine Adverse Event Reports. 988,705 Reports(+5,406 from prior week) Through October 27th, 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 +.75% to +1.75% on average.

• Asia Ex-Japan Investment Grade CDS Index 107.5 -5.0 basis points.

• China Sovereign CDS 66.75 -3.75 basis points.
  
• China Iron Ore Spot 130.3 USD/Metric Tonne +1.6%.

• Bloomberg Emerging Markets Currency Index 41.8 +.05%.
• Bloomberg Global Risk-On/Risk Off Index 63.5 -1.4%
  
• Bloomberg US Financial Conditions Index .08 +4.0 basis points.
  
• Volatility Index(VIX) futures 15.6 -.9%.
• Euro Stoxx 50 futures -.05%.

• S&P 500 futures +.12%.

• NASDAQ 100 futures +.20%.  

Morning Preview Links

BOTTOM LINE: Asian indices are modestly higher, boosted by tech and industrial shares in the region. I expect US stocks to open mixed and to rally into the afternoon, finishing modestly higher.  The Portfolio is 100% net long heading into the day.

Stocks Surging into Final Hour on Plunging Long-Term Rates, Rising Fed Rate Cut Odds, Less European/Emerging Markets/US High-Yield Debt Angst, Financial/Consumer Discretionary Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Higher
  

• Sector Performance: Every Sector Rising
  

• Volume: Heavy

• Market Leading Stocks: Outperforming
  

Equity Investor Angst:

• Volatility(VIX) 14.1 -4.5%
• DJIA Intraday % Swing .99% +69.1%
  
• Bloomberg Global Risk On/Risk Off Index 63.2 -4.0%

• Euro/Yen Carry Return Index 174.9 +.79%

• Emerging Markets Currency Volatility(VXY) 7.67 -.65%

• CBOE S&P 500 Implied Correlation Index 21.0 -5.8% 

• ISE Sentiment Index 134.0 +6.0
  

• Total Put/Call .90 -22.4%

• NYSE Arms 1.20 -10.5% 
• NYSE Non-Block Money Flow +$316.2M 
  

Credit Investor Angst:

• North American Investment Grade CDS Index 64.88 -3.9%
  

• US Energy High-Yield OAS 337.8 -1.7%
• Bloomberg TRACE # Distressed Bonds Traded 354 +4
  

• European Financial Sector CDS Index 80.96 -4.9% 
• Deutsche Bank Subordinated 5Y Credit Default Swap 260.5 -3.4%
  

• Italian/German 10Y Yld Spread 181.0 basis points -4.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 111.66 -3.3%
  

• Emerging Market CDS Index 201.8 -4.3%
• Israel Sovereign CDS 129.75 +1.2%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 25.0 +.83%

• 2-Year SOFR Swap Spread -16.5 basis points +1.0 basis point
  

• TED Spread 26.75 basis points +2.75 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -18.75 +.25 basis point
  
• MBS  5/10 Treasury Spread 161.0 -9.0 basis points
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 924.0 +10.0 basis points
  
• Avg. Auto ABS OAS 97.0 +3.0 basis points
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 41.8 +.8%
• 3-Month T-Bill Yield 5.38% -4.0 basis points
  

• China Iron Ore Spot 130.3 USD/Metric Tonne +1.7%
• Dutch TTF Nat Gas(European benchmark) 47.6 euros/megawatt-hour -.55%

• Citi US Economic Surprise Index 36.3 -5.3 points

• Citi Eurozone Economic Surprise Index -41.3 +3.2 points

• Citi Emerging Markets Economic Surprise Index 20.7 -.7 point
• S&P 500 Current Quarter EPS Growth Rate YoY(461 of 500 reporting) +2.5% -.1 percentage point
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 240.0 +.03:  Growth Rate +8.7% +.1 percentage point, P/E 18.7 +.3
  
• S&P 500 Current Year Estimated Profit Margin 12.11% -2.0 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 275.44 +.12: Growth Rate +62.5% +.1 percentage point, P/E 29.6 +.5
  
• Bloomberg US Financial Conditions Index .01 -16.0 basis points
  
• Bloomberg Euro-Zone Financial Conditions Index .21 -4.0 basis points
  
• US Yield Curve -37.75 basis points (2s/10s) +3.0 basis points
  
• US Atlanta Fed 4Q GDPNow Forecast +2.06% unch.
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +3.55% -8.0 basis points: CPI YoY +3.10% -18.0 basis points
  
• 10-Year TIPS Spread 2.30 -4.0 basis points
  
• Highest target rate probability for Jan. 31st FOMC meeting: 97.8%(+22.9 percentage points) chance of 5.25%-5.5%. Highest target rate probability for March 20th meeting: 66.5%(-1.2 percentage point) chance of 5.25%-5.5%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +545 open in Japan 
• China A50 Futures: Indicating +187 open in China

• DAX Futures: Indicating +63 open in Germany

Portfolio:

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

• Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges and some of my emerging market shorts
  

• Market Exposure: Moved to 100% Net Long
  

Bull Radar

Style Outperformer:

• Small-Cap Value +5.0%
  

Sector Outperformers:

• 1) Regional Banks +6.7% 2) Alt Energy +6.6% 3) Homebuilding +6.3%

Stocks Rising on Unusual Volume:

• MODG, CFLT, TRUP, TPX, M, KEY, AFRM, W, RILY, CC, COTY, LYFT, NTLA, FND, MATV, SSB, DOC, NET, BALY, CCS, CCL, TTD, NCLH, ACM, MODN, RRX, HGV, NGVT, HD, AI, ADNT, TOST, PSA, RAPT, FAF, WTFC, ILMN, RQI, STWD, ENV, EVR, OSPN, MTSI, AB, KRG, PYCR, RNG, NWN, ENOV, APAM, FRT, NI, CLDX, FUN, TWLO, AVB, EVRG, IDCC, TRMB, MAT and WYNN
  

Stocks With Unusual Call Option Activity:

• 1) NU 2) OIH 3) RKT 4) CPRT 5) THC

Stocks With Most Positive News Mentions:

• 1) SOWG 2) BEEM 3) SBH 4) RMAX 5) CCL
  

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:

• (AAP)/1.44
• (JD)/5.87
• (TGT)/1.47
• (TJX)/.99
  

After the Close: 

• (CSCO)/1.03
• (CPA)/3.76
• (HI)/1.04
• (JJSF)/1.72
• (KLIC)/.43
• (MMS)/1.13
• (PANW)/1.16
• (SQM)/2.03
• (NTES)/10.87
  

Economic Releases

8:30 am EST

• Retail Sales Advance MoM for Oct. is estimated to fall -.3% versus a +.7% gain in Sept.
• Retail Sales Ex Autos MoM for Oct. is estimated to fall -.1% versus a +.6% gain in Sept.
• Retail Sales Ex Autos and Gas for Oct. is estimated to rise +.2% versus a +.6% gain in Sept.
• PPI Final Demand MoM for Oct. is estimated to rise +.1% versus a +.5% gain in Sept.
• PPI Ex Food and Energy MoM for Oct. is estimated to rise +.3% versus a +.3% gain in Sept.
• Empire Manufacturing for Nov. is estimated to rise to -3.0 versus -4.6 in Oct.
  

10:00 am EST

• Business Inventories for Sept. is estimated to rise +.4% versus a +.4% gain in Aug.

10:30 am EST

• Bloomberg consensus estimates call for a weekly crude oil inventory gain of +4,291,000 barrels versus a +773,000 barrel gain the prior week. Gasoline supplies are estimated to rise by +1,058,000 barrels versus a +65,000 barrel gain the prior week. Distillate Inventories are estimated to fall by -740,000 barrels versus a -792,000 barrel decline the prior week. Finally, Refinery Utilization is estimated to rise by +.5% versus a -.2% decline prior.
  

Upcoming Splits 

• None of note
  

Other Potential Market Movers

• The Fed's Barr speaking, Atlanta Fed 4Q GDPNow Update, weekly MBA Mortgage Applications report, JPMorgan Services Investor Conference, DA Davidson Tech Summit, Stephens Investment Conference, (GT) Business Update, (FI) investor meeting, (ORCL) annual meeting, (WDC) annual meeting, (RBLX) investor day, (CLX) annual meeting, (CBRL) annual meeting, (EAT) annual meeting, (CAH) annual meeting and the Needham Virtual Tech 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:

• Volume Running +34.8% Above 100-Day Average 
• Nasdaq/NYSE Volume Ratio 7.8 -1.8
  
• 0 Sectors Declining, 11 Sectors Rising
• 90.0% of Issues Advancing, 8.7% Declining 
• TRIN/Arms 1.14 -14.9% 
• Non-Block Money Flow +$294.3M
  
• 102 New 52-Week Highs, 13 New Lows
• 42.7%(+23.8%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 63.0 +8.0

Other:

• Bloomberg Global Risk-On/Risk-Off Index 63.2 -4.1%
  
• Russell 1000: Growth/Value 18,673.0 -.37%
  
• 1-Day Vix 10.8 -29.2%
  
• Vix 14.1 -4.5%
  
• Total Put/Call .90 -22.4%