Mid-Day Market Internals

NYSE Composite Index:

• Volume Running +13.3% Above 100-Day Average 
• Nasdaq/NYSE Volume Ratio 9.0 -.3
  
• 4 Sectors Declining, 7 Sectors Rising
• 56.3% of Issues Advancing, 40.7% Declining 
• TRIN/Arms 1.06 -4.5% 
• Non-Block Money Flow +$123.4M
  
• 63 New 52-Week Highs, 17 New Lows
• 47.5%(+2.5%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 69.0 +1.0

Other:

• Bloomberg Global Risk-On/Risk-Off Index 61.7 +.8%
  
• Russell 1000: Growth/Value 18,443.0 -1.0%
  
• 1-Day Vix 9.7 -6.9%
  
• Vix 13.3 +2.2%
  
• Total Put/Call .79 unch.

Thursday Watch

Night Trading 

• Asian equity indices are -.25% to +.25% on average.

• Asia Ex-Japan Investment Grade CDS Index 98.25 -1.0 basis point.

• China Sovereign CDS 57.5 -2.5 basis points.
  
• China Iron Ore Spot 128.2 USD/Metric Tonne -.24%.

• Bloomberg Emerging Markets Currency Index 41.85 -.02%.
• Bloomberg Global Risk-On/Risk Off Index 62.05 +1.3%.
  
• Bloomberg US Financial Conditions Index .45 +1.0 basis point.
  
• Volatility Index(VIX) futures 14.0 unch.
• Euro Stoxx 50 futures +.02%.

• S&P 500 futures +.06%.

• NASDAQ 100 futures +.14%.  

Morning Preview Links

BOTTOM LINE: Asian indices are mostly higher, boosted by technology 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 75% net long heading into the day.

Stocks Reversing Slightly Lower into Close on US Policy-Induced Stagflation Fears, China Economy Worries, Month-End Positioning, Healthcare/Gambling Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Higher
  

• Sector Performance: Most Sectors Rising
  

• Volume: Above Average

• Market Leading Stocks: Outperforming
  

Equity Investor Angst:

• Volatility(VIX) 12.9 +1.6%
• DJIA Intraday % Swing .29% -50.6%
  
• Bloomberg Global Risk On/Risk Off Index 61.0 -4.8%

• Euro/Yen Carry Return Index 173.2 -.23%

• Emerging Markets Currency Volatility(VXY) 7.72 +.26%

• CBOE S&P 500 Implied Correlation Index 20.4 +4.0% 

• ISE Sentiment Index 154.0 +16.0
  

• Total Put/Call .76 -21.7%

• NYSE Arms 1.13 +19.0% 
• NYSE Non-Block Money Flow +$177.3M 
  

Credit Investor Angst:

• North American Investment Grade CDS Index 62.6 -1.0%
  

• US Energy High-Yield OAS 334.94 -2.8%
• Bloomberg TRACE # Distressed Bonds Traded 327 -1.0
  

• European Financial Sector CDS Index 77.3 -2.7% 
• Deutsche Bank Subordinated 5Y Credit Default Swap 242.3 -2.8%
  

• Italian/German 10Y Yld Spread 174.0 basis points -2.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 98.7 -1.1%
  

• Emerging Market CDS Index 185.48 -2.0%
• Israel Sovereign CDS 114.75 -3.0%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 25.4 unch.

• 2-Year SOFR Swap Spread -16.0 basis points -1.25 basis points
  

• TED Spread 25.75 basis points +1.25 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -14.5 +1.0 basis point
  
• MBS  5/10 Treasury Spread 154.0 +1.0 basis point
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 946.0 unch.
  
• Avg. Auto ABS OAS 91.0 -3.0 basis points
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 41.87 -.12%
• 3-Month T-Bill Yield 5.40% -1.0 basis point
  

• China Iron Ore Spot 127.7 USD/Metric Tonne -.67%
• Dutch TTF Nat Gas(European benchmark) 40.4 euros/megawatt-hour -5.6%

• Citi US Economic Surprise Index 28.0 +.5 point

• Citi Eurozone Economic Surprise Index -13.7 +3.5 points

• Citi Emerging Markets Economic Surprise Index 20.5 -1.4 points
• S&P 500 Current Quarter EPS Growth Rate YoY(487 of 500 reporting) +4.3% unch.
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 241.93 -.21:  Growth Rate +9.3% -.1 percentage point, P/E 18.9 unch.
  
• S&P 500 Current Year Estimated Profit Margin 12.14% unch.
  
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(8 of 10 reporting) +50.6% unch.
  
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 283.86 +.68: Growth Rate +33.4% +.3 percentage point, P/E 29.2 unch.
  
• Bloomberg US Financial Conditions Index .40 -7.0 basis points
  
• Bloomberg Euro-Zone Financial Conditions Index .24 -4.0 basis points
  
• US Yield Curve -38.5 basis points (2s/10s) +2.25 basis points
  
• US Atlanta Fed 4Q GDPNow Forecast +2.10% unch.
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 58.0% +8.4 percentage points
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +3.55% unch.: CPI YoY +3.04% unch.
  
• 10-Year TIPS Spread 2.22 -2.0 basis points
  
• Highest target rate probability for Jan. 31st FOMC meeting: 92.0%(-3.6 percentage points) chance of 5.25%-5.5%. Highest target rate probability for March 20th meeting: 49.8%(-12.8 percentage points) chance of 5.25%-5.5%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -46 open in Japan 
• China A50 Futures: Indicating +14 open in China

• DAX Futures: Indicating +35 open in Germany

Portfolio:

• Slightly Higher:  On gains in my tech/industrial sector longs and emerging market shorts
  

• Disclosed Trades: None
  

• Market Exposure: 75% Net Long
  

Tomorrow's Earnings/Economic Releases of Note; Market Movers

Earnings of Note 
Company/Estimate 

Before the Open:

• (ASO)/1.58
• (AMWD)/2.09
• (BIG)/-4.68
• (CBRL)/.74
• (FRO)/.47
• (KR)/.91
• (RY)/1.92
• (TITN)/1.53
• (TD)/1.39
• (UBS)/-.01
  

After the Close: 

• (AMBA)/.39
• (DELL)/1.46
• (PD)/.14
• (ULTA)/4.96
• (ZUMZ)/-.18
• (MRVL)/.40
  

Economic Releases

8:30 am EST

• Initial Jobless Claims for last week are estimated to rise to 218K versus 209K the prior week.
• Continuing Claims are estimated to rise to 1865K versus 1840K prior.
• Personal Income for Oct. is estimated to rise +.2% versus a +.7% gain in Sept.
• Personal Spending for Oct. is estimated to rise +.2% versus a +.7% gain in Sept.
• The PCE Core MoM for Oct. is estimated to rise +.2% versus a +.3% gain in Sept.
  

9:45 am EST

• The MNI Chicago PMI for Nov. is estimated to rise to 46.0 versus 44.0 in Oct.
  

10:00 am EST

• Pending Home Sales MoM for Oct. is estimated to fall -2.0% versus a +1.1% gain in Sept.
  

Upcoming Splits 

• None of note
  

Other Potential Market Movers

• The Fed's Williams speaking, OPEC meeting, weekly EIA natural gas inventory report, Fed's weekly balance sheet report, Dallas Fed PCE for Oct., Evercore ISI Health Conference, Barclays Auto/Mobility Tech Conference and the (IR) investor day could also impact global trading tomorrow.

US Equity Market Hours

• 9:30 am - 4:00 pm EST

Afternoon Market Internals

NYSE Composite Index:

• Volume Running +19.8% Above 100-Day Average 
• Nasdaq/NYSE Volume Ratio 9.3 -.1
  
• 3 Sectors Declining, 8 Sectors Rising
• 72.7% of Issues Advancing, 26.0% Declining 
• TRIN/Arms 1.08 +13.7% 
• Non-Block Money Flow +$211.1M
  
• 84 New 52-Week Highs, 19 New Lows
• 46.9%(+4.7%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 68.0 +1.0

Other:

• Bloomberg Global Risk-On/Risk-Off Index 61.0 -4.8%
  
• Russell 1000: Growth/Value 18,610.5 -.54%
  
• 1-Day Vix 9.4 +6.2%
  
• Vix 12.9 +1.7%
  
• Total Put/Call .78 -19.6%

Wednesday Watch

Evening Headlines

Bloomberg:

• Israel Hostages Recount Their Grim Imprisonment in Hamas Tunnels.
• Hamas Releases 12 Hostages Despite Claims of Truce Violations.
• Chinese-Style Quantitative Easing Emerges as Property Fix Option.
• China’s Property Lifeline Exposes Banks to Big Losses, Job Cuts.
• Buyout Billionaire Sees Rising China Risk, Sanctions Over Taiwan.
• Australia’s Inflation Cools, Boosting Case for Rate Pause.
• New Zealand Keeps Rates Unchanged, Forecasts Risk of Hike.
• Dollar Weakens, Treasuries Hold Gains on Fed Bets: Markets Wrap.
• Oil Extends Climb With OPEC+ Meeting and Weaker Dollar in Focus.
• Charlie Munger, Who Helped Buffett Build Berkshire, Dies at 99.
• Bill Ackman Bets Fed Will Cut Interest Rates as Soon as First Quarter.
• Fed’s Waller, Bowman Open Door to Another Interest Rate Pause in December.
• Global ESG Market Shrinks After Sizable Drop in US.
• Insiders Are Buying Up Stocks in Sign November’s Equity Rally Has Room to Run.

Zero Hedge:

• Did Deutsche Bank Just Destroy New York AG's Case Against Trump?
• Higher Incidence Of COVID-19 Found Among Consistent Mask-Wearers: Peer-Reviewed Study.
• Not Only Can Trump Win, Right Now He's The Favorite To Win.
• Iranian-Backed Hackers Breach Pennsylvania Water Control Station, Display Anti-Israel Messages.
• Refill Of Strategic Petroleum Reserve Slowed By Companies Delaying Return Of Borrowed Barrels.
• A Look At Unprecedented Surges In Cardiac Arrest Cases In Victoria, Australia.
• FBI Conducts Record Number Of Background Checks On Black Friday As Gun Demand Surges.
• The Federal Reserve Is Running Losses. Does This Cost Anyone Anything?
• Sports Illustrated Freaks Out, Deletes Evidence Of AI-Generated Journalists Writing AI-Generated Articles.
• USDJPY Won't Sustain Any Bid It Gains From MOF Abstinence.
• Goldman Finds 4 Most Affordable Cities For Housing... But There's A Catch.
• US stocks were choppy, while treasuries rallied and the dollar dipped following dovish comments from Fed hawk Waller - Newsquawk Asia-Pac Market Open.
• Market's risky calm.
• Mini-Me Soros Gets 'Community Noted' Into Oblivion Over Crime Stats.
• January 6 Was A 'Mostly Peaceful' Protest.
• WTI Holds Gains After API Reports First Crude Draw In 6 Weeks.
• Dollar dips as Treasuries rip on tip of dovish Waller and month-end flows - Newsquawk US Market Wrap.
• What Happens When Millions Of Renters Can No Longer Afford High Rents And Move Back Home?
• Counseling A Gaslit Nation.
• Waller Whacks The Dollar: Dovish Fed-Hawk Sparks Bid For Bullion, Bonds, & Bitcoin.
• Instagram Videos Sexualizing Children Shown To Adults Who Follow Preteen Influencers.

Wall Street Journal:

• Gaza Protests at Colleges Open a Generational Divide. 
• Harvard’s Hamas Confusion. An elite college degree is the fastest way to disabuse a student of the idea of truth. 
• The Newest Airline Climate Solution? Burying Sawdust.
• Electric Cars and Driving Range: Here’s What to Know.
• The Stocks That AI Mania Left Behind.
• The Price Is Wrong for Housing.
• Disney’s Bob Iger Plays Down Asset Sales.
• Housing Costs Are So High That Divorced Couples Are Still Living Together.

CNBC.com:

• Mark Cuban is selling his majority stake in the Dallas Mavericks to the Adelson family.
• Meta updates political advertising rules to cover AI-generated images and videos.
• Amazon announces Q, an AI chatbot for businesses.
• OpenAI rival Hugging Face says it’s seeing more client interest after Sam Altman fiasco.
• A signal from big companies they think workers are losing control of the job market.
• Stocks making the biggest moves after hours: NetApp, Workday, Leslie’s, Las Vegas Sands and more.

MarketWatch.com:

• Washington warily eyes the death of the Chinese economic ‘juggernaut’.
• What 2024 S&P 500 forecasts really say about the stock market.
• Apple scotches credit-card partnership with Goldman Sachs: report.
• Consumers are facing ‘widespread’ rise in loan delinquencies.
• Shein’s IPO faces frosty reception in Washington.
• CrowdStrike posts better-than-expected earnings, but its stock slips.

Newsmax:

• NYPD Fears Pro-Hamas Disruptions at Tree Lighting.
• US, Israel Spy Chiefs Discuss Options for an Extended Gaza Truce.

Fox News:

• AOC gets a rude awakening after complaining that NYC is unaffordable for working-class.
• Veterans Affairs lawyer who mocked Israelis' pleas for hostages faces calls to resign.

TheGatewayPundit.com:

• U.S. Navy Medical Officer Exposes Defense Department Data Showing Alarming Increase in Heart-Related Issues Among Pilots Following COVID-19 Vaccination: Myocarditis Up by 151%, Heart Failure by 973% (VIDEO)
• Explosive Report: US and UK Military Contractors Launched Initial Censorship Group that Later Morphed into the Censorship Industrial Complex After 2016 Trump Election.
• Victor Davis Hanson Warns America: ‘Brace Yourself for What’s Coming in 2024’ (VIDEO)
• Police Beat The Hell Out Of Innocent J6 Protesters And They Face Years In Prison. The Left Riots, Sues Police For ‘Excessive Force’ And Wins Millions..
• “Try and Avoid Connecting Crime with Migration. It’s Not Right” – Irish Prime Minister Leo Varadkar Scolds Irishmen After Algerian Stabs Children in Dublin (VIDEO).
• SHOCK REPORT: Biden Admin Is Spending $451 BILLION a Year to Pay for Illegal Alien and Asylum Seeker Benefits (VIDEO).
• French Teen Is Stabbed by Arab Migrants – So Police Vow To Crack Down – On the French Citizens Protesting It!
• ‘I Am Hopeful – that Congress Will Do It” – DHS Secretary Mayorkas Lays Out Amnesty Plan for 12-30 Million Illegal Aliens Here in the US.
• FRAUD ALERT: Democrat “Wins” Louisiana Election by ONE VOTE After Dead People Somehow Cast Ballots – But There’s No Verifiable Paper Trail Thanks to State Using Faulty Voting Machines.
• Creator of COVID 19 Vaccine was Reportedly Thrown from a Roof in China Three Months After Filing Patent for Vaccine.
• Target Learned Nothing From Their Pride Fiasco — Hires ‘Gay Cruella’ for LGBTQ Marketing.
  

The Epoch Times:

• US Should Subsidize America Not China.
• China Leads 'New Axis' in Harvesting DNA from Pregnant Women, Fetuses: British MP.

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 -.25% to +.5% on average.

• Asia Ex-Japan Investment Grade CDS Index 99.25 +.75 basis point.

• China Sovereign CDS 60.0 +.25 basis point.
  
• China Iron Ore Spot 129.9 USD/Metric Tonne +.8%.

• Bloomberg Emerging Markets Currency Index 41.97 +.1%.
• Bloomberg Global Risk-On/Risk Off Index 62.97 -1.7%
  
• Bloomberg US Financial Conditions Index .44 -3.0 basis points
  
• Volatility Index(VIX) futures 13.74 -.32%.
• Euro Stoxx 50 futures -.02%.

• S&P 500 futures +.10%.

• NASDAQ 100 futures +.13%.  

Morning Preview Links

BOTTOM LINE: Asian indices are mostly higher, boosted by technology and commodity 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 day.