Thursday Watch

Night Trading 

• Asian equity indices are +1.25% to +2.25% on average.

• Asia Ex-Japan Investment Grade CDS Index 100.0 +1.0 basis point.

• China Sovereign CDS 62.0 +.25 basis point.
  
• China Iron Ore Spot 92.7 USD/Metric Tonne -.04%

• Bloomberg Emerging Markets Currency Index 38.7 -.04%.
• Bloomberg Global Risk-On/Risk Off Index 50.3 +4.5%.
• Volatility Index(VIX) futures 18.7 +.5%.
• Euro Stoxx 50 futures +1.2%.

• S&P 500 futures +.01%.

• NASDAQ 100 futures +.06%.  

Morning Preview Links

BOTTOM LINE: Asian indices are 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 100% net long heading into the day.

Stocks Reversing Higher into Final Hour on Earnings Outlook Optimism, Short-Covering, Technical Buying, Alt Energy/Tech Sector Strength

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 38.73 +.17%
• 3-Month T-Bill Yield 5.0% +4.0 basis points
  

• China Iron Ore Spot 92.6 USD/Metric Tonne -.15%
• Dutch TTF Nat Gas(European benchmark) 36.1 euros/megawatt-hour +2.44%

• Citi US Economic Surprise Index -21.8 +5.0 points
  

• Citi Eurozone Economic Surprise Index -40.3 +1.1 points

• Citi Emerging Markets Economic Surprise Index -4.8 +2.0
• S&P 500 Current Quarter EPS Growth Rate YoY(498 of 500 reporting) +11.6% unch.
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 266.55 +.06:  Growth Rate +14.0% unch., P/E 20.5 +.1
  
• S&P 500 Current Year Estimated Profit Margin 12.67% unch.
  
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(9 of 10 reporting) +36.3% unch.
  
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 348.68 +.11: Growth Rate +22.5% +.1 percentage point, P/E 30.8 +.5
  
• Bloomberg US Financial Conditions Index .52 -7.0 basis points
  
• Bloomberg Euro-Zone Financial Conditions Index .56 -15.0 basis points
  
• US Yield Curve .75 basis point (2s/10s) -2.5 basis points
  
• US Atlanta Fed 3Q GDPNow Forecast +2.47% unch.
  
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 74.6% +2.2 percentage points
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +2.77% +3.0 basis points: CPI YoY +2.29% -27.0 basis points
  
• 10-Year TIPS Spread 2.04 +2.0 basis points
  
• Highest target rate probability for Nov. 7th FOMC meeting: 48.8%(+21.4 percentage points) chance of 4.75%-5.0%. Highest target rate probability for Dec. 18th meeting: 47.5%(+11.5 percentage points) chance of 4.25%-4.5%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -219 open in Japan 
• China A50 Futures: Indicating +5 open in China

• DAX Futures: Indicating +151 open in Germany

Portfolio:

• Higher:  On gains in my tech/biotech/industrial/consumer discretionary sector longs
  

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

• Market Exposure: Moved to 100% Net Long
  

Bear Radar

Style Underperformer:

• Large-Cap Value -.3%
  

Sector Underperformers:

• 1) Insurance -1.4% 2) Regional Banks -1.2% 3) Foods -1.2%

Stocks Falling on Unusual Volume: 

• TERN, MANU, SUPN, CTO and RTO
  

Stocks With Unusual Put Option Activity:

• 1) DBI 2) DLR 3) OIH 4) TEVA 5) GT
  

Stocks With Most Negative News Mentions:

• 1) GME 2) DBI 3) BFI 4) RLAY 5) MANU
  

Sector ETFs With Most Negative Money Flow:

• 1) ITA 2) XLF 3) XLY 4) XLV 5) XLI

Charts:

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

Bull Radar

Style Outperformer:

• Large-Cap Growth +1.5%
  

Sector Outperformers:

• 1) Alt Energy +4.6% 2) Semis +4.0% 3) Construction +2.2%

Stocks Rising on Unusual Volume:

• NNE, MOD, OSCR, LQDA, KRUS, GPCR, FSLR, ALHC, ALB, APP, LEU, XNCR, VKTX, FLNC, TWST, NXT, VRT, VRDN, AES, ASTS, TMDX, NVDA, ROKU, DOCN, SYM, VOYA, AFRM, DBRG, VECO, FIVE, NCLH, RBRK, SVCO, ENPH, FLEX, YETI, SMMT, SIRI, PLAY, SATS, GEV, PCOR, SNPS, LRCX, ASAN and X
  

Stocks With Unusual Call Option Activity:

• 1) WOOF 2) XLB 3) PLAY 4) EXAS 5) SMR

Stocks With Most Positive News Mentions:

• 1) APP 2) ALB 3) PCT 4) APDN 5) AMST
  

Sector ETFs With Most Positive Money Flow:

• 1) SMH 2) PPA 3) ITB 4) XLU 5) XLP
  

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:

• (CAL)/1.22
• (KR)/.91
• (SIG)/1.14
  

After the Close: 

• (ADBE)/4.53
• (RH)/1.56
  

Economic Releases

8:30 am EST

• The PPI Final Demand MoM for Aug. is estimated to rise +.1% versus a +.1% gain in July.
• The PPI Ex Food and Energy MoM for Aug. is estimated to rise +.2% versus a +.3% gain in July.
• Initial Jobless Claims for last week is estimated to fall to 226K versus 227K the prior week. 
• Continuing Claims is estimated to rise to 1850K versus 1838K prior.
  

12:00 pm EST

• Household Change in Net Worth for 2Q.
  

2:00 pm EST

• The Monthly Budget Deficit for Aug. is estimated to widen to -$292.5B versus -$243.7B in July.
  

Upcoming Splits

• (CTAS) 4-for-1
  

Other Potential Market Movers

• The ECB rate decision, 30Y T-Bond auction, IEA Monthly report, Thomson Reuters IPSOS PCSI for Sept., WASDE report, Fed's weekly balance sheet report, weekly EIA natural gas inventory report, (ORCL) analyst meeting, (BLNK) investor meeting, Goldman Communacopia Conference and the Morgan Stanley Laguna Conference 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 +2.4% Above 100-Day Average 
• Nasdaq/NYSE Volume Ratio 12.8 +1.9
  
• 9 Sectors Declining, 2 Sectors Rising
• 45.0% of Issues Advancing, 52.6% Declining 
• TRIN/Arms .84 -49.1%
  
• Non-Block Money Flow -$229.3M
  
• 132 New 52-Week Highs, 94 New Lows
• 51.5% (-2.5%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 50.0 -9.0
  

Other:

• Bloomberg Global Risk-On/Risk-Off Index 48.3 +.9%
• Bloomberg Cyclicals/Defensives Index 219.78 +.26%
  
• Russell 1000: Growth/Value 19,509.7 +1.53%
• CNN Fear & Greed Index 40.0 (FEAR) +3.0
  
• 1-Day Vix 15.1 -21.4%
  
• Vix 18.6 -2.5%
  
• Total Put/Call .86 -6.5%