Stocks Lower into Final Hour on US Port Strike/Supply Chain Disruption Worries, Escalating Mid-East Regional War Fears, Hurricane Response Debacle, Tech/Bank Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Lower
  

• Sector Performance: Most Sectors Declining
  

• Volume: Above Average
  

• Market Leading Stocks: Underperforming
  

Equity Investor Angst:

• Volatility(VIX) 18.3 +9.5%
• DJIA Intraday % Swing .76 +40.0%
  
• Bloomberg Global Risk On/Risk Off Index 57.1 -3.4%

• Euro/Yen Carry Return Index 176.0 -.47%

• Emerging Markets Currency Volatility(VXY) 8.9 +1.6%

• CBOE S&P 500 Implied Correlation Index 18.3 +7.0% 

• ISE Sentiment Index 137.0 +9.0 points
  

• Total Put/Call .86 -3.4%

• NYSE Arms .78 -23.5%
  
• NYSE Non-Block Money Flow +$4.3M 
  

Credit Investor Angst:

• North American Investment Grade CDS Index 53.7 +1.9%
  

• US Energy High-Yield OAS 337.1 -.08%
• Bloomberg TRACE # Distressed Bonds Traded 255 +1
  

• European Financial Sector CDS Index 67.8 +1.0%
  
• Deutsche Bank Subordinated 5Y Credit Default Swap 177.9 +.4%
  

• Italian/German 10Y Yld Spread 133.0 basis points unch.
  

• Asia Ex-Japan Investment Grade CDS Index 69.0 +.07%
  

• Emerging Market CDS Index 163.3 +.49%
  
• Israel Sovereign CDS 156.4 +3.9%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 25.1 +.06%

• 2-Year SOFR Swap Spread -20.75 basis points +.5 basis point
  

• 3M T-Bill Treasury Repo Spread -29.25 basis points -3.0 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -7.75 -1.0 basis point
  
• MBS  5/10 Treasury Spread 128.0 -1.0 basis point
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 714.0 +6.0 basis points
  
• Avg. Auto ABS OAS 67.0 unch.
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 38.9 -.43%
• 3-Month T-Bill Yield 4.59% -4.0 basis points
  

• China Iron Ore Spot 108.6 USD/Metric Tonne +.5%
• Dutch TTF Nat Gas(European benchmark) 39.3 euros/megawatt-hour +.6%

• Citi US Economic Surprise Index 2.6 +3.4 points
  

• Citi Eurozone Economic Surprise Index -48.1 +8.7 basis points

• Citi Emerging Markets Economic Surprise Index -3.5 +1.2 points
• S&P 500 Current Quarter EPS Growth Rate YoY(18 of 500 reporting) +24.9% -2.0 percentage points
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 266.95 +.35:  Growth Rate +14.3% +.1 percentage point, P/E 21.4 -.1
  
• S&P 500 Current Year Estimated Profit Margin 12.67% +2.0 basis points
  
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(0 of 10 reporting) n/a n/a
  
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 364.85 +.16: Growth Rate +28.1% unch., P/E 30.8 -.4
  
• Bloomberg US Financial Conditions Index .71 -5.0 basis points
  
• Bloomberg Euro-Zone Financial Conditions Index .83 +13.0 basis points
  
• US Yield Curve 12.25 basis point (2s/10s) -2.25 basis points
  
• US Atlanta Fed 3Q GDPNow Forecast +2.54% -54.0 basis points
  
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 61.2 -1.4 percentage points
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +2.58% unch.: CPI YoY +2.25% unch.
  
• 10-Year TIPS Spread 2.19 unch.
  
• Highest target rate probability for Dec. 18th FOMC meeting: 48.9%(+1.5 percentage points) chance of 4.0%-4.25%. Highest target rate probability for Jan. 29th meeting: 45.6%(+.2 percentage point) chance of 3.75%-4.0%. (current target rate is 4.75-5.0%)
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -362 open in Japan 
• China A50 Futures: Indicating +34 open in China

• DAX Futures: Indicating +182 open in Germany

Portfolio:

• Slightly Higher:  On gains in my industrial/utility sector longs and index hedges
  

• Disclosed Trades: Added to my (IWM)/(QQQ) hedges
  

• Market Exposure: Moved to 25% Net Long
  

Bear Radar

Style Underperformer:

• Small-Cap Value -1.6%
  

Sector Underperformers:

• 1) Alt Energy -2.8% 2) Computer Hardware -2.7% 3) Regional Banks -2.7%

Stocks Falling on Unusual Volume: 

• LNW, BBW, KALV, CCRN, RBRK, CUK, ARWR, VSAT, CCL, VERA, LOAR, WEAV, SVCO, LEGN, MU, RITM, SIRI, MSTR, LOGI, HRTG, CDW, SATS, AMN, BBVA, W, RIVN, PLRX, CAPR, HUM, PHAT, NEO, NTLA, FDMT, TEM, TWO, FVRR, FLNC, BASE, PRCT, TMDX, JKS, RCKT, MARA, INOD, COIN, ACMR, ASPN, AMSC, INMD, SIG, PNTG, MEG, MGNI, ESTA, ALHC and GMS
  

Stocks With Unusual Put Option Activity:

• 1) NFE 2) YANG 3) PAYX 4) LMT 5) NOK
  

Stocks With Most Negative News Mentions:

• 1) STTK 2) ARQQ 3) IGMS 4) GRTS 5) PTON
  

Sector ETFs With Most Negative Money Flow:

• 1) FDN 2) SMH 3) XBI 4) IGV 5) PTF

Charts:

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

Bull Radar

Style Outperformer:

• Large-Cap Value -.6%
  

Sector Outperformers:

• 1) Oil Service +2.7% 2) Energy +2.1% 3) Defense +1.0%

Stocks Rising on Unusual Volume:

• SITC, UNFI, NNE, BEKE, DIN, AYI, FUTU, LB, LI, BILI, BWLP, AVAV, GDS, SGML, PDD, KTOS, APO, ZK, SOC, PAYX, APA, ELVN, GCT, LEU, FTI and EOLS
  

Stocks With Unusual Call Option Activity:

• 1) INMD 2) LMT 3) MCHI 4) NFE 5) NFE

Stocks With Most Positive News Mentions:

• 1) AYI 2) LI 3) UNFI 4) AS 5) MCK
  

Sector ETFs With Most Positive Money Flow:

• 1) XLF 2) XLP 3) XLU 4) KRE 5) IYF
  

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:

• (CAG)/.60
• (RPM)/1.75
  

After the Close: 

• (LEVI)/.31

Economic Releases

8:15 am EST

• The ADP Employment Change for Sept. is estimated to rise to 125K versus 99K in Aug.
  

10:30 am EST

• Bloomberg consensus estimates call for a weekly crude oil inventory decline of -1,172,330 barrels versus a -4,471,000 barrel decline the prior week. Gasoline supplies are estimated to fall by -764,500 barrels versus a -1,538,000 barrel decline the prior week. Distillate inventories are estimated to fall by -2,143,170 barrels versus a -2,227,000 barrel decline the prior week. Finally, Refinery Utilization is estimated to fall by -.77% versus a -1.2% decline prior.

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Fed's Hammack speaking, Fed's Bowman speaking, Fed's Barkin speaking, OPEC Meeting, Dallas Fed PCE for August, weekly MBA Mortgage Applications report and the UBS Ophthalmology Day 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 +14.0% Above 100-Day Average 
• Nasdaq/NYSE Volume Ratio 12.0 +.3
  
• 9 Sectors Declining, 2 Sectors Rising
• 37.4% of Issues Advancing, 65.0% Declining 
• TRIN/Arms .84 -17.7%
  
• Non-Block Money Flow -$31.0M
  
• 143 New 52-Week Highs, 17 New Lows
• 58.6% (-3.9%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 67.0 +1.0
  

Other:

• Bloomberg Global Risk-On/Risk-Off Index 56.0 -5.2%
• Bloomberg Cyclicals/Defensives Index 227.2 -.2%
  
• Russell 1000: Growth/Value 19,529.6 -1.3%
• CNN Fear & Greed Index 69.0 (GREED) -5.0
  
• 1-Day Vix 13.7 +14.5%
  
• Vix 19.1 +14.1%
  
• Total Put/Call .88 -1.1%

Tuesday Watch

Around X:

• @elonmusk

• Very few Americans realize that, if Trump is NOT elected, this will be the last election. Far from being a threat to democracy, he is the only way to save it! Let me explain: if even 1 in 20 illegals become citizens per year, something that the Democrats are expediting as fast as humanly possible, that would be about 2 million new legal voters in 4 years. The voting margin in the swing states is often less than 20 thousand votes. That means if the “Democratic” Party succeeds, there will be no more swing states!!
  

• @realDonaldTrump

• We are now heading to Valdosta, Georgia, in order to pay my respects and bring lots of relief material, including fuel, equipment, water, and other things, to the State. Many politicians and Law Enforcement will be there. We’ll be saying hello to Franklin Graham, Burt Jones, Tyler Harper, Mike Collins, Austin Scott, Russ Goodman, Sam Watson, and the Mayor of Valdosta Scott James. They are working very hard. I was also going to stop into North Carolina, which has really been hit hard. I have a lot of supplies ready for them, but access and communication is now restricted, and we want to make sure that Local Emergency Management is able to focus on helping the people most affected, and not being concerned with me.

• @kylenabecker

• BREAKING. Whistlleblower informs @GOPoversight about U.S. intelligence uncovering verified links between the C.C.P. and Vice Presidential candidate Tim Walz. (pic)
  

• @Libsoftiktok
  

• Just spoke to a US Military insider about the efforts for Hurricane Helene. Here's what I was told: The 82nd Airborne Division is known as America's "Global" Response Force. They have the ability to have thousands of paratroopers anywhere in the world in 18 hours. They provide combat capability, but also helicopter airlift, stand up hospitals, and other support. They responded to Hurricane Katrina in New Orleans. The 82nd responded overnight to fly thousands of Afghans out of the country during the withdrawal. Less than 1/3 of the entire division is on the "global" alert status. Meaning there are thousands of members potentially available to render aid with a simple command. So the question is why even a fraction of the 82nd can't be used to support relief efforts in the same state in which they are stationed (North Carolina)?
• In case you’re wondering why the response to Hurricane Helene has been a disaster… Fema’s goal 1 is to instill equity as a foundation of emergency management. This is real. (pic)

• @WallStreetSilv

• CNBC: What are you hearing will happen if dockworkers strike and it goes longer than a week? Harris-Biden Commerce Sec. Gina Raimondo: "I have not been very focused on that." What is she focused on? That is her job. (video)

• @overton_news

• WATCH: MSNBC's data analyst Steve Kornacki breaks down monumental shift of Latino voters to the GOP; "Look at how this has shifted in just the last dozen years. In 2012 this was a 41 point for the Democrats, it has come all the way down to 12 points." (video)

• @Nerdy_Addict  

• Biltmore Village | | Asheville, NC. (video)

• @nicksortor

• ALERT: Shelters in West North Carolina are OVER CAPACITY and DO NOT HAVE ENOUGH FOOD. And FEMA is NOWHERE TO BE FOUND. I’m beyond infuriated. @ChrisHallWx and I were luckily able to fill the gap with hot pizzas and Gatorade, as one shelter was 30 MEALS SHORT. What the hell is going on??! WHERE ARE BIDEN AND HARRIS? (pic)

• @TheThe1776
  

• This is absolutely heartbreaking to see and hear this man describing the devastation of his animals and property in Newport, Tennessee. Our Government needs to help these Americans and NOT send Billions to Ukraine! (video)

• @dhruv2038

• Last image of a wife and husband in Asheville, NC sheltering from the flood on a roof. The roof would soon collapse, causing them and their 6 year old grandchild to drown. Their daughter and mother of the child took the photograph. When the roof collapsed, she got wedged between debris and was able to be rescued an hour later. And things are way way worse in Burnsville. These pictures need to reach people. (pic)
  

• @CL4WS_OUT

• Entire roads in North Carolina are washed out and people are without a way to get out of their driveways, no power, little to no communication, AND OUR FEDERAL GOVERNMENT IS DOING NOTHING. OUR MEDIA IS BARELY ACKNOWLEDGING THIS DISASTER. Our country is like a ship lost at sea with nobody steering. They need to HELP THESE PEOPLE! (video)

• @bennyjohnson

• Nightmarish, deadly disaster zones across 5 states. Many millions without power. Thousands missing or presumed dead. Kamala completely paralyzed. Media silent because chaos is bad optics for the regime. They spent hundreds of billions in Ukraine - won’t lift a finger for America. (pic)

• @FFAFamily

• Video coming out of Montreat College. This is a Private Christian College in Montreat, North Carolina. Montreat College is just under 19 miles from Asheville. There are students still at the college & the roads have been destroyed. We need to pray that we get to them soon!! (video)

Night Trading 

• Asian equity indices are -1.5% to -.5% on average.

• Asia Ex-Japan Investment Grade CDS Index 69.0 unch.

• China Sovereign CDS 59.25 unch.
  
• China Iron Ore Spot 107.1 USD/Metric Tonne -2.5%

• Bloomberg Emerging Markets Currency Index 39.0 -.03%.
• Bloomberg Global Risk-On/Risk Off Index 59.7 +1.0%.
• Volatility Index(VIX) futures 18.1 +.1%.
• Euro Stoxx 50 futures n/a.

• S&P 500 futures -.12%.

• NASDAQ 100 futures -.09%.  

Morning Preview Links

BOTTOM LINE: Asian indices are mostly lower, weighed down by commodity and consumer shares in the region. I expect US stocks to open mixed and to weaken into the afternoon, finishing modestly lower.  The Portfolio is 50% net long heading into the day.