Wednesday Watch

Around X:

• @elonmusk

• This is crazy. FEMA’s top priority is supposed to be saving the lives of America citizens. (pic)
• Wow, it is now illegal to require voter ID in California! They just made PREVENTING voter fraud against the law. The Joker is in charge.
  

• @GenFlynn

• If you didn’t know what the art of the deal was, this is it. Get ready America, maybe this is the black swan no one anticipated. I certainly didn’t, not at this moment. And anyone who believes Biden or Harris can handle this or anyone else in their administration, needs to think twice. (video)

• @jimmy_dore

• A Billionaire who makes huge money off Vaccines wants to take away your free speech if you criticize his product. This is what evil looks like. The devil isn’t going to appear with horns but a crew neck sweater & glasses on a nerd. (video)

• @LauraLoomer

• Shit is about to get real all over the country, but specifically in key election states of Florida, North Carolina, and Georgia as ballots are being sent out. Millions of Americans are without food and power today as a result of 600 miles of total destruction from Hurricane Helene. 600 miles of America is UNDER WATER and unrecognizable due to massive flooding from Hurricane Helene. Millions of Americans across the nation all over the country can’t make calls right now due to SOS outages from @Verizon. A strike at major East Coast ports begins tomorrow, at a time when people need supplies to rebuild after losing everything in the storm.

• @annvandersteel

• BREAKING. - HURRICANE HELENE UPDATE 60 bodies just found hanging in trees in Mitchell County, western North Carolina. Military about to take over the airports - Asheville Airport. Water will be out for 30 days. No internet, only iHeart radio is being broadcasted. Worries of next storm taking out all the bridges going west on the interstate. Mayor of Asheville is not answering questions and has not done anything. Whole Asheville infrastructure water system is totally down. Only way in is through CLT Greensville area. Whole town of Lake Lure completely gone. Mudslides/landslides taking out homes and people. Illegal Aliens were dropped off days before in Asheville and are just wandering around everywhere. God help us all... (video)

• @TheChiefNerd
  

• Fmr. CDC Director Robert Redfield: “There was a decision not to do anything that made the vaccine sound like it didn't work…The spike protein is immunotoxic…When I give you an mRNA vaccine...I don't know how much spike protein you make.” (video)

• @EndWokeness

• Biden-Harris spent $230 million to build a pier in Gaza that lasted 20 days. But no more aid for Hurricane Helene. (pic)
• 218,000 people in Arizona who did not provide the state-required citizenship documents are on the voter rolls. Their votes WILL still count this time. (video)

• @JamesOKeefeIII

• BREAKING: Second Border Patrol Agent BLOWS WHISTLE on Border Crisis: ‘My Conscience Will Be Clean, That’s Way More Important Than My Pension’. "The cartels run the border down here,” says Aaron Veckey, a United States Border Patrol agent with 19 years of service, stepping forward to expose the horrific conditions at the U.S.-Mexico border. Inspired by fellow whistleblower Zachary Apotheker (@ZachApotheker), featured in “Line in the Sand,” Veckey brings OMG onsite to his Customs and Border Protection patrol station in Ajo, Arizona, to reveal the disturbing truth. (video)

• @BoLoudon

• WOW! CNN JUST ADMITTED PRESIDENT TRUMP IS BEATING KAMALA ON THE ECONOMY BY A 50%-39% LANDSLIDE! Trump is beating Kamala BIG on the issue MOST IMPORTANT to voters! "That is a Donald Trump dominant category." Kamala DEFINITELY wouldn't want you to share this! (video)

• @CynicalPublius

• This is unbelievable. XVIII Airborne Corps is located on Fort Bragg (I refuse to call it by that other woke name), a mere 268 miles from Asheville and the worst flooding areas of this Biblical-level tragedy. The Corps’ capabilities include: (video)
  

Night Trading 

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

• Asia Ex-Japan Investment Grade CDS Index 69.25 +.25 basis point.

• China Sovereign CDS 61.0 +1.75 basis points.
  
• China Iron Ore Spot 108.3 USD/Metric Tonne +.24%

• Bloomberg Emerging Markets Currency Index 38.9 +.03%.
• Bloomberg Global Risk-On/Risk Off Index 46.5 -17.0%.
• Volatility Index(VIX) futures 19.3 +.2%.
• Euro Stoxx 50 futures n/a.

• S&P 500 futures -.11%.

• NASDAQ 100 futures -.16%.  

Morning Preview Links

BOTTOM LINE: Asian indices are mostly lower, weighed down by industrial and technology shares in the region. I expect US stocks to open mixed and to weaken into the afternoon, finishing modestly lower.  The Portfolio is 25% net long heading into the day.

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%