Stocks Reversing Slightly Higher into Close on Yen Weakness, China Stimulus Hopes, Short-Covering, Tech/Alt Energy Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Modestly Lower
  

• Sector Performance: Mixed
  

• Volume: Around Average
  

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 18.9 -1.8%
• DJIA Intraday % Swing .69 -9.5%
  
• Bloomberg Global Risk On/Risk Off Index 57.1 +2.2%

• Euro/Yen Carry Return Index 178.7 +1.7%

• Emerging Markets Currency Volatility(VXY) 9.0 +1.0%

• CBOE S&P 500 Implied Correlation Index 19.0 -1.1% 

• ISE Sentiment Index 148.0 -5.0 points
  

• Total Put/Call 1.0 +12.4%

• NYSE Arms .61 -39.0%
  
• NYSE Non-Block Money Flow -$329.8M 
  

Credit Investor Angst:

• North American Investment Grade CDS Index 53.9 -.8%
  

• US Energy High-Yield OAS 331.6 -.72%
• Bloomberg TRACE # Distressed Bonds Traded 249 -6
  

• European Financial Sector CDS Index 67.5 -.5%
  
• Deutsche Bank Subordinated 5Y Credit Default Swap 176.3 -.9%
  

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

• Asia Ex-Japan Investment Grade CDS Index 71.0 +2.8%
  

• Emerging Market CDS Index 163.7 -.44%
  
• Israel Sovereign CDS 159.7 +2.1%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 25.1 unch.

• 2-Year SOFR Swap Spread -20.0 basis points +.75 basis point
  

• 3M T-Bill Treasury Repo Spread -33.5 basis points -4.25 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -8.75 -1.0 basis point
  
• MBS  5/10 Treasury Spread 127.0 -1.0 basis point
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 717.0 +3.0 basis points
  
• Avg. Auto ABS OAS 67.0 unch.
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 38.8 -.11%
• 3-Month T-Bill Yield 4.59% unch.
  

• China Iron Ore Spot 108.8 USD/Metric Tonne +.6%
• Dutch TTF Nat Gas(European benchmark) 38.6 euros/megawatt-hour -1.7%

• Citi US Economic Surprise Index 3.8 +1.2 points
  

• Citi Eurozone Economic Surprise Index -45.3 +2.8 basis points

• Citi Emerging Markets Economic Surprise Index -3.2 +.3 point
• S&P 500 Current Quarter EPS Growth Rate YoY(21 of 500 reporting) +18.5% -6.4 percentage points
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 266.19 -.76:  Growth Rate +14.3% unch., P/E 21.5 +.1
  
• S&P 500 Current Year Estimated Profit Margin 12.65% -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 365.02 +.17: Growth Rate +28.2% +.1 percentage point, P/E 31.0 +.2
  
• Bloomberg US Financial Conditions Index .67 -4.0 basis points
  
• Bloomberg Euro-Zone Financial Conditions Index .72 -11.0 basis points
  
• US Yield Curve 14.75 basis point (2s/10s) +2.5 basis points
  
• US Atlanta Fed 3Q GDPNow Forecast +2.54% unch.
  
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 61.8 +.6 percentage point
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +2.58% unch.: CPI YoY +2.25% unch.
  
• 10-Year TIPS Spread 2.22 +3.0 basis points
  
• Highest target rate probability for Dec. 18th FOMC meeting: 48.5%(-.4 percentage point) chance of 4.0%-4.25%. Highest target rate probability for Jan. 29th meeting: 45.7%(-.2 percentage point) chance of 3.75%-4.0%. (current target rate is 4.75-5.0%)
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +1,062 open in Japan 
• China A50 Futures: Indicating +1,013 open in China

• DAX Futures: Indicating +145 open in Germany

Portfolio:

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

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

• Market Exposure: Moved to 50% Net Long
  

Bear Radar

Style Underperformer:

• Small-Cap Value -.3%
  

Sector Underperformers:

• 1) Homebuilding -1.3% 2) Retail -1.2% 3) Foods -1.1%

Stocks Falling on Unusual Volume: 

• CCI, MKC, IRON, VERA, TSLA, SMTC, GPN, HOG, MMYT, ARHS, MELI, UNFI, NKE, TXG, HRMY, CAG and HUM
  

Stocks With Unusual Put Option Activity:

• 1) TIGR 2) BKLN 3) CAG 4) IEF 5) HUM
  

Stocks With Most Negative News Mentions:

• 1) HUM 2) CAG 3) NKE 4) HOG 5) NFE
  

Sector ETFs With Most Negative Money Flow:

• 1) XBI 2) OIH 3) SMH 4) XLV 5) XLF

Charts:

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

Bull Radar

Style Outperformer:

• Mid-Cap Growth +.3%
  

Sector Outperformers:

• 1) Networking +1.6% 2) Semis +1.6% 3) Alt Energy +1.3%

Stocks Rising on Unusual Volume:

• ENVX, NVAX, ESTA, CAPR, ALHC, CRGY, BILI, NOAH, CIEN, DQ, SPHR, LEU, NTES, DBRG, ZTO, QFIN, TME, ILMN, MCS, NNE, RPM, TCOM, ZK, YUMC, HTHT, ATAT, PDD and GLDD
  

Stocks With Unusual Call Option Activity:

• 1) JOBY 2) HUM 3) IEF 4) WMG 5) TIGR

Stocks With Most Positive News Mentions:

• 1) CRGY 2) CIEN 3) RPM 4) DQ 5) MPWR
  

Sector ETFs With Most Positive Money Flow:

• 1) KWEB 2) XLU 3) XLI 4) XLY 5) IYZ
  

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:

• (ANGO)/-.15
• (STZ)/4.08
  

After the Close: 

• None of note
  

Economic Releases

7:30 am EST

• Challenger Job Cuts YoY for Sept.
  

8:30 am EST

• Initial Jobless Claims are estimated to rise to 222K versus 218K the prior week. 
• Continuing Claims is estimated to fall to 1830K versus 1834K prior.
  

9:45 am EST

• S&P Global US PMI final readings for Sept.
  

10:00 am EST

• Factory Orders for Aug. is estimated to rise +.1% versus a +5.0% gain in July.
• Final Durable Goods readings for Aug.
• The ISM Services Index for Sept. is estimated to rise to 51.7 versus 51.5 in Aug.
• ISM Services Prices Paid for Sept. is estimated to fall to 56.3 versus 57.3 in Aug.
  

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Fed's Bostic speaking, Fed's Kashkari speaking, weekly EIA natural gas inventory report and the Fed's weekly balance sheet report 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 +15.6% Above 100-Day Average 
• Nasdaq/NYSE Volume Ratio 11.7 -.3
  
• 4 Sectors Declining, 7 Sectors Rising
• 47.9% of Issues Advancing, 49.8% Declining 
• TRIN/Arms .67 -33.0%
  
• Non-Block Money Flow -$220.5M
  
• 103 New 52-Week Highs, 21 New Lows
• 59.2% (+.6%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 67.0 unch.
  

Other:

• Bloomberg Global Risk-On/Risk-Off Index 57.6 +3.1%
• Bloomberg Cyclicals/Defensives Index 228.6 +.5%
  
• Russell 1000: Growth/Value 19,610.6 +.14%
• CNN Fear & Greed Index 70.0 (GREED) +1.0
  
• 1-Day Vix 12.1 -17.1%
  
• Vix 18.9 -2.1%
  
• Total Put/Call .92 +3.4%

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.