Thursday Watch

Night Trading 

• Asian equity indices are -.25% to +1.5% on average.

• Asia Ex-Japan Investment Grade CDS Index 71.0 +1.75 basis points.

• China Sovereign CDS 60.25 -.75 basis point.
  
• China Iron Ore Spot 109.5 USD/Metric Tonne +1.2%

• Bloomberg Emerging Markets Currency Index 38.8 -.09%.
• Bloomberg Global Risk-On/Risk Off Index 58.2 +1.4%.
• Volatility Index(VIX) futures 19.2 +.2%.
• Euro Stoxx 50 futures -.12%.

• S&P 500 futures -.06%.

• NASDAQ 100 futures -.13%.  

Morning Preview Links

BOTTOM LINE: Asian indices are mostly higher, boosted 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 50% net long heading into the day.

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%