Stocks Finish Higher on Milton Downshift to Cat 3, Earnings Outlook Optimism, Technical Buying, Tech/Transport Sector Strength

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 38.5 -.13%
• 3-Month T-Bill Yield 4.65% +3.0 basis points
  

• China Iron Ore Spot 105.9 USD/Metric Tonne +.97%
• Dutch TTF Nat Gas(European benchmark) 38.3 euros/megawatt-hour -1.5%

• Citi US Economic Surprise Index 14.5 +.2
  

• Citi Eurozone Economic Surprise Index -27.3 +1.5 points

• Citi Emerging Markets Economic Surprise Index -2.6 -.1 point
• S&P 500 Current Quarter EPS Growth Rate YoY(23 of 500 reporting) +16.1% unch.
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 267.09 +.02:  Growth Rate +14.6% +.1 percentage point, P/E 21.7 +.2
  
• S&P 500 Current Year Estimated Profit Margin 12.68% unch.
  
• 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 366.18 +.24: Growth Rate +28.6% +.1 percentage point, P/E 31.8 +.2
  
• Bloomberg US Financial Conditions Index .77 -1.0 basis point
  
• Bloomberg Euro-Zone Financial Conditions Index .78 unch.
  
• US Yield Curve 4.75 basis point (2s/10s) -1.0 basis point
  
• US Atlanta Fed 3Q GDPNow Forecast +3.22% -1.0 basis point
  
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 50.8 +.9 percentage point
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +2.58% unch.: CPI YoY +2.25% unch.
  
• 10-Year TIPS Spread 2.30 +3.0 basis points
  
• Highest target rate probability for Dec. 18th FOMC meeting: 77.9%(+.8 percentage point) chance of 4.25%-4.5%. Highest target rate probability for Jan. 29th meeting: 60.3%(-4.2 percentage points) chance of 4.0%-4.25%. (current target rate is 4.75-5.0%)
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +558 open in Japan 
• China A50 Futures: Indicating +117 open in China

• DAX Futures: Indicating +141 open in Germany

Portfolio:

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

• Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges, then added them back
  

• Market Exposure: 75% Net Long
  

Bull Radar

Style Outperformer:

• Mid-Cap Growth +.8%
  

Sector Outperformers:

• 1) Networking +2.3% 2) Alt Energy +2.3% 3) Computer Services +1.9%

Stocks Rising on Unusual Volume:

• HELE, ALAB, TVTX, NCLH, CUK, CCL, YPF, WSR, GTLB, AI, AS, GSK, ENVX, MYRG, SGML, CELH, AFRM, RCL, SNOW, GLW, CRDO, BCYC, RNR, PLTR, EG, ZETA, AMSC, GGAL, BV, CHWY, TAL, VRNS, CPRT, SOBO, PFE, CIEN and RNG
  

Stocks With Unusual Call Option Activity:

• 1) WW 2) GLW 3) LNC 4) ROIV 5) SHLS

Stocks With Most Positive News Mentions:

• 1) MNTS 2) UTRX 3) NCLH 4) TVTX 5) ALAB
  

Sector ETFs With Most Positive Money Flow:

• 1) XLF 2) XLB 3) ITB 4) XOP 5) XLV
  

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:

• (DAL)/1.52
• (DPZ)/3.65
• (NEOG)/-.03
• (TLRY)/-.04
  

After the Close: 

• None of note
  

Economic Releases

8:30 am EST

• The CPI MoM for Sept. is estimated to rise +.1% versus a +.2% gain in Aug.
• The CPI Ex Food and Energy MoM for Sept. is estimated to rise +.2% versus a +.3% gain in Aug.
• Real Avg. Weekly Earnings YoY for Sept.
• Initial Jobless Claims are estimated to rise to 230K versus 225K the prior week.
• Continuing Claims is estimated to rise to 1830K versus 1826K prior.
  

Upcoming Splits

• (NVEE) 4-for-1
  

Other Potential Market Movers

• The Fed's Williams speaking, Fed's Cook speaking, ECB Meeting, Cleveland CPI MoM for Sept., 30Y T-Bond auction, weekly EIA natural gas inventory report, Fed's weekly balance sheet report, (AMD) analyst meeting, (PAYX) annual meeting, (GWRE) investor day and the (HPE) analyst day 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 +7.0% Above 100-Day Average 
• Nasdaq/NYSE Volume Ratio 12.7 -1.1
  
• 3 Sectors Declining, 8 Sectors Rising
• 57.3% of Issues Advancing, 39.9% Declining 
• TRIN/Arms .89 -36.4%
  
• Non-Block Money Flow +$140.3M
  
• 138 New 52-Week Highs, 23 New Lows
• 57.7% (+.8%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 67.0 +2.0
  

Other:

• Bloomberg Global Risk-On/Risk-Off Index 60.8 +.2%
• Bloomberg Cyclicals/Defensives Index 233.7 +.99%
  
• Russell 1000: Growth/Value 19,933.0 -.23%
• CNN Fear & Greed Index 72.0 (GREED) -1.0
  
• 1-Day Vix 14.7 +30.5%
  
• Vix 21.0 -2.1%
  
• Total Put/Call .92 unch.

Wednesday Watch

Night Trading 

• Asian equity indices are +.25% to +1.25% on average.

• Asia Ex-Japan Investment Grade CDS Index 71.5 -.75 basis point.

• China Sovereign CDS 62.75 +.5 basis point.
  
• China Iron Ore Spot 104.4 USD/Metric Tonne -.6%

• Bloomberg Emerging Markets Currency Index 38.6 -.02%.
• Bloomberg Global Risk-On/Risk Off Index 61.2 +.8%.
• Volatility Index(VIX) futures 19.9 +.03%.
• Euro Stoxx 50 futures n/a.

• S&P 500 futures -.10%.

• NASDAQ 100 futures -.13%.  

Morning Preview Links

BOTTOM LINE: Asian indices are modestly higher, boosted by technology and industrial shares in the region. I expect US stocks to open mixed and to rally into the afternoon, finishing modestly higher.  The Portfolio is 75% net long heading into the day.

Stocks Surging into Close on Rotation into FANG+, Earnings Outlook Optimism, Technical Buying, Tech/Transport Sector Strength

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 38.58 -.16%
• 3-Month T-Bill Yield 4.62% -3.0 basis points
  

• China Iron Ore Spot 104.7 USD/Metric Tonne -.3%
• Dutch TTF Nat Gas(European benchmark) 38.9 euros/megawatt-hour -3.3%

• Citi US Economic Surprise Index 14.3 unch.
  

• Citi Eurozone Economic Surprise Index -28.8 +4.0 points

• Citi Emerging Markets Economic Surprise Index -2.7 -.6 point
• S&P 500 Current Quarter EPS Growth Rate YoY(23 of 500 reporting) +16.1% -2.3 percentage points
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 267.07 unch.:  Growth Rate +14.5% unch., P/E 21.5 unch.
  
• S&P 500 Current Year Estimated Profit Margin 12.68% -1.0 basis point
  
• 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 365.94 +.06: Growth Rate +28.5% unch., P/E 31.6 +.1
  
• Bloomberg US Financial Conditions Index .78 -12.0 basis points
  
• Bloomberg Euro-Zone Financial Conditions Index .78 -5.0 basis points
  
• US Yield Curve 5.75 basis point (2s/10s) +3.0 basis points
  
• US Atlanta Fed 3Q GDPNow Forecast +3.23% +69.0 basis points
  
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 49.9 +1.3 percentage points
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +2.58% unch.: CPI YoY +2.25% unch.
  
• 10-Year TIPS Spread 2.27 unch.
  
• Highest target rate probability for Dec. 18th FOMC meeting: 78.0%(-.3 percentage point) chance of 4.25%-4.5%. Highest target rate probability for Jan. 29th meeting: 63.8%(+3.3 percentage points) chance of 4.0%-4.25%. (current target rate is 4.75-5.0%)
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +610 open in Japan 
• China A50 Futures: Indicating -297 open in China

• DAX Futures: Indicating +174 open in Germany

Portfolio:

• Higher:  On gains in my utility/consumer discretionary/biotech/tech/industrial sector longs and emerging market shorts
  

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

• Market Exposure: Moved to 75% Net Long