Monday, October 21, 2024

Tuesday Watch

Around X:

  • @elonmusk
  • @EricLDaugh
  • @BehizyTweets
  • @stillgray
  • @DC_Draino
  • @LauraLoomer
  • @BGatesIsaPsycho
  • @Sassafrass_84
  • @TrumpWarRoom
  • @charliekirk11
  • @MTGrepp
  • @TheChiefNerd
  • @WallStreetApes
  • @ProjectVirginia
  • @VigilantFox
  • @ElonMusk: “I'm not anti-vaccine, but I'm anti-forcing people to take a vaccine, that's for sure.” COLLEGE STUDENT: “Well, also the COVID vaccine did not work.” @ElonMusk: “Yeah. And suppressing information about it and side effects; that was terrible. The Biden-Harris administration tried to mandate that any company that has any federal contracts, which is most companies, would be forced to vaccinate everyone at the company or that person would have to be fired. Now thankfully, that was shot down by the Supreme Court. But that's insane. That is a massive infringement on your liberty.” (video)
  • @WallStreetSilv
  • @JohnStrandUSA
  • @Laralogan
  • @MikeKBerg
  • @hodgetwins
  • @bennyjohnson
  • @LibsOfTiktok
  • @GardensR4Health
  • @sean_j_dunn
  • @ShadowofEzra
  • @Oscarelblue
  • @amuse
Night Trading 
  • Asian equity indices are -.75% to +.25% on average.
  • Asia Ex-Japan Investment Grade CDS Index 71.75 unch.
  • China Sovereign CDS 64.25 +1.0 basis point.
  • China Iron Ore Spot 100.6 USD/Metric Tonne -1.2%
  • Bloomberg Emerging Markets Currency Index 38.3 -.03%.
  • Bloomberg Global Risk-On/Risk Off Index 62.4 -.15%.
  • Volatility Index(VIX) futures 18.4 +.13%.
  • Euro Stoxx 50 futures +.34%.
  • S&P 500 futures -.09%.
  • NASDAQ 100 futures -.13%.  
Morning Preview Links

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

Stocks Lower into Final Hour on Rising Long-Term Rates, Fed Policy Mistake Worries, US Election Integrity Concerns, Regional Bank/Homebuilding Sector Weakness

Broad Equity Market Tone:

  • Advance/Decline Line: Substantially Lower
  • Sector Performance: Most Sectors Declining
  • Volume: Around Average
  • Market Leading Stocks: Underperforming
Equity Investor Angst:
  • Volatility(VIX) 18.6 +3.1%
  • DJIA Intraday % Swing 1.0 +56.0%
  • Bloomberg Global Risk On/Risk Off Index 61.8 +1.1%
  • Euro/Yen Carry Return Index 180.7 +.39%
  • Emerging Markets Currency Volatility(VXY) 9.6 +.1%
  • CBOE S&P 500 Implied Correlation Index 15.6 +1.1% 
  • ISE Sentiment Index 124.0 -28.0 points
  • Total Put/Call .86 +3.6%
  • NYSE Arms .68 -39.3%
  • NYSE Non-Block Money Flow -$277.3M 
Credit Investor Angst:
  • North American Investment Grade CDS Index 52.1 +1.8%
  • US Energy High-Yield OAS 324.2 +.25%
  • Bloomberg TRACE # Distressed Bonds Traded 196 -3
  • European Financial Sector CDS Index 63.1 +2.0%
  • Deutsche Bank Subordinated 5Y Credit Default Swap 159.9 +1.3%
  • Italian/German 10Y Yld Spread 123.0 basis points +5.0 basis points
  • Asia Ex-Japan Investment Grade CDS Index 71.3 -.1%
  • Emerging Market CDS Index 165.3 +2.0%
  • Israel Sovereign CDS 149.5 +.4%
  • China Corp. High-Yield Bond USD ETF(KHYB) 25.2 -.04%
  • 2-Year SOFR Swap Spread -19.25 basis points +.25 basis point
  • 3M T-Bill Treasury Repo Spread -19.0 basis points +2.0 basis points
  • 3-Month EUR/USD Cross-Currency Basis Swap -3.0 -.25 basis point
  • MBS  5/10 Treasury Spread 148.0 +5.0 basis points
  • Bloomberg CMBS Investment Grade Bbb Average OAS 700.0 -1.0 basis point
  • Avg. Auto ABS OAS 59.0 -2.0 basis points
Economic Gauges:
  • Bloomberg Emerging Markets Currency Index 38.3 -.29%
  • 3-Month T-Bill Yield 4.63% unch.
  • China Iron Ore Spot 100.7 USD/Metric Tonne -1.1%
  • Dutch TTF Nat Gas(European benchmark) 40.02 euros/megawatt-hour +2.1%
  • Citi US Economic Surprise Index 16.4 +1.6 points
  • Citi Eurozone Economic Surprise Index -11.0 +6.9 points
  • Citi Emerging Markets Economic Surprise Index -.8 +2.0 points
  • S&P 500 Current Quarter EPS Growth Rate YoY(72 of 500 reporting) +6.7% unch.
  • S&P 500 Blended Forward 12 Months Mean EPS Estimate 267.80 +.24:  Growth Rate +14.8% +.1 percentage point, P/E 21.8 -.1
  • S&P 500 Current Year Estimated Profit Margin 12.64% -1.0 basis point
  • NYSE FANG+ Current Quarter EPS Growth Rate YoY(1 of 10 reporting) +40.2% n/a
  • NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 369.37 +1.32: Growth Rate +29.7% +.4 percentage point, P/E 32.1 -.1
  • Bloomberg US Financial Conditions Index .91 +3.0 basis points
  • Bloomberg Euro-Zone Financial Conditions Index .79 -3.0 basis points
  • US Yield Curve 15.5 basis point (2s/10s) +3.75 basis points
  • US Atlanta Fed 3Q GDPNow Forecast +3.43% unch.
  • US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 49.5 -.6 percentage point
  • Cleveland Fed Inflation Nowcast Core PCE YoY +2.62% unch.: CPI YoY +2.57% unch.
  • 10-Year TIPS Spread 2.32 +1.0 basis point
  • Highest target rate probability for Dec. 18th FOMC meeting: 65.3%(-11.5 percentage points) chance of 4.25%-4.5%. Highest target rate probability for Jan. 29th meeting: 44.7%(-11.1 percentage points) chance of 4.0%-4.25%. (current target rate is 4.75-5.0%)
Overseas Futures:
  • Nikkei 225 Futures: Indicating +135 open in Japan 
  • China A50 Futures: Indicating -42 open in China
  • DAX Futures: Indicating +151 open in Germany
Portfolio:
  • Lower:  On losses in my tech/industrial/biotech/consumer discretionary/utility sector longs
  • Disclosed Trades: Added to my (IWM)/(QQQ) hedges
  • Market Exposure: Moved to 75% Net Long

Bear Radar

Style Underperformer:

  • Small-Cap Value -1.7%
Sector Underperformers:
  • 1) Homebuilding -3.4% 2) Regional Banks -2.4% 3) Alt Energy -2.1%
Stocks Falling on Unusual Volume: 
  • SHYF, ASPN, PLAY, CI, DKNG, PLRX, WAL, MPWR, AGYS, CELH, XRX, WAFD, AUB, RGNX, W, GOOS, RCUS, RUN, RKT, RDFN, VFC, AMSC and NMRA
Stocks With Unusual Put Option Activity:
  • 1) NXE 2) KVUE 3) SAVE 4) NKLA 5) KBE
Stocks With Most Negative News Mentions:
  • 1) VFC 2) HTZ 3) LU 4) CI 5) UPS
Sector ETFs With Most Negative Money Flow:
  • 1) XLI 2) XLF 3) AIRR 4) XHB 5) XLK

Bull Radar

Style Outperformer:

  • Large-Cap Growth +.1%
Sector Outperformers:
  • 1) Airlines +2.6% 2) Gold & Silver +.7% 3) Oil Service +.4%
Stocks Rising on Unusual Volume:
  • NNE, OKLO, ROAD, TPC, IONQ, APP, ZIM, BIOA, TAL, CLMT, CRDO, KVUE, RBA, DJT, EH, HUT, MAG, HDB, ELF, SPR, SRAD, BEPC, SA, GATO, ALKT, STRL, HMY, BA, PAYC and PAAS
Stocks With Unusual Call Option Activity:
  • 1) BMBL 2) KHC 3) ZI 4) INDA 5) BSX
Stocks With Most Positive News Mentions:
  • 1) SAVE 2) KVUE 3) WRBY 4) ZIM 5) MNTR
Sector ETFs With Most Positive Money Flow:
  • 1) XLV 2) XLE 3) XOP 4) VGT 5) NLR
Charts:

Tomorrow's Earnings/Economic Releases of Note; Market Movers

Earnings of Note 
Company/Estimate 

Before the Open:
  • (MMM)/1.90
  • (AOS)/.93
  • (BKU)/.74
  • (CMCSA)/1.06
  • (DHR)/1.57
  • (FI)/2.26
  • (FCX)/.37
  • (GE)/1.13
  • (GM)/2.38
  • (GPC)/2.42
  • (HRI)/4.48
  • (KMB)/1.70
  • (LMT)/6.50
  • (MCO)/2.87
  • (NSC)/3.11
  • (ONB)/.46
  • (PCAR)/1.82
  • (PM)/1.82
  • (PII)/.88
  • (PHM)/3.11
  • (DGX)/2.26
  • (RTX)/1.34
  • (SHW)/3.55
  • (VZ)/1.18
After the Close: 
  • (BKR)/.61
  • (CNI)/1.70
  • (MANH)/1.06
  • (NBR)/-1.99
  • (RHI)/.62
  • (STX)/1.46
  • (TXN)/1.38
  • (VMI)/4.00
  • (ADM)/1.27
  • (IRBT)/-.06
  • (NVR)/131.00
Economic Releases
8:30 am EST
  • The Philly Fed Non-Manufacturing Activity Index for Oct. is estimated to rise to 4.1 versus -6.1 in Sept.

10:00 am EST

  • The Richmond Fed Manufacturing Index for Oct. is estimated to rise to -17 versus -21 in Sept.
  • The Richmond Fed Business Conditions Index for Oct.

Upcoming Splits

  • None of note
Other Potential Market Movers
  • The Fed's Harker speaking, IMF Meetings, M2 Money Supply MoM for Sept., API weekly crude oil stock report, weekly US retail sales reports and the (MKC) investor 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 -1.0% Below 100-Day Average 
  • Nasdaq/NYSE Volume Ratio 15.1 +5.4
  • 10 Sectors Declining, 1 Sector Rising
  • 16.5% of Issues Advancing, 81.6% Declining 
  • TRIN/Arms .59 -47.3%
  • Non-Block Money Flow +$275.4M
  • 123 New 52-Week Highs, 21 New Lows
  • 59.5% (-3.4%) of Issues Above 200-day Moving Average
  • Average 14-Day RSI 67.0 -4.0
Other:
  • Bloomberg Global Risk-On/Risk-Off Index 61.4 +.5%
  • Bloomberg Cyclicals/Defensives Index 232.2 +.34%
  • Russell 1000: Growth/Value 19,941.1 +.9%
  • CNN Fear & Greed Index 73.0 (GREED) unch.
  • 1-Day Vix 8.31 -8.6%
  • Vix 19.0 +5.4%
  • Total Put/Call .85 +2.4%