Stocks Modestly Lower into Final Hour on Higher Long-Term Rates, Falling Fed Rate-Cut Odds, Earnings Outlook Jitters, Retail/Alt Energy Sector Weakness

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 36.5 -.13%
• US 10-Year T-Note Yield 4.33% +4.0 basis points
• 3-Month T-Bill Yield 4.23% +2.0 basis points

• China Iron Ore Spot 101.4 USD/Metric Tonne +.2%
• Dutch TTF Nat Gas(European benchmark) 33.2 euros/megawatt-hour +4.0%

• Citi US Economic Surprise Index 15.0 +10.9 points

• Citi Eurozone Economic Surprise Index 37.9 +15.7 points

• Citi Emerging Markets Economic Surprise Index -1.8 -.1 point
• S&P 500 Current Quarter EPS Growth Rate YoY(470 of 500 reporting) +11.0% unch.
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 288.27 +.18:  Growth Rate +12.9% +.1 percentage point, P/E 22.1 unch.
• S&P 500 Current Year Estimated Profit Margin 13.43% -1.0 basis point
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(7 of 10 reporting) +23.6% unch.
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 470.61 +.48: Growth Rate +24.9% +.2 percentage point, P/E 31.7 -.1
• Bloomberg US Financial Conditions Index .60 -2.0 basis points
• Bloomberg Euro-Zone Financial Conditions Index 1.18 +6.0 basis points
• Bloomberg Global Trade Policy Uncertainty Index 4.3 unch.
• US Yield Curve 53.5 basis points (2s/10s) -1.5 basis points
• US Atlanta Fed GDPNow Q2 Forecast +2.3% unch.
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 42.2% +.1 percentage point

• Cleveland Fed Inflation Nowcast Core PCE YoY +2.89% unch.: CPI YoY +2.84% unch.
• 1-Year TIPS Spread 2.67 +4.0 basis points
• 10-Year TIPS Spread 2.39 +4.0 basis points
• Highest target rate probability for Oct. 29th FOMC meeting: 51.4% (+5.0 percentage points) chance of 4.0%-4.25%. Highest target rate probability for Dec. 10th meeting: 46.8%(+.5 percentage point) chance of 3.75%-4.0%. (current target rate is 4.25-4.5%)
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +50 open in Japan 
• China A50 Futures: Indicating +35 open in China

• DAX Futures: Indicating +10 open in Germany

Portfolio:

• Slightly Lower: On losses in my consumer discretionary/tech/utility sector longs
• Disclosed Trades: None
• Market Exposure: 50% Net Long

Bear Radar

Style Underperformer:

• Large-Cap Growth -.7%
  

Sector Underperformers:

• 1) Alt Energy -1.4% 2) Electrification -1.2% 3) Retail -1.2%

Stocks Falling on Unusual Volume: 

• PLYM, VKTX, SN, WSO, SLVM, WMT, SCSC, BBAR, DK, GOGO, CVI, BILI, NBR, CBRL and CSIQ

Stocks With Unusual Put Option Activity:

• 1) PCG 2) COTY 3) CZR 4) GDXJ 5) WMT

Stocks With Most Negative News Mentions:

• 1) COTY 2)  SEDG 3) RUN 4) CSIQ 5) FSLR

Sector ETFs With Most Negative Money Flow:

• 1) XLC 2) XLI 3) KBWB 4) XLY 5) ARKF

Charts:

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

Bull Radar

Style Outperformer:

• Small-Cap Growth +.2%

Sector Outperformers:

• 1) Gold & Silver +1.8% 2) Nuclear +1.4% 3) Pharma +1.1%

Stocks Rising on Unusual Volume:

• XYF, PSKY, XPEV, SUPX, TYRA, NUTX, NEGG, SDM, CPS, DRD, YMM, BZ, DVAX, NMAX, PKG, UMAC, SSYS, MNSO, TEM, TIGR, AEVA, NDSN, MDGL, CELC, SW, FRO, TEVA, LNTH, TNK, ALAB, KROS, PDD, WAY, YOU, SRAD, 

Stocks With Unusual Call Option Activity:

• 1) FHN 2) EWJ 3) BLND 4) DAY 5) DUST

Stocks With Most Positive News Mentions:

• 1) SLQT 2) LYTS 3) HPE 4) NMM 5) ALAB

Sector ETFs With Most Positive Money Flow:

• 1) XLF 2) XLK 3) SMH 4) IGV 5) KRE

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:

• (BJ)/1.09
• (BKE)/.83 
• (JKS)/-23.3 

After the Close: 

• None of note

Economic Releases 

8:30 am EST

• The Chicago Fed National Activity Index for July. 

10:00 am EST

• New Home Sales for July is estimated to fall to 626K from 627K in June. 

10:30 am EST

• The Dallas Fed Manufacturing Activity for Aug. 

Upcoming Splits

• None of note

Other Potential Market Movers

• The Fed's Powell speaking at Jackson Hole Symposium, weekly CFTC speculative net positioning reports, weekly US Baker Hughes Rig Count and the Piper Sandler Voice AI 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 -20.9% Below 100-Day Average 
• Nasdaq/NYSE Volume Ratio 13.6 +.3
• 8 Sectors Declining, 3 Sectors Rising
• 37.3% of Issues Advancing, 60.8% Declining 
• TRIN/Arms .63 -27.6% 
  
• Non-Block Money Flow -$263.8M
  
• 36 New 52-Week Highs, 19 New Lows
• 54.5% (-.1%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 57.8 -2.6

Other:

• Bloomberg Global Risk-On/Risk-Off Index 80.7 +.8%
• Bloomberg Cyclicals/Defensives Index 247.5 +.3%
  
• Morgan Stanley Growth vs Value Index 162.0 +.3%
• CNN Fear & Greed Index 54.0 (Neutral from GREED) -2.0
• 1-Day Vix 13.7 +25.4%
  
• Vix 16.7 +6.1%
  
• Total Put/Call .95 +9.2%

Thursday Watch

Night Trading 

• Asian equity indices are -.25% to +.75% on average. 
• Asia Ex-Japan Investment Grade CDS Index 66.75 +.5 basis point.
• China Sovereign CDS 43.5 -.25 basis point.
• China Iron Ore Spot 101.5 USD/Metric Tonne +.7%. 
• Swiss Franc/Offshore Chinese Renminbi Cross 8.92 -.31%.
• Bloomberg Emerging Markets Currency Index 36.5 -.01%.
• Bloomberg Global Risk-On/Risk Off Index 80.4 +.4%.
• US 10-Year Yield 4.29% +1.0 basis point.
• Volatility Index(VIX) futures 18.3 -.3%.
• Euro Stoxx 50 futures +.05%. 
• S&P 500 futures -.16%. 
• NASDAQ 100 futures -.20%.

Morning Preview Links

BOTTOM LINE: Asian indices are mostly higher, boosted by technology and commodity shares in the region. I expect US stocks to open modestly lower and rally into the afternoon, finishing mixed.  The Portfolio is 50% net long heading into the day.