Stocks Slightly Higher into Final Hour on Lower Long-Term Rates, Earnings Outlook Optimism, Rising Fed Rate-Cut Odds, Tech/Road & Rail 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) 15.3 +.5%
• S&P 500 Intraday % Swing .32 -76.5%
• Bloomberg Global Risk On/Risk Off Index 79.7 -1.2% 
• Swiss Franc/Offshore Chinese Renminbi Cross 8.97 +.47%

• Euro/Yen Carry Return Index 195.79 +.4%

• Emerging Markets Currency Volatility(VXY) 7.03 -.42%

• CBOE S&P 500 Implied Correlation Index 15.4 -2.5% 

• ISE Sentiment Index 167.0 +23.0

• Total Put/Call .79 +9.7%

• NYSE Arms 1.37 +1.5%
• NYSE Non-Block Money Flow -$51.0M 
  

Credit Investor Angst:

• North American Investment Grade CDS Index 49.9 +.08%
  

• US Energy High-Yield OAS 361.4 -4.9%
• Bloomberg TRACE # Distressed Bonds Traded 193.0 -7.0

• European Financial Sector CDS Index 57.0 -1.4%
  
• Deutsche Bank Subordinated 5Y Credit Default Swap 126.0 -.3%
  

• Italian/German 10Y Yld Spread 83.0 -4.0 basis points

• Asia Ex-Japan Investment Grade CDS Index 63.08 -.5%
  

• Emerging Market CDS Index 145.6 +1.2%
• Israel Sovereign CDS 73.7 +.8%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 24.4 +.06%

• 2-Year SOFR Swap Spread -23.75 basis points -.75 basis point

• 3M T-Bill Treasury Repo Spread -38.25 basis points +1.5 basis points

• 3-Month EUR/USD Cross-Currency Basis Swap .75 unch.
• MBS  5/10 Treasury Spread 125.0 -7.0 basis points
• Bloomberg CMBS Investment Grade Bbb Average OAS 583.0 +3.0 basis points
• Avg. Auto ABS OAS 49.0 -2.0 basis points

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 36.49 +.08%
• US 10-Year T-Note Yield 4.04% -3.0 basis points
• 3-Month T-Bill Yield 4.02% +2.0 basis points

• China Iron Ore Spot 105.7 USD/Metric Tonne +.3%
• Dutch TTF Nat Gas(European benchmark) 33.1 euros/megawatt-hour +3.4%

• Citi US Economic Surprise Index 21.8 +1.7 points

• Citi Eurozone Economic Surprise Index 17.8 -2.3 points

• Citi Emerging Markets Economic Surprise Index 11.8 -.1 point
• S&P 500 Current Quarter EPS Growth Rate YoY(496 of 500 reporting) +12.6% unch.
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 290.25 +1.28:  Growth Rate +11.3% +.5 percentage point, P/E 22.3 -.1
• S&P 500 Current Year Estimated Profit Margin 13.49% unch.
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(10 of 10 reporting) +28.4% unch.
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 483.83 +7.03: Growth Rate +18.3% +1.7 percentage points, P/E 32.9 +.2
• Bloomberg US Financial Conditions Index .60 -1.0 basis point
• Bloomberg Euro-Zone Financial Conditions Index 1.47 +4.0 basis points
• Bloomberg Global Trade Policy Uncertainty Index 3.2 -.3
• US Yield Curve 54.75 basis points (2s/10s) -3.75 basis points
• US Atlanta Fed GDPNow Q2 Forecast +3.0% unch.
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 42.1% -.9 percentage point

• Cleveland Fed Inflation Nowcast Core PCE YoY +2.95% unch.: CPI YoY +2.84% unch.
• 1-Year TIPS Spread 2.65 +3.0 basis points
• 10-Year TIPS Spread 2.36 unch.
• Highest target rate probability for Oct. 29th FOMC meeting: 73.9% (+2.9 percentage points) chance of 3.75%-4.0%. Highest target rate probability for Dec. 10th meeting: 67.9%(+2.6 percentage points) chance of 3.5%-3.75%. (current target rate is 4.25-4.5%)
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +220 open in Japan 
• China A50 Futures: Indicating +6 open in China

• DAX Futures: Indicating +2 open in Germany

Portfolio:

• Slightly Higher: On gains in my industrial/financial/tech sector longs
• Disclosed Trades: None
• Market Exposure: 75% Net Long

Bear Radar

Style Underperformer:

• Small-Cap Value -.4%
  

Sector Underperformers:

• 1) Telecom -1.5% 2) Airlines -1.4% 3) Oil Service -1.4%

Stocks Falling on Unusual Volume: 

• JACK, SBAC, CMG, KDP, AMT, CCI, KGS, PHR, SION, BHVN, ASTS, ALKS, NEGG, GLNG, VIST, SKYW, NAMS, BNTX, NX, BRBR, IRDM, PRAX, IDYA, YPF, PAM, IGS, GGAL, BMA and SMMT

Stocks With Unusual Put Option Activity:

• 1) AES 2) GGAL 3) PL 4) RBRK 5) YPF

Stocks With Most Negative News Mentions:

• 1) NFE 2) DOW 3) REPL 4) BHVN 5) SLQT

Sector ETFs With Most Negative Money Flow:

• 1) XLF 2) SOXX 3) XLE 4) KIE 5) FDN

Charts:

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

Bull Radar

Style Outperformer:

• Large-Cap Growth +.6%

Sector Outperformers:

• 1) Video Gaming +2.5% 2) AI/Innovation +2.1% 3) Shipping +1.9%

Stocks Rising on Unusual Volume:

• DNTH, GSAT, CNTA, SATS, GOOS, ALAB, HOOD, HL, HIPO, STNG, APP, LIF, ASX, CTNM, BBNX, HROW, CPNG, OPRA, WAY, ADUR, INOD, BBW, NTNX, HSAI, STOK, FTAI, ROOT, ETSY, QTWO, SUPX, TRML, PINC, NTES, CRWV, JANX, STVN, RBRK, BIDU, JANX, BTSG, BBBY, VG, APPN, NE, MLYS, CGON, SOUN, MDGL, CLDX, XPEV, GCT, BRZE, SPHR, GTLB, TRU, CRDO, GILT, U, BMNR, GFI, PAAS, JD, HMY, BABA, DOOO, ASC and VEEV

Stocks With Unusual Call Option Activity:

• 1) LDI 2) GSAT 3) PL 4) RR 5) ETHZ

Stocks With Most Positive News Mentions:

• 1) PL 2) HOOD 3) APP 4) QS 5) SWVL

Sector ETFs With Most Positive Money Flow:

• 1) IGV 2) IBB 3) XLP 4) XLV 5) IXP

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:

• (MOMO)/1.94
• (KFY)/1.24 
• (CNM)/.78
• (SAIL)/.04 

After the Close: 

• (AVAV)/.33
• (CVGW)/.54
• (GME)/.19
• (ORCL)/1.48
• (RBRK)/-.34
• (SNPS)/3.8 

Economic Releases 

6:00 am EST

• The NFIB Small Business Optimism Index for Aug. is estimated to rise to 100.5 versus 100.3 in July. 

10:00 am EST

• The preliminary benchmark payrolls revision for 2025 is estimated at -700K versus -818K in 2024. 

Upcoming Splits

• None of note

Other Potential Market Movers

• The 3Y T-Note auction, weekly US retail sales reports, BofA Real Estate Conference, Morgan Stanley Healthcare Conference, B. Riley Consumer/TMT Conference, Piper Growth Frontiers Conference, UBS Financials Conference, Wolf TMT Conference, (NKE) annual meeting and the Goldman Communacopia/Tech Conference 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 +11.3% Above 100-Day Average 
• Nasdaq/NYSE Volume Ratio 13.8 -.5
• 7 Sectors Declining, 4 Sectors Rising
• 47.1% of Issues Advancing, 51.0% Declining 
• TRIN/Arms 1.32 -2.2% 
  
• Non-Block Money Flow -$53.6M
  
• 120 New 52-Week Highs, 26 New Lows
• 59.9% (-1.7%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 60.8 +1.2

Other:

• Bloomberg Global Risk-On/Risk-Off Index 79.9 -.9%
• Bloomberg Cyclicals/Defensives Index 257.9 +.94%
  
• Morgan Stanley Growth vs Value Index 162.9 +1.7%
• CNN Fear & Greed Index 52.0 (NEUTRAL) -1.0
• 1-Day Vix 8.0 -20.4%
  
• Vix 15.3 +.9%
  
• Total Put/Call .72 unch.

Monday Watch

Around X:

• @Business 

• President Donald Trump said Hamas needs to accept his terms to end its war with Israel as he continues to press for an end to the fighting. 
• Trump said he wants to find a way to bring in experts to train US workers following an immigration raid at a South Korean-owned EV battery factory in Georgia.
• Kevin Hassett, a top candidate for Federal Reserve chair, said the US central bank put its independence and credibility in jeopardy by expanding beyond its mandate.
• Now that a September rate cut is all but sealed, options pros are expecting smooth sailing in the stock market through Thursday’s consumer price index reading. 
• Get up to speed on what's moving global markets.
• Here's what you need to know to start your day.

• @Zerohedge  

• Markets Have Figured Out That Sovereign Balance Sheets Will Be Leveraged To The Max To Win The AI War.
• Democrat New Mexico Governor Admits National Guard Making Progress in High-Crime Albuquerque.
• Undersea Cable Cuts Kill Internet To Parts Of Asia, Mideast.
• This week's 800K downward revisions in benchmark payrolls is all that's left of the labor market kitchen sinking shock. New BLS commissioner in a few weeks and then the prints take off again.
• Morgan Stanley: We now expect quarterly rate cuts beginning in September for a terminal target range of 2.75-3.0% by end-2026.
• President @realDonaldTrump is signing supporters hats at the U.S. Open.
• The Battle Brewing: Mass Surveillance Vs The People.
• Inflation: financial assets vs real world. (graph)  
• Reminder: OpenAI relies mostly on Wikipedia and Reddit data, which is censored and curated by left wing radicals. ChatGPT is being trained to brainwash the masses. 
• Why Washington's Panic Over Kennedy Tells Us He's Close To The Truth.
• The Democrat Party at every level — judges, politicians, academics, nonprofits — is organized around the defense and protection of the criminal, the monstrous and the depraved. The more vile the threat, the more vociferously the Democrat Party works to protect and enable it.
• Sacks, Chamath Describe 'Surreal' White House Dinner With Trump And Tech Elite.   
• "Still Room To Run Higher" In Stocks; Top Goldman Trader Likes Gold & Gold-Miners. 
• Here’s a list of all the news networks who have NOT covered the Charlotte NC story: - NYTimes - CNN - Washington Post - MSNBC - NPR - USA Today - Reuters - Axios - ABC News - PBS. Every single one of them wrote stories on Daniel Penny... …do you get it yet?
• "Not A Jobs Recession": Bessent Doubles Down On Tariffs, Predicts Economic Surge, Slams Goldman & Moody's.
• Japan's Prime Minister Ishiba Resigns, Most Likely To Be Replaced With Hard-Line Conservative
  .
• Putin Invited Zelensky To Moscow, Who Responds "I Can't Go To The Capital Of This Terrorist".
• The Bond Market Is Suddenly More Concerned About Jobs Than Inflation.
• Released Comey Memos Reveal Obama Admin's Endorsement Of Russian Hoax.
• US War Department To Shift Focus From China To 'Threats' In Latin America
  .

• @CNBC

• Asia markets set to open mixed as investors assess Japan PM resignation, eye China trade data.
• Stock futures are little changed as Wall Street awaits key inflation data: Live updates. 
• Why TJ Maxx is a winner as tariff-induced higher prices drive consumers to hunt for value. 

• @MarioNawful

• BREAKING: UNDERSEA CABLE CUTS DISRUPT INTERNET IN SOUTH ASIA. Several international fiber-optic cables in the Red Sea have been severed, triggering major internet outages across parts of Pakistan and India. The Red Sea is a critical choke point for global data traffic, carrying much of South Asia’s international connectivity.

• @RodDMartin

• ACTBLUE SCANDAL BLOWS OPEN! Investigators just subpoenaed ActBlue’s top lawyers in a massive donor fraud probe. Foreign money. Stolen identities. 1,900+ shady transactions. The Dems’ favorite fundraising machine may sink them all.

• @Defence_Index

• Footage shows U.S. Marines deploying in Puerto Rico amid rising tensions in the Caribbean. (video)

• @newstart_2024

• Naomi Wolf exposes shocking revelations from Pfizer's internal documents: Just one month into the vaccine rollout in November 2020, Pfizer knew their COVID shot failed to stop the virus—making every mandate, job loss, business closure, school shutdown, military compulsion, and suppression of freedoms that followed a complete lie. The most common "side effect"? Getting COVID itself. Pfizer also lied about the injection staying in the deltoid muscle. Instead, the mRNA, spike protein, and lipid nanoparticles (including petroleum-derived polyethylene glycol) biodistribute within 48 hours, crossing the blood-brain barrier and accumulating in the liver, adrenals, spleen, lymphatic system—and in women's ovaries. (video)

• @WallStreetApes

• American exposing Crumbl Cookies “I swear to God, this has 60 ingredients” in one cookie. Looking through the ingredients there are actually ingredients that European Food and Safety Authority prove damages your DNA to the point of cancer. “Holy sh*t Crumbl Cookies, why is this in your food” America needs to start aggressively banning toxic food ingredients immediately.

• @DrAseemMalhotra

• BREAKING: New data reveals Pfizer & Moderna shots had DNA fragments up 600 times above FDA/WHO limit including ONCOGENIC potential. ‘These findings demand immediate market withdrawal of the contaminated mRNA injections’. WE NEED A PUBLIC INQUIRY NOW.

• @_Aussie17

• KABOOM! Pfizer DNA contamination Peer Reviewed!

• @MDBreathe

• Just when I thought we were making progress. @POTUS medical mandates of ANY kind are WRONG. Full stop. It’s up the patient - or the parent. People are not getting vaccines because all trust has been destroyed. And that won’t change until we pull Covid shots off the market, hold people accountable, hold vaccine manufacturers accountable, and conduct real studies to determine if vaccines are as safe and effective as promised. (video)
  

• @EYakoby

• An Islamist professor at Princeton University openly declares her and others’ true intentions: “Get the University’s money and use it to dismantle the University.” Why is she still employed by Princeton? (video)

• @pulte

• Jerome Powell has made the Fed so political that it doesn't even do investigations of senior officials anymore.

• @disclosetv

• NOW - MAHA Chief Medical Advisor claims evidence based medicine has become "hijacked by powerful commercial interests," causing an "epidemic of misinformed doctors and misinformed, unwittingly harmed patients, this is the root cause of the health crisis." (video)

• @WarRoomGeorgia

• We want to thank @BrianKempGA for showing the world why "GA is the best place to do business". Bring your illegals here and pay them cheap wages and the GA tax payer will pick up the healthcare, food stamps, schooling for their kids, and affordable housing tab. All while the money class which are the state and county chambers get to build the infrastructure out and or benefit from it. The "pig" has to be fat and full of systematic pork in order for the recovery of FUNDS to take place.

• @RenzTom

• Maybe the real “misinformation” is pretending these ingredients don’t exist. Transparency matters. Informed consent matters. (list)

• @CJbakerMD

• I am a practicing physician, have been for almost 30 years. I fully support ⁦
  @SecKennedy⁩ & ⁦@POTUS⁩ & their efforts to remove Big Pharma’s capture of CDC & the corruption present in all aspects of my profession.

• @DrBenTapper1

• Tylenol creates the perfect storm once taken post vaccination. A 2008 case-control study by Schultz et al. (involving 83 children with ASD and 91 controls) found that children given acetaminophen for fever or pain after the MMR vaccine had a significantly higher risk of developing ASD compared to those given ibuprofen or no pain reliever. The odds ratio was over 20 times higher in some subgroups for acetaminophen use specifically tied to vaccination timing.
  

• @stillgray

• IIryna Zarutska was 23 years old. She left Ukraine to escape a war, believing she had found safety in America. On August 22 she boarded a train in Charlotte like anyone would — expecting nothing more than to get home. Minutes later she was stabbed again and again in her seat, her throat slashed under the harsh glow of fluorescent lights. What makes her death even more unbearable is how public it was. Passengers sat only a few feet away. Some were unaware, others froze, others turned their eyes elsewhere. The train kept moving, and Iryna bled out in plain view. Surrounded by people, she died as if she were alone. The man who killed her, Decarlos Dejuan Brown Jr., was not some hidden danger. He had been arrested fourteen times before. Robbery, larceny, false alarms, erratic behavior, even documented mental illness. Each arrest ended with the same outcome: release. He was processed, excused, and sent back out. (pic)

• @JasonJournoDC

• NEW: Bill Maher gets *HUGE APPLAUSE* for RAILING AGAINST kids being put on meds — after senators attacked RFK Jr. over his criticism of antidepressants. "Do any of us really think that putting kids on all these drugs when they're young doesn't have an effect!?" "That that isn't part of the problem with why there are school shootings and kids doing crazy things? Of course it is!" "We put kids on drugs way too early, way too often! And then we wonder why they're using street drugs when they're 20!? Because they never knew what sobriety was!" (video)

• @P_McCulloughMD

• BREAKING: RSV Shots Linked to Over 200 Safety Signals — Serious Neurological, Cardiac, and Pregnancy Harms Identified. New VAERS study finds major signals for fetal death, preterm birth, paralysis, Guillain-Barré syndrome, heart failure, thrombocytopenia, and mini-strokes. Annual risk of RSV infection in adults is <1%, why take the risk with RSV vaccines?

• @SteveHiltonx

• Gavin Newsom's election rigging scheme would make a Democrat vote worth EIGHT TIMES a Republican vote. 193,000 votes to elect a Democrat to Congress; 1.52 MILLION for a Republican. Newsom's corruption is unconstitutional and I have filed a lawsuit in federal court to block it. (video)

Night Trading

• Asian indices are +.25% to +.75% on average.
• Asia Ex-Japan Investment Grade CDS Index 63.0 -1.5 basis point.s
• China Sovereign CDS 41.5 +.75 basis point.
• China Iron Ore Spot 104.8 USD/Metric Tonne -.09%.
• Swiss Franc/Offshore Chinese Renminbi Cross 8.94 +.12% 
  
• Bloomberg Emerging Markets Currency Index 36.5 +.01%.
• Bloomberg Global Risk-On/Risk Off Index 81.2 +.7%.
• US 10-Year Yield 4.10% +2.0 basis points.
  
• Volatility Index(VIX) futures 18.8 -.5%. 
• Euro Stoxx 50 futures +.47%.
• S&P 500 futures +.14%.
• NASDAQ 100 futures +.32%.

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 rally into the afternoon, finishing modestly higher. The Portfolio is 75% net long heading into the week.