Stocks Rallying into Afternoon on Falling Long-Term Rates, Surging Fed Rate-Cut Odds, Earnings Outlook Optimism, Tech/Consumer Discretionary Sector Strength

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 36.5 +.15%
• US 10-Year T-Note Yield 4.02% -1.0 basis point
• 3-Month T-Bill Yield 4.02% -1.0 basis point

• China Iron Ore Spot 105.6 USD/Metric Tonne +.1%
• Dutch TTF Nat Gas(European benchmark) 32.3 euros/megawatt-hour -2.4%

• Citi US Economic Surprise Index 12.9 -8.3

• Citi Eurozone Economic Surprise Index 19.4 -.3 point

• Citi Emerging Markets Economic Surprise Index 11.4 -1.1 points
• S&P 500 Current Quarter EPS Growth Rate YoY(497 of 500 reporting) +12.6% unch.
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 291.92 +.13:  Growth Rate +11.5% +.1 percentage point, P/E 22.6 +.2
• S&P 500 Current Year Estimated Profit Margin 13.48% -1.0 basis point
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(10 of 10 reporting) +28.4% unch.
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 485.09 +.52: Growth Rate +18.6% +.1 percentage point, P/E 33.0 -.2
• Bloomberg US Financial Conditions Index .65 -1.0 basis point
• Bloomberg Euro-Zone Financial Conditions Index 1.47 -7.0 basis points
• Bloomberg Global Trade Policy Uncertainty Index 2.6 -.1
• US Yield Curve 48.25 basis points (2s/10s) -1.75 basis points
• US Atlanta Fed GDPNow Q2 Forecast +3.1% +10.0 basis points
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 41.6% -1.4 percentage points

• Cleveland Fed Inflation Nowcast Core PCE YoY +2.95% unch.: CPI YoY +2.84% unch.
• 1-Year TIPS Spread 2.69 unch.
• 10-Year TIPS Spread 2.36 -1.0 basis point
• Highest target rate probability for Oct. 29th FOMC meeting: 86.0% (+12.1 percentage points) chance of 3.75%-4.0%. Highest target rate probability for Dec. 10th meeting: 80.5%(+12.4 percentage points) chance of 3.5%-3.75%. (current target rate is 4.25-4.5%)
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +262 open in Japan 
• China A50 Futures: Indicating +72 open in China

• DAX Futures: Indicating +40 open in Germany

Portfolio:

• Higher: On gains in my industrial/financial/tech/utility/consumer discretionary sector longs
• Disclosed Trades: None
• Market Exposure: 100% Net Long

Bear Radar

Style Underperformer:

• Large-Cap Growth +.5%
  

Sector Underperformers:

• 1) Energy -.3% 2) Shipping unch. 3) Utilities unch.

Stocks Falling on Unusual Volume: 

• AMN, VIRT, NAMS, WAY, TVTX, CCRN, ATRO and RNA

Stocks With Unusual Put Option Activity:

• 1) BITF 2) XME 3) CVE 4) SNDK 5) KGS

Stocks With Most Negative News Mentions:

• 1) SOC 2) VRA 3) HOFT 4) LSAK 5) UNCY

Sector ETFs With Most Negative Money Flow:

• 1) GDX 2) XLV 3) XLP 4) XLU 5) IYW

Charts:

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

Bull Radar

Style Outperformer:

• Small-Cap Growth +1.9%

Sector Outperformers:

• 1) Disk Drives +5.3% 2) Alt Energy +3.1% 3) Networking +2.9%

Stocks Rising on Unusual Volume:

• MAZE, PACCS, RCAT, OXM, TEM, RMBS, BKSY, SNDK, ZLAB, CRCL, GDS, RVMD, CNC, NEGG, AEVA, VSAT, ADPT, TMDX, GRAL, SNPS, DUOL, SERV, MU, AG, OKLO, BABA, DBRG, ACMR, VCEL, GLXY, SEI, RKLB, GEO, LRCX, BE, TWST, SKYT, ONC, DAKT, WBD, DAVA, COOP, RKT, SIMO, CENX, HNGE, JAMF, KC, ZYME, PFSI, NCLH, MENS, ACLX, BMNR, INOD, ETSY, IONQ, CXW, PGY, KKR, CDNS, GILT, WIX, TSLA, AMAT, OPRX, BIDU, GCT, CCL, BX, ZS, VCTR, CYD, ABBV, LTM, AVAV, OLN, SOUN, ROIV, CUK, TECK, WLDN, SOUN, HSAI, AMRK, WH, FTV, RIVN, Z, CASY, ZG, BAND and XYL

Stocks With Unusual Call Option Activity:

• 1) GOSS 2) GEO 3) CLOV 4) FHN 5) SNPS

Stocks With Most Positive News Mentions:

• 1) OPEN 2) AMST 3) OCC 4) LBRX 5) OXM

Sector ETFs With Most Positive Money Flow:

• 1) ARKK 2) IGV 3) XLF 4) SOXX 5) GRID

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:

• None of note

After the Close: 

• None of note

Economic Releases 

10:00 am EST

• The Univ. of Mich. Consumer Sentiment Index for Sept. is estimated to fall to 58.0 versus 58.2 in Aug.
• The Univ. of Mich. 1Y Inflation Expectations Index is estimated at +4.8% versus a prior estimate of a +4.8% gain. 

Upcoming Splits

• None of note

Other Potential Market Movers

• The WASDE report, weekly CFTC speculative net positioning reports and the weekly Baker Hughes rig count 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 +9.5% Above 100-Day Average 
• Nasdaq/NYSE Volume Ratio 16.2 unch.
• 0 Sectors Declining, 10 Sectors Rising
• 81.5% of Issues Advancing, 16.9% Declining 
• TRIN/Arms 1.33 -15.8% 
  
• Non-Block Money Flow +$200.7M
  
• 190 New 52-Week Highs, 20 New Lows
• 61.0% (+3.6%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 72.6 +5.5

Other:

• Bloomberg Global Risk-On/Risk-Off Index 82.2 +1.3%
• Bloomberg Cyclicals/Defensives Index 256.5 +.5%
  
• Morgan Stanley Growth vs Value Index 163.7 +.1%
• CNN Fear & Greed Index 53.0 (NEUTRAL) +2.0
• 1-Day Vix 9.8 -27.1%
  
• Vix 14.9 -2.7%
  
• Total Put/Call .79 unch.

Thursday Watch

Around X:

• @ZeroHedge   

• "Dark Moment For America" - Trump Addresses The Nation After Kirk Assassination.

Night Trading 

• Asian equity indices are -.25% to +.75% on average. 
• Asia Ex-Japan Investment Grade CDS Index 62.5 -.75 basis point.
• China Sovereign CDS 40.75 -.5 basis point.
• China Iron Ore Spot 106.6 USD/Metric Tonne -.2%. 
• Swiss Franc/Offshore Chinese Renminbi Cross 8.91 unch.
• Bloomberg Emerging Markets Currency Index 36.43 -.01%.
• Bloomberg Global Risk-On/Risk Off Index 81.1 -.1%.
• US 10-Year Yield 4.05% +1.0 basis point.
• Volatility Index(VIX) futures 18.3 -.8%.
• Euro Stoxx 50 futures +.09%. 
• S&P 500 futures +.09%. 
• NASDAQ 100 futures +.16%.

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 100% net long heading into the day.