Stocks Surging into Final Hour on US/China Trade Tension De-Escalation, AI Infrastructure Build-Out Optimism, Short-Covering, Tech/Alt Energy Sector Strength

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 36.2 +.12%
• US 10-Year T-Note Yield 4.14% n/a
• 3-Month T-Bill Yield 3.95% n/a

• China Iron Ore Spot 106.2 USD/Metric Tonne -1.5%
• Dutch TTF Nat Gas(European benchmark) 31.5 euros/megawatt-hour -2.2%

• Citi US Economic Surprise Index 10.7 -1.9 points

• Citi Eurozone Economic Surprise Index -6.7 -3.7 points

• Citi Emerging Markets Economic Surprise Index 4.5 -.8 point
• S&P 500 Current Quarter EPS Growth Rate YoY(24 of 500 reporting) +9.7% unch.
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 295.20 +.45:  Growth Rate +12.8% +.1 percentage point, P/E 22.5 -.1
• S&P 500 Current Year Estimated Profit Margin 13.49% +1.0 basis point
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(0 of 10 reporting) n/a
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 479.13 +.92: Growth Rate +17.9% +.2 percentage point, P/E 34.0 +.1
• Bloomberg US Financial Conditions Index .34 -35.0 basis points
• Bloomberg Euro-Zone Financial Conditions Index 1.21 -11.0 basis points
• Bloomberg Global Trade Policy Uncertainty Index 2.8 +.9
• US Yield Curve 52.75 basis points (2s/10s) n/a
• US Atlanta Fed GDPNow Q2 Forecast +3.8% unch.
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 37.3% +.8 percentage point

• Cleveland Fed Inflation Nowcast Core PCE YoY +2.87% unch.: CPI YoY +2.99% unch.
• 1-Year TIPS Spread 2.63 n/a
• 10-Year TIPS Spread 2.32 n/a
• Highest target rate probability for Dec. 10th FOMC meeting: 94.0% (+2.3 percentage points) chance of 3.5%-3.75%. Highest target rate probability for Jan. 28th meeting: 51.1%(+.1 percentage point) chance of 3.5%-3.75%. (current target rate is 4.0-4.25%)
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -1,033 open in Japan 
• China A50 Futures: Indicating -40 open in China

• DAX Futures: Indicating +124 open in Germany

Portfolio:

• Higher: On gains in my tech/utility/financial/consumer discretionary/industrial sector longs
• Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges and some of my emerging market shorts
• Market Exposure: Moved to 75% Net Long

Bear Radar

Style Underperformer:

• Large-Cap Value +1.2%
  

Sector Underperformers:

• 1) Foods -.3% 2) Pharma -.1% 3) Insurance -.1%

Stocks Falling on Unusual Volume: 

• HELE, RACE, FAST, LVS, PTGX, BYRN, BETR and SRRK

Stocks With Unusual Put Option Activity:

• 1) ABAT 2) XLI 3) ZIM 4) NB 5) IE

Stocks With Most Negative News Mentions:

• 1) SMH 2) XLF 3) XLP 4) XLE 5) XLK

Sector ETFs With Most Negative Money Flow:

• 1) XLK 2) ARKK 3) FDN 4) XLE 5) KBWB

Charts:

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

Bull Radar

Style Outperformer:

• Small-Cap Growth +3.1%

Sector Outperformers:

• 1) Disk Drives +6.9% 2) Alt Energy +6.8% 3) Computer Hardware +5.2%

Stocks Rising on Unusual Volume:

• CRML, BE, ASPI, UAMY, QBTS, MP, USAR, EOSE, RGTI, BTQ, FLNC, UUUU, ARQQ, CIFR, POWI, LTBR, FORD, TMC, NNE, QS, IONQ, SNDK, SEI, SMR, CCCX, RCUS, RCAT, ARM, IREN, QUBT, GRND, APLD, TAC, AVGO, SERV, IDR, HOND, IDR, BTDR, LEU, IE, TSM, NAMS, CCJ, MANU, VRT, BROS, SMMT, BABA, DLTR, NB, PPTA, SARO, JEF, CLF, MSDL, UEC, JOBY, BHP, WOLF, ORKA, SFM, TSLX, BXSL, CLB, ONB and SBLK

Stocks With Unusual Call Option Activity:

• 1) JEF 2) IVZ 3) TAC 4) XLI 5) CODI

Stocks With Most Positive News Mentions:

• 1) BE 2) USAR 3) MP 4) RGTI 5) QBTS

Sector ETFs With Most Positive Money Flow:

• 1) FDN 2) IGV 3) XLY 4) COPX 5) VGT

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:

• (ACI)/.40
• (BLK)/11.30
• (C)/1.73
• (DPZ)/3.97
• (GS)/11.02
• (JNJ)/2.76
• (JPM)/4.85
• (WFC)/1.55 

After the Close: 

• None of note

Economic Releases 

6:00 am EST

• The NFIB Small Business Optimism Index for Sept. is estimated to fall to 100.6 versus 100.8 in Aug. 

Upcoming Splits

• None of note

Other Potential Market Movers

• The Fed's Powell speaking, Fed's Collins speaking, Fed's Waller speaking, Fed's Bowman speaking, weekly US retail sales reports, IEA monthly report,  and the (GIS) 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 +7.3% Above 100-Day Average 
• Nasdaq/NYSE Volume Ratio 13.8 -3.1
• 1 Sector Declining, 10 Sectors Rising
• 79.4% of Issues Advancing, 18.9% Declining 
• TRIN/Arms .85 -28.0% 
  
• Non-Block Money Flow +$225.1M
  
• 45 New 52-Week Highs, 53 New Lows
• 59.4% (+3.8%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 49.7 +3.3

Other:

• Bloomberg Global Risk-On/Risk-Off Index 81.0 +1.2%
• US High-Yield All Sectors OAS Index 369.5 n/a
• Bloomberg Cyclicals/Defensives Index 248.4 -2.2%
  
• Morgan Stanley Growth vs Value Index 170.9 +1.0%
• CNN Fear & Greed Index 33.0 (FEAR) +4.0
• 1-Day Vix 12.8 -50.4%
  
• Vix 19.3 -11.0%
  
• Total Put/Call .70 -23.1%

Monday Watch

Around X:

• @Business 

• President Donald Trump’s administration signaled openness to a deal with China to quell fresh trade tensions.
• Vice President JD Vance called on Beijing to “choose the path of reason” in the latest spiraling trade fight between the US and China, claiming that President Donald Trump has more leverage. 
• Chinese President Xi Jinping’s blistering response to Donald Trump violating the terms of their fragile trade truce has reignited a tit-for-tat spiral, exposing the rocky path to any US-China trade deal. 
• China’s Ministry of Commerce says recent trade countermeasures on US-related issues were necessary, defensive actions, and Washington should return to negotiations
  .
• President Donald Trump said he’d consider arming Ukraine with long-range Tomahawk missiles that would allow strikes deeper into Russia, but said he may first talk to Russian President Vladimir Putin about it in a bid to end the war
  . 
• The prospect of a revived trade war between Beijing and Washington is threatening to undermine this year’s blistering rally in Chinese stocks and weigh on the yuan. 
• President Donald Trump is looking to seal the biggest diplomatic achievement of his second term when he travels to the Middle East to herald a deal ending the Israel-Hamas war. 
• Trump and Zelenskiy spoke by phone for a second day on air defense, long-range weapons, energy and other matters. 
• URGENT: Afghanistan says it has killed 58 Pakistani soldiers in overnight border operations. 
• Corporate bond routs from Sao Paulo to Istanbul are signaling to investors that the standout run in emerging markets may be starting to show some cracks. 
• Binance says that some platform modules briefly experienced technical glitches, and certain assets had de-pegging issues due to sharp market fluctuations as crypto prices tumbled Oct. 10.
• Investors are once again preparing for big earnings-day stock moves, paying up to speculate in a market that’s faltering after it reached a record high. 
• Here's what you need to know to start your day. 

• @Zerohedge 

• Goldman Highlights Top Defense Picks Ahead Of Q3 Earnings.
• Friday Felt "More Like A Rush To Protect Than A Rush To Exit"; Top Goldman Trader.
• How Did Energy-Rich Pennsylvania Screw Up So Badly?
• Homan Says DOJ Probing Funding Behind 'Organized' Attacks On ICE.
• The level of implied correlation is nowhere near levels reached in past risk-off episodes. It’s actually not even above the 2-year average. (graph)  
• "Something Has To Give": Morgan Stanley Ponders How To Reconcile The Schizophrenic Data.
• Fall of The Machines. @Disney apparently spent over $100M over a dozen years to fund losses at 'pollster-grader' FiveThirtyEight. As soon as @DOGE arrived at USAID
  @538 was closed. Controlling the narrative about poll trustworthiness was very important and expensive. WHO ... ACTUALLY ... PAID? 
• China new home purchases slumped 33%, measured by floor space, compared to the first seven days of October 2024. Sales of existing homes in eight cities tumbled 55% from a year earlier. 
• Leftist Fear: Antifa Pretends To Be Peaceful After Trump Announces Crackdown
  .
• China's failed riverboat gambling experiment on home prices, coupled with a banking system leveraged over 300% more than America's, has forced university graduates to live with their parents, avoid dating, and not have children. This has led to disastrous consequences: (graph)
• They went from “No one is above the law,” to, “Everyone commits mortgage fraud.” (video) 
• *VANCE: TRUMP WILLING TO BE REASONABLE NEGOTIATOR WITH CHINA. *VANCE: TRUMP HOPES US DOESN'T NEED TO USE LEVERAGE ON CHINA. *VANCE: WE APPRECIATE FRIENDSHIP TRUMP DEVELOPED WITH CHINA'S XI. 
• Where Homelessness Is More (& Less) Prevalent.
• Evonik CEO Kullmann Calls For End Of CO₂ Cult: Wake-Up Call For Europe's Economy
  . 
• Teenagers Must Be Warned About The Dystopia Being Built Around Them
  .
• Asia-Pacific markets set to fall on renewed China-U.S. trade tensions
   

• @CNBC

• Asia-Pacific markets set to fall on renewed China-U.S. trade tensions. 
• Stock futures rebound from Friday’s rout after Trump says China situation ‘will all be fine’: Live updates. 
• Trump will greet Israel hostages 'in person' after Hamas releases them from Gaza, Vance says
  .
• Earnings playbook: Big banks including Goldman Sachs and JPMorgan Chase kick off the season
  .
• Global week ahead: Three-speed Europe heads to Washington D.C.
    
• How fund managers are investing for the fourth quarter as AI bubble talk swirls.

• @WSJ.com

• China was already seeing economic momentum slow before Trump announced the latest 100% tariff increase, part of a trade-war flare-up that Beijing on Sunday blamed on the U.S. 
• China has detained church leader Ezra Jin, whose ties to the U.S. mean the move could further strain Beijing-Washington relations at an already sensitive moment. 
• From @WSJopinion: The rulers in Beijing fear citizens who think for themselves, especially those who believe in a different God than the CCP. They are proving it again with a broad roundup of pastors in the underground Christian church.
• Artificial intelligence is supposed to level the playing field between superstars and average employees. But it’s more likely to do the opposite. 
• The campaign that forced Hamas to accept a deal it didn’t want was the result of weeks of effort by the Trump team to bring Middle East powers including Egypt, Qatar, and Turkey together for a coordinated push.
• Who owns your face in the age of AI images and videos? Columnist @nicnguyen explores how our likenesses are no longer our own.

• @MarioNawful

• 10,000 U.S. TROOPS DEPLOYED NEAR VENEZUELA?! U.S. forces have reportedly deployed over 10,000 troops to Puerto Rico, with additional 82nd Airborne units landing in Trinidad and Tobago, just off Venezuela’s coast. The sudden buildup has fueled speculation online that Washington may be preparing for military action against Venezuela. Some users claim the goal is to pressure or even oust Venezuelan President Maduro. Others suggest it could be part of routine training or regional exercises. Either way, tensions are rising in the Caribbean. (video)

• @RenzTom

• CRITICAL: Bondi won’t arrest any of the globalist criminal cabal but is still going after gun owners. Read this thread. Apparently Bondi is too busy going after gun owners to go after groups like her former employer (Pfizer) or Bill Gates. Is this part of the plan?

• @Adrian_R-Morris

• Well, there it is, the Rare Earth Export Controls do appear to be an attempt to curtail thier use in military applications. Link:

• @KobeissiLetter

• The more you learn about the October 10th crypto liquidation, the crazier it gets:

• @WideAwake_media

• Make no mistake: The real reason digital ID is being pushed so aggressively in country after country, despite absolutely ZERO public appetite for it, is because CBDCs (and eventually social credit systems) can't be implemented without digital ID in place first. Since all the excuses about "convenience" and "stopping illegal migration" are fooling nobody, don't be at all surprised if, out of desperation, globalist technocrats manufacture some kind of huge global "crisis" (likely financial, some kind of "cyber attack", or both) as a pretext to impose digital ID and CBDCs as the only possible "solution".

• @EricLDaugh

• WOW! Democrats failed so miserably on the government shutdown even CBS is BRUTALLY calling them out now. BRENNAN: You've been critical of shutting down the government! 2018 and 2013. Here's what you said in 2018. SEN. MURPHY (D): "We shouldn't be having the discussion amidst a government shutdown, and trying to USE our nation's security and all of these federal workers and the work that they do as hostages!" BRENNAN: Aren't you doing today EXACTLY what you were criticizing then? SEN. MURPHY: No...that was long term... (video)

• @WallStreetApes

• Rep Tim Burchett drops a BOMBSHELL. Tucker Carlson “Leadership actually said to you, we can't stop insider trading because they need the money?” Tim Burchett “Yeah. You talk about one of those issues that both parties agree on, both party leadership does” He says the don’t want to interrupt the money flow. (Congress getting filthy rich selling you out and insider trading on those secret deals) The corruption in America is off the charts. (video)
• WOAH! US Rep Tim Burchett exposes Congress Reps give military contractors no bid contracts and then buy stocks in those companies right before awarding the contracts. He says Congress makes 500-600% return on their investments when doing this insider trading scam. Tim Burchett says Congress did this during the Ukraine War. (video)

• @winwithwinsome

• YIKES: Abigail Spanberger gives a 2-minute word salad defending her support for men in girls’ bathrooms and predators in their locker rooms. (video)

• @Timcast 

• The scary thing is that calling for the murder of children only knocks you down a couple % points among Democrats. (graph)

• @TheBritishIntel

• DIGITAL ID UPDATE — THIS IS WORSE THAN WE THOUGHT!! The government just pushed an alarming update to the Digital ID plan — and it reads like a surveillance wishlist. If you value privacy, this should terrify you.

• @unusual_whales

• BREAKING: The Pentagon has launched a $1 billion buying spree to stockpile critical minerals, per Reuters.

• @RepMTG

• America is rich in critical rare earth minerals and we must be able to responsibly mine them, in order to not only compete with China, but also for our independence and national security. President Trump and his admin are working to accomplish this however there are many obstacles such as lawsuits, environmental, and permitting issues blocking our ability to mine and process our own rare earth minerals. (map)

• @Basil_TGMD

• JOE ROGAN SLAMS KEIR STARMER. "These motherf**kers are pushing Digital I.D on these people" "Any criticism of immigration, grooming gangs, any talk about it they arrest you" "They've got a concerted effort to destroy England and they're getting away with it". (video)

• @TRHLofficial

• A state that never had slavery, is taking money away from people who never owned slaves and giving it to people who never were slaves.

• @DschlopesIsBack

• This is Jay Jones’ good friend Abigail Spanberger who is running for governor of Virginia. These insane people should never hold positions of power… they are absolutely nuts. (pic)

• @KaitePavlich

• They’re driving American humvees abandoned by Biden. (video)

• @DeItaone

• USTR GREER TELLS FOX NEWS U.S. REACHED OUT FOR CALL WITH CHINA AFTER EXPORT CONTROLS ANNOUNCEMENT BUT BEIJING DEFERRED.

• @RealCandaceO

• 9/10: -A contracted U.S military owned by Lasai LLC flew around the campus at around the time Charlie was assassinated. -An Egyptian Air Force jet departed Provo in the morning completing its first ever trip to Utah. Who were the passengers?
• Okay this is actually insane because no one knows the name of the surgeons that were involved. I quite literally just the learned the names of two of them yesterday via tip and they are both on this list. How is this possible?

• @WallStreetMav

• Is Bill Gates the most dangerous person on the planet? "We need to change cows." Bill Gates wants to either get rid of all cows (use lab grown meat) and/or jab the cows with his drugs to change their digestive system. (video)
• The CDC’s “top scientists” told me cloth over my face would protect me from a virus, injecting myself with an experimental drug was safe, and attending George Floyd protests was safe, but attending church was not. Firing CDC “experts” isn’t a massacre, it’s a public service. 

• @WCdispatch

• NEW: Former Congressman Dave Brat on Spanberger’s disastrous debate performance: “I think that little smirk at the end is all you need to see. The attitude, the conscious, the moral voice.. it’s just missing.” Smiling and gritting her teeth, refusing to even look at her. It was downright sociopathic. And everyone saw it live. (video)

Night Trading

• Asian indices are -1.5% to -.5% on average.
• Asia Ex-Japan Investment Grade CDS Index 67.75 +1.0 basis point.
• China Sovereign CDS 45.5 -.5 basis point.
• China Iron Ore Spot 106.0 USD/Metric Tonne -.3%.
• Swiss Franc/Offshore Chinese Renminbi Cross 8.91 -.08% 
  
• Bloomberg Emerging Markets Currency Index 36.18 -.01%.
• Bloomberg Global Risk-On/Risk Off Index 79.4 -.8%.
• US 10-Year Yield 4.08% +3.0 basis points.
  
• Volatility Index(VIX) futures 20.2 -4.7%. 
• Euro Stoxx 50 futures +.5%.
• S&P 500 futures +1.3%.
• NASDAQ 100 futures +1.9%.

Morning Preview Links

BOTTOM LINE: Asian indices are lower, weighed down by technology and industrial shares in the region. I expect US stocks to open higher and to maintain gains into the afternoon. The Portfolio is 50% net long heading into the week.