Stocks Rising into Final Hour on Earnings Outlook Optimism, US-China Trade Deal Hopes, Short-Covering, Tech/Commodity Sector Strength

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 36.2 +.04%
• US 10-Year T-Note Yield 3.99% +4.0 basis points
• 3-Month T-Bill Yield 3.88% +1.0 basis point

• China Iron Ore Spot 104.5 USD/Metric Tonne -.2%
• Dutch TTF Nat Gas(European benchmark) 32.5 euros/megawatt-hour +2.2%

• Citi US Economic Surprise Index 10.8 -.1 point

• Citi Eurozone Economic Surprise Index -4.3 +.1 point

• Citi Emerging Markets Economic Surprise Index 9.8 -.4 point
• S&P 500 Current Quarter EPS Growth Rate YoY(131 of 500 reporting) +13.2% -1.0 percentage point
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 296.73 +.17:  Growth Rate +13.3% unch., P/E 22.7 +.1
• S&P 500 Current Year Estimated Profit Margin 13.56% +6.0 basis points
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(1 of 10 reporting) +7.6% unch.
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 482.78 unch.: Growth Rate +18.8% unch., P/E 33.8 +.2
• Bloomberg US Financial Conditions Index .50 -5.0 basis points
• Bloomberg Euro-Zone Financial Conditions Index 1.10 -10.0 basis points
• Bloomberg Global Trade Policy Uncertainty Index 3.3 -.2 point
• US Yield Curve 50.75 basis points (2s/10s) unch.
• US Atlanta Fed GDPNow Q2 Forecast +3.9% unch.
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 39.0% -.8 percentage point

• Cleveland Fed Inflation Nowcast Core PCE YoY +2.87% unch.: CPI YoY +2.99% unch.
• 1-Year TIPS Spread 2.65 +4.0 basis points
• 10-Year TIPS Spread 2.31 +2.0 basis point
• Highest target rate probability for Dec. 10th FOMC meeting: 91.8% (-3.7 percentage points) chance of 3.5%-3.75%. Highest target rate probability for Jan. 28th meeting: 48.8%(-8.3 percentage points) chance of 3.25%-3.5%. (current target rate is 4.0-4.25%)
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +515 open in Japan 
• China A50 Futures: Indicating +36 open in China

• DAX Futures: Indicating +110 open in Germany

Portfolio:

• Higher: On gains in my tech/industrial/consumer discretionary/biotech/utility sector longs 
• Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges
• Market Exposure: Moved to 100% Net Long

Bear Radar

Style Underperformer:

• Large-Cap Value +.6%
  

Sector Underperformers:

• 1) Computer Services -1.1% 2) Road & Rail -.8% 3) Foods -.7%

Stocks Falling on Unusual Volume: 

• T, BX, TXT, EEFT, LUV, SIGI, WH, KNX, DCOM, ROP, ICLR, OII, IRDM, URI, SMCI, EGBN, R, STM, SAH, GSIT, MOH, SMPL and ITGR

Stocks With Unusual Put Option Activity:

• 1) DAR 2) FITB 3) TOI 4) WU 5) LXU

Stocks With Most Negative News Mentions:

• 1) MOH 2) SMPL 3) WRLD 4) EGBN 5) BYND

Sector ETFs With Most Negative Money Flow:

• 1) XLF 2) ARKK 3) XLK 4) IYC 5) XLI

Charts:

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

Bull Radar

Style Outperformer:

• Small-Cap Growth +1.7%

Sector Outperformers:

• 1) Oil Service +4.4% 2) Computer Hardware +3.8% 3) Gambling +3.3%

Stocks Rising on Unusual Volume:

• CLB, BETR, CRS, GTX, IRE, PI, FTK, SOC, AA, BACQ, PBF, HXL, CEPU, OUST, SNDK, LC, CACI, DOW, GSHD, WST, HRMY, DAR, VAL, QBTS, SKYT, HOND, QS, MEDP, VKTX, THRM, CSTM, ARQQ, RTO, VIST, YPF, BLZE, VIST, ATI, BFH, BBAR, GPRE, SN, GEOS, VICR, FTI, TMDX, APA, NESR, CHDN, STAA, DOV, LEU, VLO, AAL, FAF, LAD, GSAT, VRT, SMR, MPWR, BMA, TEX, BC, RGTI, TLK, WWD, DBRG, TSCO, FIX, CENX, APH, PAM, TEN, AESI, VLY, MAT, SM, IONQ, QUBT, WDS, OVV, IBKR, AVY, EQNR, FANG, MTW, TRU, FRO, GTY, SGRY, HAS, TNK, ISRG, GME, INR, DHT, MSM, GEV, OXY, HAL, MAMA and IMO

Stocks With Unusual Call Option Activity:

• 1) DAR 2) FITB 3) TOI 4) WU 5) HON

Stocks With Most Positive News Mentions:

• 1) VTYX 2) GTX 3) WST 4) HRMY 5) QBTS

Sector ETFs With Most Positive Money Flow:

• 1) EMLP 2) XLV 3) XLP 4) RXI 5) XRT

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:

• (BAH)/1.51
• (GD)/3.70
• (GNTX)/.47
• (HCA)/5.72
• (ITW)/2.72
• (PG)/1.90
• (SNY)/.26
• (BLMN)/-.12 

After the Close: 

• None of note

Economic Releases 

8:30 am EST 

• The CPI MoM for Sept. is estimated to rise +.4% versus a +.4% gain in Aug. 
• The Core CPI MoM for Sept. is estimated to rise +.3% versus a +.3% gain in Aug. 

9:45 am EST

• The S&P Global US Manufacturing PMI for Oct. is estimated to fall to 51.9 versus 52.0 in Sept.
• The S&P Global US Services PMI for Oct. is estimated to fall to 53.5 versus 54.2 in Sept.
• The S&P Global US Composite PMI for Oct. is estimated to fall to 53.1 versus 53.9 in Sept.

10:00 am EST

• New Home Sales for Sept. is estimated to fall to 708K versus 800K in Aug.
• Final Univ. of Mich. Consumer Sentiment readings for Oct.

11:00 am EST

• The Kansas City Fed Services Activity for Oct. 

Upcoming Splits

• None of note

Other Potential Market Movers

• The Bloomberg US Economic Survey for Oct., Cleveland CPI MoM for Sept., US Baker Hughes oil rig count, (NNE) investor meeting call 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 +10.4% Above 100-Day Average 
• Nasdaq/NYSE Volume Ratio 18.6 -3.5
• 3 Sectors Declining, 8 Sectors Rising
• 59.1% of Issues Advancing, 38.5% Declining 
• TRIN/Arms .82 -17.2% 
  
• Non-Block Money Flow +$116.1M
  
• 58 New 52-Week Highs, 18 New Lows
• 64.1% (+.6%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 55.0 +3.0

Polymarket:

• Will Congress pass a funding bill by Oct. 31st?  16.0% -6.0 percentage points
• US tariff rate on China on Nov. 12th? 25-40% 67.0% -1.0 percentage point
• Will China invade Taiwan by end of 2026? 18.0% +1.0 percentage point
• US-Venezuela military engagement by Dec. 31st 62.0% +31.0 percentage points 

Other:

• Bloomberg Global Risk-On/Risk-Off Index 82.3 +1.9%
• US High-Yield All Sectors OAS Index 348.75 -6.75 basis points
• Bloomberg Cyclicals/Defensives Index 250.8 +1.1%
  
• Morgan Stanley Growth vs Value Index 168.9 +1.1%
• CNN Fear & Greed Index 28.0 (FEAR) +2.0
• 1-Day Vix 11.4 -13.2%
  
• Vix 17.4 -6.5%
  
• Total Put/Call .81 -2.41%

Thursday Watch

Around X:

• @Business 

• China is pushing ahead with imports of US-sanctioned Russian liquefied natural gas, after the White House stopped short of putting additional restrictions on the trade in its latest wave of sanctions. 
• Taiwanese officials are courting podcasters and influencers aligned with Trump as they grow more worried the US leader could undermine the self-ruled democracy’s interests in talks with China.
• Bank of Japan watchers pushed back their forecast for the next interest rate hike timing in a dramatic shift from last month, with only a few expecting a move next week, according to the latest Bloomberg survey.
• The Trump administration released a plan to encourage ranching and boost domestic beef production, as it separately raised a quota for Argentine beef imports. 
• Get up to speed on what's moving global markets.
• Here's what you need to know to start your day.  

• @ZeroHedge

• *POLYMARKET IS SEEKING FUNDING AT A VALUATION OF UP TO $15B.
• What could possibly go wrong? (graph)
• Peanut Allergies In Children Have Dropped Significantly: Study.
• Trump Begins Tackling Cattle Shortage, Urges U.S. Ranchers To Lower Prices.
• Watch: ZeroHedge Spars With NATO Chief In The Oval Over Failed Ukraine Policy.
• How Progressives Broke The Constitution And Praised Themselves For It.
• Government Shutdown Becomes Second-Longest In US History: 4 Things To Know.
• *TESLA SAYS TARIFF IMPACTS IN EXCESS OF $400 MILLION. Stock LOD AH.
• *TRUMP: NOT SELLING ANY WEAPONS TO UKRAINE, SELLING THEM TO NATO.
• *MUSK SAYS TESLA PLANS TO UNVEIL NEXT OPTIMUS VERSION IN Q1.
• *TRUMP: THINK WE'LL MAKE A DEAL WITH CHINA ON EVERYTHING.
• *TRUMP: THINK WE'LL MAKE DEAL WITH SOYBEANS, MAYBE NUCLEAR.
• *TRUMP: FELT IT WAS TIME FOR RUSSIA SANCTIONS. *TRUMP: CANCELLED MEETING WITH PUTIN, DIDN'T FEEL RIGHT.
• "You're Not The Only One With Guns": Anti-ICE Organizer Issues Viral Threat After US Marshal Wounded In Ramming Incident.
• "Time To Stop The Killing" - US Treasury Unveils Massive Russia Sanctions, Demands "Immediate Ceasefire".
• There it is: $38 trillion. (graph)       
• 'Fake News': Trump Slams WSJ Story That White House Sanctioned Long-Range Ukraine Missile Attacks.
• Tesla Drops After Q3 Profit Slides, Earnings Miss.
• AI Deepfakes Fueling Digitally-Enabled Crime-Wave In The Freight Industry.
• TSLA charts
  .
• Momo Meltdown Spreads To Broad Market; Bitcoin & Bullion Extend Losses.   

• @CNBC

• Amazon introduces 'Blue Jay' warehouse robot that performs multiple tasks at once.
• Stocks making the biggest moves after hours: IBM, Tesla, Moderna and more.
• Stock futures edge lower as investors digest earnings, trade news: Live updates.
• Thursday's big stock stories: What’s likely to move the market in the next trading session.
• Asia-Pacific markets set to open lower as Wall Street declines on concerns over U.S.-China trade relations.
• Elon Musk says Tesla 'not about to replace Nvidia' as EV maker develops chips for cars, robots.
• Watch: Pivotal’s eVTOL is the first ultralight electric vertical takeoff and landing aircraft to reach the consumer market. Here’s how it works and the challenges it faces as it races towards mass adoption. 

• @WSJ  

• Healthcare is a diseased sector of our economy where the prices are intentionally obscured and the customer is never right, writes @MattHennessey.
• Exclusive: Several quantum-computing companies are in talks to give the Commerce Department equity stakes in exchange for federal funding.
• “There is an untapped labor market in rural America.” One company is investing in rural America instead of offshoring jobs. 

• @TheTranscript 

• Lam Research CEO: "...we are strongly positioned for continued growth." $LRCX: +3% AH.
• IBM double beat. CEO: "This quarter we accelerated performance across all of our segments, and again exceeded expectations for revenue, profit and free cash flow". $IBM: -5% AH. 

Night Trading 

• Asian equity indices are -.75% to unch. on average. 
• Asia Ex-Japan Investment Grade CDS Index 70.5 +1.25 basis points.
• China Sovereign CDS 44.75 +.5 basis point.
• China Iron Ore Spot 104.2 USD/Metric Tonne -.03%. 
• Swiss Franc/Offshore Chinese Renminbi Cross 8.94 -.12%
• Bloomberg Emerging Markets Currency Index 36.18 -.11%.
• Bloomberg Global Risk-On/Risk Off Index 80.7 -.1%.
• US 10-Year Yield 3.95% unch.
• Volatility Index(VIX) futures 19.3 -.02%.
• Euro Stoxx 50 futures -.05%. 
• S&P 500 futures +.16%.
• NASDAQ 100 futures +.25%.

Morning Preview Links

BOTTOM LINE: Asian indices are modestly lower, weighed down by technology and real estate shares in the region. I expect US stocks to open mixed and to weaken into the afternoon, finishing modestly lower.  The Portfolio is 50% net long heading into the day.