Wednesday Watch

Night Trading 

• Asian equity indices are -.25% to +.25% on average. 
• Asia Ex-Japan Investment Grade CDS Index 64.5 unch.
• China Sovereign CDS 43.25 unch.
• China Iron Ore Spot 103.7 USD/Metric Tonne -.7%. 
• Swiss Franc/Offshore Chinese Renminbi Cross 8.92 +.14%.
• Bloomberg Emerging Markets Currency Index 36.16 +.03%.
• Bloomberg Global Risk-On/Risk Off Index 97.7 -.4%.
• US 10-Year Yield 4.16% -1.0 basis point.
• Japan 30-Year Yield 3.45% +2.0 basis points. 
• Volatility Index(VIX) futures 16.9 -.2%.
• Euro Stoxx 50 futures n/a. 
• S&P 500 futures -.07%.
• NASDAQ 100 futures -.01%.

Morning Preview Links

BOTTOM LINE: Asian indices are mostly higher, boosted by technology and industrial 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.

Stocks Modestly Higher into Final Hour on US Economic Data, Stable Long-Term Rates, Earnings Outlook Optimism, Tech/Commodity Sector Strength

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 36.15 +.09%
• US 10-Year T-Note Yield 4.17% unch.
• 3-Month T-Bill Yield 3.59% -2.0 basis points

• China Iron Ore Spot 103.6 USD/Metric Tonne -.7%
• Dutch TTF Nat Gas(European benchmark) 27.73 euros/megawatt-hour +.16%

• Citi US Economic Surprise Index 1.7 +6.3 points

• Citi Eurozone Economic Surprise Index 33.3 -.1 point

• Citi Emerging Markets Economic Surprise Index 30.4 +.4 point
• S&P 500 Current Quarter EPS Growth Rate YoY(16 of 500 reporting) +32.8% unch.
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 309.59 +.21:  Growth Rate +15.0% +.1 percentage point, P/E 22.3 +.1
• S&P 500 Current Year Estimated Profit Margin 13.52% +1.0 basis point
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(0 of 10 reporting) +n/a +n/a
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 518.64 +n/a: Growth Rate +n/a% +n/a, P/E 30.7 +n/a
• Bloomberg US Financial Conditions Index .79 +5.0 basis points
• Bloomberg Euro-Zone Financial Conditions Index 1.58 -7.0 basis points
• Bloomberg Global Trade Policy Uncertainty Index 1.8 +.1
• US Yield Curve 63.75 basis points (2s/10s) -2.25 basis points
• US Atlanta Fed GDPNow Q2 Forecast +3.0% -.5 percentage point
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 27.9% unch.

• Cleveland Fed Inflation Nowcast Core PCE YoY +2.76% +1.0 basis point: CPI YoY +2.59% -3.0 basis points
• 1-Year TIPS Spread 2.31 unch.
• 10-Year TIPS Spread 2.24 +1.0 basis point
• Highest target rate probability for March 18th FOMC meeting: 52.6% (+5.5 percentage points) chance of 3.5%-3.75%. Highest target rate probability for April 29th meeting: 44.3%(-1.0 percentage point) chance of 3.25%-3.5%. (current target rate is 3.5-3.75%)
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +250 open in Japan 
• China A50 Futures: Indicating +43 open in China

• DAX Futures: Indicating +160 open in Germany

Portfolio:

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

Bear Radar

Style Underperformer:

• Small-Cap Growth -.6%

Sector Underperformers:

• 1) Airlines -2.0% 2) Gambling -1.7% 3) Restaurants -1.5%

Stocks Falling on Unusual Volume: 

• HTFL, FSLR, ELVN and FLY

Stocks With Unusual Put Option Activity:

• 1) FITB 2) EWJ 3) SOC 4) DJT 5) AA

Stocks With Most Negative News Mentions:

• 1) FLY 2) SAVA 3) SKYE 4) RXST 5) SFM

Sector ETFs With Most Negative Money Flow:

• 1) HACK 2) XLV 3) QTUM 4) XLE 5) KWEB

Charts:

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

Bull Radar

Style Outperformer:

• Large-Cap Growth +.5%

Sector Outperformers:

• 1) Coal +.9% 2) Nuclear +.7% 3) Semis +.5%

Stocks Rising on Unusual Volume:

• AFJK, HYMC, WW, USAU, PSNY, UMAC, NVO, ZIM, MNMD, AAOI, SCHL, HUT, ISSC, SBBS and CRTO

Stocks With Unusual Call Option Activity:

• 1) FITB 2) DOMO 3) ENVX 4) DPRO 5) BTQ 

Stocks With Most Positive News Mentions:

• 1) SOC 2) HYMC 3) NVDA 4) FCX 5) STNE

Sector ETFs With Most Positive Money Flow:

• 1) IBB 2) KRE 3) VGT 4) XLP 5) XLC

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 Release 

8:30 am EST

• Initial Jobless Claims for last week is estimated to fall to 223K versus 224K the prior week.
• Continuing Claims is estimated to rise to 1900K versus 1897K prior.

Upcoming Splits

• None of note

Other Potential Market Movers

• The 7Y T-Note auction, weekly MBA Mortgage Applications report and the Dallas Fed PCE for Oct. could also impact global trading tomorrow.

US Equity Market Hours

• 9:30 am - 1:00 pm EST

Mid-Day Market Internals

NYSE Composite Index:

• Volume Running -30.3% Below 100-Day Average 
• Nasdaq/NYSE Volume Ratio 15.9 +3.2
• 4 Sectors Declining, 7 Sectors Rising
• 41.1% of Issues Advancing, 56.4% Declining 
• TRIN/Arms 1.17 +48.1%
• Non-Block Money Flow +$5.3M
  
• 111 New 52-Week Highs, 44 New Lows
• 61.5% (-1.6%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 62.0 +.8

Polymarket:

• Supreme Court Rules in Favor of Trump's Tariffs? 29.0% +1.0 percentage point
• Will there be another US government shutdown by January 31st? 26.0% -4.0 percentage points
• Will China invade Taiwan by end of 2026? 12.0% -1.0 percentage point
• US-Venezuela military engagement by Jan. 31st 31.0% -2.0 percentage points

Other:

• Bloomberg Global Risk-On/Risk-Off Index 98.1 -.6%
• US High-Yield Tech Sector OAS Index 423.25 -6.5 basis points
• Bloomberg Cyclicals/Defensives Index 268.6 +.1%
• Morgan Stanley Growth vs Value Index 161.7 -.02%
• CNN Fear & Greed Index 58.0 (GREED) +2.0
• 1-Day Vix 6.1 -20.6%
  
• Vix 13.9 -1.6%
  
• Total Put/Call .83 -5.7%