Mid-Day Market Internals

NYSE Composite Index:

• Volume Running -6.2% Below 100-Day Average 
• Nasdaq/NYSE Volume Ratio 20.9 +2.7
• 10 Sectors Rising, 1 Sector Declining
• 70.1% of Issues Advancing, 27.7% Declining 
• TRIN/Arms 1.03 -27.5%
• Non-Block Money Flow +$222.8M
  
• 51 New 52-Week Highs, 77 New Lows
• 47.8% (+4.6%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 42.1 +.8

Polymarket: 

• Will China invade Taiwan by June 30th 2027? 8.0% unch.
• Strait of Hormuz traffic returns to normal by October 31st 7.0% -1.0 percentage point
• Iran agrees to end enrichment of uranium by Dec. 31st 13.0% unch.
• Israel withdraws from Lebanon by December 31st 7.0% unch.
• US Invades Iran before 2027 17.0% -1.0 percentage point
• US announces end of Iranian blockade by October 31st 34.0% -3.0 percentage points

Other

• Bloomberg Global Risk-On/Risk-Off Index 131.6 +.02%
• Global Monitor Iran Instability Index 70.0 +10.0
• Strait of Hormuz Oil Tanker Traffic Curtailed Estimate 90.0% unch.
• US High-Yield Tech Sector OAS Index 402.75 -1.5 basis points
• Bloomberg Cyclicals/Defensives Index 269.2 +.4%
• Morgan Stanley Growth vs Value Index 148.0 +.3%
• CNN Fear & Greed Index 30.0 (FEAR) +1.0
• 1-Day Vix 11.2 -34.3%
• Vix 15.6 -12.2%
• Total Put/Call .89 -7.3%

Thursday Watch

Night Trading 

• Asian equity indices are -.25% to +.75% on average. 
• Asia Ex-Japan Investment Grade CDS Index 65.75 -.75 basis point. 
• China Sovereign CDS 33.5 -1.25 basis points.
• China Iron Ore Spot 96.0 USD/Metric Tonne +.21%. 
• Crude Oil 102.24/bbl. -.2%. 
• Gold 4,332.3 USD/t oz. -1.2%. 
• Swiss Franc/Offshore Chinese Renminbi Cross 8.13 -.02%.
• Bloomberg Emerging Markets Currency Index 34.0 -.06%.
• Bloomberg Global Risk-On/Risk Off Index 130.8 -.5%.
• US 10-Year Yield 5.0% -3.0 basis points.
• Japan 30-Year Yield 4.10% -2.0 basis points.
• Volatility Index(VIX) futures 18.6 -.9%.
• Euro Stoxx 50 futures +.38%. 
• S&P 500 futures +.51%.
• NASDAQ 100 futures +.60%.

Morning Preview Links

BOTTOM LINE: Asian indices are mostly higher, boosted by transportation and financial shares in the region. I expect US stocks to open modestly higher and to weaken into the afternoon, finishing mixed.  The Portfolio is 50% net long heading into the day.

Stocks Modestly Higher into Afternoon on Lower Long-Term Rates, Falling Oil, AI Infrastructure Build-Out Optimism, Tech/Consumer Discretionary Sector Strength

Economic/Market Gauges:

• North American Investment Grade CDS Index 51.2 -1.9%
• BofA Private Credit Proxy Index 70.7 -.3% 
• Bloomberg US Securitized MBS/ABS/CMBS Avg. OAS .37 unch.
• BofA Global Financial Stress Indicator .00 unch.
• European Financial Sector CDS Index 56.2 -1.8%
• Emerging Market CDS Index 140.8 -1.4%
• Israel Sovereign CDS 54.6 +3.1%
• Bloomberg Global Trade Policy Uncertainty Index .9 -.4
• US Morning Consult Daily Consume Sentiment Index 87.8 +.8

• Citi US Economic Surprise Index 30.9 +6.8

• Citi Eurozone Economic Surprise Index 67.1 -.5

• Citi Emerging Markets Economic Surprise Index 16.6 +5.1
• S&P 500 Current Quarter EPS Growth Rate YoY(2 of 500 reporting) +24.9% unch.
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 401.28 +.23:  Growth Rate +22.4% +.1 percentage point, P/E 18.9 unch.
• S&P 500 Current Year Estimated Profit Margin 16.27% unch.
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(0 of 10 reporting) n/a
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 981.0 +1.13: Growth Rate +46.1% +.2 percentage point, P/E 18.9 unch.
• Bloomberg US Financial Conditions Index 1.20 -3.0 basis points
• US Yield Curve 33.75 basis points (2s/10s) +1.0 basis point
• Bloomberg Industrial Metal Index 177.0 +.7%
• Dutch TTF Nat Gas(European benchmark) 77.5 euros/megawatt-hour -3.2%
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 10.3 +.4 percentage point
• US Atlanta Fed GDPNow Q3 Forecast +5.1% +.7 percentage point
• US 10-Year T-Note Yield 4.95% -5.0 basis points
• 1-Year TIPS Spread 2.49 unch.

• Highest target rate probability for Oct. 28th FOMC meeting: 56.5% (+3.5 percentage points) chance of 3.75%-4.0%. Highest target rate probability for Dec. 9th meeting: 50.3%(+.4 percentage point) chance of 4.0%-4.25%. (current target rate is 3.5-3.75%)
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +520 open in Japan 
• China A50 Futures: Indicating -48 open in China
• KOSPI 200 Futures: Indicating -3 open in South Korea 

• DAX Futures: Indicating -3 open in Germany

Portfolio:

• Modestly Higher: On gains in my tech/industrial/biotech/consumer discretionary sector longs
• Disclosed Trades: None
• Market Exposure: 50% net long

Bear Radar

Style Underperformer:

• Large-Cap Value -.1%

Sector Underperformers:

• 1) Computer Services -2.9% 2) Energy -1.9% 3) I-Banking -1.4%

Stocks Falling on Unusual Volume: 

• NU, OBE, LEGN, TALO, GRDN, PBR, NVRI, CVLG, KNX, BKV, TENB, KMTS, ARWR, APA, NGL, HTLD, SSL, FSLR, HOOD, OXY, CBIO, VNOM, CRCL, PR, VERA, SM, WLTH, INR, ELVN, FANG, PLSE and JBHT

Stocks With Unusual Put Option Activity:

• 1) APO 2) RIG 3) MUB 4) TEVA 5) LYB

Stocks With Most Negative News Mentions:

• 1) JBHT 2) FANG 3) INV 4) GDDY 5) WIX

Sector ETFs With Most Negative Money Flow:

• 1) GDX 2) XLV 3) XBI 4) XLP 5) KRE

Charts:

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

Bull Radar

Style Outperformer:

• Mid-Cap Growth +1.1%

Sector Outperformers:

• 1) Space +2.7% 2) AI Innovation +2.3% 3) Airlines +1.1%

Stocks Rising on Unusual Volume:

• FPS, CIFR, WOR, TNDM, BRUN, SWMR, BRKR, LITE, CPRI, BBNX, IPX, CRDO, ARQT, MAMA, PRLB, AXON, TRMD, LMB, SPCX, GEV, FRO, PBLS, DHT, ECO, STRL, CNM, INIO, PNTG, AADX, AS, CHDN, TCOM, RVTY, SITE, DELL, HQ, ILMN, BURL, ADPT, BXDC, PS, LI, SFL and TEN

Stocks With Unusual Call Option Activity:

• 1) UMC 2) CCI 3) PGEN 4) MAT 5) BORR 

Stocks With Most Positive News Mentions:

• 1) LUXE 2) ALVO 3) MNOV 4) FPS 5) CIFR

Sector ETFs With Most Positive Money Flow:

• 1) XLY 2) SOXX 3) XAR 4) IGV 5) IHI

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 

8:30 am EST

• The Philly Fed Business Outlook Index for Sept. is estimated to fall to 32.5 versus 47.4 in Oct.
• Initial Jobless Claims for last week is estimated to rise to 207K versus 206K the prior week.
• Continuing Claims is estimated to rise to 1780K versus 1774K prior.
• Housing Starts for Aug. is estimated to rise to 1319K versus 1239K in July.
• Building Permits for Aug. is estimated to fall to 1410K versus 1433K in July. 

10:00 am EST

• Pending Home Sales MoM for Aug. is estimated to fall -.1% versus a -2.3% decline in July.

Upcoming Splits

• None of note

Other Potential Market Movers

• The Atlanta Fed GDPNow Q3 update, Bank of England meeting, 10Y TIPS auction, weekly EIA natural gas inventory report, Fed's weekly balance sheet report, (INTU) investor day, (EAT) investor day, (TTWO) annual meeting, (YETI) investor meeting and the Morgan Stanley Laguna Conference could also impact global trading tomorrow.

US Equity Market Hours

• 9:30 am - 4:00 pm EST