Stocks Slightly Higher into Final Hour on Yen Weakness, Oil Gain, Technical Buying, Healthcare/Utility Sector Strength

 Broad Equity Market Tone:

• Advance/Decline Line: Modestly Higher
  

• Sector Performance: Mixed
  

• Volume: Below Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 12.77 +2.9%

• Euro/Yen Carry Return Index 137.16 -.09%

• Emerging Markets Currency Volatility(VXY) 10.44 -2.52%

• S&P 500 Implied Correlation 35.16 +1.77%

• ISE Sentiment Index 132.0 +25.71%
  

• Total Put/Call 1.02 +9.68%

• NYSE Arms 1.44 +33.1%

Credit Investor Angst:

• North American Investment Grade CDS Index 59.75 -.09%
  

• America Energy Sector High-Yield CDS Index 387.0 -9.37%

• European Financial Sector CDS Index 83.66 +4.15%

• Italian/German 10Y Yld Spread 267.75 +31.75 basis points
  

• Asia Pacific Sovereign Debt CDS Index 8.92 -2.51%

• Emerging Market CDS Index 192.58 +1.34%
  

• iBoxx Offshore RMB China Corporate High Yield Index 150.65 -.05%

• 2-Year Swap Spread 16.75 +.25 basis point

• TED Spread 19.75 +1.0 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -41.75 -.75 basis point

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 66.88 -.11%
• 3-Month T-Bill Yield 2.19% +1.0 basis point

• Yield Curve 23.75 +1.75 basis points

• China Iron Ore Spot 67.65 USD/Metric Tonne -.12%

• Citi US Economic Surprise Index -5.2 -2.7 points

• Citi Eurozone Economic Surprise Index -31.90 -7.4 points

• Citi Emerging Markets Economic Surprise Index -7.6 +.7 point

• 10-Year TIPS Spread 2.15 unch.
• 72.3% chance of Fed rate hike at Dec. 19th meeting, 74.0% chance at Jan. 30th meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating +35 open in Japan 
• China A50 Futures: Indicating -1 open in China

• DAX Futures: Indicating -29 open in Germany

Portfolio: 

• Higher: On gains in my biotech/medical/tech sector longs and emerging market shorts

• Disclosed Trades: None

• Market Exposure: 100% Net Long

Bear Radar

Style Underperformer:

• Large-Cap Growth unch.

Sector Underperformers:

• 1) Airlines -1.3% 2) Social Media -1.1% 3) Papers -1.0%

Stocks Falling on Unusual Volume: 

• PRGS, TRTN, AAOI, BTU, TSLA, ACAD, AMD, JKS and LASR

Stocks With Unusual Put Option Activity:

• 1) SIRI 2) TMUS 3) URBN 4) SHPG 5) AAOI

Stocks With Most Negative News Mentions:

• 1) MGTI 2) BTU 3) AAOI 4) TSLA 5) TRTN

Charts:

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

Bull Radar

Style Outperformer:

• Small-Cap Growth +.5%

Sector Outperformers:

• 1) Oil Service +1.6% 2) Disk Drives +1.1% 3) Utilities +1.0%

Stocks Rising on Unusual Volume:

• CCXI, BB, NITE, CAMP, CMTL, BCOR, SHG, AMRN, AWSM, PXD, CAG, GPN, SHEN, AIR, TGP, INTC, MTRN, FF, IRMD, CENX, BRSS, ATSG, NVDA, CDLX, NTRA, LGF/A, INTC and NBIX

Stocks With Unusual Call Option Activity:

• 1) DXJ 2) XLNX 3) CPB 4) NVDA 5) SPLK

Stocks With Most Positive News Mentions:

• 1) AMID 2) CRNT 3) NVDA 4) RIG 5) INTC

Charts:

• ETFs Rising on Unusual Volume
• Stocks Rising on Unusual Volume

Morning Market Internals

NYSE Composite Index:

• Volume Running -8.0% Below 100-Day Average
• 8 Sectors Rising, 3 Sectors Declining
• 63.0% of Issues Advancing, 33.4% Declining
• 45 New 52-Week Highs, 97 New Lows
• 47.5% of Issues Above 200-day Moving Average
• Average 14-Day RSI 44.2%
• Vix 12.3 -1.1%
• Total Put/Call 1.02 +9.7%
• TRIN/Arms 1.26 +16.4%

Friday Watch

Evening Headlines

Bloomberg:             

• Creditors in China See Strong-Arm Tactics From Local Authorities.

• What Happened This Week in the World Economy and Why It Matters.

• Asia Stocks Set for Gains; Dollar Rises, Yen Down. Asian stocks looked set to round out a topsy-turvy month with gains after their U.S. counterparts eked out an advance and the yen slid to the weakest level this year, buoying the outlook for Japanese exporters. Futures indicated gains at the open for stocks in Japan, China, Hong Kong and Australia. The Nasdaq index outperformed Thursday and the dollar hit a two-week high in the wake of this week’s message for more policy tightening from the Federal Reserve. Treasuries were steady. Oil built on its recent gains. Futures on Japan’s Nikkei 225 rose 0.9 percent in most recent Singapore trading. FTSE China A50 futures advanced 0.3 percent. Futures on Australia’s S&P/ASX 200 Index rose 0.5 percent. Futures on Hong Kong’s Hang Seng Index climbed 0.7 percent.  

• Five Things You Need to Know to Start Your Day.  

• Asia's EM Pain, Tariffs Drag U.S. Growth, India Spirits: Eco Day.

• Manhattan Builders’ 5-Year Plan: 33,000 New Rentals and Condos.   

• Crypto and Cannabis Are the Perfect Post-Crisis Bubbles.  

• Apple(AAPL) Touts Its Largest Screens, Cheaper Models in iPhone Revamp.

Wall St. Journal:

• Ingredient Prices Crimp Profits at Aluminum Makers.

• In a Strong Economy, the Fed Doesn’t Want to Hold Your Hand.

• House Republicans Tee Up Tax Vote Ahead of Midterms.

MarketWatch.com:

• Apple(AAPL) stock rises after a big endorsement.

• Italy’s budget drama: What you need to know.

Fox News:

• Kavanaugh fights back as Dems question Supreme Court pick on assault claims, drinking habits.

CNBC:     

• These are the world's biggest property bubbles as ranked by UBS.  

• GoFundMe campaigns have raised more than $500,000 to cover Blasey Ford's costs.

Zero Hedge:

• Kavanaugh-Ford Day Of Testimony Concludes; Graham Excoriates Democrats; Booker And Harris Unpersuasive.

• 45 Questions You Are Unlikely To Hear Asked Of Christine Blasey Ford.

• Elon Musk Sued By SEC For Securities Fraud, Tesla(TSLA) Stock Tumbles: Full Complaint.

• Snyder: Poverty, Crime, & Human Feces - The Worst Cities In America Are Being Run By Democrats.

• Art Berman: Don't Believe The Hype - Oil Prices Aren't Going Back To $100.

• What Was In The Envelope That Rep. Sheila Jackson Lee Slipped To Kavanaugh Accuser's Lawyer?

• Debt Threat Rises: The Government Will Soon Spend More On Interest Than On The Military.

• Italy Defies Europe, Agrees On 2019 Budget Deficit At 2.4% Of GDP.

• Bombshell WSJ Story Confirms "Systematic And Methodical" Chinese Theft Of US Trade Secrets.

• Tech Stocks Erase Powell-Plunge, Dollar Soars On Global Liquidity Panic.

Business Insider:

• 'This is not a job interview, this is hell': Lindsey Graham unloads on Senate Democrats in angry rant during Kavanaugh testimony.

Night Trading 

• Asian equity indices are +.25% to +.75% on average.

• Asia Ex-Japan Investment Grade CDS Index 80.0 -.5 basis point. 

• Asia Pacific Sovereign CDS Index 9.25 unch.

• Bloomberg Emerging Markets Currency Index 66.96 unch.

• FTSE 100 futures -.07%.

• S&P 500 futures +.03%.

• NASDAQ 100 futures +.02%.

Morning Preview Links

Earnings of Note
Company/Estimate
Before the Open:

• (BB)/.01

• (MTN)/-2.26

After the Close:

• None of note

Economic Releases

8:30 am EST

• Personal Income for August is estimated to rise +.4% versus a +.3% gain in July.

• Personal Spending for August is estimated to rise +.3% versus a +.4% gain in July.

• The PCE Core MoM for August is estimated to rise +.1% versus a +.2% gain in July.

9:45 am EST

• The Chicago Purchasing Manager report for Sept. is estimated to fall to 62.0 versus 83.6 in August.
  

Upcoming Splits

• None of note

Other Potential Market Movers

• The Fed's Williams speaking, Brazilian elections, China Manufacturing PMI report and the German Unemployment report could also impact trading today.

BOTTOM LINE:  Asian indices are higher, boosted by technology and healthcare 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 Rising into Final Hour on Less Emerging Markets Currency/Debt Angst, Yen Weakness, Oil Gain, Biotech/Airline Sector Strength

 Broad Equity Market Tone:

• Advance/Decline Line: Modestly Higher
  

• Sector Performance: Most Sectors Rising
  

• Volume: Around Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 12.11 -6.05%

• Euro/Yen Carry Return Index 137.47 -.14%

• Emerging Markets Currency Volatility(VXY) 10.78 -4.43%

• S&P 500 Implied Correlation 34.47 +.55%

• ISE Sentiment Index 105.0 +1.94%
  

• Total Put/Call .92 +6.98%

• NYSE Arms .92 -40.3%

Credit Investor Angst:

• North American Investment Grade CDS Index 59.73 -2.93%
  

• America Energy Sector High-Yield CDS Index 427.0 -.55%

• European Financial Sector CDS Index 80.33 +.88%

• Italian/German 10Y Yld Spread 236.0 +2.75 basis points
  

• Asia Pacific Sovereign Debt CDS Index 9.15 -1.40%

• Emerging Market CDS Index 190.28 -1.43%
  

• iBoxx Offshore RMB China Corporate High Yield Index 150.74 +.08%

• 2-Year Swap Spread 16.50 -.75 basis point

• TED Spread 18.75 +1.0 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -41.0 -24.75 basis points

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 67.03 +.28%

• 3-Month T-Bill Yield 2.18% -2.0 basis points

• Yield Curve 22.0 -2.25 basis points

• China Iron Ore Spot 67.48 USD/Metric Tonne -.84%

• Citi US Economic Surprise Index -2.5 -2.2 points

• Citi Eurozone Economic Surprise Index -24.50 +.7 point

• Citi Emerging Markets Economic Surprise Index -8.3 +1.1 points

• 10-Year TIPS Spread 2.15 unch.

• 71.3% chance of Fed rate hike at Dec. 19th meeting, 72.4% chance at Jan. 30th meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating +300 open in Japan 

• China A50 Futures: Indicating +56 open in China

• DAX Futures: Indicating -9 open in Germany

Portfolio: 

• Higher: On gains in my biotech/industrial/tech sector longs

• Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges

• Market Exposure: Moved to 100% Net Long