Stocks Rising into Final Hour on Diminished Fed Taper Worries, Lower Long-Term Rates, Sector Rotation, Tech/Medical Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Modestly Lower
  

• Sector Performance: Mixed
  

• Volume: Below Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 16.1 -1.8%
• Bloomberg Global Risk On/Risk Off Index 2,868.0 +49.0 points

• Euro/Yen Carry Return Index 133.81 +.08%

• Emerging Markets Currency Volatility(VXY) 8.6 -.93%

• S&P 500 Implied Correlation 49.3 +.94%

• ISE Sentiment Index 124.0  -15.0 points
  

• Total Put/Call .75 -12.8%

• NYSE Arms 1.3 +63.2%

Credit Investor Angst:

• North American Investment Grade CDS Index 46.12 -1.5%
  

• US Energy High-Yield OAS 417.90 -.6%

• European Financial Sector CDS Index 52.32 +.01%

• Italian/German 10Y Yld Spread 105.0 -1.0 basis point
  

• Asia Ex-Japan Investment Grade CDS Index 67.75 -4.3%
  

• Emerging Market CDS Index 151.81 -1.1%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 38.49 unch.

• 2-Year Swap Spread 9.25 +.25 basis point

• TED Spread 7.5 -.25 basis point
  

• 3-Month EUR/USD Cross-Currency Basis Swap -3.0 -.25 basis point
  
• MBS  5/10 Treasury Spread  73.75 +1.75 basis points
  
• IHS Markit CMBX BBB- 6 72.5 unch.
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 60.14 +.16%
• 3-Month T-Bill Yield .04% -1.0 basis point
  

• Yield Curve 108.0 -1.0 basis point
  

• China Iron Ore Spot 156.90 USD/Metric Tonne -2.1%

• Citi US Economic Surprise Index -50.7 -1.2 points

• Citi Eurozone Economic Surprise Index -16.9 -2.2 points
  

• Citi Emerging Markets Economic Surprise Index 23.6 -4.9 points

• 10-Year TIPS Spread 2.37 -1.0 basis point
• 100.0% chance of no change at Nov. 3rd meeting, 98.2% chance of no change at Dec. 15th meeting

US Covid-19:

• 333 new infections/100K people(last 7 days total) +3/100K people
• 62% of Jan. 7th, 2021 peak(highest daily avg. new infections) unch.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -79 open in Japan 
• China A50 Futures: Indicating -74 open in China

• DAX Futures: Indicating -4 open in Germany

Portfolio:

• Higher: On gains in my consumer discretionary/tech/medical sector longs
  

• Disclosed Trades: None
  

• Market Exposure: 100% Net Long
  

Bear Radar

 Style Underperformer:

• Small-Cap Value -.4%

Sector Underperformers:

• 1) Airlines -2.6% 2) Oil Service -1.9% 3) Gold & Silver -1.6%

Stocks Falling on Unusual Volume: 

• SAVA and ADTN
  

Stocks With Unusual Put Option Activity:

• 1) BBIG 2) ISEE 3) GIS 4) HOG 5) MMAT
  

Stocks With Most Negative News Mentions:

• 1) ASTR 2) SAVA 3) AKTS 4) EAT 5) COF
  

Charts:

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

Bull Radar

Style Outperformer:

• Large-Cap Growth +1.2%

Sector Outperformers:

• 1) Shipping +1.4% 2) Computer Hardware +1.2% 3) Medical Equipment +1.1%

Stocks Rising on Unusual Volume:

• AFRM, SPRT, BGFV, INMB, IRDM, HRC, SKYT, AGFY, DVAX, ASTS, MRSN, MTTR, CONN, FLYW, PSTG, MQ, OLLI, TXG, BLI, COMP, OSCR, SEMR, FIGS, TASK, RCKT, DV, COHU, TCS, HAIN, HIBB, RXT, PYPL, ETWO, BLFS, HEAR, BAX, DKS, CVET and FBRX
  

Stocks With Unusual Call Option Activity:

• 1) GSAT 2) ALTO 3) BBIG 4) BAX 5) KSU

Stocks With Most Positive News Mentions:

• 1) GSAT 2) BBIG 3) AFRM 4) HRC 5) SPRT
  

Charts:

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

Mid-Day Market Internals

NYSE Composite Index:

• Volume Running -21.7% Below 100-Day Average 
• 10 Sectors Rising, 2 Sectors Declining
• 46.3% of Issues Advancing, 49.4% Declining
• 147 New 52-Week Highs, 17 New Lows
• 72.1% of Issues Above 200-day Moving Average
• Average 14-Day RSI 51.0%
  
• Bloomberg Global Risk-On/Risk-Off Index 2,871.0 +52.0 points
• Russell 1000: Growth/Value 17,808 +.89%
  
• Vix 16.4 -.12%
• Total Put/Call .74 -14.0%
• TRIN/Arms 1.14 +50.0%

Monday Watch

Today's Headlines

Bloomberg:             

• Huarong Posts $15.9 Billion Loss as Leverage Hit 1,333 Times.   
• China to Sell 150,000 Tons of Metals From Reserves on Sept. 1.
• Biden’s Rushed Afghan Exit Adds Strains to U.S.-Pakistan Ties.  
• Stocks Set to Climb on Powell’s Dovish Fed Stance: Markets Wrap.
• Kuwaiti Stocks Lead Middle East Gains Helped by Banks: Inside EM.
• U.S. Gasoline Jumps With Oil After Hurricane Ida Roils Supplies.
• White House Rushes Boosters; China Rejects Report: Virus Update.
• Ida Is Hitting With Stronger Winds, But Katrina Was Bigger Storm.
  
• Hospitals in U.S. South Run Low on Oxygen Amid Covid, Storm.
  
• High-Frequency Charts Show U.S. Economy Softening From Delta.  
• U.S. Gulf Oil Producers, Refiners Shutting Ahead of Ida.  
• Hottest Crypto Coins Are Now the Bitcoin and Ether Alternatives.
• U.S. Jobs Recovery Cools in Shadow of Delta Variant: Eco Week.
• One Stuck Box of Fertilizer Shows the Global Supply Chain Crisis.
• U.S. Port Problems Reach Worst of Pandemic Amid Crush of Imports.   
• New Orleans Facing Weeks of Darkness on Hurricane Damage.  
• Baxter Nears $10 Billion Deal to Buy Hill-Rom, Dow Jones Says.

Wall Street Journal:

• Who Abandoned Bagram Air Base?
• How the Biggest Firms Have Fared During the Pandemic.  
• The Kabul Airport Massacre.  
• The Covid Origin Muddle.
• Fed Faces Challenge Spelling Out Employment Goals.
• China Curbs Steel Output, but Familiar Economic Pressures Test Its Mettle.
• CVS Wants to Be Your Therapist, Too.  
• You Are Living in the Golden Age of Stupidity.  
• Keep the ‘Pineapple Express’ Rolling.
• European Union Set to Recommend Halting Nonessential Travel From the U.S.
• North Korea Appears to Have Restarted Yongbyon Nuclear Reactor.
• Covid-19 in Malaysia Threatens to Prolong Chip Shortage.
  

Fox News:

• Gulf Coast braces for landfall as Ida nears Category 5 strength.
• After deadly Kabul attacks, retired Army general warns of terrorism threat already in the US.
• Taliban rule will be 'long slow death' for women facing lives of sexual slavery. 
• Biden walks away after one question he doesn't want to answer at FEMA.

NY Post: 

• US companies riddled with members of Chinese Communist Party: Devine. Boeing(BA), Qualcomm(QCOM) and Pfizer(PFE) are just three US companies that have employed dozens of CCP members in their Chinese facilities, the database reveals.

CNBC:

• Oil firms slash U.S. Gulf of Mexico output by 91% ahead of powerful Hurricane Ida.
• Peloton investors face a new reality as fitness company’s costs eat into profits.
• Weapons proliferation risk in Afghanistan ‘very worrying,’ former Saudi intel chief says.

Zero Hedge: 

• Hurricane Ida Weakens To Cat 3 As It Pummels Louisiana With Strong Wind, Rain And Storm Surge; Half Million Without Power.
• Viral Infographic Reveals The Shocking Amount Of Military Hardware Biden Handed To The Taliban.
• China Has a Grand Strategy to Displace US: China Expert.
• Gov. DeSantis Demands Biden Administration Cease Resettlement Of Illegals In Florida.
• Moderna Vaccine Halted In Okinawa After Contamination From "Black Substances".
• The SNAP Boost Will Make The Poor Appear Poorer.
• Morgan Stanley: This Fall We Expect The Mid-Cycle Transition To End With A 10%+ S&P 500 Correction.
• Americans Have Traded Their Freedoms For Safety From COVID, And Now We Have Neither. 
• Apple CEO Receives $750 Million Payout, Begins To Dump Stock.
• Vaccinated Australians To Be Granted New "Freedom"; Government-Sanctioned "Hour Of Recreation".
• US Air Strike Reportedly Takes Out Suicide Bomber Near Airport, Explosion Heard Across Kabul.
• Twitter Permanently Bans Alex Berenson After Viral COVID Tweets.
• Fed Says Taper Is Coming. Bulls Hear "No Taper Now".
• "Extremely Dangerous" - Hurricane Ida Almost Category 5 Strength As It Nears Louisiana.
• The Bear Case In 12 "Charts Of Darkness".
• COVID Bailouts Have Nothing To Do With COVID.
• Green Card Applicants Will Soon Need COVID-19 Vaccine To Be Eligible: CDC.
• Hipster Climate Change Protesters Left Behind 120 Tons Of Trash In London.
• US State Dept Urges US Citizens To "Immediately" Leave Kabul Airport Area Due To "Specific, Credible" Threat.
• "Backdoor Gun Control" - How Biden Banning Russian Ammo Will Make Range Ammo "Hard To Come By".
• What The Polio Vaccines Can Teach Us About The COVID Ones.
• China Blacklists Billionaire Actress, Cracks Down On 'Unruly' Internet Fan Culture.
• Foreign Syndicates May Have Stolen Up To $400 Billion In COVID Benefits. 
• Holy Cow - Australian Beef Prices Hit Record High As Food Inflation Concerns Persist.
• "He's Failed": Students Disown Joe Biden After Endless "Disaster".

MarketWatch.com:             

• Opinion: Why inflation isn’t higher even though money is flooding the economy.
  
• Opinion: The S&P 500 will keep going up this fall — for these 9 reasons.
  
• Opinion: Why you should think twice before betting that stocks will have a rough September.
  

NewsMax:

• Packed with Virus Patients, Louisiana Hospitals Await Ida. 
• Chinese Foreign Minister Tells Blinken World Must 'Positively Guide' Taliban.

TheGatewayPundit.com:

• EXCLUSIVE: U.S. Scientists Continue Their Treachery in Assisting China’s Biowarfare Program Unabated.
• Report: Biden Regime Targets “ISIS-K” Terrorists in Kabul Missile Strike – Kill 3 to 6 Children Instead.
• Secretary of State Blinken Claims US Never Gave Taliban Kill List – Then Admits US Gave Names of American Citizens to Taliban (VIDEO).
• Secretary of State Blinken Vacationed in the Hamptons as Kabul Fell to the Taliban. 
• Joe Biden Checks Watch During The Dignified Transfer Of 13 American Heroes Killed By His Incompetence. 
• SURVEILLANCE STATE: “Identify and Disrupt” Bill will Give Australian Authorities Access to Any Citizen’s Social Media, Email Account Without Consent; Allow Them to Add, Delete Information and Send Messages.
• STRANDED: Congressmen and Others Accuse Biden of Blocking US Citizens from Kabul Airport, Leaving Them to be Beaten by Taliban Terrorists.
• Kamala Harris Poses In Front Of Communist Ho Chi Minh Bust – “The WORST Photo Op For An American In That Country Since Jane Fonda Donned A Helmet There In 1972.”.
• Talibans Begin Shake Down of Joe Biden: Offer to Extend Deadline if Biden Will Unfreeze Their Funds.
• Obama Administration Officials Are Torching Biden Over Failed Afghanistan Withdrawal (VIDEO).
• Woke CDC Publishes Guide With ‘Preferred Terms’ Americans Should Use; Suggest Citizens Refrain From Using “Dehumanizing Language” Like “Inmate” or “Foreigners” In the Name of Public Health.

The Epoch Times:

• Over Half of Americans Favor Defending Taiwan If China Invades: Poll.
• China Will Soon Surpass Russia as a Nuclear Threat, Senior US Military Official Says. 
• China’s Celebrity Fan Clubs the Latest Target Under Beijing’s Widening Crackdown on Internet Sector.

Covid-19(Data, Maps, Graphs):

• Our World in Data:  New Global Covid-19 Cases(7-day rolling average graphs). New US Covid Hospital Admissions/ICU Admissions/Deaths
  
• FT.com:  Fully Vaccinated by Country(graph). Global Lockdown Stringency Index(map).
• Bloomberg.com:  International Travel Restrictions.  Case Graphs by State.
  
• NYTimes.com:  County Trends and Clusters. Local ICU Occupancy.
  
• Brown School of Public Health:  Covid Severity by State/County(map).  US Hospital Capacity(region).
  
• CovidActNow:  Covid Severity/Infection Rate by Metro Area.
  
• KFF:  US Vaccinations by Race/Ethnicity.
  
• Carnegie Mellon: Covid-Like Symptoms in Community. Covid Symptom Searches on Google. Covid-Related Dr.Visits.  Restaurant Visits. Wearing Masks. (graphs)
  
• Safegraph.com:  Commerce Patterns(graphs).

Night Trading

• Asian indices are +.25% to +.75% on average.
• Asia Ex-Japan Investment Grade CDS Index 70.75 -.25 basis point.
• China Sovereign CDS 33.25 -1.5 basis points.
• Bloomberg Emerging Markets Currency Index 60.06 +.03%.
• Bloomberg Global Risk-On/Risk Off Index 2,826.0 +6.0 points.
• Volatility Index(VIX) futures 18.9 -.28%. 
• Euro Stoxx 50 futures n/a.
• S&P 500 futures +.09%.
• NASDAQ 100 futures +.15%

Morning Preview Links

Earnings of Note

Company/Estimate

Before the Open:

• (CLDR)/.09
  

After the Close:

• (ZM)/1.16
  

Economic Releases

10:00 am EST

• Pending Home Sales MoM for July is estimated to rise +.5% versus a -1.9% decline in June.

10:30 am EST

• The Dallas Fed Manufacturing Activity Index for August is estimated to fall to 22.9 versus 27.3 in July.

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Japan Unemployment Rate, China Manufacturing PMI and the Germany Inflation report could also impact trading today.

US Equity Market Hours

• 9:30 am - 4:00 pm EST

BOTTOM LINE: Asian indices are modestly 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 week.

Today's Headlines

Bloomberg:                 

• China to Cleanse Online Content That ‘Bad-Mouths’ Its Economy.
• Biden Criticizes China for Not Aiding Report on Virus Origin.  
• Taliban Tighten Access; U.S. Strikes ISIS: Afghanistan Update.
•  Germans Protest Covid Rules; Japan Probes Deaths: Virus Update.
• Antibodies Waning? The Immune System Has a Backup Plan For That .
  
• Hurricane Ida May Damage Almost 1 Million Homes on U.S. Gulf. 
• Stock Market Risks Pile Up After Record-Setting Earnings Season.  
• U.S. Port Problems Reach Worst of Pandemic Amid Crush of Imports.
• Stocks in Powell’s Thrall Can See a Taper Without Much Tantrum.  
• Charting the Global Economy: Shortages, Virus Thwarting Growth.  
• SEC Hints at Tough Online-Broker Rules on Game-Like Features.

Wall Street Journal:  

• Xi Jinping Says What He Means.
• U.S. Moves Into Final Stages of Afghanistan Withdrawal.
• Who Abandoned Bagram Air Base?
• Latest Afghanistan Updates.  
• Biden’s Collapsing Reputation.  
• The Federal Unemployment Bonus Holds the Recovery Back.
• In Its Last Days in Kabul, U.S. Turns to Taliban as a Partner.
• Renters Prepare for Eviction After High Court Ruling.
• ESPN Explores Sports-Betting Deal Worth at Least $3 Billion.
• Why We Ignore Friends to Look at Our Phones.

CNBC:

• Powell’s view on inflation is getting pushback at the Fed, and elsewhere.
• A key jobs report in the week ahead could drive the next big market move.
• Biden says U.S. health officials are weighing Covid booster shots at 5 months, moving up third shot.

IG:

• Weekend Markets Trading Live.

Barron's:

• Had bullish commentary on (MSFT), (GOOG), (AAPL), (AMZN), (FB), (JEF), (STEM) and (SPOT).

MarketWatch.com:     

• August jobs report emerges as key test for whether U.S. bond yields will remain lower-for-longer.

NY Post: 

• US companies riddled with members of Chinese Communist Party: Devine. Boeing(BA), Qualcomm(QCOM) and Pfizer(PFE) are just three US companies that have employed dozens of CCP members in their Chinese facilities, the database reveals.

Fox News: 

• Rubio: US list given to Taliban is a tool for ‘revenge'.
• Afghan evacuees flagged by CBP at military bases worldwide, following over 100K people evacuated.
• Stranded interpreter: 'I know I'm going to get killed'.
• Who is funding ISIS-K terror group?
• New Orleans evacuated as Hurricane Ida expected to strengthen to Cat 4 storm.

Newsmax:    

• Anger, Grief for Family Members of 13 US Troops Killed in Afghanistan.
• Taliban Using US Biometric Equipment to Hunt Targets.
• Poll: Most Americans Blame Biden for Kabul Attack. Rep. 
• Rep. McCaul: Afghan Partners 'Have Death Warrant' on Their Backs.

Zero Hedge:

• US Says It Killed "Planner" Behind Kabul Airport Attack In Targeted Drone Strike.
• Update: Pentagon Refuses To Release Names Of Two "High Profile ISIS Planners" Killed In Drone Strike. 
• West Coast Port Congestion Hits Record As More Ships Join Queue. 
• This Won't End Well – Gen Z'ers Take On Debt To Invest.
• ESG Is A Superfluous Virtue Signal.
• 2 Dead In Japan After Receiving Moderna Jabs From Contaminated Batches.
• Why Is The Gates Foundation Funding The UK's Medicines Regulator?
• "Rapidly Becoming Untenable" - Eurozone Finances Have Deteriorated.
• CCP's Anti-Satellite Weapons Present Complex Challenge For US: Experts.
• Japan Plans To Build Undersea Tunnel To Help Dump Radioactive Water From Fukushima Into The Pacific.
• The Mask Mandate Farce.
• "I Demand Accountability": Marine Commander Fired For Viral Video Ripping 'Inept' Afghan War Decisions.
• 'This Ends The Debate' - Israeli Study Shows Natural Immunity 13x More Effective Than Vaccines At Stopping Delta.
• The Structural Changes Taking Place In The Economy Are "Very Dangerous".
• "It Feels As If Nobody Knows Anything": A "Mystery" Market Meltup.
• Russia Announces Plan To "Routinely Deploy" Hypersonic Missiles On Warships.
• Erik Prince Responds To Psaki's Comments, Issues Warning For Kabul Airport.
• Record Plastic Prices May Go "Stratospheric" As Hurricane Approaches Gulf Coast.
• How The Fed Is Enabling Congress's Trillion-Dollar Deficits.
• Dovish Powell Sparks "Most Painful" Meltup To 52nd Record High In 2021.
• US Intel Agency Has "Moderate" Confidence Covid Escaped From Wuhan Lab: Origins Report.
• "Nothing Has Changed" - White House Flip-Flops Again On Timeline For Booster Jabs.
• Taliban Fighters Reportedly Seize Military Side Of Kabul Airport Using American Weapons.
• "A Meltup From Here Would Be Most Painful": Goldman's Sentiment Indicator Hits Lowest Level In 63 Weeks.
• Biden And Israeli Prime Minister Threaten Iran: We're "Ready For Other Options".
• Denmark To Scrap All Covid-19 Restrictions.

TheGatewayPundit.com:

• All Hail Your Supreme Leader: Active Duty and Retired Navy Members Are Being Told They Cannot “Disrespect” Biden Over Afghanistan Debacle.
• EXCLUSIVE: The U.S. Intelligence Report on the Origin of COVID-19 Looks “Preordained” and “Mirrors Many of the the Talking Points of the CCP”.
• The New Witch Hunt: Dem Jan 6 Committee Demands Data From 15 Social Media Companies.
• Independent Voters Sour On Biden — Disapproval Hits Record High.
• “Wellcamp: The Best Way To Keep You Safe” – Australian Health Officials Produce Creepy Dystopian Propaganda For New ‘Mandatory Quarantine Camps’ (Video).
• RIP HEROES: Here Are 9 of the 13 US Servicemen Killed in Kabul Airport Blast.
• New Israeli Study Finds Fully Vaccinated People are at “Greater Risk of Hospitalization” and 13 TIMES MORE LIKELY to Catch Covid-19 Than Those Who Have Recovered and Have Natural Immunity.
• Marine Battalion Commander Fired For Blasting Senior Military Leaders For Failures in Afghanistan that Resulted in 13 US Servicemen Dying (VIDEO).
• Operation ‘Pineapple Express’ – Rogue Team of Retired US Vets Rescue Afghan Allies During Secret Missions Conducted BEHIND BIDEN’S BACK.
• The Biden Effect: Taliban Announces Citizens Must Turn Over Guns, All Women are Required to Have Male Chaperone to Leave the House for Extended Periods.
• Psaki: “I Don’t Think We Can Guarantee” Americans Who Want to Get Out Will Get Out of Afghanistan After August 31 (VIDEO).
• Kamala Harris Walks Away Laughing When Reporter Asks If Americans Are “Safer” After Biden’s Botched Withdrawal (VIDEO).

The Epoch Times:

• CCP’s Anti-Satellite Weapons Present Complex Challenge for US: Experts.
• US Urges Beijing to Release The Epoch Times’ Sources Detained for Supplying Information on COVID-19.

Covid-19(Data, Maps, Graphs):

• Our World in Data:  New Global Covid-19 Cases(7-day rolling average graphs). New US Covid Hospital Admissions/ICU Admissions/Deaths
  
• FT.com:  Fully Vaccinated by Country(graph). Global Lockdown Stringency Index(map).
• Bloomberg.com:  International Travel Restrictions.  Case Graphs by State.
  
• NYTimes.com:  County Trends and Clusters. Local ICU Occupancy.
  
• Brown School of Public Health:  Covid Severity by State/County(map).  US Hospital Capacity(region).
  
• CovidActNow:  Covid Severity/Infection Rate by Metro Area.
  
• KFF:  US Vaccinations by Race/Ethnicity.
  
• Carnegie Mellon: Covid-Like Symptoms in Community. Covid Symptom Searches on Google. Covid-Related Dr.Visits.  Restaurant Visits. Wearing Masks. (graphs)
  
• Safegraph.com:  Commerce Patterns(graphs).