Stocks Rising into Final Hour on Long-Term Rate Reversal Lower, Falling Fed Rate-Hike Odds, Short-Covering, Tech/Consumer Discretionary Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Higher
  

• Sector Performance: Most Sectors Rising
  

• Volume: Around Average

• Market Leading Stocks: Outperforming
  

Equity Investor Angst:

• Volatility(VIX) 17.5 -4.0%
• DJIA Intraday % Swing .82% -12.0%
  
• Bloomberg Global Risk On/Risk Off Index 73.5 +2.9%

• Euro/Yen Carry Return Index 167.57 +.3%

• Emerging Markets Currency Volatility(VXY) 8.7 +1.3%

• CBOE S&P 500 Implied Correlation Index 26.2 -3.9% 

• ISE Sentiment Index 91.0 -4.0 points
  

• Total Put/Call .89 -31.0%

• NYSE Arms .97 +12.8%

Credit Investor Angst:

• North American Investment Grade CDS Index 73.5 -.68%
  

• US Energy High-Yield OAS 329.33 -.35%
• Bloomberg TRACE # Distressed Bonds Traded 340 +6
  

• European Financial Sector CDS Index 90.96 -2.11% 
• Deutsche Bank Subordinated 5Y Credit Default Swap 303.75 -1.8%
  

• Italian/German 10Y Yld Spread 194.0 basis points -1.0 basis point
  

• Asia Ex-Japan Investment Grade CDS Index 129.5 +1.14%
  

• Emerging Market CDS Index 222.78 -1.1%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 24.8 unch.

• 2-Year SOFR Swap Spread -8.0 basis points -.75 basis point
  

• TED Spread 18.0 basis points +.25 basis point
  

• 3-Month EUR/USD Cross-Currency Basis Swap -35.75 -23.75 basis point
  
• MBS  5/10 Treasury Spread 174.0 -6.0 basis points
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 914.0 +1.0 basis point
  
• Avg. Auto ABS OAS 79.0 -1.0 basis point
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 41.65 -.03%
• 3-Month T-Bill Yield 5.45% -3.0 basis points
  

• China Iron Ore Spot 119.3 USD/Metric Tonne +1.0%
• Dutch TTF Nat Gas(European benchmark) 39.7 euros/megawatt-hour +1.1%

• Citi US Economic Surprise Index 48.9 +.6 point

• Citi Eurozone Economic Surprise Index -40.8 +5.7 points

• Citi Emerging Markets Economic Surprise Index 12.9 +.9
• S&P 500 Current Quarter EPS Growth Rate YoY(14 of 500 reporting) -11.2% -20.9 percentage points
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 239.55 -.22:  Growth Rate +9.0% -.1 percentage point, P/E 18.0 +.2
  
• S&P 500 Current Year Estimated Profit Margin 12.14% +1.0 basis point
  
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(0 of 10 reporting) n/a
  
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 263.62 +.35: Growth Rate +59.0% +.2 percentage point, P/E 27.9 +.5
  
• Bloomberg US Financial Conditions Index .10 +1.0 basis point
  
• Bloomberg Euro-Zone Financial Conditions Index -.15 -8.0 basis points
  
• US Yield Curve -48.25 basis points (2s/10s) +3.25 basis points
  
• US Atlanta Fed 2Q GDPNow Forecast +4.92% +6.0 basis points
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +3.95% unch.: CPI YoY +3.69% unch.
  
• 10-Year TIPS Spread 2.38 +3.0 basis points
  
• Highest target rate probability for Dec. 13th FOMC meeting: 62.2%(+4.3 percentage points) chance of 5.25%-5.5%. Highest target rate probability for Jan. 31st meeting: 62.7%(+8.4 percentage points) chance of 5.25%-5.5%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +172 open in Japan 
• China A50 Futures: Indicating +29 open in China

• DAX Futures: Indicating +151 open in Germany

Portfolio:

• Higher:  On gains in my commodity/industrial/tech/medical/transport sector longs
  

• Disclosed Trades: Covered some of my (IWM)/(QQQ) hehttp://hedgefundmgr.blogspot.com/2023/09/bear-radar_28.html#gsc.tab=0dges and some of my emerging market shorts
  

• Market Exposure: Moved to 100% Net Long
  

Bear Radar

Style Underperformer:

• Large-Cap Growth -.3%
  

Sector Underperformers:

• 1) Utilities -1.3% 2) Computer Services -.9% 3) Pharma -.2%

Stocks Falling on Unusual Volume: 

• INFY, TRP, AY, NEE, MU, BEPC, BEP, NAPA, CWEN, ACN, XPRO, FOLD, WDAY, KMX, WOR, ACAD and NEP
  

Stocks With Unusual Put Option Activity:

• 1) SNDX 2) NOW 3) BCLI 4) WDAY 5) KMX
  

Stocks With Most Negative News Mentions:

• 1) KMX 2) WDAY 3) WOR 4) PTN 5) MU
  

Charts:

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

Bull Radar

Style Outperformer:

• Mid-Cap Growth +1.6%
  

Sector Outperformers:

• 1) Semis +2.4% 2) Computer Hardware +2.1% 3) Retail +2.0%

Stocks Rising on Unusual Volume:

• JBL, SPT, CNXC, IONQ, BHVN, GH, ASAN, VFS, BILL, PLTR, TRMB, NCNO, XPO, MASI, SSYS, LTHM, IRTC, ALB, MSTR, DBRG, FUL, AMD, ZBRA, AEO, ALGT, SUM, AX, DUOL, CCL, NET, NCLH, DIOD, FIVE, TCMD, HPE, AAL, CHWY, ACMR, RHP, TCMD, METC, PAR, CYTK, BRZE, CARR and CRK
  

Stocks With Unusual Call Option Activity:

• 1) PTON 2) CPRI 3) XRT 4) WDAY 5) MU

Stocks With Most Positive News Mentions:

• 1) JBL 2) CNCX 3) GRTS 4) PLTR 5) MAIA
  

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:

• (CCL)/.75

After the Close: 

• None of note
  

Economic Releases  

8:30 am EST

• Advance Goods Trade Balance report for Aug. is estimated at -$91.4B versus -$91.2B in July.
• Wholesale Inventories MoM for Aug. is estimated to fall -.2% versus a -.2% decline in July.
• Retail Inventories MoM for Aug. is estimated to rise +.5% versus a +.3% gain in July.
• Personal Income for Aug. is estimated to rise +.4% versus a +.2% gain in July.
• Personal Spending for Aug. is estimated to rise +.5% versus a +.8% gain in July. 
• The PCE Core MoM for Aug. is estimated to rise +.2% versus a +.2% gain in July.
  

9:45 am EST

• The MNI Chicago PMI for Sept. is estimated to fall to 47.6 versus 48.7 in Aug.
  

10:00 am EST

• Univ. of Mich. Consumer Sentiment revisions.
  

11:00 am EST

• The Kansas City Fed Services Activity Index for Sept.
  

Upcoming Splits 

• None of note
  

Other Potential Market Movers

• The US govt funding deadline and the UK GDP report could also impact global trading tomorrow.

US Equity Market Hours

• 9:30 am - 4:00 pm EST

Morning Market Internals

NYSE Composite Index:

• NYSE Volume Running -6.6% Below 100-Day Average 
• Nasdaq/NYSE Volume Ratio 9.4 -.5
  
• 1 Sector Declining, 10 Sectors Rising
• 68.6% of Issues Advancing, 28.9% Declining
• 28 New 52-Week Highs, 181 New Lows
• 36.9%(+1.9%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 36.0 +6.0
  
• Bloomberg Global Risk-On/Risk-Off Index 73.7 +3.5%
  
• Russell 1000: Growth/Value 17,386.1 -.15%
  
• 1-Day Vix 15.0 -14.7%
  
• Vix 17.7 -3.0%
  
• Total Put/Call .86 -33.3%
• TRIN/Arms .85 -1.2%
  

Thursday Watch

Night Trading 

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

• Asia Ex-Japan Investment Grade CDS Index 128.25 unch. 

• China Sovereign CDS 82.5 +.25 basis point.
  
• China Iron Ore Spot 116.0 USD/Metric Tonne -.47%.

• Bloomberg Emerging Markets Currency Index 41.6 -.17%.
• Bloomberg Global Risk-On/Risk Off Index 71.2 -.03%. 
• Bloomberg US Financial Conditions Index 9.0 -1.0 basis point.
  
• Volatility Index(VIX) futures 18.4 +.3%.
• Euro Stoxx 50 futures n/a.

• S&P 500 futures +.13%.

• NASDAQ 100 futures +.17%.  

Morning Preview Links

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