Stocks Slightly Higher into Final Hour on Earnings Optimism, Oil Gain, Technical Buying, Energy/Technology Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: About Even
  

• Sector Performance: Most Sectors Rising
  

• Volume: Around Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 9.63 -2.8%

• Euro/Yen Carry Return Index 137.84 -.37%

• Emerging Markets Currency Volatility(VXY) 8.09 -.49%

• S&P 500 Implied Correlation 16.05 -6.58%

• ISE Sentiment Index 125.0 +71.2%
  

• Total Put/Call .84 -.2%

• NYSE Arms .88 -42.12%

Credit Investor Angst:

• North American Investment Grade CDS Index 54.55 -1.49%
  

• America Energy Sector High-Yield CDS Index 396.0 -1.28%

• European Financial Sector CDS Index 58.58 -1.1%

• Western Europe Sovereign Debt CDS Index 5.10 +4.3%

• Asia Pacific Sovereign Debt CDS Index 16.09 -.06%

• Emerging Market CDS Index 177.90 -.22%
  

• iBoxx Offshore RMB China Corporate High Yield Index 142.30 +.04%

• 2-Year Swap Spread 25.75 -2.0 basis points

• TED Spread 29.25 +.5 basis points

• 3-Month EUR/USD Cross-Currency Basis Swap -41.0 +.5 basis point

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 73.93 +.38%
• 3-Month T-Bill Yield 1.07% unch.
  

• Yield Curve 78.0 -3.0 basis points

• China Import Iron Ore Spot $62.53/Metric Tonne +4.06%

• Citi US Economic Surprise Index 3.90 -3.3 points

• Citi Eurozone Economic Surprise Index 55.70 -.1 point

• Citi Emerging Markets Economic Surprise Index 22.30 -1.1 basis points

• 10-Year TIPS Spread 1.86 -3.0 basis points
  
• 76.9% chance of Fed rate hike at Dec. 13 meeting, 77.8% chance at Jan. 31 meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating +110 open in Japan 
• China A50 Futures: Indicating +44 open in China

• DAX Futures: Indicating +1 open in Germany

Portfolio: 

• Slightly Higher: On gains in my tech/retail sector longs

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

• Market Exposure: Moved to 100% Net Long

Bear Radar

Style Underperformer:

• Small-Cap Growth -.1%

Sector Underperformers:

• 1) Road & Rail -.9% 2) Utilities -.5% 3) Defense -.2%

Stocks Falling on Unusual Volume: 

• NEWT, PCG, TWNK, FRC, CNC, SSYS, AAOI, MOH, SSRM, DDD, GCP, FRC, SGH, ABEO, GLYC and VYGR

Stocks With Unusual Put Option Activity:

• 1) SRPT 2) DISH 3) MTZ 4) HUN 5) CNC

Stocks With Most Negative News Mentions:

• 1) ATRS 2) PCG 3) TWNK 4) THC 5) MINI

Charts:

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

Bull Radar

Style Outperformer:

• Mid-Cap Value +.4%

Sector Outperformers:

• 1) Steel +4.0% 2) Computer Hardware +1.7% 3) Oil Service +1.5%

Stocks Rising on Unusual Volume:

• SOHU, FARO, CEVA, SPAR, EQGP, MON, HMNY, XRF, BOX, HPQ, ULTA, MT, HUN, NFLX, ACLS, UNVR, JLL, LCI, X, TSE, RE, UN, LN, NEP, RDUS, ADS, IONS, VIAB and HUN

Stocks With Unusual Call Option Activity:

• 1) VIAB 2) OCN 3) BOX 4) CMCSA 5) THC

Stocks With Most Positive News Mentions:

• 1) HPQ 2) ORIG 3) MOS 4) ETH 5) NVDA

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running +18.7% Above 100-Day Average
• 8 Sectors Rising, 2 Sectors Declining
• 65.9% of Issues Advancing, 38.0% Declining
• 210 New 52-Week Highs, 18 New Lows
• 47.7% of Issues Above 200-day Moving Average
• Average 14-Day RSI 39.7%
• Vix 9.7 -2.5%
• Total Put/Call 1.17 +11.4%
• TRIN/Arms 1.09 -27.3%

Friday Watch

Night Trading 

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

• Asia Ex-Japan Investment Grade CDS Index 77.50 -.5 basis point. 

• Asia Pacific Sovereign CDS Index 16.0 -.25 basis point.

• Bloomberg Emerging Markets Currency Index 73.67 +.01%.

• S&P 500 futures -.03%.

• NASDAQ 100 futures -.04%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (BAC)/.45
• (DFRG)/-.01
• (JBHT)/.97
• (PNC)/2.13
• (WFC)/1.03

Economic Releases 

8:30 am EST

• The CPI MoM for September is estimated to rise +.6% versus a +.4% gain in August. 
• The CPI Ex Food and Energy MoM for September is estimated to rise +.2% versus a +.2% gain in August.
• Real Avg. Weekly Earnings YoY for Sept.
• Retail Sales Advance MoM for September are estimated to rise +1.7% versus a -.2% decline in August.
• Retail Sales Ex Autos MoM for September is estimated to rise +.9% versus a +.2% gain in August.
• Retail Sales Ex Autos and Gas  for September is estimated to rise +.4% versus a -.1% decline in August.

10:00 am EST

• Preliminary Univ. of Mich. Consumer Sentiment for October is estimated to fall to 95.0 versus 95.1 in September.
• Business Inventories for August are estimated to rise +.7% versus a +.2% gain in July.
  

Upcoming Splits

• None of note

Other Potential Market Movers

• The Fed's Rosengren speaking, Fed's Evans speaking, Fed's Kaplan speaking, Fed's Powell speaking, China Trade Balance report and the (SAFM) investor event could also impact trading today.

BOTTOM LINE:  Asian indices are slightly higher, boosted by commodity and consumer shares in the region. I expect US stocks to open modestly lower and to rally into the afternoon, finishing mixed.  The Portfolio is 75% net long heading into the day.

Stocks Slightly Lower into Final Hour on Earnings Concerns, Oil Decline, Profit-Taking, Retail/Oil Service Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: About Even
  

• Sector Performance: Mixed
  

• Volume: Above Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 9.96 +1.12%

• Euro/Yen Carry Return Index 138.48 -.47%

• Emerging Markets Currency Volatility(VXY) 8.16 -.73%

• S&P 500 Implied Correlation 17.0 +1.74%

• ISE Sentiment Index 76.0 -2.56%
  

• Total Put/Call 1.02 +14.61%

• NYSE Arms 1.84 +40.69%

Credit Investor Angst:

• North American Investment Grade CDS Index 55.40 +1.39%
  

• America Energy Sector High-Yield CDS Index 401.0 -.01%

• European Financial Sector CDS Index 59.20 +.39%

• Western Europe Sovereign Debt CDS Index 4.88 -.81%

• Asia Pacific Sovereign Debt CDS Index 16.26 -.98%

• Emerging Market CDS Index 177.18 -1.43%
  

• iBoxx Offshore RMB China Corporate High Yield Index 142.24 -.05%

• 2-Year Swap Spread 25.75 -2.0 basis points

• TED Spread 28.75 +1.75 basis points

• 3-Month EUR/USD Cross-Currency Basis Swap -41.50 +.5 basis point

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 73.72 +.08%

• 3-Month T-Bill Yield 1.07% -2.0 basis points
  

• Yield Curve 81.0 -1.5 basis points

• China Import Iron Ore Spot $60.09/Metric Tonne +.74%

• Citi US Economic Surprise Index 7.20 +.8 point

• Citi Eurozone Economic Surprise Index 55.80 +2.2 points

• Citi Emerging Markets Economic Surprise Index 23.40 +4.5 basis points

• 10-Year TIPS Spread 1.89 unch.
  

• 78.6% chance of Fed rate hike at Dec. 13 meeting, 79.9% chance at Jan. 31 meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating +76 open in Japan 

• China A50 Futures: Indicating +38 open in China

• DAX Futures: Indicating -4 open in Germany

Portfolio: 

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

• Disclosed Trades: None

• Market Exposure: 100% Net Long