Bear Radar

Style Underperformer:

• Mid-Cap Growth -.6%

Sector Underperformers:

• 1) Gold and Silver -1.6% 2) Semis -1.6% 3) Social Media -1.6%

Stocks Falling on Unusual Volume: 

• CAMP, BK, FSLR, BOX, SPWR, AXDX, GKOS, MU, PRGS and INMD

Stocks With Unusual Put Option Activity:

• 1) BK 2) KKR 3) GPRO 4) MSGN 5) WU

Stocks With Most Negative News Mentions:

• 1) AXDX 2) VSLR 3) LMNX 4) MCK 5) ATRA

Charts:

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

Bull Radar

Style Outperformer:

• Large-Cap Value +.1%

Sector Outperformers:

• 1) Airlines +3.0% 2) Gaming +1.4% 3) Networking +.8%

Stocks Rising on Unusual Volume:

• DDS, GOSS, SGEN, DRNA, URBN, LVS, MTN, SPB, WFC, GH and ALLO

Stocks With Unusual Call Option Activity:

• 1) BK 2) KKR 3) GPRO 4) PRU 5) MU

Stocks With Most Positive News Mentions:

• 1) LVS 2) CHD 3) FLR 4) KMB 5) PFE

Charts:

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

Mid-Day Market Market Internals

NYSE Composite Index:

• Volume Running -9.2% Below 100-Day Average
• 9 Sectors Rising, 2 Sectors Declining
• 62.4% of Issues Advancing, 34.4% Declining
• 97 New 52-Week Highs, 30 New Lows
• 58.0% of Issues Above 200-day Moving Average
• Average 14-Day RSI 48.6%
• Vix 15.8 -1.7%
• Total Put/Call 1.02 -1.9%
• TRIN/Arms .96 -27.3%

Friday Watch

Evening Headlines

Bloomberg:     

• U.K. Consumers Are ‘Treading Water’ as Brexit Approaches Climax.  

• Trade War Hasn’t Stopped Wall Street’s $9 Billion China Rush.

• Saudi Arabia Drops Dress Code for Foreign Women in Tourism Push.

• Asia Stocks Start Mixed; Treasuries Hold Gains. Stocks in Asia opened mixed after a dip in U.S. equities, with investors assessing the latest on trade and American politics. Treasuries held gains. Shares in Tokyo and Seoul fell, while Australian equities gained. The S&P 500 ended modestly lower after the release of a whistle-blower complaint central to the latest political drama and reports that the U.S. is unlikely to extend a waiver allowing American firms to supply China’s Huawei Technologies. Ten-year Treasury yields traded just under 1.7%. Meantime, in a surprise move, FTSE Russell opted not to add Chinese bonds into its flagship World Government Bond Index. Futures on the S&P 500 Index were flat. The underlying gauge lost 0.2% Thursday. Japan’s Topix index lost 0.8% as of 9:13 a.m. in Tokyo. South Korea’s Kospi slid 0.6%. Australia’s S&P/ASX 200 Index rose 0.5%.  

• Oil Set for Weekly Decline as Saudis Restoring Lost Production.

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

• Peloton, Endeavor Duds Give IPO Bankers Another Black Eye.

• Two WeWork Executives Close to Neumann Said to Depart.

Wall Street Journal:

• Big Banks Loom Over Fed Repos.

• Syria Conducted Chlorine Attack in May, U.S. Says.

• Instagram’s Content Factories Are Huge—And That’s a Problem for Facebook.

• Taking Out Joe Biden.

• Pelosi Ducks an Impeachment Vote.

• France Unveils Billions in Tax Cuts to Reset Pro-Business Plan.

• Vaping-Related Illnesses Rise 52%.

Fox News:

• Republicans race to identify whistleblower's WH sources as apparent inconsistencies emerge.

• KARL ROVE: Nancy Pelosi was forced to pursue impeachment inquiry.

MarketWatch.com:   

• Trump campaign capitalizes on impeachment threat, raising millions from supporters this week.

CNBC:

• China trade talks set to resume Oct. 10.

• Peloton’s future depends on whether investors think it’s a hardware company or a fitness platform.

• Wall Street Democrats warn the party: We’ll sit out, or back Trump, if you nominate Elizabeth Warren.

• Delta is buying 20% of LATAM, Latin America’s largest airline.

• Endeavor pulls plug on IPO day before debut.

• Stocks making the biggest moves after hours: LATAM, Micron, Las Vegas Sands and more.

Zero Hedge:

• NYTimes 'Outs' Ukraine-Call "Whistleblower" As CIA Officer.

• 5 Million DoorDash Customers Had Data Stolen In Hack Attack.

• "A Looming Wall Of Dollar Debt:" 2020 Could Be A Disastrous Year For China's Domestic Bond Market.

• What's Wrong With Chinese GDP Data?

• Illinois Cities Getting Crushed By Pension Costs - Just Look At Peoria!

• US To Deploy 200 Troops, Patriot Missile System To Saudi Arabia; Oil Jumps.

• If The World's Ending In 12 Years, Why Even Go To College?

• S&P Downgrades WeWork To 'B-' Due To "Liquidity Strains".

• Stocks Burst Into The Green On Chinese Foreign Minister Trade Talk Optimism.

• Peloton Pounded, Crypto Crushed, Bonds Bid, Stocks Skid.

Telegraph:

• Greta Thunberg is wrong: economic growth is friend to the environment, not foe.

Night Trading 

• Asian equity indices are -.5% to +.25% on average.

• Asia Ex-Japan Investment Grade CDS Index 76.25 +.5 basis point.

• China Sovereign CDS 47.75 +.5 basis point.

• Bloomberg Emerging Markets Currency Index  65.30 -.03%.

• FTSE 100 futures +.14%.

• S&P 500 futures -.18%.

• NASDAQ 100 futures -.28%.

Morning Preview Links 

Earnings of Note 
Company/Estimate

Before the Open:

• None of note

After the Close:

• None of note

Economic Releases
8:30 am EST

• Personal Income for August is estimated to rise +.4% versus a +.1% gain in July.

• Personal Spending for August is estimated to rise +.3% versus a +.6% gain in July.

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

• Durable Goods Orders for Aug. are estimated to fall -1.1% versus a +2.0% gain in July.

• Durables Ex Transports for Aug. are estimated to rise +.2% versus a -.4% decline in July.

• Cap Goods Orders Non-Defense Ex-Air for August are estimated to rise +.3% versus a -.6% decline in July.

Upcoming Splits

• None of note

Other Potential Market Movers

• The Fed's Vice Chair for Supervision Randal Quarles speaking and the Eurozone Business Confidence Index could also impact trading today.

BOTTOM LINE: Asian indices are mostly lower, weighed down by technology 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 China Trade Concerns, Impeachment Talk,Technical Selling, Energy/Healthcare Sector Weakness

 Broad Equity Market Tone:

• Advance/Decline Line: Lower
  

• Sector Performance: Most Sectors Declining
  

• Volume: Below Average

• Market Leading Stocks: Performing In Line

Equity Investor Angst:

• Volatility(VIX) 16.1 +.8%

• Euro/Yen Carry Return Index 122.34 -.08%

• Emerging Markets Currency Volatility(VXY) 8.24 -.23%

• S&P 500 Implied Correlation 40.3 -2.4%

• ISE Sentiment Index 65.0 -12.3%
  

• Total Put/Call 1.08 +3.9%

• NYSE Arms 1.33 +51.1%

Credit Investor Angst:

• North American Investment Grade CDS Index 60.44 +.17%
  

• America Energy Sector High-Yield CDS Index 412.0 +2.93%

• European Financial Sector CDS Index 67.42 -.16%

• Italian/German 10Y Yld Spread 140.75 -1.0 basis point
  

• Asia Ex-Japan Investment Grade CDS Index 76.13 +.47%
  

• Emerging Market CDS Index 211.89 +1.83%
  

• iBoxx Offshore RMB China Corporate High Yield Index 165.93 -.01%

• 2-Year Swap Spread -1.25 unch.

• TED Spread 24.75 +6.0 basis points

• 3-Month EUR/USD Cross-Currency Basis Swap -10.5 +2.25 basis points

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 65.35 -.15%
• 3-Month T-Bill Yield 1.80% -8.0 basis points

• Yield Curve .01 -2.0 basis points

• China Iron Ore Spot 89.0 USD/Metric Tonne +.32%

• Citi US Economic Surprise Index 44.90 -.8 point

• Citi Eurozone Economic Surprise Index -63.60 +1.7 points

• Citi Emerging Markets Economic Surprise Index -8.0 -.2 point

• 10-Year TIPS Spread 1.57 -3.0 basis points
• 73.5% chance of Fed rate cut at Dec. 11th meeting, 85.3% chance of cut at Jan. 29th meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating -68 open in Japan 
• China A50 Futures: Indicating +3 open in China

• DAX Futures: Indicating +23 open in Germany

Portfolio:

• Slightly Lower: On losses in my biotech/retail sector longs

• Disclosed Trades: None

• Market Exposure: 75% Net Long

Bear Radar

Style Underperformer:

• Small-Cap Growth -.9%

Sector Underperformers:

• 1) Oil Service -2.6% 2) Alt Energy -1.9% 3) Healthcare Providers -1.9%

Stocks Falling on Unusual Volume: 

• GH, AIR, AMTD, CCL, FDS, SGH, SCHN, URGN and ATU

Stocks With Unusual Put Option Activity:

• 1) MSGN 2) RAD 3) NWL 4) FSLR 5) UUP

Stocks With Most Negative News Mentions:

• 1) GTT 2) SNDL 3) CCL 4) NKTR 5) ABMD

Charts:

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