Stocks Slightly Higher into Final Hour on Earnings Outlooks, Diminished Global Growth Concerns, Oil Gain, Energy/Medical Sector Strength

 Broad Equity Market Tone:

• Advance/Decline Line: Around Even
  

• Sector Performance: Mixed
  

• Volume: Around Average

• Market Leading Stocks: Performing In Line

Equity Investor Angst:

• Volatility(VIX) 14.5 +.1%

• Euro/Yen Carry Return Index 125.50 +.15%

• Emerging Markets Currency Volatility(VXY) 7.54 -1.6%

• S&P 500 Implied Correlation 32.2 -.22%

• ISE Sentiment Index 78.0 -16.1%
  

• Total Put/Call .91 -4.2%

• NYSE Arms .91 -7.1%

Credit Investor Angst:

• North American Investment Grade CDS Index 54.71 +.63%
  

• America Energy Sector High-Yield CDS Index 492.0 -.28%

• European Financial Sector CDS Index 57.21 +.41%

• Italian/German 10Y Yld Spread 133.0 +3.75 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 69.40 -.04%
  

• Emerging Market CDS Index 198.55 -1.89%
  

• iBoxx Offshore RMB China Corporate High Yield Index 166.97 +.07%

• 2-Year Swap Spread 3.75 +1.75 basis points

• TED Spread 28.75 -4.25 basis points

• 3-Month EUR/USD Cross-Currency Basis Swap -24.25 unch.

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 66.30 +.31%
• 3-Month T-Bill Yield 1.65% +2.0 basis points

• Yield Curve .18 unch.

• China Iron Ore Spot 83.47 USD/Metric Tonne -.76%

• Citi US Economic Surprise Index 6.0 -.6 point

• Citi Eurozone Economic Surprise Index -57.3 -1.4 points

• Citi Emerging Markets Economic Surprise Index -20.80 -.3 basis point

• 10-Year TIPS Spread 1.62 +1.0 basis point
• 94.9% chance of Fed rate cut at Dec. 11th meeting, 96.7% chance of cut at Jan. 29th meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating +155 open in Japan 
• China A50 Futures: Indicating +42 open in China

• DAX Futures: Indicating -5 open in Germany

Portfolio:

• Slightly Lower: On losses in my tech sector longs

• Disclosed Trades: None

• Market Exposure: 75% Net Long

Wednesday Watch

Night Trading 

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

• Asia Ex-Japan Investment Grade CDS Index 69.25 -.75 basis point.

• China Sovereign CDS 39.25 -.25 basis point.

• Bloomberg Emerging Markets Currency Index  66.10 +.02%.
• FTSE 100 futures unch.

• S&P 500 futures -.09%.

• NASDAQ 100 futures -.12%.

Morning Preview Links

Earnings of Note 

Company/Estimate

Before the Open:

• (ABB)/.25
• (ALXN)/2.47
• (ANTM)/4.82
• (BX)/.55
• (BA)/2.14
• (BSX)/.38
• (CAT)/2.90
• (CLF)/.26
• (CMC)/.70
• (LLY)/1.41
• (FCX)/.01
• (GD)/3.06
• (HLT)/1.02
• (KNX)/.48
• (NDAQ)/1.21
• (NSC)/2.59
• (OC)/1.51
• (PNR)/.55
• (WGO)/1.01

After the Close:

• (ALGN)/1.14
• (AMP)/4.09
• (CP)/4.50
• (EBAY)/.64
• (FFIV)/2.55
• (F)/.26
• (LRCX)/3.02
• (LSTR)/1.41
• (LVS)/.75
• (MSFT)/1.24
• (ORLY)/4.79
• (PYPL)/.62
• (RJF)/1.91
• (RHI)/1.00
• (NOW)/.89
• (TSLA)/-.28
• (VMI)/2.30 
• (VAR)/1.21
• (XLNX)/.92

Economic Releases

9:00 am EST

• The FHFA House Price Index MoM for Aug. is estimated to rise +.3% versus a +.4% gain in July.

10:30 am EST

• Bloomberg consensus estimates call for a weekly crude oil inventory gain of +2,397,330 barrels versus a +9,281,000 barrel gain the prior week.Gasoline supplies are estimated to fall by -2,106,550 barrels versus a -2,562,000 barrel decline the prior week. Distillate inventories are estimated to fall by -2,711,550 barrels versus a -3,823,000 barrel decline the prior week. Finally, Refinery Utilization is estimated to rise by +.96% versus a -2.6% decline prior.
  

Upcoming Splits

• None of note

Other Potential Market Movers

• The Japan manufacturing data, $41B 5Y T-Note auction, weekly MBA Mortgage Applications report, Zuckerberg(FB) testimony to House regarding Libra and the (HPE) analyst meeting could also impact trading today.

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

Stocks Slightly Lower into Final Hour on Brexit Deal Concerns, Profit-Taking, Technical Selling, Tech/Restaurant Sector Weakness

 Broad Equity Market Tone:

• Advance/Decline Line: Slightly Higher
  

• Sector Performance: Mixed
  

• Volume: Around Average

• Market Leading Stocks: Performing In Line

Equity Investor Angst:

• Volatility(VIX) 13.9 -1.1%

• Euro/Yen Carry Return Index 125.37 -.21%

• Emerging Markets Currency Volatility(VXY) 7.64 -1.42%

• S&P 500 Implied Correlation 30.9 -.45%

• ISE Sentiment Index 93.0 -18.8%
  

• Total Put/Call .87 -7.5%

• NYSE Arms .90 +7.1%

Credit Investor Angst:

• North American Investment Grade CDS Index 54.09 +.14%
  

• America Energy Sector High-Yield CDS Index 494.0 +1.67%

• European Financial Sector CDS Index 56.97 -.60%

• Italian/German 10Y Yld Spread 129.25 -3.5 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 69.30 -1.18%
  

• Emerging Market CDS Index 201.30 +.01%
  

• iBoxx Offshore RMB China Corporate High Yield Index 166.86 +.02%

• 2-Year Swap Spread 2.0 -.5 basis point

• TED Spread 33.0 +3.25 basis points

• 3-Month EUR/USD Cross-Currency Basis Swap -24.25 -1.5 basis points

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 66.10 +.29%
• 3-Month T-Bill Yield 1.63% -2.0 basis points

• Yield Curve .18 unch.

• China Iron Ore Spot 84.30 USD/Metric Tonne +.89%

• Citi US Economic Surprise Index 6.6 -.6 point

• Citi Eurozone Economic Surprise Index -55.9 +1.3 points

• Citi Emerging Markets Economic Surprise Index -20.50 -.4 basis point

• 10-Year TIPS Spread 1.61 unch.
• 94.7% chance of Fed rate cut at Dec. 11th meeting, 96.5% chance of cut at Jan. 29th meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating +182 open in Japan 
• China A50 Futures: Indicating -19 open in China

• DAX Futures: Indicating -58 open in Germany

Portfolio:

• Slightly Lower: On losses in my tech/medical sector longs

• Disclosed Trades: None

• Market Exposure: 100% Net Long