Thursday Watch

Evening Headlines

Bloomberg:                 

• The UK’s Crisis of Confidence Was Years in the Making.
• US Is Increasingly Worried About UK Turmoil, Working With IMF.
• China’s Race to Avoid a Wall Street Ban Is Off to a Tense Start.  
• Yuan Bears Bet China Is Powerless to Fight the Mighty Dollar.
• India Heads for Its Third Half-Point Hike as Rupee Slumps.  
• Asian Stocks to Rally as BOE Lifts Risk Sentiment: Markets Wrap.
• Oil Rallies the Most Since July As Supply Risks Tighten Outlook.
  
• Six Big Threats Hurricane Ian Poses Now That It Has Come Ashore.
  
• Florida Tourism Economy Could Take $7 Billion Hurricane Ian Hit.
• Fed Must Press On Despite Global Market Volatility, Evans Says.  
• MacKenzie Scott Files for Divorce From Science Teacher Husband.  
• Wall Street Says Ignore the Treasury Rally. Fed Hikes Won’t Stop.  
• Fertilizer Prices Resist Knee-Jerk Reaction to Hurricane Ian.
• Orange Juice Futures Surge as Hurricane Ian Menaces Florida.
• Jet Fuel Premiums Skyrocket as New York, Gulf Supplies Sink.

Wall Street Journal:

• Bonds Rally Across Globe After BOE Moves to Buy Debt.
• Storm’s Effects Expected to Be Widespread.
• Protesters Seek End of Iranian Pillar—the Morality Police.
• Chevron Sells Global Headquarters, Pares Back in California Amid Texas Expansion.
• Gambler Claims Online Casino BetMGM Glitches Robbed His Winnings, Fueled Addiction.
• Alzheimer’s Blockbuster Might Spur Investor Bonanza.

Fox News:

• LIVE UPDATES:Massive hurricane leaves 'catastrophic' damage, turns roads into raging rivers.
• Millions of Floridians lose power as Hurricane Ian crawls across state.
• Voters weigh in on critical Pennsylvania race for Senate.

CNBC.com:

• Amazon hikes pay for warehouse and delivery workers.
• Jim Chanos says this is the biggest investing story that no one is talking about.
• Amazon dominates the $113 billion smart home market — here’s how it uses the data it collects.
• 10-year yield drops the most since 2020 after touching 4%.
• Ken Griffin says Fed has not done enough, must continue on its path to reset inflation expectations.
• Don’t bet that the bottom is in for what were high-growth tech stocks, private equity investors say.
• A new wave of UK port labor strikes begins, with ‘massive impact’ for Christmas supply chain.
  

MarketWatch:       

• Porsche IPO is set to trade Thursday. Here’s what to know.  
• ‘We are in deep trouble’: Billionaire investor Druckenmiller believes Fed’s tightening will push economy into recession in 2023.  
• This stock market rout looks like the dot-com bust of 2000, says investing guru.  
• Hurricane Ian: These stocks could feel the storm’s impact.

Zero Hedge:

• Biden Draining SPR Like "Campaign Credit Card" For Midterms.
• Something Broke: "At Some Point This Morning I Was Worried This Was The Beginning Of The End".
• Hurricane Ian To Unleash Up To $70 Billion In Losses, Insurance Market Devastation And Even Bigger Spike In Inflation.
• Janet Yellen Is Disturbingly Serious About Tax Hikes.
• Charting A Course To Self-Reliance.
• Philadelphia PD Seeks To Identify 100 Juveniles In "Riot" At Wawa Convenience Store Last Weekend.
• Max pain market.
• Iran Oil Workers Threaten To Strike If Government Doesn't End Crackdown.
• Stocks and bonds rallied following the BoE's Gilt purchase announcement - Newsquawk Asia-Pac Market Open.
• Climate Activist's Rank Hypocrisy Exposed In Hilarious Radio Interview.
• Bonds, Stocks, Bitcoin, & Bullion Soar After Brits 'Save The World'.
• The Other Reason The BOE Panicked: 26% Of All UK Mortgages Are Variable Rate And Set For Imminent Repricing.

TheGatewayPundit.com:

• Tennessee House GOP Requests Vanderbilt Medical Stop Performing Gender Surgeries On Children, Refer to it as ‘Abuse’.
• ANALYSIS: Nord Stream Pipelines Sabotaged, and Only One Country Benefits.
• “Where’s Jackie?” – Biden Asks Referring to Rep. Jackie Walorski Who Recently Died in a Car Accident (VIDEO).
• ‘#BringBackMasks’ Is Trending On Twitter And It’s Clear Most People Around The World Agree On One Thing: They Don’t Work.
• BREAKING: Libs of TikTok Suspended on Twitter — AGAIN.
• Virgin Atlantic Just Teamed Up With LGBTQ+ Celebs To Become The World’s ‘Most Inclusive Airline,’ New Policy Encourages MALE PILOTS TO WEAR SKIRTS, Everyone Gets A Pronoun Badge And More..
• Russell Brand Says He Has Been ‘Censored By YouTube’ for Video Discussing COVID, Now Moving to Rumble (VIDEO).

OpenVAERS:

• VAERS US COVID Vaccine Adverse Event Reports. 867,627 Reports(+2,042 from prior week) Through September 16th, 2022.

SKirsch.com:

• Using the MGH numbers with our own VAERS queries, we have 247 cases per million doses from the MGH study divided by 5.97 cases per million doses from VAERS. 247/5.97 = 41. This suggests that the VAERS under-reporting factor (URF) is 41X.

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 equity indices are +1.0% to +1.5% on average.

• Asia Ex-Japan Investment Grade CDS Index 176.5 -7.5 basis points. 

• China Sovereign CDS 104.25 -.25 basis point.
  

• Bloomberg Emerging Markets Currency Index 47.27 -.14%   
• Bloomberg Global Risk-On/Risk Off Index 48.52 +.67%. 
• Bloomberg US Financial Conditions Index -1.20 +7.0 basis points
  
• Volatility Index(VIX) futures 30.0 -.5%
• Euro Stoxx 50 futures +.72%.

• S&P 500 futures +.03%.

• NASDAQ 100 futures -.02%  

Morning Preview Links

Earnings of Note 
Company/Estimate 

 

Before the Open: 

• (BBBY)/-1.79
• (KMX)/1.40
• (RAD)/-.46
• (WOR)/1.58
  

After the Close:

• (CMTL)/-.02
• (MU)/1.39
• (NKE)/,92
  

Economic Releases

8:30 am EST

• Initial Jobless Claims for last week are estimated to rise to 215K versus 213K the prior week.
• Continuing Claims are estimated to rise to 1388K versus 1379K prior.
  

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Fed's Mester speaking, Eurozone CPI report, weekly EIA natural gas inventory report, (VMC) investor day, (INTU) investor day and the Ladenburg Thalmann Healthcare Conference could also impact global trading today.

US Equity Market Hours

• 9:30 am - 4:00 pm EST
  

BOTTOM LINE: Asian indices are modestly higher, boosted by commodity 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.

Stocks Higher into Final Hour on Lower Long-Term Rates, Diminished European Currency Crisis Fears, Short-Covering, Commodity/Homebuilding Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Higher
  

• Sector Performance: Almost Sector Rising
  

• Volume:  Around Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 31.3 -4.0%
• DJIA Intraday % Swing 1.9%
  
• Bloomberg Global Risk On/Risk Off Index 47.0 -4.4%

• Euro/Yen Carry Return Index 144.4 +.9%

• Emerging Markets Currency Volatility(VXY) 12.1 unch.

• CBOE S&P 500 Implied Correlation Index 49.0 -3.8% 

• ISE Sentiment Index 116.0 +5.0 points
  

• Total Put/Call 1.10 -5.3%

• NYSE Arms .73 -12.0%

Credit Investor Angst:

• North American Investment Grade CDS Index 107.54 -3.1%
  

• US Energy High-Yield OAS 453.25 +3.3%
• Bloomberg TRACE # Distressed Bonds Traded 411.0 +15.0
  

• European Financial Sector CDS Index 151.61 +2.6%
  

• Italian/German 10Y Yld Spread 241.0 basis points -12.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 182.07 +6.8%
  

• Emerging Market CDS Index 321.83 -3.4%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 25.7 -1.4%

• 2-Year Swap Spread 33.0 basis points +5.0 basis points
  

• TED Spread 34.75 basis points +.25 basis point
  

• 3-Month EUR/USD Cross-Currency Basis Swap -23.75 basis points -.25 basis point
  
• MBS  5/10 Treasury Spread  163.0 -10.0 basis points
  
• iShares CMBS ETF 45.72 +.78%
• Avg. Auto ABS OAS .64 +3.0 basis  points
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 47.31 +.26%
• 3-Month T-Bill Yield 3.31% +2.0 basis points
  

• Yield Curve -37.75 basis points (2s/10s) -3.0 basis points
  

• China Iron Ore Spot 96.0 USD/Metric Tonne -1.1%
• Dutch TTF Nat Gas(European benchmark) 205.0 euros/megawatt-hour +10.2%

• Citi US Economic Surprise Index 15.0 +.1 point

• Citi Eurozone Economic Surprise Index -.8 +.1 point
  

• Citi Emerging Markets Economic Surprise Index -1.2 +1.2 points
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 236.03 -.23:  Growth Rate +15.8% -.1 percentage point, P/E 15.7 +.3
  
• Bloomberg US Financial Conditions Index -1.28 -18.0 basis points
  
• US Atlanta Fed GDPNow Forecast +.27% unch.
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +4.68% unch.: CPI YoY +8.20% unch.
  
• 10-Year TIPS Spread 2.33 -1.0 basis point
  
• Highest target rate probability for December 14th FOMC meeting: 47.7%(-12.0 percentage points) chance of 4.25%-4.5%. Highest target rate probability for February 1st meeting: 45.3%(+5.1 percentage points) chance of 4.25%-4.5%.
  

US Covid-19:

• 112 new infections/100K people(last 7 days total). 6.4%(-0.0 percentage point) of 1/14/22 peak(1,740) -0/100K people from prior report.
  
• New Covid-19 patient hospital admissions per 100K population -82.5%(+.1 percentage point) from peak 7-day avg. of 1/9/22 - 1/15/22
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +257 open in Japan 
• China A50 Futures: Indicating +77 open in China

• DAX Futures: Indicating +69 open in Germany

Portfolio:

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

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

• Market Exposure:  Moved to 50% Net Long
  

Bear Radar

Style Underperformer:

• Large-Cap Growth +1.1%
  

Sector Underperformers:

• 1) Electric Vehicles -1.8% 2) Shipping -1.2% 3) Semis +.6%

Stocks Falling on Unusual Volume: 

• VFC, PATH and SAVA
  

Stocks With Unusual Put Option Activity:

• 1) KOS 2) BIIB 3) EWH 4) RLMD 5) EMB
  

Stocks With Most Negative News Mentions:

• 1) PHAS 2) NIO 3) SWKS 4) BB 5) AZRE
  

Charts:

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

Bull Radar

Style Outperformer:

• Small-Cap Growth +2.6%

Sector Outperformers:

• 1) Gold & Silver +5.3% 2) Homebuilders +4.2% 3) Oil Service +3.8%

Stocks Rising on Unusual Volume:

• BIIB, QTRX, DNLI, RDNT, BTU, OPCH, LLY, FYBR, ILMN, CWH, HAIN, HLIT, ALKT, IVR, BECN, KMX and AMPS
  

Stocks With Unusual Call Option Activity:

• 1) CTIC 2) BIIB 3) IGT 4) KMX 5) OCGN

Stocks With Most Positive News Mentions:

• 1) LLY 2) BIIB 3) PRTA 4) ABOS 5) BIAF
  

Charts:

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

Mid-Day Market Internals

NYSE Composite Index:

• Volume Running +2.2% Above 100-Day Average 
• 1 Sector Declining, 10 Sectors Rising
• 82.6% of Issues Advancing, 13.4% Declining
• 8 New 52-Week Highs, 222 New Lows
• 17.4%(+10.4%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 30.0 +6.0
  
• Bloomberg Global Risk-On/Risk-Off Index 46.4 -5.7%
  
• Russell 1000: Growth/Value 15,621.0 -.77%
  
• Vix 31.9 -2.3%
• Total Put/Call 1.10 -2.7%
• TRIN/Arms .93 +12.0% 

Wednesday Watch

Night Trading 

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

• Asia Ex-Japan Investment Grade CDS Index 169.0 -10.0 basis points. 

• China Sovereign CDS 104.75 -5.25 basis points.
  

• Bloomberg Emerging Markets Currency Index 47.14 unch.  
• Bloomberg Global Risk-On/Risk Off Index 49.22 +.04%. 
• Bloomberg US Financial Conditions Index -1.16 -6.0 basis points
  
• Volatility Index(VIX) futures 31.0 -1.1%
• Euro Stoxx 50 futures n/a.

• S&P 500 futures +.26%.

• NASDAQ 100 futures +.34%  

Morning Preview Links

Earnings of Note 
Company/Estimate 

 

Before the Open: 

• (CTAS)/3.14
• (PAYX)/.97
• (THO)/3.85
  

After the Close:

• (JEF)/.73
• (MTN)/-2.88
  

Economic Releases

8:30 am EST

• Advance Goods Trade Balance for Aug. is estimated at -$89.0B versus -$89.1B in Sept.
• Wholesale Inventories MoM for Aug. is estimated to rise +.4% versus a +.6% gain in July.
• Retail Inventories MoM for Aug. is estimated to rise +1.0% versus a +1.1% gain in July.
  

10:00 am EST

• Pending Home Sales MoM for Aug. is estimated to fall -1.5% versus a -1.0% decline in July. 
• Pending Home Sales YoY for Aug. is estimated to fall -24.5% versus a -22.5% decline in July.
  

10:30 am EST

• Bloomberg consensus estimates call for a weekly crude oil inventory gain of +1,206,710 barrels versus a +1,141,000 barrel gain the prior week. Gasoline supplies are estimated to rise by +323,140 barrels versus a +1,570,000 barrel gain the prior week. Distillate inventories are estimated to rise by +212,000 barrels versus a +1,230,000 barrel gain the prior week. Finally, Refinery Utilization is estimated to fall by -.77% versus a +2.1% gain prior.
  

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Fed's Powell speaking, Fed's Bowman speaking, Fed's Bullard speaking, German GFK Confidence report, 7Y T-Note auction, weekly MBA Mortgage Applications report and the (MDRX) investor day could also impact global trading today.

US Equity Market Hours

• 9:30 am - 4:00 pm EST
  

BOTTOM LINE: Asian indices are modestly lower, weighed down by technology and consumer shares in the region. I expect US stocks to open modestly higher and to weaken into the afternoon, finishing mixed. The Portfolio is 25% Net Long heading into the day.