Tuesday Watch

Night Trading 

• Asian equity indices are +.25% to +2.75% on average. 
• Asia Ex-Japan Investment Grade CDS Index 78.0 -1.5 basis points  
• China Sovereign CDS 38.75 -.5 basis point.
• China Iron Ore Spot 89.55 USD/Metric Tonne -1.0%. 
• Crude Oil 100.94/bbl. -.8%. 
• Gold 4,028.2 USD/t oz. -.3%. 
• Swiss Franc/Offshore Chinese Renminbi Cross 8.06 -.01%.
• Bloomberg Emerging Markets Currency Index 33.37 -.05%.
• Bloomberg Global Risk-On/Risk Off Index 127.7 +.7%.
• US 10-Year Yield 4.99% unch.
• Japan 30-Year Yield 3.83 -1.0 basis point.
• Volatility Index(VIX) futures 19.1 -.4%.
• Euro Stoxx 50 futures -.20%. 
• S&P 500 futures +.17%.
• NASDAQ 100 futures +.29%.

Morning Preview Links

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

Stocks Higher into Final Hour on Mideast War De-Escalation Hopes, AI Infrastructure Build-Out Optimism, Technical Buying, Tech/Defense Sector Strength

Economic/Market Gauges:

• North American Investment Grade CDS Index 62.7 -1.3%
• BofA Private Credit Proxy Index 65.4 -.3% 
• Bloomberg US Securitized MBS/ABS/CMBS Avg. OAS .38 -1.0 basis point
• BofA Global Financial Stress Indicator .20 +6.0 basis points
• European Financial Sector CDS Index 76.3 -2.0% 
• Emerging Market CDS Index 173.9 +1.0% 
• Israel Sovereign CDS 64.0 -.9% 
• Bloomberg Global Trade Policy Uncertainty Index .5 -.1
• US Morning Consult Daily Consume Sentiment Index 85.1 -.3

• Citi US Economic Surprise Index 46.0 +1.6

• Citi Eurozone Economic Surprise Index 8.2 -3.5

• Citi Emerging Markets Economic Surprise Index 26.6 -1.4
• S&P 500 Current Quarter EPS Growth Rate YoY(123 of 500 reporting) +37.2% -1.1 percentage points
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 412.85 +1.10:  Growth Rate +25.8% +.4 percentage point, P/E 18.6 unch.
• S&P 500 Current Year Estimated Profit Margin 16.39% +3.0 basis points
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(3 of 10 reporting) +499.8% unch.
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 1,095.71 +3.00: Growth Rate +63.2% +.5 percentage point, P/E 16.7 -.1
• Bloomberg US Financial Conditions Index .80 +1.0 basis point
• US Yield Curve 27.0 basis points (2s/10s) -3.25 basis points
• Bloomberg Industrial Metal Index 173.7 +.3%
• Dutch TTF Nat Gas(European benchmark) 95.80 euros/megawatt-hour +2.0%
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 10.8% +.2%
• US Atlanta Fed GDPNow Q3 Forecast +3.5% unch.
• US 10-Year T-Note Yield 4.99% unch.
• 1-Year TIPS Spread 2.66 -5.0 basis points

• Highest target rate probability for Dec. 9th FOMC meeting: 72.9% (+4.0 percentage points) chance of 4.0%-4.25%. Highest target rate probability for Jan. 27th meeting: 51.8%(-1.5 percentage points) chance of 4.0%-4.25%. (current target rate is 3.75-4.0%)
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +750 open in Japan 
• China A50 Futures: Indicating -29 open in China
• KOSPI 200 Futures: Indicating +22 open in South Korea 

• DAX Futures: Indicating +57 open in Germany

Portfolio:

• Higher: On gains in my tech/energy/industrial sector longs and emerging market shorts
• Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges
• Market Exposure: Moved to 75% net long

Bear Radar

Style Underperformer:

• Mid-Cap Value +.2%

Sector Underperformers:

• 1) Healthcare Providers -1.2% 2) Social Media -.9% 3) Airlines -.8%

Stocks Falling on Unusual Volume: 

• VZ, VALE, TGS, CART, DLO, AMKR, GGAL, LTM, KNSA, CRESY, WHR, BMA, MELI, PBR, VIV, TIMB, FICO, NU, ELPC, AVBP, AFYA and XP

Stocks With Unusual Put Option Activity:

• 1) BHP 2) AMKR 3) CARR 4) BURL 5) CNC

Stocks With Most Negative News Mentions:

• 1) XP 2) DUOL 3) DG 4) JBLU 5) BULL

Sector ETFs With Most Negative Money Flow:

• 1) XLP 2) ARKK 3) XLF 4) XLV 5) XBI

Charts:

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

Bull Radar

Style Outperformer:

• Mid-Cap Growth +1.5%

Sector Outperformers:

• 1) Lithography/Photonics +4.1% 2) Networking +3.9% 3) Semis +3.4%

Stocks Rising on Unusual Volume:

• SGRY, NN, XNCR, RPD, RRC, ORKA, LITE, TSEM, WULF, TTMI, INIO, FIX, BE, AVLN, HAWK, TSLA, SANM, SA, GEV, RBRK, HSAI, WDC, HHH, ERAS, R, LMT, IREN, MSM, FRO, MBX, HWM, SRAD, RDY, DOW, RDWR, LQDA, ASC, AR, CRWV, WTTR, LGN, CDNS, CGNT, TEN, CRS, IHG and EAT

Stocks With Unusual Call Option Activity:

• 1) NRGV 2) SLN 3) CORT 4) BRZE 5) PRMW 

Stocks With Most Positive News Mentions:

• 1) XNCR 2) ORKA 3) BE 4) TSLA 5) RBRK

Sector ETFs With Most Positive Money Flow:

• 1) SOXX 2) XLE 3) VOLT 4) ARKG 5) VGT

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:

• (AB)/.86
• (AMT)/2.77
• (AWI)/2.39
• (BA)/-.25
• (KO)/.88
• (GLW)/.88
• (FCX)/.82
• (HCA)/6.65
• (HRI)/2.92
• (HLT)/2.36
• (ITW)/2.97
• (ITRI)/1.56
• (JBLU)/-.54
• (PCAR)/1.61
• (PYPL)/1.31
• (PII)/.60
• (RGEN)/.46
• (RCL)/6.38
• (SHW)/3.69
• (UPS)/1.62 

After the Close: 

• (BKR)/.61
• (CZR)/-.12
• (CAKE)/.96
• (CR)/1.82
• (FFIV)/4.26
• (FE)/.90
• (LSTR)/1.67
• (MANH)/1.46
• (MIR)/.12
• (NXPI)/4.12
• (PPG)/2.12
• (HOOD)/.56
• (STX)/7.45
• (TER)/2.09
• (V)/3.44
• (WERN)/.16 

Economic Releases 

8:30 am EST

• Durable Goods Orders for Sept. is estimated to rise +1.9% versus a -.1% decline in Aug.
• Durables Ex Transports for Sept. is estimated to rise +.6% versus a +.2% gain in Aug.
• Cap Goods Orders Non-Defense Ex-Air for Sept. is estimated to rise +.8% versus a +.5% gain in Aug. 

9:00 am EST

• The FHFA House Price Index MoM for Aug. is estimated to rise +.2% versus a +.3% gain in Sept.
• The S&P Cotality CS 20-City MoM SA for Aug. is estimated to rise +.3% versus a +.32% gain in July. 

10:00 am EST

• The Conference Board Consumer Confidence Index for Oct. is estimated to fall to 81.0 versus 81.9 in Sept.
• The Richmond Fed Manufacturing Index for Oct. is estimated to rise to 0.0 versus -2.0 in Sept. 
• New Home Sales for Sept. is estimated to fall to 651K versus 684K in Aug.

10:30 am EST

• The Dallas Fed Services Activity Index for Oct. 

Upcoming Splits

• None of note

Other Potential Market Movers

• The 5-Year T-Note auction, Atlanta Fed GDPNow Q3 update, weekly ADP employment change report, weekly US retail sales reports, M2 Money Supply MoM for Sept., weekly API crude oil stock report, (CTAS) annual meeting and the (WOLF) general meeting  could also impact global trading tomorrow.

US Equity Market Hours

• 9:30 am - 4:00 pm EST

Mid-Day Market Internals

NYSE Composite Index:

• Volume Running +34.0% Above 100-Day Average 
• Nasdaq/NYSE Volume Ratio 10.0 -4.7
• 9 Sectors Rising, 2 Sectors Declining
• 63.7% of Issues Advancing, 34.1% Declining 
• TRIN/Arms 3.10 +219.5%
• Non-Block Money Flow +$156.3M
  
• 47 New 52-Week Highs, 96 New Lows
• 42.1% (+.8%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 55.7 +1.3

Polymarket: 

• Will China invade Taiwan by June 30th 2027? 6.0% unch.
• Strait of Hormuz traffic returns to normal by November 30th 7.0% +1.0 percentage point
• Iran agrees to end enrichment of uranium by Dec. 31st 13.0% +3.0 percentage points
• Israel withdraws from Lebanon by December 31st 3.0% unch.
• US Invades Iran before 2027 20.0% +4.0 percentage points
• US announces end of Iranian blockade by November 30th 23.0% -2.0 percentage points

Other

• Bloomberg Global Risk-On/Risk-Off Index 127.2 +.6%
• Global Monitor Iran Instability Index 68.0 +1.0
• Strait of Hormuz Oil Tanker Traffic Curtailed Estimate 25.0% +55.0 percentage points
• US High-Yield Tech Sector OAS Index 459.25 -11.75 basis points
• Bloomberg Cyclicals/Defensives Index 264.3 +.9%
• Morgan Stanley Growth vs Value Index 138.3 +.4%
• CNN Fear & Greed Index 30.0 (Moved to FEAR from EXTREME FEAR) +10.0
• 1-Day Vix 8.6 -48.8%
• Vix 17.8 -8.4%
• Total Put/Call .82 -11.8%