Wednesday Watch

Night Trading 

• Asian equity indices are +.50% to +2.75% on average. 
• Asia Ex-Japan Investment Grade CDS Index 76.0 -2.0 basis points  
• China Sovereign CDS 37.75 -1.0 basis point.
• China Iron Ore Spot 89.5 USD/Metric Tonne -.02%. 
• Crude Oil 101.10/bbl. +1.2%. 
• Gold 4,071.2 USD/t oz. -.1%. 
• Swiss Franc/Offshore Chinese Renminbi Cross 8.04 -.03%.
• Bloomberg Emerging Markets Currency Index 33.37 -.04%.
• Bloomberg Global Risk-On/Risk Off Index 128.2 +.8%.
• US 10-Year Yield 5.0% unch.
• Japan 30-Year Yield 3.87% +1.0 basis point.
• Volatility Index(VIX) futures 19.1 +.5%.
• Euro Stoxx 50 futures -.18%. 
• S&P 500 futures +.01%.
• NASDAQ 100 futures +.07%.

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 Finish Higher on Mideast War Resolution Hopes, AI Infrastructure Build-Out Optimism, Declining Eurozone Sovereign Debt Angst, Tech/Transport Sector Strength

Economic/Market Gauges:

• North American Investment Grade CDS Index 60.8 -2.8%
• BofA Private Credit Proxy Index 67.3 +2.8% 
• Bloomberg US Securitized MBS/ABS/CMBS Avg. OAS .37 -1.0 basis point
• BofA Global Financial Stress Indicator .17 -3.0 basis points
• European Financial Sector CDS Index 73.7 -3.4% 
• Emerging Market CDS Index 166.8 -4.0% 
• Israel Sovereign CDS 61.4 -4.0% 
• Bloomberg Global Trade Policy Uncertainty Index .4 -.1
• US Morning Consult Daily Consume Sentiment Index 85.7 +.6

• Citi US Economic Surprise Index 53.1 +7.1

• Citi Eurozone Economic Surprise Index 5.4 -2.8

• Citi Emerging Markets Economic Surprise Index 28.4 +1.8
• S&P 500 Current Quarter EPS Growth Rate YoY(161 of 500 reporting) +37.6% +.4 percentage point
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 412.95 +.10:  Growth Rate +25.8% unch., P/E 18.7 +.1
• S&P 500 Current Year Estimated Profit Margin 16.39% unch.
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(3 of 10 reporting) +499.8% unch.
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 1,095.86 +.15: Growth Rate +63.2% unch., P/E 16.9 +.2
• Bloomberg US Financial Conditions Index .86 +6.0 basis points
• US Yield Curve 25.75 basis points (2s/10s) -1.25 basis points
• Bloomberg Industrial Metal Index 176.0 +1.3%
• Dutch TTF Nat Gas(European benchmark) 96.81 euros/megawatt-hour +.1%
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 11.6% +.8%
• US Atlanta Fed GDPNow Q3 Forecast +3.4% -.1 percentage point
• US 10-Year T-Note Yield 5.0% +1.0 basis point
• 1-Year TIPS Spread 2.64 -4.0 basis points

• Highest target rate probability for Dec. 9th FOMC meeting: 78.0% (+5.2 percentage points) chance of 4.0%-4.25%. Highest target rate probability for Jan. 27th meeting: 52.4%(-.4 percentage point) chance of 4.0%-4.25%. (current target rate is 3.75-4.0%)
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +1,170 open in Japan 
• China A50 Futures: Indicating +80 open in China
• KOSPI 200 Futures: Indicating +19 open in South Korea 

• DAX Futures: Indicating +150 open in Germany

Portfolio:

• Higher: On gains in my tech/industrial/biotech sector longs 
• Disclosed Trades: Covered some of my (QQQ) hedges, then added them back
• Market Exposure: 75% net long

Bear Radar

 Style Underperformer:

• Mid-Cap Value -.1%

Sector Underperformers:

• 1) Energy -3.8% 2) Gambling -2.4% 3) Computer Services -1.9%

Stocks Falling on Unusual Volume: 

• WING, PSO, MG, BMI, HUBB, AWI, BRO, CTAS, HSBC, HCA, AVLN, WELL, EEFT, AIT, UNF, BA, XYL and INOD

Stocks With Unusual Put Option Activity:

• 1) CDNS 2) CART 3) CMG 4) CNC 5) BA

Stocks With Most Negative News Mentions:

• 1) AWI 2) DKS 3) PZZA 4) UNCY 5) ONON

Sector ETFs With Most Negative Money Flow:

• 1) DRAM 2) ARKG 3) XBI 4) XLP 5) IYZ

Charts:

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

Bull Radar

Style Outperformer:

• Small-Cap Growth +1.7%

Sector Outperformers:

• 1) Alt Energy +5.3% 2) Space +4.4% 3) Airlines +4.1%

Stocks Rising on Unusual Volume:

• HRI, MFIC, KNSA, BETR, CTOS, FTH, SOFI, CLS, PNR, ABSI, USAR, DNA, INBX, NGNE, MXL, THRM, CBRS, LEU, EAF, RDWR, WSC, LECO, BE, CRWV, ABG, SSMR, PBLS, CDNS, EGO, FER, PII, KALU, HAWK, ASTS, GLXY, RCL, CECO, FLEX, LITE, AMKR, GM, RDNT, NUE, CSQR, ARLO, UPS, LFUS, VRT, ORKA, MOS, SSD, TIMB, NAMS, AEVA, EAT, NTSK, JCI, BHP, SKM, GEV, TSLA, STX, MSDL, XP, GE, FIX, HTO, CINF, NNE, HAPN and SCTX

Stocks With Unusual Call Option Activity:

• 1) HSBC 2) WMB 3) REPL 4) BKNG 5) PPTA 

Stocks With Most Positive News Mentions:

• 1) MFIC 2) SOFI 3) MMA 4) KNSA 5) LITE

Sector ETFs With Most Positive Money Flow:

• 1) SMH 2) ARKK 3) XLV 4) XLF 5) KRE

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: 

• (APH)/.73
• (AEP)/2.05
• (AON)/3.30 
• (ADP)/2.77
• (AEP)/2.05
• (AON)/3.30
• (APH)/.73
• (BIIB)/1.98
• (BSX)/.72
• (EAT)/2.45
• (CHRW)/1.75
• (CHEF)/.59
• (CLH)/3.26
• (ETSY)/.76
• (EVR)/2.52
• (FLEX)/1.06
• (GRMN)/2.41 
• (GEV)/4.01
• (GNRC)/2.43
• (GSK)/1.33
• (IP)/.29
• (JLL)/6.15 
• (LH)/4.64
• (LII)/7.36
• (ODFL)/1.61
• (OTIS)/1.01
• (PAG)/3.37 
• (PSX)/11.73
• (TMO)/6.41
• (VRT)/1.82
• (IP)/.29
• (MAS)/1.02
• (UBS)/.91
• (VFC)/.53
• (VRT)/1.82
• (WING)/1.02 
• (TEL)/3.07
• (TDY)/6.16

After the Close: 

• (AEM)/2.50
• (ALGN)/2.77
• (GOOG)/3.03
• (BOOT)/1.64
• (CP)/1.31
• (CVNA)/.44
• (CMG)/.29
• (EBAY)/1.41
• (FDX)/3.34
• (FLS)/.98
• (F)/.41
• (FTNT)/.86
• (KLAC)/1.19
• (MGM)/.04
• (MSFT)/4.71
• (MYRG)/2.97
• (ORLY)/.93
• (PBI)/.35
• (RJF)/3.26
• (NOW)/1.02
• (SFM)/1.23
• (STRL)/6.20
• (VKTX)/-1.06
• (WEX)/5.66 

Economic Releases 

8:30 am EST

• Advance Goods Trade Balance for for Sept. is estimated at -$130.2B versus -$132.6B in Aug.
• Retail Inventories MoM for Sept. is estimated to rise +.3% versus a +.3% gain in Aug.
• Wholesale Inventories MoM for Sept. is estimated to rise +.3% versus a +.3% gain in Aug. 

10:30 am EST

• Bloomberg consensus estimates call for a weekly crude oil inventory gain of +81,170 barrels versus a -3,060,000 barrel decline the prior week. Gasoline supplies are estimated to fall by -691,670 barrels versus a -2,952,000 barrel decline the prior week.  Distillite inventories are estimated to fall by -1,172,170 barrels versus a +1,675,000 barrel gain the prior week. Finally, Refinery Utilization is estimated to rise by +.02% versus a -.1% decline prior.

2:00 pm EST

• The FOMC is expected to leave the benchmark Fed Funds rate at 3.75-4.0%. 

Upcoming Splits

• None of note

Other Potential Market Movers

• The FOMC press conference, 7Y T-Note auction, Atlanta Fed GDPNow Q3 update, weekly MBA Mortgage Applications report and the (PH) annual 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 -3.9% Below 100-Day Average 
• Nasdaq/NYSE Volume Ratio 13.6 +3.6
• 6 Sectors Rising, 5 Sectors Declining
• 53.7% of Issues Advancing, 44.6% Declining 
• TRIN/Arms 1.18 -30.6%
• Non-Block Money Flow +$9.8M
  
• 30 New 52-Week Highs, 80 New Lows
• 41.% (+.7%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 55.2 -.5

Polymarket: 

• Will China invade Taiwan by June 30th 2027? 6.0% unch.
• Strait of Hormuz traffic returns to normal by November 30th 6.0% -1.0 percentage point
• Iran agrees to end enrichment of uranium by Dec. 31st 14.0% +1.0 percentage point
• Israel withdraws from Lebanon by December 31st 4.0% +1.0 percentage point
• US Invades Iran before 2027 19.0% -1.0 percentage point
• US announces end of Iranian blockade by November 30th 23.0% unch.

Other

• Bloomberg Global Risk-On/Risk-Off Index 127.4 +.5%
• Global Monitor Iran Instability Index 68.0 unch.
• Strait of Hormuz Oil Tanker Traffic Curtailed Estimate 40.0% +15.0 percentage points
• US High-Yield Tech Sector OAS Index 446.5 -14.5 basis points
• Bloomberg Cyclicals/Defensives Index 266.3 +.9%
• Morgan Stanley Growth vs Value Index 141.3 +2.1%
• CNN Fear & Greed Index 33.0 (FEAR) +3.0
• 1-Day Vix 10.1 -3.5%
• Vix 17.6 -4.4%
• Total Put/Call .85 +3.7%