Thursday Watch

Night Trading 

• Asian equity indices are -2.25% to +1.0% on average. 
• Asia Ex-Japan Investment Grade CDS Index 72.5 -3.75 basis points.   
• China Sovereign CDS 35.25 -1.25 basis points.
• China Iron Ore Spot 92.15 USD/Metric Tonne +.33%. 
• Crude Oil 87.39/bbl. -.83%. 
• Gold 4,121.90 USD/t oz. +1.15%. 
• Swiss Franc/Offshore Chinese Renminbi Cross 8.19 -.21%.
• Bloomberg Emerging Markets Currency Index 33.32 +.02%.
• Bloomberg Global Risk-On/Risk Off Index 123.1 -.8%.
• US 10-Year Yield 4.84% -4.0 basis points.
• Japan 30-Year Yield 3.89% -5.0 basis points.
• Volatility Index(VIX) futures 18.2 +1.0%.
• Euro Stoxx 50 futures +.02%. 
• S&P 500 futures -.2%.
• NASDAQ 100 futures -1.0%.

Morning Preview Links

BOTTOM LINE: Asian indices are mostly lower, weighed down by technology and energy shares in the region. I expect US stocks to open modestly lower and to rally into the afternoon, finishing mixed.  The Portfolio is 50% net long heading into the day.

Stocks Substantially Higher into Final Hour on Mideast War Resolution Hopes, Election Uncertainty End, Lower Long-Term Rates, Consumer Discretionary/Healthcare Sector Strength

Economic/Market Gauges:

• North American Investment Grade CDS Index 59.1 -4.4%
• BofA Private Credit Proxy Index 870.4 +2.2% 
• Bloomberg US Securitized MBS/ABS/CMBS Avg. OAS .33 -1.0 basis point
• BofA Global Financial Stress Indicator .10 -5.0 basis points
• European Financial Sector CDS Index 70.1 -5.1% 
• Emerging Market CDS Index 160.6 -4.4% 
• Israel Sovereign CDS 56.6 -5.0% 
• Bloomberg Global Trade Policy Uncertainty Index .5 unch.
• US Morning Consult Daily Consume Sentiment Index 85.4 +.5

• Citi US Economic Surprise Index 59.6 -4.1

• Citi Eurozone Economic Surprise Index 1.3 -4.5

• Citi Emerging Markets Economic Surprise Index 40.6 -.3
• S&P 500 Current Quarter EPS Growth Rate YoY(372 of 500 reporting) +28.6% -.4 percentage point
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 414.98 +.08:  Growth Rate +26.6% unch., P/E 18.6 +.3
• S&P 500 Current Year Estimated Profit Margin 16.35% unch.
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(8 of 10 reporting) +34.9% -6.3 percentage points
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 1,102.36 +1.12: Growth Rate +64.2% +.2 percentage point, P/E 16.2 +.3
• Bloomberg US Financial Conditions Index .74 +10.0 basis points
• US Yield Curve 31.0 basis points (2s/10s) -2.5 basis points
• Bloomberg Industrial Metal Index 172.53 +.6%
• Dutch TTF Nat Gas(European benchmark) 93.5 euros/megawatt-hour -1.5%
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 13.2% +.5 percentage point
• US Atlanta Fed GDPNow Q4 Forecast +3.4% -.3 percentage point
• US 10-Year T-Note Yield 4.89% -7.0 basis points
• 1-Year TIPS Spread 2.12 -25.0 basis points

• Highest target rate probability for Jan. 27th FOMC meeting: 65.5% (+3.2 percentage points) chance of 4.0%-4.25%. Highest target rate probability for March 17th meeting: 44.9%(+.6 percentage point) chance of 4.25%-4.5%. (current target rate is 3.75-4.0%)
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +860 open in Japan 
• China A50 Futures: Indicating -48 open in China
• KOSPI 200 Futures: Indicating -15 open in South Korea 

• DAX Futures: Indicating +270 open in Germany

Portfolio:

• Slightly Higher: On gains in my tech/biotech/consumer discretionary sector longs
• Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges and some of my emerging market shorts
• Market Exposure: Moved to 75% Net Long

Bear Radar

Style Underperformer:

• Mid-Cap Growth -1.1%

Sector Underperformers:

• 1) Energy -6.4% 2) Lithography/Photonics -5.2% 3) Space -3.1%

Stocks Falling on Unusual Volume: 

• E, CNR, RYZ, ET, URI, ARLP, CIGI, NFG, EC, NOC, INTC, NICE, SOLS, IFF, TARS, PARR, ARMK, VTOL, SEDG, WULF, VTS, CMI, SMCI, GOOD, JCI, VTS, ALAB, CEG, CAT, PR, EQNR, VIAV, STM, IMNM, RVLV, CDNL, PBR/A, IMNM, LMT, VNOM, WMB, TLN, BWLP, BE, VLO, APLD, VIST, FTAI, DRS, VG, EME, ECO, WBI, AVAV, HAWK, CECO, TKR, MRVL, ODTX, ETN, GEV, CORZ, IA, MTUS, SITM, DOCN, CAMT, LITE, SIMO, HURN, TSEM, ANDE, KGS, ALMR, IREN, DPC, KEX, NRG, LBRT, PWR, CVS, FLEX, MCY, CVI, LB, VRT, NVT, VET, TPL, KMT, FIX, DDOG, VST, GLXY, SM, IESC, MTZ, BTU, TRMB, LGN, URGN, SEI, FPS, UNM, AAON, TH, INIO, MTRN, STRL, HUT, CGEM, FIS, MOD, DOX, SNDX, ECG and NRIX

Stocks With Unusual Put Option Activity:

• 1) EXE 2) FIS 3) CG 4) MSOS 5) NRG

Stocks With Most Negative News Mentions:

• 1) DJT 2) DOX 3) CIFR 4) URGN 5) STVN

Sector ETFs With Most Negative Money Flow:

• 1) XLC 2) SOXX 3) XLY 4) XLF 5) XLP

Charts:

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

Bull Radar

Style Outperformer:

• Large-Cap Value +2.6%

Sector Outperformers:

• 1) Gold & Silver +8.1% 2) Airlines +7.2% 3) Medical Equipment +7.1%

Stocks Rising on Unusual Volume:

• KD, ALIT, DUOL, TREE, OPRT, HELE, YOU, LIVN, DFH, PCOR, ENOV, MDLN, TREX, XYZ, LMRI, LMB, SWK, MOS, ZBH, TCMD, FLYW, CPNG, ACEL, ARLO, PFGC, ARLO, LYFT, RIOT, ARDT, NXT, WPM, EXPE, CNC, BRKR, VRDN, CARS, LGIH, FND, W, ACHC, BKNG, HCA, SKY, ISRG, MMM, RELY, SYK, CVNA, OSCR, CVNA, TRIP, VCEL, CNM, VIA, ZG, RDNT, LTM, THC, RHG, MOH, PHG, IRTC, GXO, SIRI, SWBI, SSRM, CON, GWW, GEHC, DB, RYAAY, OC, LOGI, KMTS, WSE, HGTY, CWK, SNN, APO, PACS, CSIQ, KEP, ALC, ZVRA, AMZN, LPX, NWG, UBER, PACS, KGC, RYTM, DNLI, SPB, ING, MCD, JKS, MSFT, AAPL, FMS, HSIC, OFRM, SF, NVO, WYNN, ANET, FISV, HASI, HSBC, BEKE, DRVN, PSLV, PPG, PRVA, TOST, AIZ, XPRO, FSLR, SIBN, HCKT, RIVN, ENPH, BDX, EGO, VGNT, NEE, IDXX, TTAM, EW, D, PKX, TAC, RELX, TECK, ACAD, GOOG and GPK

Stocks With Unusual Call Option Activity:

• 1) UNM 2) MDLN 3) VNET 4) GXO 5) ET 

Stocks With Most Positive News Mentions:

• 1) MDLN 2) DUOL 3) SWK 4) LYFT 5) TREX

Sector ETFs With Most Positive Money Flow:

• 1) SMH 2) XLV 3) XRT 4) KRE 5) ARKK

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: 

• (AAP)/.77
• (APD)/3.61
• (MT)/-.40
• (BDX)/4.07
• (CAH)/2.94
• (COP)/3.05
• (CMI)/8.21
• (DUK)/1.86
• (FTDR)/1.77
• (GPN)/3.58
• (HAE)/1.29
• (HTZ)/.25
• (IRM)/1.48
• (KMB)/1.65
• (DNUT)/.01
• (MTSI)/2.00
• (TAP)/1.44
• (OSCR)/-.14
• (PZZA)/.16
• (PH)/8.21
• (PENN)/.17
• (PLNT)/.81
• (RL)/4.26
• (ROK)/3.69
• (SHAK)/.34
• (SO)/1.71
• (STRA)/1.95
• (TPR)/1.56
• (CI)/7.52
• (WEN)/.09
• (ZTS)/1.51 

After the Close: 

• (TXG)/-.27
• (ABNB)/2.85
• (AKAM)/1.67
• (AAOI)/.14
• (TEAM)/1.44
• (AXON)/1.89
• (CALY)/.01
• (NET)/.34
• (ED)/2.03
• (DVN)/1.33
• (DKNG)/-.41
• (DBX)/.73
• (EOG)/4.47
• (GH)/-.75
• (GRDN)/.31
• (FROG)/.23
• (KTOS)/.21
• (LYV)/1.51
• (LYFT)/.20
• (MAT)/.94
• (MCHP)/.94
• (MNST)/.30
• (NTRA)/-.28
• (SMR)/-.12
• (SPG)/3.31 
• (STE)/2.68
• (WYNN)/.52
• (YELP)/.45
• (ZD)/1.20 

Economic Releases 

5:30 am EST

• Challenger Job Cuts YoY for Oct. 

8:30 am EST

• 3Q Non-Farm Productivity is estimated to rise +2.7% versus a +1.4% gain in 2Q.
• 3Q Unit Labor Costs are estimated to rise +.5% versus a +1.2% gain in 2Q.
• Initial Jobless Claims for last week is estimated to rise to 196K versus 194K the prior week.
• Continuing Claims is estimated to rise to 1710K versus 1701K prior. 

Upcoming Splits

• None of note

Other Potential Market Movers

• The Fed's Logan speaking, Fed's Barkin speaking, Fed's weekly balance sheet report, weekly EIA natural gas inventory report, (VEEV) investor day, (NWSA) annual meeting and the (BOX) investor meeting could also impact global trading tomorrow.

US Equity Market Hours

• 9:30 am - 4:00 pm EST

Afternoon Market Internals

NYSE Composite Index:

• Volume Running +58.3% Above 100-Day Average 
• Nasdaq/NYSE Volume Ratio 10.7 -3.7
• 9 Sectors Rising, 2 Sectors Declining
• 76.0% of Issues Advancing, 22.7% Declining 
• TRIN/Arms 1.31 +15.9%
• Non-Block Money Flow +$274.2M
  
• 141 New 52-Week Highs, 78 New Lows
• 47.5% (+7.6%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 63.6 +6.3

Polymarket: 

• Will China invade Taiwan by June 30th 2027? 6.0% unch.
• Strait of Hormuz traffic returns to normal by November 30th 7.0% unch.
• Iran agrees to end enrichment of uranium by Dec. 31st 7.0% unch.
• Israel withdraws from Lebanon by December 31st 3.0% unch.
• US Invades Iran before 2027 18.0% unch.
• US announces end of Iranian blockade by November 30th 31.0% unch.

Other

• Bloomberg Global Risk-On/Risk-Off Index 124.5 +.7%
• Global Monitor Iran Instability Index 91.0 -1.0
• Strait of Hormuz Oil Tanker Traffic Curtailed Estimate 45.0% unch.
• US High-Yield Tech Sector OAS Index 457.5 -10.0 basis points
• France Sovereign CDS 91.5 -4.4%
• Bloomberg Cyclicals/Defensives Index 261.7 -.4%
• Morgan Stanley Growth vs Value Index 137.1 -.3%
• CNN Fear & Greed Index 28.0 (Moved to FEAR from EXTREME FEAR) +7.0
• 1-Day Vix 11.3 -51.2%
• Vix 16.8 -19.4%
• Total Put/Call .84 unch.