Wednesday Watch

Night Trading 

• Asian equity indices are -.25% to +1.25% on average. 
• Asia Ex-Japan Investment Grade CDS Index 70.25 unch.   
• China Sovereign CDS 34.5 -.5 basis point.
• China Iron Ore Spot 91.65 USD/Metric Tonne -1.0%. 
• Crude Oil 86.44/bbl. +.46%. 
• Gold 4,047.90 USD/t oz. +.45%. 
• Swiss Franc/Offshore Chinese Renminbi Cross 8.08 -.09%.
• Bloomberg Emerging Markets Currency Index 33.13 unch.
• Bloomberg Global Risk-On/Risk Off Index 121.4 +.7%.
• US 10-Year Yield 4.99% unch.
• Japan 30-Year Yield 3.93% +5.0 basis points.
• Volatility Index(VIX) futures 19.3 -1.4%.
• Euro Stoxx 50 futures +.58%. 
• S&P 500 futures +.46%.
• NASDAQ 100 futures +.88%.

Morning Preview Links

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

Stocks Lower into Final Hour on Mideast War-Induced Inflation Fears, Rising Fed Rate-Hike Odds, AI Infrastructure Build-Out Worries, Tech/Alt Energy Sector Weakness

Economic/Market Gauges:

• North American Investment Grade CDS Index 59.7 +.7%
• BofA Private Credit Proxy Index 69.4 +.1% 
• Bloomberg US Securitized MBS/ABS/CMBS Avg. OAS .33 unch.
• BofA Global Financial Stress Indicator .08 -12.0 basis points
• European Financial Sector CDS Index 67.80 +.2% 
• Emerging Market CDS Index 160.9 +1.4% 
• Israel Sovereign CDS 56.5 -2.5% 
• Bloomberg Global Trade Policy Uncertainty Index .7 -.1
• US Morning Consult Daily Consume Sentiment Index 88.1 +3.3

• Citi US Economic Surprise Index 73.6 +4.1

• Citi Eurozone Economic Surprise Index -2.5 -.5

• Citi Emerging Markets Economic Surprise Index 37.5 -1.3
• S&P 500 Current Quarter EPS Growth Rate YoY(451 of 500 reporting) +27.1% +.7 percentage point
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 416.41 +.33:  Growth Rate +27.0% +.1 percentage point, P/E 18.0 -.1
• S&P 500 Current Year Estimated Profit Margin 16.32% -2.0 basis points
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(8 of 10 reporting) +34.9% unch.
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 1,106.67 +.80: Growth Rate +64.8% +.1 percentage point, P/E 15.5 -.2
• Bloomberg US Financial Conditions Index .81 +32.0 basis points
• US Yield Curve 25.5 basis points (2s/10s) -5.75 basis points
• Bloomberg Industrial Metal Index 169.4 -1.4%
• Dutch TTF Nat Gas(European benchmark) 85.4 euros/megawatt-hour +3.5%
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 14.1% -.1 percentage point
• US Atlanta Fed GDPNow Q4 Forecast +3.5% unch.
• US 10-Year T-Note Yield 4.99% +10.0 basis points
• 1-Year TIPS Spread 2.0 +12.0 basis points

• Highest target rate probability for Jan. 27th FOMC meeting: 59.7% (+40.4 percentage points) chance of 4.25%-4.5%. Highest target rate probability for March 17th meeting: 43.4%(+2.1 percentage points) chance of 4.25%-4.5%. (current target rate is 3.75-4.0%)
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -380 open in Japan 
• China A50 Futures: Indicating -45 open in China
• KOSPI 200 Futures: Indicating -16 open in South Korea 

• DAX Futures: Indicating +240 open in Germany

Portfolio:

• Slightly Lower: On losses in my tech/biotech/consumer discretionary sector longs
• Disclosed Trades: Added to my (IWM)/(QQQ) hedges
• Market Exposure: Moved to 75% Net Long

Bear Radar

Style Underperformer:

• Large-Cap Growth -1.3%

Sector Underperformers:

• 1) Gold & Silver -5.0% 2) Alt Energy -4.2% 3) Homebuilding -2.5%

Stocks Falling on Unusual Volume: 

• AXON, JHX, CIB, BV, PRAA, LYTS, SMA, HNRG, JBS, GEV, JANX, QMCO, TREX, NVDA, ONON, GMRS, LIF, IONS, GFL, FA, UPST, CRSP, GDOT, QBTS, ASTS, ETD, LINE, PS, QLYS, GSHD, NOVT, DSP, WGS, HIMS, MUX, MUX, EQPT and GRPN

Stocks With Unusual Put Option Activity:

• 1) GPRO 2) CARR 3) LCID 4) PBR 5) WGS

Stocks With Most Negative News Mentions:

• 1) HIMS 2) ASTS 3) APPS 4) GEV 5) ONON

Sector ETFs With Most Negative Money Flow:

• 1) ALAI 2) XLV 3) AGIX 4) MAGS 5) XLC

Charts:

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

Bull Radar

Style Outperformer:

• Large-Cap Growth unch.

Sector Outperformers:

• 1) Insurance +1.7% 2) Gambling +1.3% 3) Healthcare Providers +1.0%

Stocks Rising on Unusual Volume:

• AAON, AMRC, CSQR, ACAD, IAM, CCAP, HROW, CHTR, LILA, TTWO, SENS, SBH, PRCH, ZETA, EMBJ, QNT, SBGI, ORKA, VTOL, APEI, SANM, CPS, AXSM, TDW, CRTO, MBX, XPEL, AMG, GRDN, AKAM, GEO, IRON, TTD, GDYN, HG, GCMG, TRAX, LB, LXU, NET, STRA, BAP and CVS

Stocks With Unusual Call Option Activity:

• 1) GFL 2) DBA 3) GRPN 4) APPS 5) PRMW 

Stocks With Most Positive News Mentions:

• 1) SECZ 2) AAON 3) SENS 4) SANM 5) TTWO

Sector ETFs With Most Positive Money Flow:

• 1) SOXX 2) XLU 3) XLP 4) VGT 5) IGV

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: 

• (MOG/A)/2.68 

After the Close: 

• (CAE)/.19
• (ENS)/3.19
• (BMBL)/.23 

Economic Releases 

• None of note

Upcoming Splits

• (SNDK) 8-for-1

Other Potential Market Movers

• The Fed's Bowman speaking, OPEC monthly report, Thomson Reuters IPSOS PCSI for Nov., weekly MBA Mortgage Applications report, Baird Global Industrial Conference, BMO Tech/Innovation Leaders Conference and the Wolfe Research Wealth Symposium, (MRNA) analyst day, (ADP) annual meeting, (TPR) annual meeting and the Truist Biopharma Symposium 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 +.% Above 100-Day Average 
• Nasdaq/NYSE Volume Ratio 13.2 -.8
• 4 Sectors Rising, 7 Sectors Declining
• 27.3% of Issues Advancing, 71.0% Declining 
• TRIN/Arms .86 -15.7%
• Non-Block Money Flow -$205.7M
  
• 27 New 52-Week Highs, 8 New Lows
• 44.9% (-3.9%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 53.4 -3.2

Polymarket: 

• Will China invade Taiwan by June 30th 2027? 6.0% unch.
• Strait of Hormuz traffic returns to normal by November 30th 3.0% -1.0 percentage point
• Iran agrees to end enrichment of uranium by Dec. 31st 4.0% -4.0 percentage points
• Israel withdraws from Lebanon by December 31st 2.0% -1.0 percentage point
• US Invades Iran before 2027 9.0% -4.0 percentage points
• US announces end of Iranian blockade by November 30th 26.0% -8.0 percentage points

Other

• Bloomberg Global Risk-On/Risk-Off Index 120.1 +2.0%
• Global Monitor Iran Instability Index 71.0 -1.0
• Strait of Hormuz Oil Tanker Traffic Curtailed Estimate 35.0% unch.
• US High-Yield Tech Sector OAS Index 514.75 +44.25 basis points
• France Sovereign CDS 86.0 -2.6%
• Bloomberg Cyclicals/Defensives Index 259.9 -.2%
• Morgan Stanley Growth vs Value Index 135.7 -1.4%
• CNN Fear & Greed Index 33.0 (FEAR) +1.0
• 1-Day Vix 14.2 -50.6%
• Vix 20.2 -21.3%
• Total Put/Call .81 -14.7%