Stocks Higher into Final Hour on AI Infrastructure Build-Out Stock Bargain Hunting, Short-Covering, Technical Buying, Tech/Biotech Sector Strength

Economic/Market Gauges:

• North American Investment Grade CDS Index 62.2 -.2%
• BofA Private Credit Proxy Index 65.4 -1.9% 
• Bloomberg US Securitized MBS/ABS/CMBS Avg. OAS .42 +3.0 basis points
• BofA Global Financial Stress Indicator .09 +3.0 basis points
• European Financial Sector CDS Index 72.5 +1.6% 
• Emerging Market CDS Index 164.7 +.7% 
• Israel Sovereign CDS 60.9 +2.3% 
• Bloomberg Global Trade Policy Uncertainty Index .5 unch.
• US Morning Consult Daily Consume Sentiment Index 84.7 -1.1

• Citi US Economic Surprise Index 42.6 -2.5

• Citi Eurozone Economic Surprise Index 37.0 -6.4

• Citi Emerging Markets Economic Surprise Index 33.2 +5.9
• S&P 500 Current Quarter EPS Growth Rate YoY(46 of 500 reporting) +47.4% -2.5 percentage points
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 410.78 +.83:  Growth Rate +25.2% +.3 percentage point, P/E 18.8 -.1
• S&P 500 Current Year Estimated Profit Margin 16.31% +2.0 basis points
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(1 of 10 reporting) +1,013.1% unch.
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 1,092.25 +2.57: Growth Rate +62.7% +.4 percentage point, P/E 17.3 -.2
• Bloomberg US Financial Conditions Index .88 -20.0 basis points
• US Yield Curve 37.25 basis points (2s/10s) +1.0 basis point
• Bloomberg Industrial Metal Index 172.7 +.4%
• Dutch TTF Nat Gas(European benchmark) 87.9 euros/megawatt-hour +.4%
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 10.8% -.4%
• US Atlanta Fed GDPNow Q3 Forecast +3.6% unch.
• US 10-Year T-Note Yield 5.13% +5.0 basis points
• 1-Year TIPS Spread 3.0 -1.0 basis point

• Highest target rate probability for Dec. 9th FOMC meeting: 82.8% (-1.7 percentage points) chance of 3.75%-4.0%. Highest target rate probability for Jan. 27th meeting: 75.2%(-.3 percentage point) chance of 4.0%-4.25%. (current target rate is 3.75-4.0%)
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -150 open in Japan 
• China A50 Futures: Indicating -158 open in China
• KOSPI 200 Futures: Indicating -4 open in South Korea 

• DAX Futures: Indicating +9 open in Germany

Portfolio:

• Slightly Higher: On gains in my tech/biotech sector longs
• Disclosed Trades: None
• Market Exposure: 50% net long

Bear Radar

Style Underperformer:

• Mid-Cap Value -.4%

Sector Underperformers:

• 1) Utilities -1.6% 2) I-Banks -1.3% 3) Airlines -1.3%

Stocks Falling on Unusual Volume: 

• FLEX, SAFE, BIRK, GEO, EHC, FLNG, GDS, XRPN, CLMT, ES, JEF, AMP, DX, MOS, CBRS, GOOD, THO, FRO, SFL, STWD, QNT, TLK, LEU, ARR, SE, RBA, INSW, iam, FOXF and MESO

Stocks With Unusual Put Option Activity:

• 1) M 2) RBA 3) KR 4) XOP 5) IRON

Stocks With Most Negative News Mentions:

• 1) NCPL 2) GUTS 3) INV 4) ENSG 5) REKR

Sector ETFs With Most Negative Money Flow:

• 1) ARKK 2) IGV 3) XLY 4) IHI 5) ITB

Charts:

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

Bull Radar

Style Outperformer:

• Large-Cap Growth +1.0%

Sector Outperformers:

• 1) AI Innovation +2.4% 2) Computer Services +2.0% 3) Software +1.8%

Stocks Rising on Unusual Volume:

• SLN, IRON, CLF, ARQT, PBLS, AXTI, MANE, XERS, MAZE, APLD, DXC, SLGN, DXC, KMTS, HPK, PRAX, TRAX, WRBY, RGC, PHVS, ASST, AMZN, ASTS, GMAB, SITM, EQPT, SUPN, HSAI, CIEN, TSLA, GPCR, PBYI, WULF, IREN and TTMI

Stocks With Unusual Call Option Activity:

• 1) EL 2) PBR 3) CSX 4) GLAS 5) WU 

Stocks With Most Positive News Mentions:

• 1) APLD 2) DDOG 3) SLN 4) CLF 5) SNDK

Sector ETFs With Most Positive Money Flow:

• 1) SOXX 2) XLF 3) XLV 4) VGT 5) VOLT

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:

• (MMM)/2.39
• (ALLY)/1.33
• (EFX)/2.20
• (GE)/2.01
• (GM)3.70
• (GPC)/2.04
• (HAL)/.58
• (HAS)/1.86
• (KEY)/.46
• (MSCI)/5.02
• (NOC)/7.18
• (PM)/2.30
• (RTX)/1.78
• (VMI)/5.70
• (VICR)/1.32 

After the Close: 

• (ALK)/.39
• (OZK)/1.43
• (COF)/5.50
• (CB)/6.79
• (NFLX)/.82
• (PEGA)/.45
• (SPCX)/.14
• (LRN)/1.07
• (UAL)/2.58
• (WFRD)/1.30 
• (ISRG)/2.65 

Economic Releases 

8:30 am EST

• Philly Fed Non-Manufacturing Activity for Oct.
• Housing Starts for Sept. is estimated to rise to 1300K versus 1275K in Aug.
• Building Permits for Sept. is estimated to fall to 1385K versus 1403K in Aug. 

10:00 am EST

• Pending Home Sales MoM for Sept. is estimated to fall -1.0% versus a +.3% gain in Aug. 

Upcoming Splits

• None of note

Other Potential Market Movers

• The Atlanta Fed GDPNow Q3 update, weekly ADP employment change report, weekly US retail sales reports, weekly API crude oil stock report and the (KR) investor day 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 -18.0% Below 100-Day Average 
• Nasdaq/NYSE Volume Ratio 13.9 -2.2
• 3 Sectors Rising, 8 Sectors Declining
• 37.7% of Issues Advancing, 60.4% Declining 
• TRIN/Arms 1.23 +53.8%
• Non-Block Money Flow -$167.5M
  
• 29 New 52-Week Highs, 114 New Lows
• 39.3% (-1.6%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 50.8 +.1

Polymarket: 

• Will China invade Taiwan by June 30th 2027? 6.0% -2.0 percentage points
• Strait of Hormuz traffic returns to normal by November 30th 6.0% unch.
• Iran agrees to end enrichment of uranium by Dec. 31st 8.0% -2.0 percentage points
• Israel withdraws from Lebanon by December 31st 2.0% -8.0 percentage points
• US Invades Iran before 2027 16.0% -1.0 percentage point
• US announces end of Iranian blockade by November 30th 27.0% +2.0 percentage points

Other

• Bloomberg Global Risk-On/Risk-Off Index 130.9 +1.2%
• Global Monitor Iran Instability Index 72.0 +2.0
• Strait of Hormuz Oil Tanker Traffic Curtailed Estimate 45.0% unch.
• US High-Yield Tech Sector OAS Index 470.75 -14.0 basis points
• Bloomberg Cyclicals/Defensives Index 268.3 +1.7%
• Morgan Stanley Growth vs Value Index 143.4 +1.6%
• CNN Fear & Greed Index 26.0 (Moved to FEAR from EXTREME FEAR) +9.0
• 1-Day Vix 10.4 -55.3%
• Vix 17.9 -10.7%
• Total Put/Call .86 -8.5%

Monday Watch

Around X:

• @Business   

• President Donald Trump said he cut a diesel export deal with Russia and delayed imposing further sanctions because he doesn’t want to drive Vladimir Putin away from peace talks with Ukraine. 
• Ukrainian President Volodymyr Zelenskyy accused Donald Trump of trying to pressure Kyiv into surrendering to Russia, escalating a week-long row with the US president. 
• The euro fell against most of its Group-of-10 peers as escalating tensions in Ukraine and widespread protests in France dented sentiment toward the common currency.
• Nscale is facing opposition to the valuation target it’s pursuing in its initial public offering, according to people familiar with the matter, after a series of market setbacks for artificial intelligence companies. 
• South Korean stocks resumed declines Monday, as DeepSeek’s latest model sparked concerns over demand for memory chips, compounding market worries over AI financing. 
• Anthropic said it plans to put 5% of its shares into a new fund that the AI company says will enable it to make donations that can address “the public good,” including mitigating AI’s impact on the job market. 
• The gig workers training AI increasingly have medical degrees, law degrees and specialized expertise. Some are commanding hundreds of dollars an hour for what they know. 
• The nation’s largest business lobby said it is endorsing Ken Paxton, the Trump-endorsed Republican candidate for a Senate seat from Texas. 
• The CFOs discuss investment plans, forecasting and the trade-offs they are weighing. 
• Treasuries are showing tentative signs of reclaiming their traditional role as a haven — threatening to wrong-foot investors who are heavily positioned for this year’s bond slump to deepen. 
• Get up to speed on what's moving global markets. 
• Here’s the latest news and analysis on the oil market.
• Here’s what you need to know to start your day: Morning Briefing Asia.  

• @Zerohedge  

• Putin Proposes Summit With Trump And Xi To Negotiate End Of Ukraine War; Zelensky Not Invited. 
• UBS Trading Desk: This Week's Action Looks Very Similar To The Situational Awareness Unwind. 
• "We reached a new record of nontraditional account inquiry on CRWV debt and ORCL CDS. Given investor appetite on the subject, we are hosting an AI Cross Cap Structure Investor call on Monday…" - Goldman FICC. 
• X Gets "Stronger" As Threads And Bluesky Quarantine The "Worst People On The Internet". 
• BTIG Spots "Real-World Evidence" Humanoid Robots Are Entering The Workforce. 
• Saudi Arabia At The Breaking Point. 
• Saudi Helicopter Downed, Two Pilots Killed, In First Of Renewed Yemen War.
• Paper Tail Risk Is Cheap, And Everyone Just Noticed: Hedge Funds Load Up On Brent Upside, Dealers Face 'Short Gamma' Squeezed.
• Pimco Sees A 6% 10-Year... Here's Why "Bad Inflation" Caps Yields.
• "The Scenic Route": Morgan Stanley's AI Basket Suffers Worst Week Ever As S&P Barely Flinches.   
• Two Decades Of Mass Financial Delusion Ends Now.
• The Left's Rank Hypocrisy On 'Socialist Influencers'.
• Catch Up Or Catch Down: Goldman Says Either Way, Momentum Loses As Breadth Sits At Dot-Com Extremes.
• France Enters "Point Of No Return" As Riots And Chaos Spread.
• Where is S&P earnings growth coming from.
• Army Chief Warns Britons Must Make Sacrifices For Coming War.
• Live-Fire Drill Sparks Massive Gas Explosion At Canadian Base, Killing 7.
• Here's Where Germany's 17 Million Immigrants Come From.
• Nine Days From The Dark: What Sixty Million People Learned About Water, Warmth, And Medicine During Spain's Ten-Hour Blackout.
• Migration Has Cost German Taxpayers At Least €400 Billion Since 2016.
• Watergate, A Hoax?
• How I Stopped Worrying, And Learned To Love Data Centers.
• Has France Fallen? Far-Left Rioters Torch Buildings, Loot Luxury Stores As Macron Loses Control.
• Clancy Contagion Spreads: Queens Mom Kills Her Kindergartener.             
• Nurse Deemed 'Not Disabled Enough' For Payout After COVID Jab Paralysis. 

• @CNBC 

• Brent crude hovers near $109 a barrel as Ukraine resumes energy strikes, tankers attacked in Middle East. 
• Nasdaq futures gain as traders buy the dip in the AI trade: Live updates. 
• Iran says it has a 'new operational plan' if the U.S. resumes attacks, as shipping vessels report strikes. 

• @MarioNawful

• Yesterday, Macron was enjoying Céline Dion's concert in Paris alongside his family. Meanwhile, France is descending into CHAOS, with riots, looting, burning businesses, and violent clashes spreading across the country. Judging by his evening plans, the chaos gripping his country doesn't seem to be ruining HIS weekend... (video)
• Open borders. Woke pandering. A government that called anyone who tried to warn them a 'racist.' Now Paris is burning. Who could have seen this coming? Everyone. Absolutely everyone. (video) 
• Trump is giving Netanyahu his “COMPLETE AND TOTAL ENDORSEMENT” ahead of the Oct 27 election: “Bibi will never let you down…” POTUS praised the PM as a “Great Warrior Prime Minister” and a strong partner against Iran. His endorsement comes as Netanyahu’s Likud trails fmr. army chief Gadi Eisenkot’s Yashar party in the polls. For a moment, it seemed Trump would be happy to be rid of Netanyahu... But old habits die hard, I guess. (pic)
• Trump’s endorsement of Netanyahu is political suicide ahead of the midterms, yet he did it anyway. He risked his own political future for Bibi, and that speaks volumes about Israel’s influence over Trump and U.S. politics. 
• Remember the man who tried to ASSASSINATE TRUMP at the White House Correspondents' Dinner? Cole Allen, a 31-year-old fmr. engineering student and tutor who traveled across the country with a shotgun, a pistol, and knives. He reportedly booked a room at the SAME HOTEL weeks in advance, sent a disturbing message to his family, and then rushed a security checkpoint just feet from a ballroom packed with America's political elite. The armed confrontation lasted SEVEN SECONDS. He was arrested, charged with attempting to assassinate the president, and pleaded NOT GUILTY on May 11, following the April 25 attack. The last major press coverage I could verify about him was on May 11, when outlets reported his court appearance and his lawyers' attempt to remove senior Justice Department officials from the case.  

• @LaraLogan

• A warning to the U.S.: My dear American friends, I say this with love, as someone who has lived among you and owes you a great deal: your midterms are on November 3rd. And the same alliance is growing inside your Democratic Party. The same far-left wing that treats disorder as protest and police as the enemy. The same activists who refuse to draw a line between legitimate dissent and those who openly despise the West. The same politicians who think tolerance means tolerating everything, including the people who want to burn it down. It always starts with excuses. Then comes impunity. Then come the flames. Same causes, same effects. If you create the conditions we created, you will get exactly what we got tonight. France was the country of the Enlightenment, of cathedrals and town halls that stood for centuries. Tonight, one of them collapsed live on social media while the government called for calm. My dear American friends, the only advantage you have over us is that you've been warned. Vote like your city hall depends on it. Because one day, it will. “

• @GlobalDiss

• France has FALLEN. This is Paris after yesterday's violent riots. Streets in chaos, destruction everywhere. This is what happens when you put someone like Macron in charge. (video)

• @Nicksortor

• BREAKING: Looters are now BREAKING INTO HOMES in Paris — and it was only a matter of time. Absolutely NOBODY is coming to help the Parisians either. This is why you NEVER give up your guns. The government will NOT be there for you. (video)

• @EricLDaugh

• WTF?! Sen. Elissa Slotkin (D-MI) just announced her plan is mass political persecution of Trump allies to FRIGHTEN young conservatives away from getting involved with him. "I want young people to say, should I go work for the Trump admin? [...] I want them to be like, lord, that might buy myself a TON of PROBLEMS I don't want. Let me avoid participating." She just says it plainly. Slotkin wants a list of "signature cases" against Trump officials, and she named Kristi Noem, Doug Burgum, and Jeanine Pirro All this from the same party that spent four years screaming about "retribution" and "weaponization!" (video)

• @RadioGenoa

• If you have time, watch this video all the way to the end to truly understand what Europe is like today. It’s an absolute apocalypse. (video)

• @radleftexposed

• They have a 300 ft Palestine flag hanging from the leaning tower of Piza and the mainstream media still can't figure out what these riots are really about. It's a mystery wrapped inside an enigma. (video)

• @Polymarket

• JUST IN: MapQuest adds new “Surveillance Layer” that shows users the locations of Flock cameras along their driving routes.

• @Inevitablewest

• BREAKING: Millions takeover the streets of Brazil in support of right-wing Presidential candidate Flavio Bolsonaro. This is unprecedented. This is a people's REVOLT against leftism! (video)

• @HJB_News_

• The most horrifying image of this October 17th. An elderly couple stripped of everything, right in the middle of the street, left half-naked. As if the pillaged Rolexes, Vuitton, Hermès, Dior, Sephora weren't enough for resale. The image that should be a wake-up call for the entire West. The image of a so-called president who has lost control. Who has utterly failed his people. (pic)

• @NiohBerg

• Elon Musk bought Twitter in 2022, and that's the only reason you're even aware that France is a warzone tonight. Legacy media describes it as "scuffles" and "cost of living protests". They're lying to everyone's faces. You and I are the media now..

• @Faytuks

• Breaking: Russia's Ministry of Defence says it shot down 1,015 Ukrainian drones tonight. Multiple targets have been struck. (I can't recall such a big number being reported by Russia's MoD before). (video)

• @BradBeringer

• A liberal French women explains to these African Islamic invaders robbing her family’s store that she’s on their side & voted for them to come here & voted to defund the police. They laughed and mocked her and stole all her merchandise & probably r_ped her. (video)

• @AGEnglish

• Video posted on social media shows multiple explosions and fires around the port of St Petersburg, Russia after a suspected Ukrainian drone swarm. Witnesses say an oil terminal and data centre were hit in the attack. (video)

Night Trading

• Asian indices are -1.5% to unch. on average.
• Asia Ex-Japan Investment Grade CDS Index 73.75 +.25 basis point.
• China Sovereign CDS 36.75 +.5 basis point.
• China Iron Ore Spot 91.0 USD/Metric Tonne +.8%.
• Crude Oil 100.61/bbl. -.8%
• Gold 4,2825.90 USD/t oz. +.34% 
• Swiss Franc/Offshore Chinese Renminbi Cross 8.11 +.11%. 
  
• Bloomberg Emerging Markets Currency Index 33.6 -.01%.
• Bloomberg Global Risk-On/Risk Off Index 128.8 -.42%.
• US 10-Year Yield 5.06% -1.0 basis point. 
• Japan 30-Year Yield 4.0% -2.0 basis points. 
• Volatility Index(VIX) futures 18.6 -3.3%. 
• Euro Stoxx 50 futures -.39%.
• S&P 500 futures +.57%.
• NASDAQ 100 futures +1.0%.

Morning Preview Links

BOTTOM LINE: Asian indices are modestly lower, weighed down by technology and financial shares in the region. I expect US stocks to open modestly higher and to weaken into the afternoon, finishing mixed. The Portfolio is 50% Net Long heading into the week.