Stocks Higher into Afternoon on Mideast War De-Escalation Hopes, AI Infrastructure Build-Out Optimism, Stable Long-Term Rates, Tech/Consumer Discretionary Sector Strength

Overseas Futures:

• Nikkei 225 Futures: Indicating +50 open in Japan 
• China A50 Futures: Indicating -20 open in China
• KOSPI 200 Futures: Indicating +1 open in South Korea 

• DAX Futures: Indicating +312 open in Germany

Portfolio:

• Slightly Higher: On gains in my tech/consumer discretionary/industrial sector longs
• Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges
• Market Exposure: Moved to 75% net long

Monday's Earnings/Economic Releases of Note; Market Movers

Earnings of Note 
Company/Estimate 

Before the Open:

• None of note

After the Close: 

• (MTN)/-5.35

Economic Releases 

10:30 am EST

• The Dallas Fed Manufacturing Activity report for Sept. is estimated to fall to 7.3 versus 11.6 in Aug. 

Upcoming Splits

• None of note

Other Potential Market Movers

• The Fed's Williams speaking, Fed's Barkin speaking, Wolfe Research Utilities/Midstream, ROTH Healthcare Opportunities Conference and the RBC Communications Infra Conference could also impact global trading on Monday.

US Equity Market Hours

• 9:30 am - 4:00 pm EST

Friday Watch

Night Trading 

• Asian equity indices are -.25% to +.25% on average. 
• Asia Ex-Japan Investment Grade CDS Index 71.5 +.75 basis point. 
• China Sovereign CDS 34.0 +.5 basis point.
• China Iron Ore Spot 95.60 USD/Metric Tonne unch. 
• Crude Oil 93.75/bbl. -.9%. 
• Gold 4,308.0 USD/t oz. +.23%. 
• Swiss Franc/Offshore Chinese Renminbi Cross 8.11 -.03%.
• Bloomberg Emerging Markets Currency Index 33.76 -.07%.
• Bloomberg Global Risk-On/Risk Off Index 136.7 +.3%.
• US 10-Year Yield 5.19% -1.0 basis point.
• Japan 30-Year Yield 4.23% +6.0 basis points.
• Volatility Index(VIX) futures 18.0 +1.0%.
• Euro Stoxx 50 futures +.40%. 
• S&P 500 futures -.21%.
• NASDAQ 100 futures -.21%.

Morning Preview Links

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

Stocks Slightly Lower into Final Hour on Surging Long-Term Rates, Mideast War-Induced Inflation Fears, Rising Fed Rate-Hike Odds, Alt Energy/Gambling Sector Weakness

Economic/Market Gauges:

• North American Investment Grade CDS Index 57.7 +.9% 
• BofA Private Credit Proxy Index 69.5 -.6% 
• Bloomberg US Securitized MBS/ABS/CMBS Avg. OAS .39 +3.0 basis points
• BofA Global Financial Stress Indicator -.09 +5.0 basis points
• European Financial Sector CDS Index 65.2 +3.0% 
• Emerging Market CDS Index 149.8 +1.5% 
• Israel Sovereign CDS 58.9 +2.2% 
• Bloomberg Global Trade Policy Uncertainty Index 1.2 +.3
• US Morning Consult Daily Consume Sentiment Index 89.1 +1.5

• Citi US Economic Surprise Index 42.6 +2.3

• Citi Eurozone Economic Surprise Index 84.2 +2.1

• Citi Emerging Markets Economic Surprise Index 18.2 +.5
• S&P 500 Current Quarter EPS Growth Rate YoY(8 of 500 reporting) +16.2% -.3 percentage point
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 403.15 +.25:  Growth Rate +22.9% +.1 percentage point, P/E 19.0 -.3
• S&P 500 Current Year Estimated Profit Margin 16.29% unch.
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(0 of 10 reporting) n/a
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 1,048.63 +1.38: Growth Rate +56.2% +.2 percentage point, P/E 18.3 -.1
• Bloomberg US Financial Conditions Index 1.27 -3.0 basis points
• US Yield Curve 26.25 basis points (2s/10s) +4.5 basis points
• Bloomberg Industrial Metal Index 181.9 +.5%
• Dutch TTF Nat Gas(European benchmark) 74.7 euros/megawatt-hour +3.8%
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 7.6% -.9 percentage point
• US Atlanta Fed GDPNow Q3 Forecast +5.1% unch.
• US 10-Year T-Note Yield 5.18% +7.0 basis points
• 1-Year TIPS Spread 2.48 +6.0 basis points

• Highest target rate probability for Dec. 9th FOMC meeting: 55.7% (+.8 percentage point) chance of 4.25%-4.5%. Highest target rate probability for Jan. 27th meeting: 46.6%(unch.) chance of 4.25%-4.5%. (current target rate is 3.75-4.0%)
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +160 open in Japan 
• China A50 Futures: Indicating +23 open in China
• KOSPI 200 Futures: Indicating +1 open in South Korea 

• DAX Futures: Indicating +281 open in Germany

Portfolio:

• Higher: On gains in my tech/biotech/energy sector longs, index hedges 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 -.3%

Sector Underperformers:

• 1) Gambling -2.6% 2) Computer Services -2.3% 3) Gold & Silver -2.1%

Stocks Falling on Unusual Volume: 

• BCAX, ORCL, SWMR, NXRT, SLGN, BBSI, STRZ, FDMT, RSI, CGEM, ALKT, XYL, ROL, DK, IMXI, U, FTH, EQPT, FSLY, MAAS, SNX, KLRA, QURE, FSLR, GEN, MGM, ACAD, VKTX, HIL and KGC

Stocks With Unusual Put Option Activity:

• 1) APO 2) KOD 3) Q 4) QURE 5) UCO

Stocks With Most Negative News Mentions:

• 1) MGM 2) ACAD 3) BE 4) INV 5) FCEL

Sector ETFs With Most Negative Money Flow:

• 1) SOXX 2) ARKK 3) BAI 4) XBI 5) IDEF

Charts:

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

Bull Radar

Style Outperformer:

• Mid-Cap Growth +.5%

Sector Outperformers:

• 1) Computer Hardware +1.7% 2) Space +1.7% 3) Biotech +1.3%

Stocks Rising on Unusual Volume:

• SRZN, QMCO, CDNA, P, GRAL, WRBY, TWST, USDE, BLLN, LIFE, SECZ, VCYT, CBRL, CRL, PL, PRGO, IONQ, ARCT, INFQ, RKLB, PRLB, PUBM, NKTR, GDDY, TEM, MANU, META, RCL, CRWV, ICLR, TWLO, RVMD, ASST, SAIL, SPNT, KOD, WLTH, SPNT, WGS, CTAS, XENE and GME

Stocks With Unusual Call Option Activity:

• 1) BBD 2) GLND 3) GDDY 4) Z 5) COF 

Stocks With Most Positive News Mentions:

• 1) GRAL 2) P 3) GLND 4) TJGC 5) CTAS

Sector ETFs With Most Positive Money Flow:

• 1) MAGS 2) XLI 3) XLE 4) ICLN 5) XOP

Charts: 

• ETFs Rising on Unusual Volume
• Stocks Rising on Unusual Volume