Wednesday Watch

Night Trading 

• Asian equity indices are -1.5% to -.5% on average. 
• Asia Ex-Japan Investment Grade CDS Index 76.25 unch.  
• China Sovereign CDS 36.5 -.5 basis point.
• China Iron Ore Spot 91.40 USD/Metric Tonne +.77%. 
• Crude Oil 95.96/bbl. -.12%. 
• Gold 3,962.0 USD/t oz. +.59%. 
• Swiss Franc/Offshore Chinese Renminbi Cross 8.20 +.92%.
• Bloomberg Emerging Markets Currency Index 33.24 +.02%.
• Bloomberg Global Risk-On/Risk Off Index 121.0 -1.7%.
• US 10-Year Yield 4.90% -6.0 basis points.
• Japan 30-Year Yield 3.89% unch.
• Volatility Index(VIX) futures 19.9 +1.8%.
• Euro Stoxx 50 futures -1.04%. 
• S&P 500 futures -.36%.
• NASDAQ 100 futures -1.13%.

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 maintain losses into the afternoon.  The Portfolio is 25% net long heading into the day.

Stocks Modestly Higher into Final Hour on Mideast War Resolution Hopes, Earnings Outlook Optimism, US Election-Related Short-Covering, Tech/Alt Energy Sector Strength

Economic/Market Gauges:

• North American Investment Grade CDS Index 62.0 -.9%
• BofA Private Credit Proxy Index 68.9 -1.1% 
• Bloomberg US Securitized MBS/ABS/CMBS Avg. OAS .34 -2.0 basis points
• BofA Global Financial Stress Indicator .15 unch.
• European Financial Sector CDS Index 73.9 +.6% 
• Emerging Market CDS Index 167.7 -.8% 
• Israel Sovereign CDS 59.6 +1.7% 
• Bloomberg Global Trade Policy Uncertainty Index .5 +.1
• US Morning Consult Daily Consume Sentiment Index 84.9 +1.7

• Citi US Economic Surprise Index 63.7 +12.3

• Citi Eurozone Economic Surprise Index 5.8 -.5

• Citi Emerging Markets Economic Surprise Index 40.9 +2.1
• S&P 500 Current Quarter EPS Growth Rate YoY(342 of 500 reporting) +29.0% -.3 percentage point
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 414.91 +.61:  Growth Rate +26.6% +.2 percentage point, P/E 18.3 -.1
• 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 1,101.14 +.24: Growth Rate +64.0% +.1 percentage point, P/E 15.9 -.2
• Bloomberg US Financial Conditions Index .64 -10.0 basis points
• US Yield Curve 33.5 basis points (2s/10s) +2.5 basis points
• Bloomberg Industrial Metal Index 171.5 -2.1%
• 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) 12.7% +.1 percentage point
• US Atlanta Fed GDPNow Q4 Forecast +3.7% unch.
• US 10-Year T-Note Yield 4.95% +4.0 basis points
• 1-Year TIPS Spread 2.36 -1.0 basis point

• Highest target rate probability for Jan. 27th FOMC meeting: 64.5% (+3.5 percentage points) chance of 4.0%-4.25%. Highest target rate probability for March 17th meeting: 45.9%(+3.4 percentage points) chance of 4.25%-4.5%. (current target rate is 3.75-4.0%)
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +110 open in Japan 
• China A50 Futures: Indicating -50 open in China
• KOSPI 200 Futures: Indicating +11 open in South Korea 

• DAX Futures: Indicating +38 open in Germany

Portfolio:

• Higher: On gains in my tech/industrial/biotech sector longs and emerging market shorts 
• Disclosed Trades: None
• Market Exposure: 50% Net Long

Bear Radar

Style Underperformer:

• Large-Cap Value unch.

Sector Underperformers:

• 1) Homebuilding -2.0% 2) Airlines -2.0% 3) Computer Services -2.0%

Stocks Falling on Unusual Volume: 

• BMRN, LPX, BXMT, BUD, RMD, ASC, PFGC, DASH, FMS, RYZ, VRTX, WLFC, OSPN, HSIC, KDP, APO, XPEL, SFM, FLUT, APTV, ZG, GCT, LDOS, UMH, MSA, OC, BALL, NICE, LGIH, TRI, OBX, RYTM, MTCH, ADM, SHOP, OTTR, CALX, INSP, SYY, ZBRA, SHC, NXRT, VTS, MDGL, PAY, LIND, ADEA, DT, IT, CVI, XPRO, BVS, STVN and SUPN

Stocks With Unusual Put Option Activity:

• 1) EL 2) XLB 3) CPNG 4) RIG 5) GILD

Stocks With Most Negative News Mentions:

• 1) RYTM 2) OI 3) DUOL 4) IT 5) NXRT

Sector ETFs With Most Negative Money Flow:

• 1) XLI 2) COPX 3) MAGS 4) XLU 5) XLC

Charts:

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

Bull Radar

Style Outperformer:

• Small-Cap Growth +1.4%

Sector Outperformers:

• 1) Alt Energy +3.5% 2) Lithography/Photonics +2.9% 3) Space +2.7%

Stocks Rising on Unusual Volume:

• AEHR, IBTA, XMTR, GPK, EVER, SIBN, FN, NBIX, HUT, BETA, CMCO, SRAD, RIOT, PENG, FISV, WULF, PTCT, CCXI, LSCC, CORZ, RVTY, VIAV, AEIS, RRX, DD, HLF, VITL, TCMD, SNDX, IREN, APLD, ALSN, RAL, ENPH, RSI, TTMI, FOXA, TBBB, JAZZ, TLN, ECG, ETN, STRL, MPWR, GEV, FWRG, SITM, AXTI, REF, FIX, COIN, HWM, NXT, HGTY, OPRA, AXSM, JBIO, CIEN, ROL, CE, CRL, ORCL, ZYME, CMPR, AMD, JAN, TREE, TAC, CDNA, VOYA, SIRI, PVLA, UPWK, RACE, AVT, WKC, PHG, RACE, AVT, WKC, PHG, SGHC, WAT, ROKU and TEVA

Stocks With Unusual Call Option Activity:

• 1) LYV 2) TAN 3) GXO 4) PTEN 5) ROKU 

Stocks With Most Positive News Mentions:

• 1) NBIX 2) RVTY 3) LSCC 4) AEHR 5) GRAB

Sector ETFs With Most Positive Money Flow:

• 1) XLK 2) KRE 3) SOXX 4) XLV 5) IHI

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: 

• (ARCB)/2.50
• (BCO)/2.21
• (CDW)/2.98
• (COR)/4.58
• (CRL)/2.97
• (CVS)/1.65
• (DDOG)/.6
• (EMR)/1.85
• (FLUT)/.32
• (PODD)/1.59
• (KHC)/.42
• (MLM)/5.99
• (MTRN)/1.91
• (MCD)/3.38
• (OC)/3.07
• (BTU)/-.05
• (SMG)/-2.21
• (SN)/1.89
• (SWK)/1.55
• (UBER)/.86
• (UTHR)/6.01
• (VSH)/.29
• (W)/.80
• (ZBH)/1.88 

After the Close: 

• (AFL)/1.80
• (ALB)/2.53
• (ALL)/6.89
• (APA)/1.60
• (APP)/4.03
• (BIO)/2.23
• (CAVA)/.12
• (LEU)/-.44
• (CF)/3.00
• (CRUS)/2.42
• (CGNX)/.52
• (COHR)/1.99
• (CW)/3.76
• (ELF)/.59
• (BROS)/.24
• (EXPE)/8.85
• (GT)/-.06
• (ITT)/2.08
• (JOBY)/-.25
• (MCK)/10.72
• (MELI)/9.27
• (MET)/2.77
• (NWSA)/.26
• (POWI)/.41
• (QCOM)/2.16
• (RGLD)/2.74
• (RGR)/.37
• (VECO)/.43
• (WOLF)/-1.99
• (ZG)/.58 

Economic Releases 

8:15 am EST

• The ADP Employment Change for Oct. is estimated to fall to 67,000 versus 90,000 in Sept. 

8:30 am EST

• The US Treasury Quarterly Refunding Announcement.
• The Trade Deficit for Sept. is estimated to widen to -$107.9B versus -$105.6B in Aug.
• Imports MoM for Sept. is estimated to rise +1.5% versus a +4.3% gain in Aug.
• Exports MoM for Sept. is estimated to rise +1.8% versus a +1.4% gain in Aug. 

10:00 am EST

• The ISM Services Index for Oct. is estimated to fall to 54.8 versus 54.9 in Sept.
• The ISM Services Prices Paid Index for Oct. is estimated to rise to 74.8 versus 74.0 in Sept.

10:30 am EST

• Bloomberg consensus estimates call for a weekly crude oil inventory decline of -377,500 barrels versus a -1,892,000 barrel decline the prior week. Gasoline supplies are estimated to rise by +855,500 barrels versus a +3,870,000 barrel gain the prior week. Distillate inventories are estimated to fall by -1,099,500 barrels versus a -1,462,000 barrel decline the prior week. Finally, Refinery Utilization is estimated to rise by +.04% versus a -.6% decline prior.

Upcoming Splits

• None of note

Other Potential Market Movers

• The weekly MBA Mortgage Applications report, (APLD) annual meeting, (FOXA) annual meeting, (KLAC) annual meeting and the (EL) business update call 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 +1.3% Above 100-Day Average 
• Nasdaq/NYSE Volume Ratio 14.4 -1.4
• 4 Sectors Rising, 6 Sectors Declining
• 43.5% of Issues Advancing, 53.9% Declining 
• TRIN/Arms 1.17 +48.1%
• Non-Block Money Flow -$81.4M
  
• 34 New 52-Week Highs, 91 New Lows
• 47.2% (+.9%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 57.4 -2.8

Polymarket: 

• Will China invade Taiwan by June 30th 2027? 6.0% unch.
• Strait of Hormuz traffic returns to normal by November 30th 7.0% +1.0 percentage point
• 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 123.5 +.7%
• Global Monitor Iran Instability Index 92.0 +5.0
• Strait of Hormuz Oil Tanker Traffic Curtailed Estimate 45.0% unch.
• US High-Yield Tech Sector OAS Index 467.5 +5.5 basis points
• France Sovereign CDS 95.9 -.1%
• Bloomberg Cyclicals/Defensives Index 262.1 +.3%
• Morgan Stanley Growth vs Value Index 136.5 +1.4%
• CNN Fear & Greed Index 21.0 (EXTREME FEAR) -4.0
• 1-Day Vix 14.6 -18.3%
• Vix 20.5 -3.0%
• Total Put/Call .84 +21.7%