Thursday, August 20, 2026

Stocks Falling into Final Hour on Rising Long-Term Rates, Increasing War-Induced Inflation Expectations, Earnings Outlook Jitters, Retail/Defense Sector Weakness

Economic/Market Gauges:

  • North American Investment Grade CDS Index 51.5 +.9%
  • BofA Private Credit Proxy Index 73.7 -.1% 
  • Bloomberg US Securitized MBS/ABS/CMBS Avg. OAS .27 -2.0 basis points
  • BofA Global Financial Stress Indicator -.14 -2.0 basis points
  • European Financial Sector CDS Index 54.37 +1.0%
  • Emerging Market CDS Index 140.5 +1.0%
  • Israel Sovereign CDS 54.0 +2.7%
  • Bloomberg Global Trade Policy Uncertainty Index .9 +.1
  • US Morning Consult Daily Consume Sentiment Index 90.9 -.2
  • Citi US Economic Surprise Index 20.9 +5.6
  • Citi Eurozone Economic Surprise Index 78.0 -.7
  • Citi Emerging Markets Economic Surprise Index 25.2 +.3
  • S&P 500 Current Quarter EPS Growth Rate YoY(466 of 500 reporting) +49.6% -.4 percentage point
  • S&P 500 Blended Forward 12 Months Mean EPS Estimate 390.57 +.40:  Growth Rate +32.6% unch., P/E 19.7 -.1
  • S&P 500 Current Year Estimated Profit Margin 16.28% +2.0 basis points
  • NYSE FANG+ Current Quarter EPS Growth Rate YoY(8 of 10 reporting) +138.4% unch.
  • NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 950.01 +.96: Growth Rate +83.2% +.2 percentage point, P/E 19.3 -.1
  • Bloomberg US Financial Conditions Index 1.30 +5.0 basis points
  • US Yield Curve 51.0 basis points (2s/10s) +4.0 basis points
  • Bloomberg Industrial Metal Index 177.46 -.24%
  • Dutch TTF Nat Gas(European benchmark) 65.45 euros/megawatt-hour +3.3%
  • US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 14.1% -1.0 percentage point
  • US Atlanta Fed GDPNow Q3 Forecast +4.0% unch.
  • US 10-Year T-Note Yield 4.69% +4.0 basis points
  • 1-Year TIPS Spread 1.95 +13.0 basis points
  • Highest target rate probability for Oct. 28th FOMC meeting: 52.4% (-1.2 percentage points) chance of 3.5%-3.75%. Highest target rate probability for Dec. 9th meeting: 44.9%(-.4 percentage point) chance of 3.75%-4.0%. (current target rate is 3.5-3.75%)
Overseas Futures:
  • Nikkei 225 Futures: Indicating -720 open in Japan 
  • China A50 Futures: Indicating -74 open in China
  • KOSPI 200 Futures: Indicating -7 open in South Korea 
  • DAX Futures: Indicating +50 open in Germany
Portfolio:
  • Slightly Higher: On gains in my tech sector longs, index hedges and emerging market shorts
  • Disclosed Trades: None
  • Market Exposure: 75% net long

Bear Radar

Style Underperformer:

  • Small-Cap Growth -2.0%
Sector Underperformers:
  • 1) Defense -3.7% 2) Space -3.4% 3) Alt Energy -3.1%
Stocks Falling on Unusual Volume: 
  • RS, IPX, TSAT, VIK, STLD, MT, FRVO, CPRI, ONON, BLZE, BBNX, ENVA, BMA, VAC, BBW, NTES, GPCR, KLAR, ARQT, VICR, DKS, UPST, PRG, KC, MRCY, MAIR, AERO, ATAT, UTI, EQPT, SEI, EIKN, WMT, EROC, ONT, WOLF, LYTS, MRNA, AAP and AADX
Stocks With Unusual Put Option Activity:
  • 1) ROST 2) AAP 3) MRNA 4) WMT 5) GTM
Stocks With Most Negative News Mentions:
  • 1) AAP 2) EQPT 3) CAPR 4) AARD 5) COTY
Sector ETFs With Most Negative Money Flow:
  • 1) KRE 2) XLF 3) XLV 4) XLI 5) XNTK

Bull Radar

Style Outperformer:

  • Mid-Cap Value -.4%
Sector Outperformers:
  • 1) Gold & Silver +1.8% 2) Agriculture +1.7% 3) Digital Health +1.6%
Stocks Rising on Unusual Volume:
  • SCSC, MARA, SCTX, ANDG, TEM, CAI, ASST, BTDR, ALM, NDSN, COIN, DE, LB, AUPH, DQ, DRD, CRCL, LIF, AU, MFP, BMNR, RIOT, AGRO, CLSK, SMJF, PSNL, ARCT, KGC, CNH, AMLX, HIMS, ILMN, MOS, ETOR, VIST, VIRT, PCG, HSAI, EE and AGCO
Stocks With Unusual Call Option Activity:
  • 1) PTEN 2) QXO 3) NYT 4) PURR 5) CSGP 
Stocks With Most Positive News Mentions:
  • 1) DE 2) NDSN 3) MARA 4) SCSC 5) TEM
Sector ETFs With Most Positive Money Flow:
  • 1) SMH 2) XBI 3) XME 4) XLP 5) IGV
Charts: 

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

Earnings of Note 
Company/Estimate 

Before the Open:
  • (BJ)/1.17
  • (BKE)/.81
  • (UI)/4.03 
After the Close: 
  • None of note
Economic Releases 

9:45 am EST

  • The S&P Global US Manufacturing PMI for August is estimated at 53.9 versus 53.9 in July.
  • The S&P Global US Services PMI for August is estimated at 54.0 versus 54.9 in July.
  • The S&P Global US Composite PMI for August is estimated to fall to 53.9 versus 54.5 in July. 

Upcoming Splits

  • None of note
Other Potential Market Movers
  • The Bloomberg US Economic Survey for August and the US Baker Hughes oil rig count 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 -9.5% Below 100-Day Average 
  • Nasdaq/NYSE Volume Ratio 16.2 +3.3
  • 3 Sectors Rising, 8 Sectors Declining
  • 37.5% of Issues Advancing, 60.1% Declining 
  • TRIN/Arms .70 -34.0%
  • Non-Block Money Flow -$316.5M
  • 54 New 52-Week Highs, 50 New Lows
  • 59.8% (-2.5%) of Issues Above 200-day Moving Average
  • Average 14-Day RSI 63.5 -3.0
Polymarket: 
  • Will China invade Taiwan by June 30th 2027? 9.0% unch.
  • Strait of Hormuz traffic returns to normal by September 30th 6.0% unch.
  • Iran agrees to end enrichment of uranium by Sept. 30th 3.0% unch.
  • Israel withdraws from Lebanon by September 30th 2.0% unch.
  • US Invades Iran before 2027 18.0% unch.
  • US announces end of Iranian blockade by September 30th 28.0% -5.0 percentage points
Other
  • Bloomberg Global Risk-On/Risk-Off Index 126.8 +.2%
  • Global Monitor Iran Instability Index 66.0 +12.0
  • Strait of Hormuz Oil Tanker Traffic Curtailed Estimate 92.0% unch.
  • US High-Yield Tech Sector OAS Index 470.5 +1.25 basis points
  • Bloomberg Cyclicals/Defensives Index 268.4 -.1%
  • Morgan Stanley Growth vs Value Index 147.2 -.8%
  • CNN Fear & Greed Index 55.0 (Moved to NEUTRAL from GREED) -4.0
  • 1-Day Vix 8.9 -9.3%
  • Vix 15.9% +6.8%
  • Total Put/Call .80 unch.

Wednesday, August 19, 2026

Thursday Watch

Around X:

  • @Business
  • @ZeroHedge
Night Trading 
  • Asian equity indices are +.25% to +2.25% on average. 
  • Asia Ex-Japan Investment Grade CDS Index 67.75 -.75 basis point. 
  • China Sovereign CDS 35.5 -.75 basis point.
  • China Iron Ore Spot 96.0 USD/Metric Tonne -.03%. 
  • Crude Oil 86.10/bbl. +.3% 
  • Gold 4,556.0 USD/t oz. +.24%. 
  • Swiss Franc/Offshore Chinese Renminbi Cross 8.41 +.35%.
  • Bloomberg Emerging Markets Currency Index 34.46 +.02%.
  • Bloomberg Global Risk-On/Risk Off Index 126.9 +.2%.
  • US 10-Year Yield 4.63% -1.0 basis point.
  • Japan 30-Year Yield 4.0% -12.0 basis points.
  • Volatility Index(VIX) futures 17.5 -.6%.
  • Euro Stoxx 50 futures -.26%. 
  • S&P 500 futures +.17%.
  • NASDAQ 100 futures +.53%.
Morning Preview Links

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