Stocks Slightly Higher into Final Hour on Lower Long-Term Rates, Mideast War Resolution Hopes, Earnings Outlook Optimism, Biotech/Homebuilding Sector Strength

Economic/Market Gauges:

• North American Investment Grade CDS Index 62.2 -.6%
• BofA Private Credit Proxy Index 65.4 +.1% 
• Bloomberg US Securitized MBS/ABS/CMBS Avg. OAS .42 unch.
• BofA Global Financial Stress Indicator .08 -1.0 basis point
• European Financial Sector CDS Index 73.4 +1.3% 
• Emerging Market CDS Index 166.7 +1.3% 
• Israel Sovereign CDS 61.7 +1.4% 
• Bloomberg Global Trade Policy Uncertainty Index .5 unch.
• US Morning Consult Daily Consume Sentiment Index 85.6 +.9

• Citi US Economic Surprise Index 40.1 -2.5

• Citi Eurozone Economic Surprise Index 33.4 -3.6

• Citi Emerging Markets Economic Surprise Index 31.6 -1.6
• S&P 500 Current Quarter EPS Growth Rate YoY(60 of 500 reporting) +44.2% -3.2 percentage points
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 411.22 +.44:  Growth Rate +25.3% +.1 percentage point, P/E 18.8 unch.
• S&P 500 Current Year Estimated Profit Margin 16.33% +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 1,092.64 +.39: Growth Rate +62.7% unch., P/E 17.2 -.1
• Bloomberg US Financial Conditions Index .99 +11.0 basis points
• US Yield Curve 37.75 basis points (2s/10s) +.5 basis point
• Bloomberg Industrial Metal Index 173.1 +.2%
• Dutch TTF Nat Gas(European benchmark) 86.8 euros/megawatt-hour -1.4%
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 11.2% +.4%
• US Atlanta Fed GDPNow Q3 Forecast +3.5% -10.0 basis points
• US 10-Year T-Note Yield 5.11% -2.0 basis points
• 1-Year TIPS Spread 2.98 -2.0 basis points

• Highest target rate probability for Dec. 9th FOMC meeting: 73.7% (+1.2 percentage points) chance of 4.0%-4.25%. Highest target rate probability for Jan. 27th meeting: 45.1%(-.7 percentage point) chance of 4.0%-4.25%. (current target rate is 3.75-4.0%)
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +96 open in Japan 
• China A50 Futures: Indicating -114 open in China
• KOSPI 200 Futures: Indicating +13 open in South Korea 

• DAX Futures: Indicating +221 open in Germany

Portfolio:

• Slightly Higher: On gains in my tech/biotech/consumer discretionary/industrial sector longs
• Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges
• Market Exposure: Moved to 50% net long

Bear Radar

Style Underperformer:

• Large-Cap Growth +.1%

Sector Underperformers:

• 1) Space -.8% 2) Shipping -.4% 3) Energy -.2%

Stocks Falling on Unusual Volume: 

• BAX, CLF, IREN, GE, DVA, TSEM, AERO, SE, GM and MLI

Stocks With Unusual Put Option Activity:

• 1) BORR 2) QQQM 3) MPT 4) DJT 5) GPRO

Stocks With Most Negative News Mentions:

• 1) INV 2) FCEL 3) HONA 4) STLD 5) DUOL

Sector ETFs With Most Negative Money Flow:

• 1) XLF 2) VIS 3) XLY 4) IXP 5) VAW

Charts:

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

Bull Radar

Style Outperformer:

• Small-Cap Growth +1.9%

Sector Outperformers:

• 1) Biotech +3.0% 2) Pharma +3.0% 3) Airlines +2.5%

Stocks Rising on Unusual Volume:

• BRZE, KLRA, SGMT, LION, TRAX, KVYO, TLK, EFX, REAX, SLS, RCUS, RGR, HAS, ORIC, HSAI, HTFL, MAZE, IMNM, SPHR, IMCR, WHR, FTH, NESR, RVMD, ARGX, LI, ALMR, LIFE, TRU, ABVX, NVAX, MMM, DNTH, QGEN, ARHS, VICR, MANE, NOC, FOXF, ASST, RKT, ZYME, TMDX, SGRY, TREX, LLY, GDS, SNY, NRIX, KEY, PHVS, MSCI, TW and ONC

Stocks With Unusual Call Option Activity:

• 1) FLR 2) BORR 3) KVUE 4) GPRO 5) MMM 

Stocks With Most Positive News Mentions:

• 1) BRZE 2) HOST 3) KSCP 4) KVYO 5) HAS

Sector ETFs With Most Positive Money Flow:

• 1) SOXX 2) XLK 3) XLV 4) XLE 5) XLP

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:

• (T)/.60
• (ABT)/1.42
• (CME)/2.99
• (DHR)/1.92
• (ELV)/4.71
• (MCO)/4.25
• (NEE)/1.20
• (NTRS)/2.87
• (PM)/2.30
• (SF)/1.44
• (TDY)/6.17
• (TMO)/6.40
• (WGO)/.47 

After the Close: 

• (CACI)/6.57
• (CCI)/1.21
• (CSX)/.53
• (HXL)/.49
• (IBM)/2.85
• (KALU)/2.37
• (KMI)/.32
• (KX)/.76
• (LRCX)/2.18
• (LVS)/.70
• (MEDP)/4.44
• (META)/6.60
• (OII)/.59
• (QS)/-.17
• (RS)/6.83
• (SAP)/2.03
• (SLG)/1.58
• (LUV)/.57
• (TSLA)/.45
• (TXN)/2.43
• (URI)/13.97
• (WH)/1.32 

Economic Releases 

10:30 am EST

• Bloomberg consensus estimates call for a weekly crude oil inventory decline of -324,200 barrels versus a -8,557,000 barrel decline the prior week. Gasoline inventories are estimated to rise by +268,000 barrels versus a +3,518,000 barrel gain the prior week. Distillate inventories are estimated to fall by -634,800 barrels versus a -2,527,000 barrel decline the prior week. Finally, Refinery Utilization is estimated to fall -.02% versus a +.8% gain prior. 

Upcoming Splits

• None of note

Other Potential Market Movers

• The 20Y T-Note auction and the weekly MBA Mortgage Applications report 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 -.4% Below 100-Day Average 
• Nasdaq/NYSE Volume Ratio 15.4 +2.1
• 6 Sectors Rising, 5 Sectors Declining
• 68.7% of Issues Advancing, 28.9% Declining 
• TRIN/Arms .90 -21.7%
• Non-Block Money Flow +$116.5M
  
• 54 New 52-Week Highs, 84 New Lows
• 40.4% (+5.1%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 56.3 +5.5

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 8.0% unch.
• Israel withdraws from Lebanon by December 31st 2.0% unch.
• US Invades Iran before 2027 16.0% unch.
• US announces end of Iranian blockade by November 30th 27.0% unch.

Other

• Bloomberg Global Risk-On/Risk-Off Index 129.5 -.4%
• Global Monitor Iran Instability Index 80.0 +8.0
• Strait of Hormuz Oil Tanker Traffic Curtailed Estimate 45.0% unch.
• US High-Yield Tech Sector OAS Index 480.0 +6.75 basis points
• Bloomberg Cyclicals/Defensives Index 266.7 -.6%
• Morgan Stanley Growth vs Value Index 142.9 -.01%
• CNN Fear & Greed Index 27.0 (FEAR) +1.0
• 1-Day Vix 10.1 -15.5%
• Vix 17.8 -3.6%
• Total Put/Call .84 -3.5%

Tuesday Watch

Around X:

• @Business

• The Alberta energy watchdog took over an oil and gas firm’s wells and infrastructure on a military base less than two weeks before a major fire killed four soldiers and injured dozens of others. 
• Cboe launched pre-market trading in single-stock options, like those on ETFs tracking major stock indexes. 
• Virginia Governor Abigail Spanberger won’t support NextEra’s $67 billion takeover of Dominion without a six-year freeze on residential power rates and a tripling of bill credits. 
• Intel asked the FCC to exempt niche foreign-made robotics critical to US semiconductor manufacturing from a recent ban. 
• Thoma Bravo Managing Partner Seth Boro said the AI buildout will only be possible if proper cybersecurity measures are in place, especially at the consumer level. 
• Get up to speed on what's moving global markets.
• Here’s what you need to know to start your day: Morning Briefing Asia.      

• @ZeroHedge

• Supreme Showdown: Investigative Reporter And Accused Chinese Operative Face Off In Press Freedom Case.
• Too Broken For Frontier: Indonesian Markets Suffer Worst Rout Since 1998 As MSCI Threatens The "Argentina Treatment". 
• Another Day, Another Data Center Faceplant: Korea's Biggest IPO Of The Year Craters 32% On Debut. 
• Central Banks Keep Hoarding Gold, But Now The Question Is "Where To Store It": Goldman.
• OpenAI is racing to secure investor commitments before Anthropic's expected IPO in mid-November; SoftBank and MGX are in talks to join the round of about $30 billion.
• Brookfield, NextEra To Build $100 Billion AI Hub On Cold War Nuclear Site.
• 'Once He Leaves, The Case Is Over': Judge Jails OpenAI Bugging Suspect After Saudi Consulate Offers 'Blank-Check' Bail.
• Another Nor'easter Brews In Atlantic, Putting Mid-Atlantic In Potential Crosshairs.
• 'Operation Protect The Vote': Feds Arrest 28 Foreign Nationals In California Monday For Illegal Voting.
• Intifada For All...
• World's largest corporate bond, RPLDCI of 2049 ($27BN bond funding Meta's Hyperion data center), hit new lifetime lows.
• Houthis Target More Saudi Airports, Aramco Sites As US Issues Urgent Alert For 12 Mideast States.
• *TRUMP: WE'VE GIVEN A LOT TO UKRAINE, THEY GIVE NOTHING TO US.
• *TRUMP: TIME FOR SOMEONE ELSE TO NEGOTIATE ON BEHALF OF UKRAINE.  
• Trump Admin, US Businesses 'Need To Be Wary' Of AI Espionage, Intelligence Chief Warns.         
• Mag7 Saves Stocks From 'Black Monday' Redux As CRWV Dead-Cat-Bounce Trounced; Bonds & Bullion Slide.           

• @CNBC

• Tuesday's big stock stories: What’s likely to move the market in the next trading session. 
• JD Vance refrains from endorsing Israeli leader Netanyahu as Trump offers praise.
• CNBC Daily Open: Tech investors buy the dip — but debt remains a concern.

Night Trading 

• Asian equity indices are -1.25% to -.5% on average. 
• Asia Ex-Japan Investment Grade CDS Index 74.5 +.75 basis point. 
• China Sovereign CDS 37.5 +.25 basis point.
• China Iron Ore Spot 91.20 USD/Metric Tonne -.5%. 
• Crude Oil 103.77/bbl. +.1%. 
• Gold 4,151.70 USD/t oz. -.2%. 
• Swiss Franc/Offshore Chinese Renminbi Cross 8.09 -.08%.
• Bloomberg Emerging Markets Currency Index 33.6 unch.
• Bloomberg Global Risk-On/Risk Off Index 130.0 -.1%.
• US 10-Year Yield 5.13% -1.0 basis point.
• Japan 30-Year Yield 4.0 -1.0 basis point.
• Volatility Index(VIX) futures 18.7 +.3%.
• Euro Stoxx 50 futures -.58%. 
• S&P 500 futures +.16%.
• NASDAQ 100 futures unch.

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 mixed and to weaken into the afternoon, finishing modestly lower.  The Portfolio is 25% net long heading into the day.