Thursday Watch

Night Trading 

• Asian equity indices are -.25% to +.75% on average. 
• Asia Ex-Japan Investment Grade CDS Index 67.0 unch. 
• China Sovereign CDS 35.25 unch.
• China Iron Ore Spot 98.10 USD/Metric Tonne +.8%. 
• Crude Oil 90.62/bbl. -.43% 
• Gold 4,434.30 USD/t oz. +.48%. 
• Swiss Franc/Offshore Chinese Renminbi Cross 8.26 -.05%.
• Bloomberg Emerging Markets Currency Index 34.23 -.06%.
• Bloomberg Global Risk-On/Risk Off Index 129.6 -.4%.
• US 10-Year Yield 4.78% unch.
• Japan 30-Year Yield 4.08% -9.0 basis points.
• Volatility Index(VIX) futures 18.5 +.4%.
• Euro Stoxx 50 futures -.03%. 
• S&P 500 futures -.05%.
• NASDAQ 100 futures -.12%.

Morning Preview Links

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

Stocks Modestly Higher into Final Hour on Earnings Outlook Optimism, US Economic Data, Short-Covering, Commodity/Financial Sector Strength

Economic/Market Gauges:

• North American Investment Grade CDS Index 50.5 -.6%
• BofA Private Credit Proxy Index 73.9 +.4% 
• Bloomberg US Securitized MBS/ABS/CMBS Avg. OAS .32 unch.
• BofA Global Financial Stress Indicator -.15 +2.0 basis points
• European Financial Sector CDS Index 54.5 unch.
• Emerging Market CDS Index 138.5 -.7%
• Israel Sovereign CDS 53.0 +1.1%
• Bloomberg Global Trade Policy Uncertainty Index .8 -.2
• US Morning Consult Daily Consume Sentiment Index 86.4 -1.1

• Citi US Economic Surprise Index 16.7 +.4

• Citi Eurozone Economic Surprise Index 72.9 +.6

• Citi Emerging Markets Economic Surprise Index 23.0 -1.2
• S&P 500 Current Quarter EPS Growth Rate YoY(488 of 500 reporting) +52.5% +.5 percentage point
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 397.24 +.31:  Growth Rate +21.1% +.1 percentage point, P/E 19.3 unch.
• S&P 500 Current Year Estimated Profit Margin 16.28% -1.0 basis point
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(9 of 10 reporting) +133.3% unch.
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 970.51 +2.20: Growth Rate +87.1% +.4 percentage point, P/E 19.1 -.2
• Bloomberg US Financial Conditions Index 1.23 -10.0 basis points
• US Yield Curve 40.25 basis points (2s/10s) -.5 basis point
• Bloomberg Industrial Metal Index 179.5 -2%
• Dutch TTF Nat Gas(European benchmark) 73.3 euros/megawatt-hour +1.5%
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 12.0 -.3 percentage point
• US Atlanta Fed GDPNow Q3 Forecast +4.8% unch.
• US 10-Year T-Note Yield 4.80% unch.
• 1-Year TIPS Spread 2.27 -2.0 basis points

• Highest target rate probability for Oct. 28th FOMC meeting: 56.0% (-1.7 percentage points) chance of 3.75%-4.0%. Highest target rate probability for Dec. 9th meeting: 41.3%(-1.9 percentage points) chance of 4.0%-4.25%. (current target rate is 3.5-3.75%)
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +230 open in Japan 
• China A50 Futures: Indicating -41 open in China
• KOSPI 200 Futures: Indicating +12 open in South Korea 

• DAX Futures: Indicating +25 open in Germany

Portfolio:

• Slightly Lower: On losses in my tech sector longs and index hedges
• Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges
• Market Exposure: Moved to 50% net long

Bear Radar

Style Underperformer:

• Mid-Growth -.5%

Sector Underperformers:

• 1) Cyber Security -3.3% 2) Software -2.8% 3) AI Innovation -1.4%

Stocks Falling on Unusual Volume: 

• CRK, SNOW, UTHR, AADX, PCG, QURE, CLS, EIX, FRVO, STDN, PANW, GIII, MDB, FCEL and CRDO

Stocks With Unusual Put Option Activity:

• 1) CPB 2) AUR 3) GTLB 4) MUB 5) IHI

Stocks With Most Negative News Mentions:

• 1) FCEL 2) NLST 3) CRDO 4) AVEX 5) EIX

Sector ETFs With Most Negative Money Flow:

• 1) IGV 2) XLY 3) SMH 4) VGT 5) IYH

Charts:

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

Bull Radar

Style Outperformer:

• Small-Cap Value +1.4%

Sector Outperformers:

• 1) Gambling +3.7% 2) Gold & Silver +2.3% 3) Regional Banks +2.3%

Stocks Rising on Unusual Volume:

• MOVE, TRAX, FTH, TITN, TARS, MLYS, ASTS, FMC, GTLB, ALMS, SCZM, LMB, DELL, MGNI, MMED, EXK, ALNY, CNH, SBSW, SIRI, SRPT, AYA, SCTX, PUBM, BBY, PUBM, AFRM, LIFE, TDS, CBRS, WS, WOR, RELY, ELPC, VAL, ATRC, GPRK, ANDE, BF/B, PRE, KYIV, LBRX, WING, CRESY, ETD, PAY, REPX, SLDE, SHOE, VIST, FRNM, VALE, NXRT, PBR, NVDA, CLMT, DKS, VCX, JANX, METC, JANX, SHIP, GNK, VCX, MLM, AGCO, 

Stocks With Unusual Call Option Activity:

• 1) LNG 2) REI 3) RUN 4) DELL 5) PRMW 

Stocks With Most Positive News Mentions:

• 1) DELL 2) GTLB 3) MMED 4) SIRI 5) TDS

Sector ETFs With Most Positive Money Flow:

• 1) XLE 2) SOXX 3) MLPX 4) IYM 5) XHB

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:

• (CIEN)/1.73
• (CPB)/.39
• (TTC)/1.31
• (VSXY)/.77

After the Close: 

• (AMBA)/.17
• (ASAN)/.09
• (DOCU)/1.09
• (GWRE)/.93
• (LULU)/1.79
• (OXM)/1.31
• (PL)/-.02
• (SWBI)/-.06
• (PATH)/.15
• (ZS)/1.09 

Economic Releases 

5:30 am EST

• Challenger Job Cuts YoY for Aug. 

8:30 am EST

• The Trade Deficit for July is estimated to widen to -$90.3B versus -$73.3B in June.
• Imports for July MoM is estimated to rise +1.2% versus a -1.8% decline in June.
• Exports for July MoM is estimated to fall -.3% versus a -.9% decline in June.
• Final 2Q Productivity readings.
• Initial Jobless Claims for last week is estimated to rise to 205K versus 203K the prior week.
• Continuing Claims is estimated to rise to 1785K versus 1778K the prior week. 

10:00 am EST

• The ISM Services Index for Aug. is estimated at 54.1 versus 54.1 in July.
• ISM Services Prices Paid Index for Aug. is estimated to fall to 70.0 versus 70.3.  

Upcoming Splits

• (APH) 2-for-1

Other Potential Market Movers

• The Fed's Goolsbee speaking, Fed's Hammack speaking, Fed's Waller speaking, weekly EIA natural gas inventory report, (RBC) annual meeting, (VEE) shareholder's meeting and the (VSAT) annual meeting 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 -14.2% Below 100-Day Average 
• Nasdaq/NYSE Volume Ratio 13.3 +.2
• 9 Sectors Rising, 2 Sectors Declining
• 63.9% of Issues Advancing, 33.1% Declining 
• TRIN/Arms .88 +48.3%
• Non-Block Money Flow +$95.5M
  
• 44 New 52-Week Highs, 92 New Lows
• 57.6% (+4.0%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 50.4 +2.4

Polymarket: 

• Will China invade Taiwan by June 30th 2027? 9.0% unch.
• Strait of Hormuz traffic returns to normal by September 30th 3.0% unch.
• Iran agrees to end enrichment of uranium by Sept. 30th 3.0% unch.
• Israel withdraws from Lebanon by September 30th 1.0% unch.
• US Invades Iran before 2027 16.0% unch.
• US announces end of Iranian blockade by September 30th 20.0% -1.0 percentage point

Other

• Bloomberg Global Risk-On/Risk-Off Index 130.3 -.2%
• Global Monitor Iran Instability Index 65.0 -7.0
• Strait of Hormuz Oil Tanker Traffic Curtailed Estimate 90.0% unch.
• US High-Yield Tech Sector OAS Index 434.75 +2.5 basis points
• Bloomberg Cyclicals/Defensives Index 269.1 +.7%
• Morgan Stanley Growth vs Value Index 145.4 -.7%
• CNN Fear & Greed Index 35.0 (moved to FEAR from NEUTRAL) -11.0
• 1-Day Vix 8.5 -21.1%
• Vix 15.4% -5.9%
• Total Put/Call .78 -20.4%