Stocks Rising into Final Hour on Earnings Outlook Optimism, US Economic Data, Technical Buying, Tech/Transport Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Around Even
  

• Sector Performance: Mixed
  

• Volume: Below Average
  

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 15.1 -3.6%
• DJIA Intraday % Swing .80 -32.7%
  
• Bloomberg Global Risk On/Risk Off Index 57.1 +2.5%

• Euro/Yen Carry Return Index 178.2 +.6%

• Emerging Markets Currency Volatility(VXY) 9.0 -.11%

• CBOE S&P 500 Implied Correlation Index 14.2 -3.5% 

• ISE Sentiment Index 140.0 -2.0
  

• Total Put/Call .71 -23.7%

• NYSE Arms .82 -24.8%
  
• NYSE Non-Block Money Flow -$125.2M 
  

Credit Investor Angst:

• North American Investment Grade CDS Index 49.6 -.07%
  

• US Energy High-Yield OAS 294.53 -.11%
• Bloomberg TRACE # Distressed Bonds Traded 249 -5
  

• European Financial Sector CDS Index 60.41 +1.1%
  
• Deutsche Bank Subordinated 5Y Credit Default Swap 162.75 +.92%
  

• Italian/German 10Y Yld Spread 140.0 basis points +2.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 91.4 -.94%
  

• Emerging Market CDS Index 162.0 +.6%
  
• Israel Sovereign CDS 127.2 -.33%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 25.1 unch.

• 2-Year SOFR Swap Spread -19.75 basis points -.25 basis point
  

• Treasury Repo 3M T-Bill Spread -20.75 basis points +2.0 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -.75 -.25 basis point
  
• MBS  5/10 Treasury Spread 136.0 +2.0 basis points
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 692.0 -3.0 basis points
  
• Avg. Auto ABS OAS 66.0 unch.
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 38.9 -.06%
• 3-Month T-Bill Yield 5.11% unch.
  

• China Iron Ore Spot 100.8 USD/Metric Tonne -.23%
• Dutch TTF Nat Gas(European benchmark) 39.82 euros/megawatt-hour +2.49%

• Citi US Economic Surprise Index -24.2 +.6 point

• Citi Eurozone Economic Surprise Index -50.9 -.7 point

• Citi Emerging Markets Economic Surprise Index -11.4 -.4 point
• S&P 500 Current Quarter EPS Growth Rate YoY(493 of 500 reporting) +11.4% unch.
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 265.53 +.33:  Growth Rate +13.7% +.2 percentage point, P/E 21.1 -.2
  
• S&P 500 Current Year Estimated Profit Margin 12.69% unch.
  
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(9 of 10 reporting) +36.3% unch.
  
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 345.75 +.99: Growth Rate +22.3% +.3 percentage point, P/E 31.8 -.5
  
• Bloomberg US Financial Conditions Index .78 +1.0 basis point
  
• Bloomberg Euro-Zone Financial Conditions Index .74 -6.0 basis points
  
• US Yield Curve -2.0 basis points (2s/10s) +1.0 basis point
  
• US Atlanta Fed 3Q GDPNow Forecast +2.53% +54.0 basis points
  
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 69.4% -1.6 percentage points
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +2.74% +10.0 basis points: CPI YoY +2.56% unch.
  
• 10-Year TIPS Spread 2.16 unch.
  
• Highest target rate probability for Nov. 7th FOMC meeting: 50.3%(+4.3 percentage points) chance of 4.75%-5.0%. Highest target rate probability for Dec. 18th meeting: 44.8%(+.1 percentage point) chance of 4.25%-4.5%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +336 open in Japan 
• China A50 Futures: Indicating -59 open in China

• DAX Futures: Indicating +70 open in Germany

Portfolio:

• Slightly Higher:  On gains in my industrial/tech/utility sector longs
  

• Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges
  

• Market Exposure: Moved to 100% Net Long
  

Bear Radar

Style Underperformer:

• Small-Cap Value -.2%
  

Sector Underperformers:

• 1) Oil Service -1.2% 2) Gold & Silver -1.0% 3) Digital Health -1.0%

Stocks Falling on Unusual Volume: 

• ACI, ULTA, EE, ALNY, ALAB and ESTC
  

Stocks With Unusual Put Option Activity:

• 1) WMG 2) FIVE 3) ASHR 4) HUT 5) SPHR
  

Stocks With Most Negative News Mentions:

• 1) ESTC 2) EGIO 3) DDD 4) ALNY 5) ULTA
  

Sector ETFs With Most Negative Money Flow:

• 1) XLK 2) XRT 3) VDE 4) VIS 5) XLC

Charts:

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

Bull Radar

Style Outperformer:

• Large-Cap Growth +.4%
  

Sector Outperformers:

• 1) Electric Vehicles +2.0% 2) Semis +1.5% 3) Shipping +1.0%

Stocks Rising on Unusual Volume:

• MDB, BBIO, MRVL, MXL, CLCO, INTC, AAOI, TITN, AMRK, FUTU, QXO, YPF, AFRM, PGNY, BMA, JKS, DELL, GGAL, FRO, OLLI, BBW, DCTH, DINO and PGY
  

Stocks With Unusual Call Option Activity:

• 1) FLR 2) K 3) DNB 4) BSX 5) DISH

Stocks With Most Positive News Mentions:

• 1) MDB 2) DELL 3) MRVL 4) CAVA 5) AVGO
  

Sector ETFs With Most Positive Money Flow:

• 1) VGT 2) VDC 3) XLI 4) XLF 5) VOX
  

Charts:

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

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

Earnings of Note 
Company/Estimate 

Before the Open:

• (MOMO)/1.84

After the Close: 

• (GTLB)/.10
• (PD)/.17
• (ZS)/.70
  

Economic Releases

10:00 am EST

• Construction Spending MoM for July is estimated to rise +.1% versus a -.3% decline in June. 
• ISM Manufacturing for August is estimated to rise to 47.5 versus 46.8 in July.
  

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Atlanta Fed GDPNow 3Q update, IBD/TIPP Economic Optimism Index for Sept., Goldman Sachs Retailing Conference, Morgan Stanley Healthcare Conference, Wells Fargo Healthcare Conference, Barclays Consumer Staples Conference, Benchmark Tech/Media/Telecom Conference, (DHR) analyst day, Jefferies Industrial Conference and the Citi Tech Conference could also impact global trading on Tuesday.

US Equity Market Hours

• 9:30 am - 4:00 pm EST

Mid-Day Market Internals

NYSE Composite Index:

• Volume Running -27.2% Below 100-Day Average 
• Nasdaq/NYSE Volume Ratio 14.2 +.3
  
• 10 Sectors Declining, 1 Sector Rising
• 35.2% of Issues Advancing, 61.9% Declining 
• TRIN/Arms 1.02 -6.4%
  
• Non-Block Money Flow +$38.1M
  
• 198 New 52-Week Highs, 12 New Lows
• 60.7% (-.4%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 65.0 -3.0
  

Other:

• Bloomberg Global Risk-On/Risk-Off Index 56.6 +1.7%
• Bloomberg Cyclicals/Defensives Index 226.4 +.06%
  
• Russell 1000: Growth/Value 19,411.3 +.17%
• CNN Fear & Greed Index 62.0 (GREED) +10.0
  
• 1-Day Vix 11.8 -9.1%
  
• Vix 15.9 +1.3%
  
• Total Put/Call .79 -15.1%

Friday Watch

Night Trading 

• Asian equity indices are unch. to +.5% on average.

• Asia Ex-Japan Investment Grade CDS Index 92.0 -1.0 basis point.

• China Sovereign CDS 57.5 -.75 basis point.
  
• China Iron Ore Spot 101.4 USD/Metric Tonne -.3%

• Bloomberg Emerging Markets Currency Index 38.9 -.03%.
• Bloomberg Global Risk-On/Risk Off Index 56.0 +.6%.
• Volatility Index(VIX) futures 15.8 -1.1%.
• Euro Stoxx 50 futures n/a.

• S&P 500 futures +.12%.

• NASDAQ 100 futures +.22%.  

Morning Preview Links

BOTTOM LINE: Asian indices are modestly higher, boosted by industrial and technology 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.

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

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Higher
  

• Sector Performance: Most Sectors Rising
  

• Volume: Below Average
  

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 15.7 -8.2%
• DJIA Intraday % Swing 1.20 +49.5%
  
• Bloomberg Global Risk On/Risk Off Index 55.9 +4.5%

• Euro/Yen Carry Return Index 176.8 -.3%

• Emerging Markets Currency Volatility(VXY) 9.12 +2.2%

• CBOE S&P 500 Implied Correlation Index 14.9 +2.7% 

• ISE Sentiment Index 153.0 +15.0
  

• Total Put/Call .91 +2.3%

• NYSE Arms 1.111 -5.9%
  
• NYSE Non-Block Money Flow -$243.7M 
  

Credit Investor Angst:

• North American Investment Grade CDS Index 49.6 -.7%
  

• US Energy High-Yield OAS 296.5 -2.0%
• Bloomberg TRACE # Distressed Bonds Traded 254 +11
  

• European Financial Sector CDS Index 59.8 -.2%
  
• Deutsche Bank Subordinated 5Y Credit Default Swap 161.3 +.32%
  

• Italian/German 10Y Yld Spread 138.0 basis points -1.0 basis point
  

• Asia Ex-Japan Investment Grade CDS Index 92.2 -.5%
  

• Emerging Market CDS Index 160.71 +.5%
  
• Israel Sovereign CDS 127.7 -7.6%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 25.1 unch.

• 2-Year SOFR Swap Spread -19.5 basis points -1.75 basis points
  

• Treasury Repo 3M T-Bill Spread -22.75 basis points +1.25 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -.5 +.25 basis point
  
• MBS  5/10 Treasury Spread 134.0 +2.0 basis points
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 695.0 -2.0 basis points
  
• Avg. Auto ABS OAS 66.0 -1.0 basis point
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 38.9 -.11%
• 3-Month T-Bill Yield 5.11% +1.0 basis point
  

• China Iron Ore Spot 101.7 USD/Metric Tonne -.03%
• Dutch TTF Nat Gas(European benchmark) 38.6 euros/megawatt-hour +.21%

• Citi US Economic Surprise Index -24.8 +2.4 points

• Citi Eurozone Economic Surprise Index -50.2 +6.4 points

• Citi Emerging Markets Economic Surprise Index -11.0 +1.7 points
• S&P 500 Current Quarter EPS Growth Rate YoY(490 of 500 reporting) +11.4% +2.0 percentage points
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 265.20 +.17:  Growth Rate +13.5% -2.8 percentage points, P/E 21.3 +.2
  
• S&P 500 Current Year Estimated Profit Margin 12.69% +1.0 basis point
  
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(9 of 10 reporting) +36.3% +10.0 percentage points
  
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 344.76 +.27: Growth Rate +22.0% -6.4 percentage points, P/E 32.3 +.6
  
• Bloomberg US Financial Conditions Index .77 +3.0 basis points
  
• Bloomberg Euro-Zone Financial Conditions Index .80 +6.0 basis points
  
• US Yield Curve -3.0 basis points (2s/10s) unch.
  
• US Atlanta Fed 3Q GDPNow Forecast +1.99% unch.
  
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 71.0% +.1 percentage point
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +2.64% unch.: CPI YoY +2.56% unch.
  
• 10-Year TIPS Spread 2.16 +1.0 basis point
  
• Highest target rate probability for Nov. 7th FOMC meeting: 46.0%(+4.1 percentage points) chance of 4.75%-5.0%. Highest target rate probability for Dec. 18th meeting: 44.6%(+.5 percentage point) chance of 4.25%-4.5%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -77 open in Japan 
• China A50 Futures: Indicating -24 open in China

• DAX Futures: Indicating -35 open in Germany

Portfolio:

• Slightly Higher:  On gains in my industrial/tech/utility/biotech sector longs
  

• Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges
  

• Market Exposure: Moved to 75% Net Long
  

Bear Radar

Style Underperformer:

• Large-Cap Growth +.6%
  

Sector Underperformers:

• 1) Disk Drives -1.4% 2) Computer Hardware -.6% 3) Telecom -.6%

Stocks Falling on Unusual Volume: 

• EDU, AEO, IMCR, GMS, OLLI, NTAP, DLTR, PSTG, OKTA, BIRK and DG
  

Stocks With Unusual Put Option Activity:

• 1) DG 2) OKTA 3) ATUS 4) AFRM 5) EOSE
  

Stocks With Most Negative News Mentions:

• 1) AILE 2) DG 3) BIG 4) BIRK 5) DLTR
  

Sector ETFs With Most Negative Money Flow:

• 1) SOXX 2) XLE 3) AMLP 4) XBI 5) KWEB

Charts:

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

Bull Radar

Style Outperformer:

• Small-Cap Growth +1.7%
  

Sector Outperformers:

• 1) Alt Energy +3.8% 2) Social Media +1.9% 3) Networking +1.8%

Stocks Rising on Unusual Volume:

• AFRM, NTNX, BBW, BBY, AAOI, ATAT, COO, BZ, ALAB, MXL, PGY, IRTC, LI, ENLC, STVN, ZK, MNSO, UPST, HRTG, RDDT, FLYW, CM, WOLF, CM, CLCO, ASTS, LMND, AVAV, PRO, GGAL, PDD, CRWD, FL, TS, GDYN, PLAB, ASTL, NBIX, APP, YOU, PCG, ZLAB, MRVL, SCVL, VSH, MEOH, CYBR, SN, GLDD, EW, LIF, HPQ, CEIX, MCY, BOX and GAP
  

Stocks With Unusual Call Option Activity:

• 1) DG 2) AFRM 3) MULN 4) BBY 5) GSAT

Stocks With Most Positive News Mentions:

• 1) AFRM 2) NTNX 3) COO 4) BZ 5) BBY
  

Sector ETFs With Most Positive Money Flow:

• 1) XLP 2) XLV 3) XLK 4) XLF 5) SMH
  

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:

• (FRO)/.78
• (JKS)/-1.09
  

After the Close: 

• None of note
  

Economic Releases

8:30 am EST

• Personal Income for July is estimated to rise +.2% versus a +.2% gain in June.
• Personal Spending for July is estimated to rise +.5% versus a +.3% gain in June.
• Real Personal Spending for July is estimated to rise +.3% versus a +.2% gain in June.
• The Core PCE Price Index MoM for July is estimated to rise +.2% versus a +.1% gain in June.
  

9:45 am EST

• The MNI Chicago PMI for Aug. is estimated to fall to 44.8 versus 45.3 in July.
  

10:00 am EST

• Final Univ. of Mich. Consumer Confidence readings for Aug.
  

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Atlanta Fed Q3 GDPNow update, Dallas Fed PCE for July, CFTC speculative net positioning reports and the US Baker Hughes Oil Rig Count 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 -20.4% Below 100-Day Average 
• Nasdaq/NYSE Volume Ratio 13.9 +.6
  
• 2 Sectors Declining, 9 Sectors Rising
• 75.4% of Issues Advancing, 22.3% Declining 
• TRIN/Arms 1.09 -7.6%
  
• Non-Block Money Flow +$354.9M
  
• 177 New 52-Week Highs, 16 New Lows
• 61.8% (+3.3%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 68.0 +4.0
  

Other:

• Bloomberg Global Risk-On/Risk-Off Index 53.4 +5.3%
• Bloomberg Cyclicals/Defensives Index 227.8 +1.4%
  
• Russell 1000: Growth/Value 19,556. +.12%
• CNN Fear & Greed Index 62.0 (GREED) +10.0
  
• 1-Day Vix 11.0 -48.4%
  
• Vix 15.3 -10.8%
  
• Total Put/Call .88 -1.1%

Thursday Watch

Night Trading 

• Asian equity indices are -1.5% to -.5% on average.

• Asia Ex-Japan Investment Grade CDS Index 93.0 +1.0 basis point.

• China Sovereign CDS 58.25 +.75 basis point.
  
• China Iron Ore Spot 101.2 USD/Metric Tonne +.3%

• Bloomberg Emerging Markets Currency Index 38.9 -.11%.
• Bloomberg Global Risk-On/Risk Off Index 53.5 -.03%.
• Volatility Index(VIX) futures 16.8 +1.4%.
• Euro Stoxx 50 futures n/a.

• S&P 500 futures -.66%.

• NASDAQ 100 futures -1.1%.  

Morning Preview Links

BOTTOM LINE: Asian indices are mostly lower, weighed down by consumer and technology shares in the region. I expect US stocks to open modestly lower and to maintain losses into the afternoon.  The Portfolio is 50% net long heading into the day.

Stocks Lower into Final Hour on China Economy Worries, Earnings Outlook Jitters, Technical Selling, Tech/Alt Energy Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Lower
  

• Sector Performance: Almost Every Sector Declining
  

• Volume: Below Average
  

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 17.8 +15.2%
• DJIA Intraday % Swing .80 +117.9%
  
• Bloomberg Global Risk On/Risk Off Index 53.6 -1.5%

• Euro/Yen Carry Return Index 177.2 -.2%

• Emerging Markets Currency Volatility(VXY) 8.9 +.8%

• CBOE S&P 500 Implied Correlation Index 14.7 +16.4% 

• ISE Sentiment Index 137.0 +10.0
  

• Total Put/Call .92 -7.1%

• NYSE Arms 1.53 +24.4%
  
• NYSE Non-Block Money Flow -$222.2M 
  

Credit Investor Angst:

• North American Investment Grade CDS Index 50.2 +1.99%
  

• US Energy High-Yield OAS 303.3 +2.0%
• Bloomberg TRACE # Distressed Bonds Traded 243 -1
  

• European Financial Sector CDS Index 59.9 +1.2%
  
• Deutsche Bank Subordinated 5Y Credit Default Swap 160.8 -.11%
  

• Italian/German 10Y Yld Spread 139.0 basis points +1.0 basis point
  

• Asia Ex-Japan Investment Grade CDS Index 92.7 -.01%
  

• Emerging Market CDS Index 161.4 +1.7%
  
• Israel Sovereign CDS 138.2 -.04%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 25.1 unch.

• 2-Year SOFR Swap Spread -17.75 basis points +4.0 basis points
  

• Treasury Repo 3M T-Bill Spread -24.0 basis points -1.5 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -.75 unch.
  
• MBS  5/10 Treasury Spread 132.0 unch.
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 697.0 +1.0 basis point
  
• Avg. Auto ABS OAS 67.0 unch.
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 38.9 -.23%
• 3-Month T-Bill Yield 5.10% unch.
  

• China Iron Ore Spot 101.9 USD/Metric Tonne +.04%
• Dutch TTF Nat Gas(European benchmark) 38.5 euros/megawatt-hour -.44%

• Citi US Economic Surprise Index -27.2 +.9 point

• Citi Eurozone Economic Surprise Index -56.6 -.3 point

• Citi Emerging Markets Economic Surprise Index -12.7 unch.
• S&P 500 Current Quarter EPS Growth Rate YoY(479 of 500 reporting) +9.4% unch.
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 265.03 +.11:  Growth Rate +16.3% unch., P/E 21.1 -.1
  
• S&P 500 Current Year Estimated Profit Margin 12.68% unch.
  
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(8 of 10 reporting) +26.3% unch.
  
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 344.49 +.25: Growth Rate +28.4% +.1 percentage point, P/E 31.7 -.6
  
• Bloomberg US Financial Conditions Index .74 +1.0 basis point
  
• Bloomberg Euro-Zone Financial Conditions Index .74 +1.0 basis point
  
• US Yield Curve -3.0 basis points (2s/10s) +4.0 basis points
  
• US Atlanta Fed 3Q GDPNow Forecast +1.99% unch.
  
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 70.9% +1.6 percentage points
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +2.64% unch.: CPI YoY +2.56% unch.
  
• 10-Year TIPS Spread 2.15 unch.
  
• Highest target rate probability for Nov. 7th FOMC meeting: 45.8%(unch.) chance of 4.5%-4.75%. Highest target rate probability for Dec. 18th meeting: 44.0%(+.1 percentage point) chance of 4.25%-4.5%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -216 open in Japan 
• China A50 Futures: Indicating -18 open in China

• DAX Futures: Indicating +11 open in Germany

Portfolio:

• Slightly Lower:  On losses in my consumer discretionary/industrial/tech sector longs and index hedges
  

• Disclosed Trades: None
  

• Market Exposure: 75% Net Long