Afternoon Market Internals

NYSE Composite Index:

• Volume Running +26.9% Above 100-Day Average
• 7 Sectors Rising, 4 Sectors Declining
• 47.7% of Issues Advancing, 50.2% Declining
• 165 New 52-Week Highs, 42 New Lows
• 60.2% of Issues Above 200-day Moving Average
• Average 14-Day RSI 50.9%
• Vix 12.5 -.8%
• Total Put/Call .65 -31.6%
• TRIN/Arms .75 -37.0%

Thursday Watch

Evening Headlines

Bloomberg:

• Trump-Xi Trade Summit May Slip to December, Be Outside U.S.    

• Hong Kong Leaders Accused of Spending ‘Peanuts’ to Save Economy.

• Toxic Air Adds to India’s Woes as Economy Goes From Bad to Worse.    

• BOE to Hold Steady as Brexit Fog Thickens: Decision Day Guide.

• Smartphone Rebound Sparks Signs of Life in Asia’s Tech Cycle.

• Stocks Mixed as Interim Trade Deal Hits Roadblock. Stocks in Asia were mixed Thursday after reports that the signing of a partial U.S.-China trade deal may be delayed until next month. Treasuries extended Wednesday’s gains. Equities in Japan opened flat and South Korean stocks slipped, while shares in Sydney rose modestly. The S&P 500 Index closed little changed Wednesday. The latest news suggested that the signing of a preliminary trade agreement may not happen this month as originally planned as the two sides wrangle over a location. West Texas oil remained near $53 a barrel. Japan’s Topix index dipped 0.1% of as 9:07 a.m. in Tokyo. South Korea’s Kospi index dropped 0.3%. Australia’s S&P/ASX 200 Index rose 0.5%. Futures on the S&P 500 were flat.

• Five Things You Need to Know to Start Your Day.   

• Europe Girds for Worse, Productivity Plunges, Trump-Xi: Eco Day.

• Vape Shops Likely to Be Exempted in Planned FDA E-Cig Curbs.  

• North Sea Oil Man Finds New Opportunities in Dying Fields.   

• ‘Powerfully’ Bullish Setup Fuels Year-End Optimism in Stocks.

Wall Street Journal:

• China Embraces Bankruptcy, U.S.-Style, to Cushion a Slowing Economy.

• Has Elizabeth Warren Wrecked the Left?

• If Warren Scraps Private Health Care, Beware Unintended Consequences.

• Sessions Plans to Enter Alabama Senate Race.

• Google(GOOG) Weighs Changes to Political Ad Policy.

• Mexico Says U.S. Homicides May Have Been Case of Mistaken Identity.

• The New College Rock Stars.

Fox News:

• Whistleblower attorney called for 'rebellion,' 'impeachment' in 2017.

MarketWatch.com:     

• Roku(ROKU) shares slump 15% on widening loss.  

• Square(SQ) gives a rosier revenue forecast after Caviar sale, but earnings outlook is light.  

• Short sellers are increasing bets on cannabis stocks even after summer selloff.

CNBC:

• Alphabet’s(GOOG) board of directors is investigating executives over inappropriate relationships.

• Qualcomm(QCOM) stock spikes after licensing business propels earnings and revenue past estimates.

• Netflix(NFLX) CEO Reed Hastings says subscriber numbers aren’t the right metric to track competition.

• This industrial stock could be the best way to ride sector surge, trader says.

Zero Hedge:   

• 'Coup Has Started': Whistleblower's Attorney Vowed To 'Get Rid Of Trump' In 2017.

• Arizona County Declares Itself A "Second Amendment Sanctuary".

• Almost 80,000 California Retirees Receive Over $100,000 In Pension Pay.

• Two Former Twitter Employees Charged With Spying For Saudi Arabia, May Be Involved In Khashoggi Murder.

• The 'Sissifying' Of America Continues.

• Ukrainians Pimped Hunter Biden's Seat For Leverage With Obama State Department.

• 45 Population-Control Quotes That Expose The Elites' Plan To Cut The Number Of People On The Planet.

• Democrats' 'Star Witness' Admits He Wasn't On Trump-Ukraine Call, Sole Source Was NY Times.

• Bonds & Bullion Bid As Trade-Deal-Delay Stalls Stocks.

Night Trading 

• Asian equity indices are -.25% to +.5% on average.

• Asia Ex-Japan Investment Grade CDS Index 64.75 +.5 basis point.

• China Sovereign CDS 36.75 -.25 basis point.

• Bloomberg Emerging Markets Currency Index  66.16 -.05%.

• FTSE 100 futures +.15%.

• S&P 500 futures -.06%.

• NASDAQ 100 futures -.06%.

Morning Preview Links

Earnings of Note 
Company/Estimate

Before the Open:

• (APD)/2.29

• (ABC)/1.58

• (MT)/-.28

• (CAH)/1.09

• (DISCA)/.81

• (DISH)/.58

• (HAIN)/.08

• (JCI)/.76

• (NCLH)/2.17

• (RL)/2.39

• (STRA)/1.20

• (TSG)/.42

• (WWW)/.63

• (ZTS)/.88

After the Close:

• (ATVI)/.23

• (MNST)/.54

• (NWSA)/.08

• (PETQ)/.35

• (SGMS)/.03

• (STMP)/.74

• (SYNA)/.73

• (TTWO)/1.70

• (TTD)/.66

• (DIS)/.97

• (YELP)/.50

• (ZG)/-.20

Economic Releases
8:30 am EST

• Initial Jobless Claims for last week are estimated to fall to 215K versus 218K the prior week.

• Continuing Claims are estimated to fall to 1682K versus 1690K prior.

3:00 pm EST

• Consumer Credit for Sept. is estimated to fall to $15.0B versus $17.901B in Aug.

Upcoming Splits

• None of note

Other Potential Market Movers

• The Fed's Bostic speaking, Fed's Kaplan speaking, BofE rate decision/meeting, China Trade Balance report, $19B 30Y T-Bond auction, weekly EIA natural gas inventory report, weekly Bloomberg Consumer Comfort Index, (STRA) analyst day and the Stifel Growth Conference could also impact trading today.

BOTTOM LINE: Asian indices are slightly lower, weighed down by consumer and commodity shares in the region. I expect US stocks to open mixed and rally into the afternoon, finishing modestly higher. The Portfolio is 100% net long heading into the day.

Stocks Slightly Lower into Final Hour on China Trade Deal Concerns, Profit-Taking, Oil Decline, Energy/Telecom Sector Weakness

 Broad Equity Market Tone:

• Advance/Decline Line: Lower
  

• Sector Performance: Mixed
  

• Volume: Heavy

• Market Leading Stocks: Performing In Line

Equity Investor Angst:

• Volatility(VIX) 13.0 -1.0%

• Euro/Yen Carry Return Index 125.18 -.25%

• Emerging Markets Currency Volatility(VXY) 7.35 +.14%

• S&P 500 Implied Correlation 29.68 +1.4%

• ISE Sentiment Index 89.0 -23
  

• Total Put/Call .96 +12.9%

• NYSE Arms 1.52 +82.4%

Credit Investor Angst:

• North American Investment Grade CDS Index 51.82 +.16%
  

• America Energy Sector High-Yield CDS Index 506.0 -8.4%

• European Financial Sector CDS Index 58.09 +4.51%

• Italian/German 10Y Yld Spread 133.5 -.25 basis point
  

• Asia Ex-Japan Investment Grade CDS Index 63.94 +.67%
  

• Emerging Market CDS Index 193.75 +.67%
  

• iBoxx Offshore RMB China Corporate High Yield Index 167.36 +.01%

• 2-Year Swap Spread 4.0 -.25 basis point

• TED Spread 36.0 -1.75 basis points

• 3-Month EUR/USD Cross-Currency Basis Swap -12.0 -1.25 basis points

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 66.17 -.31%
• 3-Month T-Bill Yield 1.55% +1.0 basis point

• Yield Curve .23 +2.0 basis points

• China Iron Ore Spot 80.52 USD/Metric Tonne +.35%

• Citi US Economic Surprise Index 7.10 -.4 point

• Citi Eurozone Economic Surprise Index -27.70 +8.8 points

• Citi Emerging Markets Economic Surprise Index -23.70 +1.8 basis points

• 10-Year TIPS Spread 1.68 unch.
• 29.2% chance of Fed rate cut at Jan. 29th meeting, 41.3% chance of cut at March 18th meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating +7 open in Japan 
• China A50 Futures: Indicating +6 open in China

• DAX Futures: Indicating -11 open in Germany

Portfolio:

• Slightly Higher: On gains in my medical sector longs and index hedges

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

• Market Exposure: Moved to 100% Net Long

Morning Market Internals

NYSE Composite Index:

• Volume Running +46.2% Above 100-Day Average
• 7 Sectors Rising, 4 Sectors Declining
• 47.5% of Issues Advancing, 49.4% Declining
• 67 New 52-Week Highs, 23 New Lows
• 60.5% of Issues Above 200-day Moving Average
• Average 14-Day RSI 51.4%
• Vix 13.1 -.4%
• Total Put/Call .71 -16.5%
• TRIN/Arms 1.5 +75.3%