Thursday, November 03, 2022

Friday Watch

Evening Headlines

Bloomberg:                   
Fox News:
Zero Hedge:
Newsmax:  
TheGatewayPundit.com:
SKirsch.com:
Night Trading 
  • Asian equity indices are -1.25% to -.25% on average.
  • Asia Ex-Japan Investment Grade CDS Index 223.75 +3.5 basis points. 
  • China Sovereign CDS 120.0 +4.75 basis points.
  • Bloomberg Emerging Markets Currency Index 46.3 unch.  
  • Bloomberg Global Risk-On/Risk Off Index 48.5 -1.4%. 
  • Bloomberg US Financial Conditions Index -1.06 -2.0 basis points.
  • Volatility Index(VIX) futures 26.2 +.32%.
  • Euro Stoxx 50 futures -.17%.
  • S&P 500 futures -.07%.
  • NASDAQ 100 futures +.03%  
Morning Preview Links

Earnings of Note 
Company/Estimate 
 
Before the Open: 
  • (ACMR)/.23
  • (AMCX)/1.78
  • (AXL)/.24
  • (CAH)/.97
  • (CBOE)/1.65
  • (D)/1.08
  • (DKNG)/-1.05
  • (DUK)/1.85
  • (FLR)/.42
  • (HSY)/2.10
  • (LAMR)/1.35
  • (MGA)/1.12
  • (PPL)/.42
After the Close:
  • (SJR)/.36
Economic Releases
8:30 am EST
  • The Change in Non-Farm Payrolls for Oct. is estimated at +198,000 versus +263,000 in Sept.
  • The Unemployment Rate for Oct. is estimated to rise to 3.6% versus 3.5% in Sept.
  • Average Hourly Earnings MoM for Oct. is estimated to rise +.3% versus a +.3% gain in Sept.
  • The Labor Force Participation Rate for Oct. is estimated at 62.3% versus 62.3% in Sept.
Upcoming Splits
  • None of note
Other Potential Market Movers
  • The Eurozone PMI report could also impact global trading today.
US Equity Market Hours
  • 9:30 am - 4:00 pm EST
BOTTOM LINE: Asian indices are modestly lower, weighed down by industrial and technology 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.

Stocks Lower into Final Hour on US Policy-Induced Stagflation Fears, US Election Credibility Concerns, Dollar Strength, Tech/Gambling Sector Weakness

Broad Equity Market Tone:

  • Advance/Decline Line: Lower
  • Sector Performance: Mixed
  • Volume:  Above Average
  • Market Leading Stocks: Outperforming
Equity Investor Angst:
  • Volatility(VIX) 25.4 -1.9%
  • DJIA Intraday % Swing 1.43%
  • Bloomberg Global Risk On/Risk Off Index 48.5 +3.8%
  • Euro/Yen Carry Return Index 149.15 -.43%
  • Emerging Markets Currency Volatility(VXY) 12.4 +.3%
  • CBOE S&P 500 Implied Correlation Index 51.5 -1.0% 
  • ISE Sentiment Index 92.0 -3.0 points
  • Total Put/Call 1.0 -14.2%
  • NYSE Arms .62 -75.2%
Credit Investor Angst:
  • North American Investment Grade CDS Index 93.07 +2.34%
  • US Energy High-Yield OAS 362.67 +3.8%
  • Bloomberg TRACE # Distressed Bonds Traded 482.0 +6.0
  • European Financial Sector CDS Index 123.87 +2.2% 
  • Credit Suisse Subordinated 5Y Credit Default Swap 362.83 +5.8%
  • Italian/German 10Y Yld Spread 217.0 basis points +1.0 basis point
  • Asia Ex-Japan Investment Grade CDS Index 221.72 +1.74%
  • Emerging Market CDS Index 297.58 -.07%
  • China Corp. High-Yield Bond USD ETF(KHYB) 23.98 +.71%
  • 2-Year Swap Spread 38.25 basis points -1.75 basis points
  • TED Spread 34.5 basis points +1.75 basis points
  • 3-Month EUR/USD Cross-Currency Basis Swap -56.0 basis points -2.25 basis points
  • MBS  5/10 Treasury Spread  172.0 +7.0 basis points
  • Bloomberg US Agg CMBS Avg OAS 132.0 +1.0 basis point
  • Avg. Auto ABS OAS 1.14 +3.0 basis points
Economic Gauges:
  • Bloomberg Emerging Markets Currency Index 46.32 -.35%
  • 3-Month T-Bill Yield 4.11% +1.0 basis point
  • Yield Curve -57.75 basis points (2s/10s) -11.5 basis points
  • China Iron Ore Spot 82.3 USD/Metric Tonne +1.7%
  • Dutch TTF Nat Gas(European benchmark) 125.10 euros/megawatt-hour -.6%
  • Citi US Economic Surprise Index 14.1 +.6 point
  • Citi Eurozone Economic Surprise Index 8.2 -.7 point
  • Citi Emerging Markets Economic Surprise Index 3.8 -.6 point
  • S&P 500 Blended Forward 12 Months Mean EPS Estimate 231.94 -.10:  Growth Rate +12.3% +.2 percentage point, P/E 16.1 -.6 point
  • Bloomberg US Financial Conditions Index 1.02 +1.0 basis point
  • US Atlanta Fed GDPNow Forecast +3.60% +100.0 basis points
  • Cleveland Fed Inflation Nowcast Core PCE YoY +5.16% unch.: CPI YoY +8.09% unch.
  • 10-Year TIPS Spread 2.41 -13.0 basis points
  • Highest target rate probability for March 22nd FOMC meeting: 46.6%(+5.5 percentage points) chance of 5.0%-5.25%. Highest target rate probability for May 3rd meeting: 38.7%(unch.) chance of 5.0%-5.25%.
US Covid-19:
  • 77 new infections/100K people(last 7 days total). 4.4%(+0.0 percentage points) of 1/14/22 peak(1,740) +0/100K people from prior report.
  • New Covid-19 patient hospital admissions per 100K population -84.8%(-.4 percentage point) from peak 7-day avg. of 1/9/22 - 1/15/22
Overseas Futures:
  • Nikkei 225 Futures: Indicating -313 open in Japan 
  • China A50 Futures: Indicating +30 open in China
  • DAX Futures: Indicating +23 open in Germany
Portfolio:
  • Higher:  On gains in my industrial/commodity/ sector longs and index hedges
  • Disclosed Trades:  Covered some of my (IWM)/(QQQ) hedges
  • Market Exposure:  Moved to 25% Net Long

Afternoon Market Internals

NYSE Composite Index:

  • Volume Running +13.2% Above 100-Day Average 
  • 6 Sectors Declining, 5 Sectors Rising
  • 42.4% of Issues Advancing, 54.4% Declining
  • 41 New 52-Week Highs, 226 New Lows
  • 33.1%(+1.5%) of Issues Above 200-day Moving Average
  • Average 14-Day RSI 54.0 -6.0
  • Bloomberg Global Risk-On/Risk-Off Index 48.5 +3.7%
  • Russell 1000: Growth/Value 14,362.9 -.92%
  • Vix 25.4 -1.9%
  • Total Put/Call 1.0 -14.2%
  • TRIN/Arms .63 -74.8% 

Wednesday, November 02, 2022

Thursday Watch

Night Trading 

  • Asian equity indices are -2.0% to -1.0% on average.
  • Asia Ex-Japan Investment Grade CDS Index 220.25 -5.5 basis points. 
  • China Sovereign CDS 115.25 -3.75 basis points.
  • Bloomberg Emerging Markets Currency Index 46.5 -.02%.  
  • Bloomberg Global Risk-On/Risk Off Index 46.8 -.14%. 
  • Bloomberg US Financial Conditions Index -1.02 +2.0 basis points.
  • Volatility Index(VIX) futures 26.7 -.18%.
  • Euro Stoxx 50 futures -1.16%.
  • S&P 500 futures -.20%.
  • NASDAQ 100 futures -.15%  
Morning Preview Links

Earnings of Note 
Company/Estimate 
 
Before the Open: 
  • (APD)/2.76
  • (ABC)/2.58
  • (APTV)/1.00
  • (AAWW)/4.26
  • (GOLD)/.12
  • (CARS)/.49
  • (CI)/5.71
  • (COP)/3.44
  • (CMI)/4.83
  • (DDOG)/.16
  • (EXC)/.70
  • (FSS)/.53
  • (H)/.25
  • (ICE)/1.27
  • (IRM)/.76
  • (ITT)/1.17
  • (JCI)/.98
  • (K)/.98
  • (MAR)/1.68
  • (MRNA)/3.11
  • (MUR)/1.61
  • (PZZA)/.61
  • (PH)/4.17
  • (BTU)/1.80
  • (PTON)/-.67
  • (PENN)/.49
  • (PWR)/1.77
  • (REGN)/9.62
  • (RCL)/.17
  • (SHAK)/-.06
  • (W)/-2.17
  • (ZTS)/1.24
After the Close:
  • (AES)/.53
  • (MDRX)/.19
  • (AMGN)/4.45
  • (AVB)/2.53
  • (SQ)/.23
  • (CVNA)/-1.93
  • (NET)/.00
  • (CGNX)/.14
  • (COIN)/-1.47
  • (ED)/1.46
  • (DASH)/-.07
  • (DBX)/.38
  • (LOCO)/.12
  • (EOG)/3.77
  • (EXPE)/4.13
  • (ILMN)/.30
  • (LYV)/1.05
  • (MTZ)/1.28
  • (MELI)/2.49
  • (MCHP)/1.44
  • (MNST)/.61
  • (PYPL)/.96
  • (RMAX)/.60
  • (SWKS)/2.90
  • (SBUX)/.72
  • (TRUP)/-.07
  • (TWLO)/-.35
  • (OLED)/1.00
  • (YELP)/.58
Economic Releases
7:30 am EST
  • Challenger Job Cuts YoY for Oct.
8:30 am EST
  • The Trade Balance for Sept. is estimated at -$72.2B versus -$67.4B in Aug.
  • 3Q Non-Farm Productivity is estimated to rise +.5% versus a -4.1% decline in 2Q.
  • 3Q Unit Labor Costs is estimated to rise +4.0% versus a +10.2% gain in 2Q.
  • Initial Jobless Claims for last week is estimated to rise to 220K versus 217K the prior week.
  • Continuing Claims is estimated to rise to 1450K versus 1438K prior.
10:00 am EST:
  • Factory Orders for Sept. is estimated to rise +.3% versus unch. in Aug.
  • Factory Orders Ex Transports for Sept. is estimated unch. versus a +.2% gain in Aug.
  • ISM Services Index for Oct. is estimated to fall to 55.2 versus 56.7 in Sept.
Upcoming Splits
  • None of note
Other Potential Market Movers
  • The BofE rate decision, Eurozone Retail Sales report, weekly EIA natural gas inventory report, (TWLO) investor day, (ANET) analyst day and the (SLB) investor conference could also impact global trading today.
US Equity Market Hours
  • 9:30 am - 4:00 pm EST
BOTTOM LINE: Asian indices are lower, weighed down by commodity and technology shares in the region. I expect US stocks to open mixed and to weaken into the afternoon, finishing modestly lower. The Portfolio is Market Neutral heading into the day.

Stocks Reversing Lower into Final Hour on US Policy-Induced Stagflation Fears, Fed "Behind the Curve" Worries, Increasingly Divisive Political Rhetoric, Consumer Discretionary/Tech Sector Weakness

Broad Equity Market Tone:

  • Advance/Decline Line: Lower
  • Sector Performance: Mixed
  • Volume:  Around Average
  • Market Leading Stocks: Performing In Line
Equity Investor Angst:
  • Volatility(VIX) 26.4 +2.4%
  • DJIA Intraday % Swing 1.59%
  • Bloomberg Global Risk On/Risk Off Index 46.0 -2.1%
  • Euro/Yen Carry Return Index 150.20 -.59%
  • Emerging Markets Currency Volatility(VXY) 12.5 -.32%
  • CBOE S&P 500 Implied Correlation Index 52.1 +.2% 
  • ISE Sentiment Index 99.0 +19.0 points
  • Total Put/Call .95 +1.1%
  • NYSE Arms .85 +4.9%
Credit Investor Angst:
  • North American Investment Grade CDS Index 87.3 -1.8%
  • US Energy High-Yield OAS 353.92 +.97%
  • Bloomberg TRACE # Distressed Bonds Traded 476.0 +5.0
  • European Financial Sector CDS Index 122.5 +1.9% 
  • Credit Suisse Subordinated 5Y Credit Default Swap 339.55 +2.5%
  • Italian/German 10Y Yld Spread 216.0 basis points +3.0 basis points
  • Asia Ex-Japan Investment Grade CDS Index 218.1 -5.0%
  • Emerging Market CDS Index 280.19 -1.7%
  • China Corp. High-Yield Bond USD ETF(KHYB) 23.87 +.11%
  • 2-Year Swap Spread 40.0 basis points +2.5 basis points
  • TED Spread 32.75 basis points -2.0 basis points
  • 3-Month EUR/USD Cross-Currency Basis Swap -53.75 basis points +1.0 basis point
  • MBS  5/10 Treasury Spread  165.0 -4.0 basis points
  • Bloomberg US Agg CMBS Avg OAS 131.0 -2.0 basis points
  • Avg. Auto ABS OAS 1.11 +1.0 basis point
Economic Gauges:
  • Bloomberg Emerging Markets Currency Index 46.63 +.2%
  • 3-Month T-Bill Yield 4.10% +3.0 basis points
  • Yield Curve -46.25 basis points (2s/10s) +2.75 basis points
  • China Iron Ore Spot 80.9 USD/Metric Tonne +1.4%
  • Dutch TTF Nat Gas(European benchmark) 135.90 euros/megawatt-hour +17.0%
  • Citi US Economic Surprise Index 13.5 +1.1 points
  • Citi Eurozone Economic Surprise Index 8.9 -9.3 points
  • Citi Emerging Markets Economic Surprise Index 3.8 -.6 point
  • S&P 500 Blended Forward 12 Months Mean EPS Estimate 232.04 +.05:  Growth Rate +12.1% -.8 percentage point, P/E 16.7 +.1 point
  • Bloomberg US Financial Conditions Index -.99 +3.0 basis points
  • US Atlanta Fed GDPNow Forecast +2.60% unch.
  • Cleveland Fed Inflation Nowcast Core PCE YoY +5.16% unch.: CPI YoY +8.09% unch.
  • 10-Year TIPS Spread 2.54 +3.0 basis points
  • Highest target rate probability for February 1st FOMC meeting: 44.0%(-3.0 percentage points) chance of 4.75%-5.0%. Highest target rate probability for March 22nd meeting: 41.0%(+9.4 percentage points) chance of 4.75%-5.0%.
US Covid-19:
  • 77 new infections/100K people(last 7 days total). 4.4%(+0.0 percentage points) of 1/14/22 peak(1,740) +0/100K people from prior report.
  • New Covid-19 patient hospital admissions per 100K population -84.4%(+.3 percentage point) from peak 7-day avg. of 1/9/22 - 1/15/22
Overseas Futures:
  • Nikkei 225 Futures: Indicating +12 open in Japan 
  • China A50 Futures: Indicating -63 open in China
  • DAX Futures: Indicating +83 open in Germany
Portfolio:
  • Slightly Higher:  On gains in my industrial sector longs and index hedges
  • Disclosed Trades:  Added to my (IWM)/(QQQ) hedges
  • Market Exposure:  Moved to 25% Net Long

Morning Market Internals

NYSE Composite Index:

  • Volume Running -18.6% Below 100-Day Average 
  • 10 Sectors Declining, 1 Sector Rising
  • 32.6% of Issues Advancing, 64.2% Declining
  • 34 New 52-Week Highs, 73 New Lows
  • 35.2%(-3.5%) of Issues Above 200-day Moving Average
  • Average 14-Day RSI 60.0 -2.0
  • Bloomberg Global Risk-On/Risk-Off Index 46.5 -.5%
  • Russell 1000: Growth/Value 14,656.0 -.25%
  • Vix 26.3 +1.9%
  • Total Put/Call 1.07 +13.8%
  • TRIN/Arms 1.13 +39.5%