Tuesday Watch

Evening Headlines

Bloomberg:                 

• Inflation-Focused Voters Defy Biden’s Bid to Change the Subject.  
• Fed Will Stick to the Task of Curbing Inflation, Barkin Says.  
• Xi’s New No. 2 Faces Challenge to Make China’s Economy Hum Again   
• UK Shop Sales Slow as Consumers Shift Spending Toward Essentials.
• UK Firms Set to Face New Requirements to Back Up Climate Claims.  
• US Quietly Asks Banks to Keep Some Ties With Russia, Even as Congress Balks.  
• Asian Stocks, US Futures Rise Before Midterms: Markets Wrap.
  
• Crude Oil Steadies as Supply Angst Vies With Slowdown Concerns.
• Banks Fall Dangerously Short on Pledges in New Net-Zero Study.
  
• Dollar Resumes Drop Amid Risk-On Trade Ahead of Inflation Data.  
• AmerisourceBergen Falls as Walgreens Cuts Stake by $1.6 Billion.

Wall Street Journal:

• Biden’s Closing Argument: Higher Energy Prices. “No more drilling,” says the president in response to a global warmist in New York.
• The 2022 Midterm Election Endangers Democrats, Not Democracy. The party is in the grip of an ideology that believes the entire constitutional construct is illegitimate. 
• Walgreens Unit Strikes Roughly $9 Billion Deal With Summit Health.
• Live Updates and Analysis on the Election.
• Covid’s Drag on the Workforce Proves Persistent. ‘It Sets Us Back.’.
• U.S. Seeks Billions in Carbon Credits to Wean Developing Countries Off Fossil Fuels5 min read.

Fox News:

• Entire midterm cycle summed up by top Dem’s 'clueless' inflation comment, critics say.
• Recordings of Dem's wife expose plan to implement unpopular agenda ‘quietly’.
• Netflix boss rips Dems, backs candidate who was Republican for years.

CNBC.com:

• Take-Two stock tumbles after it cuts outlook.
• Some of NY Gov. Kathy Hochul’s top donors privately sound alarm over GOP candidate Lee Zeldin surge.
• Here’s how much equity U.S. homeowners have lost since May.
• Elon Musk encourages independents to vote for a Republican Congress ahead of midterms.
  

MarketWatch:        

• Republicans have over 70% chance of winning Senate in midterm elections, betting markets say  
• ‘The housing market will continue to cool in the months ahead’: Home-buying sentiment hits all-time low, Fannie Mae says.
• Lyft stock sinks 15% despite price increases driving record revenue.

Zero Hedge:

• Top Dems Warn Party Seen As 'Extreme' And Driving Inflation.
• The Funeral Business Is Booming (And Not Because Of COVID).
• Inflation Was Always The Endgame. 
• Philly Home Depot Workers Reject Union In Lopsided Vote.
• Delaware Professor: Doubting Fetterman's Fitness Is Embracing Eugenics.
• Chinese Exports And Imports Unexpectedly Contract For The First Time Since May 2020.
• Top 10 House Races To Watch On Election Night.
• Twitter Daily User Growth Hits 'All-Time Highs' During First Week Under Musk.
• The Political Left's Reaction To Free Speech On Twitter Confirms Their Authoritarian Intent.
• US stocks gained amid China reopening rumors and ahead of the US midterm elections - Newsquawk Asia-Pac Market Open.
• ReBunked? Politico Warns Of 'Hackable' Voting Equipment.
• Maybe The Fed Too Was Trolled.
• Equity rebound continues on China re-opening optimism ahead of Midterms & CPI - Newsquawk US Market Wrap.
• Wall Street Agrees: A Red Wave In The Midterms Will Push Stocks Higher.
• As Midterms Loom, Stocks Rally, Everything Else Drops.
• Sell-side getting very "trading buy" bullish.

Newsmax:  

• WSJ Poll: Rising Support for GOP Among Black, Latino Voters.
• GOP's Karamo: Parents 'Demonized' by Dems.

TheGatewayPundit.com:

• AG Garland’s DOJ Will “Monitor” Elections (Poll Challengers?) In Dem Cities…Michigan’s SOS Jocelyn Benson Tweets Support For Marxist Move.
• John Fetterman’s Campaign Sues to Allow Undated or Misdated Ballots Counted.
• Karine Jean-Pierre ‘Clarifies’ Joe Biden’s “No More Drilling” Comment to Climate Change Protester (VIDEO).
• “How Did We Twist Those Words?!” – Reporter Confronts Karine Jean-Pierre After Biden Promises to Shut Coal Plants Down (VIDEO).
• Democrat John Fetterman Tells Reporters to “Buckle Up” Because Ballot Counting Process Could Take “Several Days”.
• WHAT’S GOING ON? New Mexico Secretary of State Site Shows 16 Million Registered Voters Drop Overnight.
• Early Voting in Arizona Spells Doom for Democrats – Expect WINS FOR MAGA CANDIDATES – Lake, Blake, Hamadeh, Finchem! #GetOutAndVote.
• Joe Biden’s America: 1 in 4 Americans Skipping Thanksgiving Due to High Food Costs, Some Opting For Pizza Instead of Turkey.
• Desperate Stacey Abrams Already Making Excuses, Stokes ‘Voter Suppression’ Fears in Georgia Despite Record Turnout.
• Pfizer Develops RSV Vaccine for Pregnant Women to Immunize their Unborn Babies While in the Womb.

The Epoch Times:

• Former CCP Intelligence Chief Promoted to Head of China’s Political and Legal Affairs.
• Beijing Marathon Returns but China Sticks to ‘Zero-COVID’.

OpenVAERS:

• VAERS US COVID Vaccine Adverse Event Reports. 887,564 Reports(+3,505 from prior week) Through October 21st, 2022.

SKirsch.com:

• Using the MGH numbers with our own VAERS queries, we have 247 cases per million doses from the MGH study divided by 5.97 cases per million doses from VAERS. 247/5.97 = 41. This suggests that the VAERS under-reporting factor (URF) is 41X.

Covid-19(Data, Maps, Graphs):

• Our World in Data:  New Global Covid-19 Cases(7-day rolling average graphs). New US Covid Hospital Admissions/ICU Admissions/Deaths
  
• FT.com:  Fully Vaccinated by Country(graph). Global Lockdown Stringency Index(map).
• Bloomberg.com:  International Travel Restrictions.  Case Graphs by State.
  
• NYTimes.com:  County Trends and Clusters. Local ICU Occupancy.
  
• Brown School of Public Health:  Covid Severity by State/County(map).  US Hospital Capacity(region).
  
• CovidActNow:  Covid Severity/Infection Rate by Metro Area.
  
• KFF:  US Vaccinations by Race/Ethnicity.
  
• Carnegie Mellon: Covid-Like Symptoms in Community. Covid Symptom Searches on Google. Covid-Related Dr.Visits.  Restaurant Visits. Wearing Masks. (graphs)
  
• Safegraph.com:  Commerce Patterns(graphs).

Night Trading 

• Asian equity indices are -.25% to +.75% on average.

• Asia Ex-Japan Investment Grade CDS Index 190.75 -21.0 basis points. 

• China Sovereign CDS 93.75 -11.0 basis points.
  

• Bloomberg Emerging Markets Currency Index 46.9 -.09%.  
• Bloomberg Global Risk-On/Risk Off Index 52.2 +.5%. 
• Bloomberg US Financial Conditions Index -.98 -1.0 basis point.
  
• Volatility Index(VIX) futures 25.4 -.31%.
• Euro Stoxx 50 futures +.19%.

• S&P 500 futures +.11%.

• NASDAQ 100 futures +.23%  

Morning Preview Links

Earnings of Note 
Company/Estimate 

 

Before the Open: 

• (CNHI)/.33
• (DBD)/.24
• (DD)/.79
• (ELAN)/.16
• (EXPD)/1.94
• (HAIN)/.09
• (IGT)/.31
• (RIDE)/-.31
• (NCLH)/-.69
• (SAGE)/-2.19
• (SPWR)/.08
  

After the Close:

• (DDD)/-.08
• (AFRM)/-.88
• (AKAM)/1.22
• (BIRD)/-.18
• (AMC)/-.25
• (DOX)/1.29
• (BLNK)/-.47
• (IAC)/-.46
• (NWSA)/.13
• (OXY)/2.45
• (SFM)/.51
• (DIS)/.56
  

Economic Releases

6:00 am EST

• The NFIB Small Business Optimism Index for Oct. is estimated to fall to 91.4 versus 92.1 in Sept.
  

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Fed's Mester speaking, 3Y T-Note auction, weekly US retail sales reports, Baird Industrial Conference, Morgan Stanley Industrial Conference, (ZM) investor day, (NUE) investor day, (NDAQ) investor day and the Morgan Stanley Chemicals/Ag/Packaging Conference could also impact global trading today.

US Equity Market Hours

• 9:30 am - 4:00 pm EST
  

BOTTOM LINE: Asian indices are mostly higher, boosted by financial 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 Rising into Final Hour on Pre-Election Positioning, Dollar Weakness, Bargain-Hunting, Tech/Energy Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Modestly Higher
  

• Sector Performance: Mixed
  

• Volume:  Around Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 24.5 -.5%
• DJIA Intraday % Swing 1.2%
  
• Bloomberg Global Risk On/Risk Off Index 51.9 +3.0%

• Euro/Yen Carry Return Index 151.7 +.7%

• Emerging Markets Currency Volatility(VXY) 12.3 +.2%

• CBOE S&P 500 Implied Correlation Index 48.5 -3.4% 

• ISE Sentiment Index 127.0 +42.0 points
  

• Total Put/Call .88 -12.9%

• NYSE Arms 1.30 +62.8%

Credit Investor Angst:

• North American Investment Grade CDS Index 88.7 -2.2%
  

• US Energy High-Yield OAS 356.50 -.8%
• Bloomberg TRACE # Distressed Bonds Traded 498.0 -2.0
  

• European Financial Sector CDS Index 115.88 -2.8% 
• Credit Suisse Subordinated 5Y Credit Default Swap 358.14 -.07%
  

• Italian/German 10Y Yld Spread 215.0 basis points -2.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 194.33 -9.5%
  

• Emerging Market CDS Index 271.05 -4.4%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 23.90 -.61%

• 2-Year Swap Spread 35.0 basis points -1.5 basis points
  

• TED Spread 45.0 basis points +4.0 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -53.25 basis points +.5 basis point
  
• MBS  5/10 Treasury Spread  167.0 -4.0 basis points
  
• Bloomberg US Agg CMBS Avg OAS 130.0 -1.0 basis point
  
• Avg. Auto ABS OAS 1.15 +2.0 basis points
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 46.89 +.42%
• 3-Month T-Bill Yield 4.08% -3.0 basis points
  

• Yield Curve -51.75 basis points (2s/10s) -1.5 basis points
  

• China Iron Ore Spot 86.8 USD/Metric Tonne +.2%
• Dutch TTF Nat Gas(European benchmark) 113.4 euros/megawatt-hour -1.2%

• Citi US Economic Surprise Index 21.5 +2.6 points

• Citi Eurozone Economic Surprise Index 10.9 +1.7 points
  

• Citi Emerging Markets Economic Surprise Index 1.2 -.5 point
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 231.22 -.44:  Growth Rate +11.7% -.4 percentage point, P/E 16.5 +.4
  
• Bloomberg US Financial Conditions Index 1.01 -4.0 basis points
  
• US Atlanta Fed GDPNow Forecast +3.60% unch.
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +5.16% unch.: CPI YoY +8.09% unch.
  
• 10-Year TIPS Spread 2.53 +7.0 basis points
  
• Highest target rate probability for Feb. 1st FOMC meeting: 50.6%(-1.5 percentage points) chance of 4.75%-5.0%. Highest target rate probability for March 22nd meeting: 46.8%(+1.5 percentage points) chance of 5.0%-5.25%.
  

US Covid-19:

• 84 new infections/100K people(last 7 days total). 4.8%(+.0 percentage point) of 1/14/22 peak(1,740) +0/100K people from prior report.
  
• New Covid-19 patient hospital admissions per 100K population -85.6%(-.8 percentage point) from peak 7-day avg. of 1/9/22 - 1/15/22
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +168 open in Japan 
• China A50 Futures: Indicating -10 open in China

• DAX Futures: Indicating +49 open in Germany

Portfolio:

• Slightly Higher:  On gains in my industrial/tech/commodity/medical sector longs and emerging market shorts
  

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

• Market Exposure:  Moved to 75% Net Long
  

Bear Radar

Style Underperformer:

• Small-Cap Value -.2%
  

Sector Underperformers:

• 1) Utilities -3.1% 2) Alt Energy -2.2% 3) Homebuilding -.9%

Stocks Falling on Unusual Volume: 

• CRWD, GSUN, LNC, SGRY, CDAY, APLS, EXPE, PAYC, FIVN, TEAM, GDYN, THS, ALKT, AMEH, OMCL, NET, DOCN, TTD, FOUR, HKD, HCP, PAR, APPN, NIO, ERII, S, RUTH, CHH, D, CROX, BEAM, FRRG, CLFD, LXU, FLGT, RBA and VERV
  

Stocks With Unusual Put Option Activity:

• 1) VERU 2) D 3) SYF 4) APLS 5) CNVA
  

Stocks With Most Negative News Mentions:

• 1) CVNA 2) RDFN 3) PLTR 4) APRN 5) BEAM
  

Charts:

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

Bull Radar

Style Outperformer:

• Large-Cap Value +.3%

Sector Outperformers:

• 1) Oil Service +2.2% 2) Shipping +1.7% 3) Computer Hardware +1.4%

Stocks Rising on Unusual Volume:

• TRMB, TWLO, META, DH, TCPC, TMDX, KRP, DWAC, VERU, CERT, SYNH, VTRS, NSSC, CRK, BAND, BTU, TNET, ARKO and ACDC
  

Stocks With Unusual Call Option Activity:

• 1) VERU 2) CNK 3) SAVE 4) FOXA 5) TRIP

Stocks With Most Positive News Mentions:

• 1) DWAC 2) VERU 3) GCT 4) NSSC 5) DQ
  

Charts:

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

Mid-Day Market Internals

NYSE Composite Index:

• Volume Running +7.5% Above 100-Day Average 
• 3 Sectors Declining, 8 Sectors Rising
• 48.9% of Issues Advancing, 47.1% Declining
• 54 New 52-Week Highs, 109 New Lows
• 35.1%(+1.6%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 59.0 -1.0
  
• Bloomberg Global Risk-On/Risk-Off Index 51.5 +2.4%
  
• Russell 1000: Growth/Value 14,217.7 -.25%
  
• Vix 24.8 +.8%
• Total Put/Call .87 -13.9%
• TRIN/Arms 1.16 +48.7% 

Monday Watch

Night Trading

• Asian indices are unch. to +1.0% on average.
• Asia Ex-Japan Investment Grade CDS Index 211.75 -12.0 basis points.
• China Sovereign CDS 104.75 -15.25 basis points.
• Bloomberg Emerging Markets Currency Index 46.7 +.03%.
• Bloomberg Global Risk-On/Risk Off Index 51.1 +1.5%.
• Bloomberg US Financial Conditions Index -1.05 -8.0 basis points. 
  
• Volatility Index(VIX) futures 25.9 +.13%. 
• Euro Stoxx 50 futures -.35%.
• S&P 500 futures -.35%.
• NASDAQ 100 futures -.45%.

Morning Preview Links

Earnings of Note

Company/Estimate

Before the Open:

• (AMG)/3.91
• (BNTX)/3.42 
• (WHD)/.48
• (NRG)/1.08
• (PLTR)/.02
• (THS)/.16
  

After the Close:

• (ATVI)/.50
• (ADTN)/.19
• (FANG)/6.36
• (FN)/1.74
• (LYFT)/.08
• (MTW)/.09
• (MOS)/3.41
• (QGEN)/.45
• (SANM)/1.33
• (TTWO)/1.38
• (TRIP)/.38
• (VECO)/.41
  

Economic Releases 

3:00 pm EST

• Consumer Credit for Sept. is estimated to fall to $31.75B versus $32.24B in Aug.
  

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The China Trade Data report, CSFB Healthcare Conference and the (AMGN) investor call could also impact trading today.

US Equity Market Hours

• 9:30 am - 4:00 pm EST

BOTTOM LINE: Asian indices are mostly higher, boosted by financial and industrial shares in the region. I expect US stocks to open mixed and to weaken into the afternoon, finishing modestly lower.  The Portfolio is 50% net long heading into the week.