Bear Radar

Style Underperformer:

• Small-Cap Growth -2.5%
  

Sector Underperformers:

• 1) Foods -.4% 2) Shipping +.3% 3) Healthcare Providers +.4%

Stocks Falling on Unusual Volume: 

• VRTX, INSW, ABC, K, GIS, UNM, MO, HSY, CPB, SJM, CBOE, MCK, CAH, AXSM, GDOT, SGEN, GO, GTLS, SI, ISEE, RXO, LPLA, ADEA, MATV, MNTK, HQY, ARCT, CDNA and XMTR
  

Stocks With Unusual Put Option Activity:

• 1) IBB 2) URA 3) BHC 4) RDFN 5) WSM
  

Stocks With Most Negative News Mentions:

• 1) EQRX 2) VERU 3) TTGT 4) ADTH 5) APYX
  

Charts:

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

Bull Radar

Style Outperformer:

• Mid-Cap Growth +5.9%

Sector Outperformers:

• 1) Homebuilding +11.3% 2) Alt Energy +8.8% 3) Internet +8.4%

Stocks Rising on Unusual Volume:

• EBIX, APPS, BLFS, RNG, W, YETI, U, AFRM, RUN, COCO, NET, PAR, JBI, SPT, TTD, MDB, GTLB, BYND, BILL, VCEL, PRVA, RIVN, VZIO, ALLY, BTAI, SPWR, ZIP, PLUG, JXN, SQ, DDOG, EXPI, TRUP, WRBY, FND, UPST, TRUP, ALRM, LC, S, SIX, FIVN, APP, FLYW, SIVB, BLNK, OM, TWLO, TROW, BROS, LMND, NABL, EBS, PHM, TOST, WSM, POOL, CELH, GXO, LEN, DGII, AMZN, BX, KBH, CFLT, VRNS, BLK, DHI, FRC, DH, XM, BSY, UDMY, MCO, KKR, VSCO and ZG
  

Stocks With Unusual Call Option Activity:

• 1) EBIX 2) KBH 3) EWU 4) TGTX 5) ICLN

Stocks With Most Positive News Mentions:

• 1) APPS 2) YETI 3) CPNG 4) FICO 5) WRBY
  

Charts:

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

Mid-Day Market Internals

NYSE Composite Index:

• Volume Running +44.9% Above 100-Day Average 
• 0 Sectors Declining, 11 Sectors Rising
• 89.5% of Issues Advancing, 8.4% Declining
• 56 New 52-Week Highs, 29 New Lows
• 40.8%(+23.2%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 63.0 +5.0
  
• Bloomberg Global Risk-On/Risk-Off Index 46.6 -1.7%
  
• Russell 1000: Growth/Value 14,492.4 +1.99%
  
• Vix 23.0 -11.7%
• Total Put/Call .88 -12.9%
• TRIN/Arms 1.46 -39.2% 

Thursday Watch

Evening Headlines

Bloomberg:               

• China Property Crisis Imperils $1.6 Trillion of Local State Debt.   
• Japan’s Credit Ratings May Hinge on BOJ Policy Changes, S&P Says.  
• Yen Speculators Bow to Japan’s Stealth Strategy as CPI Looms.
• Asian Stocks Fall Amid Crypto Slump Before CPI: Markets Wrap.  
• Alaska’s Pricey Crude Is Pushed Out of China by Russian Oil.
• FTX Warns of Bankruptcy Without Rescue for $8 Billion Shortfall.
• US Justice Department Looking Into FTX Turmoil During SEC Probe.  
• Short Seller Jim Chanos Warns the Crypto Crackdown Is Coming Now.   
• Carney Says ‘Significant’ US Inflation May Spur Fed to Do More.
• Shrunken Mississippi River Slows US Food Exports When World Needs Them Most.  
• Numbed Treasury Market Takes an Ugly 10-Year Auction in Stride.
• A Klimt Sells for $105 Million, Setting a New Auction Record.
• Cezanne Painting Sells for a Record $138 Million at Auction.   
• Apple Taps Facebook Veteran as Information Chief After Departures.  
• Tech IPO Candidates Leap Ahead of Bigger Peers in Cutting Jobs.  
• A Tiny Lab Finds Danger on Drugstore Shelves While the FDA Lags Behind.  
• Disney Drop Sends Media Stocks Toward Worst Decline in 30 Years.

Wall Street Journal:

• Senate Control Up in Air as Georgia Race Heads to Runoff.
• Arizona Races Remain in Flux.
• Election Live Updates.
• Crypto Prices Fall Further.
• Heard on the Street: Crypto Has Reinvented Bank Runs.
• Russia Orders Withdrawal From Kherson, Only Regional Ukrainian Capital It Held.
• Redfin Shuts Home-Flipping Business, Cuts 13% of Staff.
• Brittney Griner Is Moved to Russian Penal Colony.
• Under Xi Jinping, Women in China Have Given Up Gains.
• Some Investors Bet Fed Could Lift Rates to Two-Decade High.
• Carvana’s Earnings Crash Spurs Bond Selloff.

Fox News:

• WATCH:Biden vows to do 'nothing' different even as majority say US is heading in the 'wrong direction'.

CNBC.com:

• Binance backs out of FTX rescue, leaving the crypto exchange on the brink of collapse.
• Bitcoin falls to its lowest level in nearly two years as Binance abandons FTX deal.
• Wall Street layoffs pick up steam as Citigroup and Barclays cut hundreds of workers.
• Here’s a rundown of tech companies that have announced layoffs in 2022.
• Beyond Meat reports wider-than-expected loss, falling revenue.
• Cryptocurrencies tank as FTX fallout continues to roil markets: CNBC Crypto World.
  

MarketWatch:            

• Biden suggests no pivot after midterm elections: ‘I’m not going to change anything’.
  
• Binance CEO in internal memo: ‘I had very little knowledge of the internal state of things at FTX’.  
  
• Investors fear potential FTX bankruptcy spilling over to reeling crypto, stock markets.  
• Dow sheds nearly 650 points as stocks suffer worst day after any election in a decade.  
• Housing market should brace for mortgage rates hitting 10% in 2023, investment banker says.

Zero Hedge:

• Regardless Of Who's Elected, Imperial Corruption Rules The Nation.
• "Beyond Our Ability To Help" - Binance Abandons FTX Deal; SBF Admits $8 Billion Shortfall, Bankruptcy Likely.
• Midterms Post-Mortem: Comprehending GOP's Underwhelming Performance.
• World's Top Chipmaker To Build Another US Plant In Arizona.
• Doug Casey On The WEF's Plan For Mankind And What Comes Next.
• Midterms And Markets: The Good News And The Bad News.
• India Pledges To Buy More Russian Oil, Mulls Joint Weapons Production.
• Here Are All The Funds That Are About To Lose Billions In FTX.
• Beijing Insists On Zero-COVID Policy But Blames Local Governments For Excessive Measures.
• From Riches To Rags: Peloton Co-Founder Starts A Rug Company.
• Biden's Inner Pluskat: How The Loss Of Control Of Either House Could Impact The President.
• Watch Live: President Biden Takes 'Un-Victory' Lap After Midterms.
• US stocks declined amid crypto contagion - Newsquawk Asia-Pac Market Open.
• SBF killed the "mid-term" rally....
• Stocks sold and Dollar bid as crypto crash deepens into US CPI - Newsquawk US Market Wrap.
• 'Meh' Midterms & FTX Fiasco Spark 'Red Wave' Across Stocks & Crypto.

Reuters:

• Fed's Kashkari: any talk of pivot is 'entirely premature'.

TheGatewayPundit.com:

• AZ State Representative-Elect Austin Smith In Victory Speech: “What Happened In Maricopa County Is CRIMINAL” – “Get Rid Of These STUPID Dominion Voting Machines”.
• Publius 2.0: It Feels Like We Are Watching the First Wholly Manufactured Election in Our History. 
• “I Seriously Feel Like We Are Watching the First Wholly Manufactured Election in Our History” – Roger Stone on the 2022 Election.
• We Caught Them Again: TGP Catches Late-Night Operatives Moving Van-Loads of Suspicious Ballots Way After Legal Deadline in Detroit, Michigan.
• Ten Reasons Why Kevin McCarthy Should NEVER Be Republican Speaker of the House.
• Here’s Zuckerberg’s Letter to the 11,000 Facebook (Meta) Employees He Fired As Holidays Approach.
• It’s Time for Mitch McConnell to Go – GOP Senate Votes to Keep Him Leader on November 16.
• Project Veritas: Ballot Box Keys Left Unattended on Top of Philadelphia Ballot Drop Box on Election Night (VIDEO).
• Democrat Pennsylvania State Rep Wins Reelection Despite Being Dead.
• Don’t Feel Alone – 7 Out of 10 Americans Are Unhappy with the State of the Union – We Are the Tide.
• Georgia Update: Herschel Walker Is Only GOP Candidate Not to Win Outright.

The Epoch Times:

• China’s Market Environment Deteriorates as Foreign Investment Confidence Drops to New Low.
• ‘Industrial Sabotage’: Former Army Pilot Sentenced for Spying for China.

OpenVAERS:

• VAERS US COVID Vaccine Adverse Event Reports. 891,607 Reports(+4,043 from prior week) Through October 28th, 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 -1.25% to -.25% on average.

• Asia Ex-Japan Investment Grade CDS Index 187.5 +6.5 basis points. 

• China Sovereign CDS 96.0 +11.75 basis points.
  

• Bloomberg Emerging Markets Currency Index 47.02 unch.  
• Bloomberg Global Risk-On/Risk Off Index 46.7 -.91%. 
• Bloomberg US Financial Conditions Index -.93 -2.0 basis points.
  
• Volatility Index(VIX) futures 27.0 -.01%.
• Euro Stoxx 50 futures -.72%.

• S&P 500 futures +.18%.

• NASDAQ 100 futures +.30%  

Morning Preview Links

Earnings of Note 
Company/Estimate 

 

Before the Open: 

• (MT)/1.45
• (AZN)/1.51
• (BDX)/2.74
• (DDS)/4.87
• (RL)/2.08
• (RBC)/1.66
• (TPR)/.76
• (WRBY)/.01
• (WE)/-.44
• (YETI)/.59
  

After the Close:

• (BZH)/2.06
• (FLO)/.29
• (POSH)/-.28

Economic Releases

8:30 am EST

• The CPI MoM for Oct. is estimated to rise +.6% versus a +.4% gain in Sept.
• The CPI Ex Food and Energy MoM for Oct. is estimated to rise +.5% versus a +.6% gain in Sept.
• The CPI YoY for Oct. is estimated to rise +7.9% versus an +8.2% increase in Sept.
• Real Avg. Weekly Earnings YoY for Oct.
• Initial Jobless Claims for last week is estimated to rise to 220K versus 217K the prior week.
• Continuing Claims are estimated to rise to 1487K versus 1485K prior.
  

2:00 pm EST

• The Monthly Budget Statement for Oct. is estimated at -$90.0B versus -$165.1B in Sept.

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Fed's Williams, Fed's George speaking, Fed's Mester speaking, UK GDP report, 30Y T-Note auction and the weekly EIA natural gas inventory report 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 financial and technology shares in the region. I expect US stocks to open modestly higher and to weaken into the afternoon, finishing modestly lower. The Portfolio is 25% net long heading into the day.

Stocks Falling Substantially into Final Hour on Nonsensical US Election Results, Crypto Crash, China Hard-Landing Fears, Consumer Discretionary/Tech Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Lower
  

• Sector Performance: Almost Every Sector Declining
  

• Volume:  Around Average

• Market Leading Stocks: Underperforming
  

Equity Investor Angst:

• Volatility(VIX) 25.9 +1.5%
• DJIA Intraday % Swing 1.4%
  
• Bloomberg Global Risk On/Risk Off Index 47.8 -3.5%

• Euro/Yen Carry Return Index 151.5 unch.

• Emerging Markets Currency Volatility(VXY) 12.2 -.3%

• CBOE S&P 500 Implied Correlation Index 50.4 -.9% 

• ISE Sentiment Index 97.0 +5.0 points
  

• Total Put/Call 1.01 -12.9%

• NYSE Arms 1.63 +54.7%

Credit Investor Angst:

• North American Investment Grade CDS Index 90.8 +2.4%
  

• US Energy High-Yield OAS 374.1 +3.2%
• Bloomberg TRACE # Distressed Bonds Traded 474.0 -4.0
  

• European Financial Sector CDS Index 117.14 +2.6% 
• Credit Suisse Subordinated 5Y Credit Default Swap 363.9 +2.1%
  

• Italian/German 10Y Yld Spread 212.0 basis points +1.0 basis point
  

• Asia Ex-Japan Investment Grade CDS Index 183.79 -3.7%
  

• Emerging Market CDS Index 276.27 +2.5%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 24.0 unch.

• 2-Year Swap Spread 35.25 basis points -.75 basis point
  

• TED Spread 39.5 basis points -1.25 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -57.25 basis points -1.5 basis points
  
• MBS  5/10 Treasury Spread  165.0 -3.0 basis points
  
• Bloomberg US Agg CMBS Avg OAS 130.0 +1.0 basis point
  
• Avg. Auto ABS OAS 1.19 +2.0 basis points
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 47.0 -.11%
• 3-Month T-Bill Yield 4.19% +5.0 basis points
  

• Yield Curve -48.25 basis points (2s/10s) +5.75 basis points
  

• China Iron Ore Spot 85.8 USD/Metric Tonne -3.0%
• Dutch TTF Nat Gas(European benchmark) 110.4 euros/megawatt-hour -6.6%

• Citi US Economic Surprise Index 21.5 -.1 point

• Citi Eurozone Economic Surprise Index 10.0 -.5 point
  

• Citi Emerging Markets Economic Surprise Index 3.5 +.7 point
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 231.32 +.10:  Growth Rate +11.9% -.1 percentage point, P/E 16.3 -.2
  
• Bloomberg US Financial Conditions Index -.90 unch.
  
• US Atlanta Fed GDPNow Forecast +4.0% +40.0 basis points
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +5.16% unch.: CPI YoY +8.09% unch.
  
• 10-Year TIPS Spread 2.44 -5.0 basis points
  
• Highest target rate probability for Feb. 1st FOMC meeting: 50.6%(-.3 percentage point) chance of 4.75%-5.0%. Highest target rate probability for March 22nd meeting: 45.1%(-.4 percentage point) 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 -83.7%(+0.0 percentage point) from peak 7-day avg. of 1/9/22 - 1/15/22
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -196 open in Japan 
• China A50 Futures: Indicating -86 open in China

• DAX Futures: Indicating -52 open in Germany

Portfolio:

• Slightly Lower:  On losses in my industrial/tech/commodity/medical sector longs
  

• Disclosed Trades:  Added to my (IWM)/(QQQ) hedges and to my emerging market shorts
  

• Market Exposure:  Moved to 25% Net Long
  

Bear Radar

Style Underperformer:

• Small-Cap Growth -2.5%
  

Sector Underperformers:

• 1) Networking -4.5% 2) Energy -4.5% 3) Alt Energy -3.7%

Stocks Falling on Unusual Volume: 

• KRP, LMND, LXU, AEM, D, XENE, BLNK, FRO, TTM, JKHY, NWSA, GMED, TDW, LITE, NWS, UPWK, FA, TSN, EXFY, PAR, IGT, CDAY, ARWR, CTRA, OVV, TSLA, SEAS, SBNY, CXW, CARG, RILY, TTD, CYRX, MIDD, SPTN, BROS, PRA, YY, COIN, SI, GME, APP, PAAS, ASLE, SSP, NTRA, RDNT, ZNTL, GO, DAR, UPST, IMXI, DIS, PUBM, TASK, BLFS, MIRM, DWAC, MSTR, VCEL, RBLX, LCID, VSAT, SG, AFRM, LEU, GTLS, EBS and WWW
  

Stocks With Unusual Put Option Activity:

• 1) CARG 2) AMRS 3) VSTO 4) TSN 5) DIS
  

Stocks With Most Negative News Mentions:

• 1) AMRS 2) CLVS 3) MSTR 4) LCID 5) RBLX
  

Charts:

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