Stocks Rising into Final Hour on Earnings Outlook Optimism, Loosening US Financial Conditions, Less China Economy Pessimism, Tech/Transport Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Modestly Higher
  

• Sector Performance: Most Sectors Rising
  

• Volume: Around Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 13.8 -.4%
• DJIA Intraday % Swing .45%
  
• Bloomberg Global Risk On/Risk Off Index 71.9 +2.0%

• Euro/Yen Carry Return Index 167.0 -.42%

• Emerging Markets Currency Volatility(VXY) 8.8 +.46%

• CBOE S&P 500 Implied Correlation Index 19.7 -.6% 

• ISE Sentiment Index 101.0 -15.0 points
  

• Total Put/Call .96 -10.3%

• NYSE Arms .97 +10.2%

Credit Investor Angst:

• North American Investment Grade CDS Index 63.4 -1.5%
  

• US Energy High-Yield OAS 310.35 -.17%
• Bloomberg TRACE # Distressed Bonds Traded 327.0 -19
  

• European Financial Sector CDS Index 81.2 -1.09% 
• Deutsche Bank Subordinated 5Y Credit Default Swap 270.6 -.05%
  

• Italian/German 10Y Yld Spread 176.0 basis points +2.0 basis point
  

• Asia Ex-Japan Investment Grade CDS Index 121.6 -.92%
  

• Emerging Market CDS Index 201.5 -.38%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 24.9 -.2%

• 2-Year SOFR Swap Spread -10.75 basis points -.75 basis point
  

• TED Spread 22.0 basis points +.75 basis point
  

• 3-Month EUR/USD Cross-Currency Basis Swap -11.25 +.5 basis point
  
• MBS  5/10 Treasury Spread 166.0 -1.0 basis point
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 807.0 +1.0 basis point
  
• Avg. Auto ABS OAS 75.0 +1.0 basis point
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 42.3 +.41%
• 3-Month T-Bill Yield 5.44% -1.0 basis point
  

• China Iron Ore Spot 117.9 USD/Metric Tonne +.43%
• Dutch TTF Nat Gas(European benchmark) 35.8 euros/megawatt-hour +3.9%

• Citi US Economic Surprise Index 58.5 -2.9 points

• Citi Eurozone Economic Surprise Index -71.3 -2.8 points

• Citi Emerging Markets Economic Surprise Index 9.4 +3.1 points
• S&P 500 Current Quarter EPS Growth Rate YoY(497 of 500 reporting) -5.8%  unch.
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 238.6 +.23:  Growth Rate +8.6% +.1 percentage point, P/E 18.7 unch.
  
• S&P 500 Current Year Estimated Profit Margin 12.13% -1.0 basis point
  
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(10 of 10 reporting) +25.4% unch.
  
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 246.31 +.57: Growth Rate +48.5% +.3 percentage point, P/E 32.0 +.2
  
• Bloomberg US Financial Conditions Index .48 +3.0 basis points
  
• Bloomberg Euro-Zone Financial Conditions Index .21 +75.0 basis points
  
• US Yield Curve -70.75 basis points (2s/10s) +1.5 basis points
  
• US Atlanta Fed 2Q GDPNow Forecast +5.57% -1.0 basis point
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +4.03% unch.: CPI YoY +3.82% unch.
  
• 10-Year TIPS Spread 2.35 +2.0 basis points
  
• Highest target rate probability for Nov. 1st FOMC meeting: 54.5%(+.9 percentage point) chance of 5.25%-5.5%. Highest target rate probability for Dec. 13th meeting: 54.0%(+.6 percentage point) chance of 5.25%-5.5%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +20 open in Japan 
• China A50 Futures: Indicating +20 open in China

• DAX Futures: Indicating +52 open in Germany

Portfolio:

• Higher:  On gains in my tech/medical/transport sector longs
  

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

• Market Exposure: Moved to 100% Net Long
  

Bear Radar

Style Underperformer:

• Mid-Cap Value +.3%
  

Sector Underperformers:

• 1) Energy -1.0% 2) Gambling -.7% 3) Telecom -.3%

Stocks Falling on Unusual Volume: 

• OVV, AMKR, VFS, SJM, MDGL and RTX
  

Stocks With Unusual Put Option Activity:

• 1) OVV 2) CGC 3) RTX 4) RH 5) CRNX
  

Stocks With Most Negative News Mentions:

• 1) RTX 2) BABA 3) EOSE 4) RAIN 5) XPOF
  

Charts:

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

Bull Radar

Style Outperformer:

• Large-Cap Growth +1.1%
  

Sector Outperformers:

• 1) Airlines +2.0% 2) Medical Equipment +1.8% 3) Alt Energy +1.5%

Stocks Rising on Unusual Volume:

• CRNX, AVTA, TWNK, SN, CABA, SAVE, PRME, HROW, CSL, BGNE, TSLA, LAC,  BCYC, COCO, SBGI, NXST, DAR, BOWL, GCT, PLL, CBAY, PHAT, MNSO, GPRE, CECO, TMCI, SNCY, BLBD, AFYA, SPOK, QCOM, PHG, TECK, RMD, SHLS, TMST, SYK, SUZ, ALPN, PATH, HE, MMSI, OMCL, RIO, MDRX, CHTR, GLNG, NVO, ASLE and RH
  

Stocks With Unusual Call Option Activity:

• 1) ACB 2) SAVE 3) XOP 4) GEO 5) HTZ

Stocks With Most Positive News Mentions:

• 1) CRNX 2) TSLA 3) CSL 4) ZYXI 5) TARS
  

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:

• (CGNT)/-.21

After the Close: 

• None of note
  

Economic Releases  

6:00 am EST

• The NFIB Small Business Optimism Index for Aug. is estimated to fall to 91.5 versus 91.9 in July.
  

10:00 am EST

• The Income, Poverty and Health Insurance report for 2022.
  

Upcoming Splits 

• None of note
  

Other Potential Market Movers

• The China New Loan data, 10Y T-Note auction, (AAPL) iPhone 15 event, weekly US retail sales reports, Goldman Retail Conference, Baird Healthcare Conference, BMO Media/Telecom Conference, RBC Industrials Conference and the Morgan Stanley Laguna Conference could also impact global trading tomorrow.

US Equity Market Hours

• 9:30 am - 4:00 pm EST

Mid-Day Market Internals

NYSE Composite Index:

• NYSE Volume Running -15.7% Below 100-Day Average 
• Nasdaq/NYSE Volume Ratio 9.8 -.6
  
• 4 Sectors Declining, 7 Sectors Rising
• 58.4% of Issues Advancing, 38.6% Declining
• 54 New 52-Week Highs, 45 New Lows
• 44.1%(+3.1%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 49.0 +1.0
  
• Bloomberg Global Risk-On/Risk-Off Index 71.4 +1.3%
  
• Russell 1000: Growth/Value 17,759.2 +.48%
• 1-Day Vix 8.4 -22.8%
  
• Vix 14.0 +1.2%
  
• Total Put/Call .90 -15.9%
• TRIN/Arms 1.08 +22.7%
  

Monday Watch

Today's Headlines

Bloomberg:

• Biden Doubts China Able to Invade Taiwan Amid Economic Woes. 
• Taiwan Envoy Sees ‘Alarming’ Signs in China’s Economic Slowdown.
• Lula Says Putin Can Visit Brazil for G-20 Without Fear of Arrest. 
• China Eases Rules for Insurers Buying Stocks in Support Measure. 
• Hong Kong’s Economic Growth Forecast at Risk, Survey Shows.
• Blinken Says Musk’s Starlink Should Keep Giving Ukraine Full Use.
• The Inflation Crisis Is Fraying Europe’s Climate Consensus.
• Trudeau Is Stuck in India With Faulty Aircraft After Hearing Criticism From Modi. 
• Asian Stocks Trade Mixed; Yen Advances on Ueda: Markets Wrap.
• Mideast Addiction to Cheap Gas Stifling Transition to Renewables.
• Oil Dips After Technicals Signal Rally May Have Run Too Hot.
• US Launches New Spy Satellites to Track Russian, Chinese Threats.
• Biden Says Climate Change Poses Greater Threat Than Nuclear War.
• Fear of Stock Market Dive Creeps Back as Hedging Costs Climb.
• The Big Bet on Luxury Stocks Stumbles on Inflation, China Woes.
• The Mighty American Consumer Is About to Hit a Wall, Investors Say.
• US Politicians Should Open More Health Records, GOP Senator Says.
• Everything Apple Plans to Show on Sept. 12: iPhone 15, Watches, AirPods.
• Schonfeld, Balyasny, ExodusPoint Lag as Multi-Strat Funds Falter. 
• Even Brief UAW Strike Seen Causing Billions in US Economic Damage.
• Short Sellers Reap $13 Billion on Gaps in Winner-Take-All Market. 
• Five Things You Need to Know to Start Your Day.

Zero Hedge:

• Pardon Issued For Dad Who "Exploded With Rage" Over Daughter's Transgender Bathroom Rape, School Coverup.
• Southwest Airlines Finds Bogus Parts On 737 Jet.
• Who's Better At Generating Innovative Ideas, ChatGPT Or MBA Students?
• 'Derailing Goldilocks' - Goldman Questions The 'Soft Landing' Narrative.
• Senators Unveil Bipartisan Blueprint For Comprehensive AI Regulation. 
• Are Emergency Powers A Test To See What Americans Will Put Up With?
• Weekend News Round Up - Newsquawk Asia-Pac Market Open.
• RFK Jr. Wants His Party Back: The American People "Are Tired Of Being Lied To By The Government & The Media".
• TME Weekend: You come at the king, you best not miss.
• Fat is the new gold. 
• Portfolio Manager's Weekly Summary: Goldman's Most Comprehensive Report Of What Traders Are Doing.
• Alpha.
• New Mexico Lawmakers Call For Governor's Impeachment Over 2A Overreach.
• "Who Is Biden Working For?" Admin Under Fire For 'Illegal, Reckless' Cancellation Of Alaska Oil Leases.
•  "See You In Court": Gun Owners of America Sues Tyrannical New Mexico Governor.
• A Change In CPI Methodology Is About To Send Core CPI Sharply Higher.
• Austrian Economics Vs. CBDC, ESG, UBI, And Other Newfangled Socioeconomic Gimmicks.
• "A Headwind For Policy Normalization": Morgan Stanley Adds El Niño To List Of Inflation Risks.
• Soros-Aligned Texas DA Sidesteps Removal Trial By Resigning, Announces Senate Run Against Ted Cruz.
• Hurricane Season Could Pummel American Supply Chains.
• Myth Busted: Europe Also Favored Fired Ukraine Prosecutor As Biden 'Quid-Pro' Cover Story Crumbles.
• NYC Mayor Adams Proposes Budget Cuts As Biden's Migrant Crisis 'Destroys' Big Apple.
• Subsidies Corrupt Economies, China, A Cautionary Tale.
• Which Countries Drink The Most Beer?
• CNN Poll: Majority Of Americans Think Biden Directly Involved In Hunter's Dealings While VP.
• "That Simply Doesn't Make Sense": Lead Author Of Cochrane Mask Review Responds To Fauci's Dismissal Of Evidence.
• Scientists Create Human "Entity" That Has No Mother Or Father.
• Triggered: Woke Alabama School Suspends 6-Year-Old Over 'Finger Guns' During Cops And Robbers Game.
• Pfizer, J&J Pressured South Africa Into Shielding Companies From COVID Vaccine Injury Claims: Documents.
• Where Do International Students In The U.S. Come From?
• Visualizing The 25 Best Stocks By Shareholder Wealth Creation Since 1926.

Wall Street Journal:

• Texas Suffers a Solar and Wind Power ‘Drought’. The Lone Star State barely avoids blackouts, thanks to natural gas.
• The Tension Driving the UAW Strike Threat.
• Important Shift in Fed Officials’ Rate Stance Is Under Way.
• Xi’s Tight Control Hampers Response to China Slowdown.
• "Hard-Line" Conservatives Talk Tough and Government Shutdown Looms.
• Earnings Estimates Are Rising, a Welcome Sign for the 2023 Market Rally.
• The Rich and Famous Love This Banker, Even If She’s a Little Mean to Them.
• The Race to Drill America’s Longest Oil and Gas Wells.
• World’s Top School Systems Try to Ease Pressure on Students.
• Tech’s Middle Managers Feel Squeeze as Boom Ends.
• U.S., Saudi Arabia in Talks to Secure Metals for EVs.

CNBC:

• Iran, US on verge of prisoner swap under Qatar-mediated deal.
• With the economy holding up, why is the market still so down on America’s banks?
• Top Wall Street analysts select these dividend stocks to enhance returns.
• Alibaba says Daniel Zhang steps down from cloud business.
• AI expert is a hot new position in the freelance jobs market.
• IMF chief says new Biden-backed economic corridor should not exclude any countries. 
• Instacart aiming for valuation of $8.6 billion to $9.3 billion in IPO, reports say.

Reuters:

• Exclusive-SoftBank's Arm eyes pricing IPO at top of range or above-sources

MarketWatch.com:

• When will consumers stop buying more stuff? It’s a key question for the stock market in the week ahead.
• Just how much is the AI discourse helping stocks? An analyst scoured earnings calls for clues.
  

NewsMax:

• Embattled Biden Seeks Help From Vietnam Against Rising China Threat.

Fox News:

• Expert reveals what is fueling the massive military recruiting crisis.
• Hawaii lawmaker rips president after appearing to fall asleep during memorial.
• Fauci predicts when face masks could make a comeback: 'Significant uptick'.
• California voters let pollster know exactly where they stand on Dems' plan for cash reparations.
• Democrat mayor changes tune as migrant crisis spirals across sanctuary city.
• Communist revolutionaries burn American flags, bash US outside Jason Aldean concert.

TheGatewayPundit.com:

• HERE WE GO: Minnesota Begins Process For Issuing Driver’s Licenses to 81,000 Illegal Aliens. 
• Teachers Who Refused COVID Shots Must Be Reinstated with Back Pay, Rules State Supreme Court Judge.
• Return of COVID Restrictions? Instead Of Complying, Here’s One Way To Be Prepared.
• They’re Still Digging Up the Charred Remains in Maui and 2,000 Kids Are Still Missing Following Historic Fire – But Joe Biden Focusing On “Making Sure We Build a Railroad All the Way Across Africa”.
• Joe Biden Goes Off Script: Global Warming “Going Above 1.5 degrees in the Next 2010 Years” Is More Frightening Than Nuclear War (Video).
• Leftist Gen-Z Mouthpiece Is Called Out by Twitter Notes for Being a Bought and Paid For Democrat Hack.
• Trans Teacher Who Rarely Wore Prosthetic Breasts Outside Classroom Now Identifies as Male, Ditches Z-Cups on First Day of School.
• “I Just Follow My Orders Here… I Ain’t Calling on You!” Joe Biden Shouts at Reporter During Presser in Vietnam (VIDEO).
• Colorado’s Democrat Secretary of State Calls Trump a ‘Liar’ for Saying Attempt to Keep Him Off the Ballot is Election Interference.
• Loudoun County Dad Pardoned by Governor Youngkin After Facing Charges for Speaking Out at School Board Meeting on Daughter’s Bathroom Sexual Assault.
• Democrat Governor Facing Calls of Impeachment from Elon Musk After Attack on 2A.
• New Mexico Governor’s Unconstitutional Gun Grab So Over the Top That Far Left Rep. Ted Lieu and Gun-Grabber David Hogg Are Calling Her Out.
• Anyone Who Complies with Illegal, Unconstitutional Edicts Like the One Just Announced by New Mexico’s Governor is Complicit in America’s Slide Into Totalitarianism.
• Gun Grab: California Approves Massive Additional Firearms and Ammo Tax.

The Epoch Times:

• Environmental Rail Subsidies Are a Waste of Taxpayer Money..
• CCP's Covert Infiltration of Hong Kong and the US: Insights from a Veteran Journalist.

OpenVAERS:

• VAERS US COVID Vaccine Adverse Event Reports. 983,973 Reports(+1,886 from prior week) Through August 25th, 2023.

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.

Night Trading

• Asian indices are -.25% to +.25% on average.
• Asia Ex-Japan Investment Grade CDS Index 122.0 -1.5 basis points.
  
• China Sovereign CDS 72.0 -.25 basis point.
• China Iron Ore Spot 114.6 USD/Metric Tonne +1.12%.
  
• Bloomberg Emerging Markets Currency Index 42.18 +.01%.
• Bloomberg Global Risk-On/Risk Off Index 72.3 +2.6%.
• Bloomberg US Financial Conditions Index .45 unch. 
  
• Volatility Index(VIX) futures 16.0 -.61%. 
• Euro Stoxx 50 futures -.02%.
• S&P 500 futures +.02%.
• NASDAQ 100 futures +.09%.

Morning Preview Links

BOTTOM LINE: Asian indices are mostly lower, weighed down by financial and commodity shares in the region. I expect US stocks to open mixed and rally into the afternoon, finishing modestly higher.  The Portfolio is 75% net long heading into the week.