Morning Market Internals

NYSE Composite Index:

• NYSE Volume Running +4.2% Above 100-Day Average 
• Nasdaq/NYSE Volume Ratio 6.3 -2.5
  
• 8 Sectors Declining, 3 Sectors Rising
• 33.6% of Issues Advancing, 63.1% Declining
• 4 New 52-Week Highs, 280 New Lows
• 29.1%(-3.1%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 36.0 -5
  
• Bloomberg Global Risk-On/Risk-Off Index 66.3 -3.2%
  
• Russell 1000: Growth/Value 17,911.6 -.56%
  
• 1-Day Vix 17.3 -15.4%
  
• Vix 21.5 +.4%
  
• Total Put/Call .98 -9.3%
• TRIN/Arms 1.08 +16.1%
  

Friday Watch

Night Trading 

• Asian equity indices are -1.75% to -.75% on average.

• Asia Ex-Japan Investment Grade CDS Index 135.5 +2.75 basis points.

• China Sovereign CDS 86.5 +3.0 basis points.
  
• China Iron Ore Spot 115.4 USD/Metric Tonne -1.3%.

• Bloomberg Emerging Markets Currency Index 41.13 -.07%
• Bloomberg Global Risk-On/Risk Off Index 70.3 +2.4%. 
• Bloomberg US Financial Conditions Index -.19 -4.0 basis points.
  
• Volatility Index(VIX) futures 20.7 +.51%.
• Euro Stoxx 50 futures -.93%.

• S&P 500 futures -.22%.

• NASDAQ 100 futures -.33%.  

Morning Preview Links

BOTTOM LINE: Asian indices are modestly lower, weighed down by technology and consumer 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 Closing at Session Lows on Mid-East Regional War Fears, Rising Long-Term Rates, Earnings Outlook Jitters, Alt Energy/Consumer Discretionary Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Lower
  

• Sector Performance: Most Sectors Declining
  

• Volume: Around Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 19.7 +2.5%
• DJIA Intraday % Swing .98% -15.3%
  
• Bloomberg Global Risk On/Risk Off Index 69.9 -1.6%

• Euro/Yen Carry Return Index 169.0 +.44%

• Emerging Markets Currency Volatility(VXY) 8.5 +1.2%

• CBOE S&P 500 Implied Correlation Index 28.7 +5.2% 

• ISE Sentiment Index 103.0 +22.0 points
  

• Total Put/Call 1.04 +5.1%

• NYSE Arms .77 -28.7%

Credit Investor Angst:

• North American Investment Grade CDS Index 79.57 +2.6%
  

• US Energy High-Yield OAS 370.5 +2.1%
• Bloomberg TRACE # Distressed Bonds Traded 354 -18
  

• European Financial Sector CDS Index 98.71 +2.2% 
• Deutsche Bank Subordinated 5Y Credit Default Swap 306.9 +1.5%
  

• Italian/German 10Y Yld Spread 201.0 basis points -5.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 134.3 +3.2%
  

• Emerging Market CDS Index 242.8 +.8%
• Israel Sovereign CDS 128.8 +.1%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 24.7 +.13%

• 2-Year SOFR Swap Spread -11.75 basis points unch.
  

• TED Spread 16.0 basis points -1.75 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -25.75 +.25 basis point
  
• MBS  5/10 Treasury Spread 185.0 -3.0 basis points
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 909.0 +2.0 basis points
  
• Avg. Auto ABS OAS 85.0 -1.0 basis point
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 41.2 +.16%
• 3-Month T-Bill Yield 5.47% -3.0 basis point
  

• China Iron Ore Spot 115.6 USD/Metric Tonne -1.2%
• Dutch TTF Nat Gas(European benchmark) 50.17 euros/megawatt-hour -1.3%

• Citi US Economic Surprise Index 54.3 -.1 point

• Citi Eurozone Economic Surprise Index -34.7 +1.5 points

• Citi Emerging Markets Economic Surprise Index 23.9 unch.
• S&P 500 Current Quarter EPS Growth Rate YoY(78 of 500 reporting) +1.9% -4.6 percentage points
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 240.35 -.30:  Growth Rate +9.3% -.1 percentage point, P/E 18.0 -.2
  
• S&P 500 Current Year Estimated Profit Margin 12.12% -3.0 basis points
  
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(2 of 10 reporting) -20.9%
  
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 267.66 +.14: Growth Rate +57.9% +.1 percentage point, P/E 28.3 +.1
  
• Bloomberg US Financial Conditions Index -.11 -11.0 basis points
  
• Bloomberg Euro-Zone Financial Conditions Index -.92 -79.0 basis points
  
• US Yield Curve -18.25 basis points (2s/10s) +13.75 basis points
  
• US Atlanta Fed 2Q GDPNow Forecast +5.41% unch.
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +3.70% unch.: CPI YoY +3.36% unch.
  
• 10-Year TIPS Spread 2.50 +7.0 basis points
  
• Highest target rate probability for Dec. 13th FOMC meeting: 75.2%(+14.4 percentage points) chance of 5.25%-5.5%. Highest target rate probability for Jan. 31st meeting: 62.7%(+10.7 percentage points) chance of 5.25%-5.5%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -140 open in Japan 
• China A50 Futures: Indicating -25 open in China

• DAX Futures: Indicating +14 open in Germany

Portfolio:

• Slightly Higher:  On gains in my index hedges and emerging market shorts
  

• Disclosed Trades: Added to my (IWM)/(QQQ) hedges
  

• Market Exposure: Moved to Market Neutral
  

Bear Radar

Style Underperformer:

• Small-Cap Growth -.2%
  

Sector Underperformers:

• 1) Electric Vehicles -3.4% 2) Disk Drives -2.2% 3) Biotech -1.4%

Stocks Falling on Unusual Volume: 

• SHYF, AA, ARR, HP, AMAT, CAMT, ALB, REXR, LRCX, CCI, BIDU, EH, FUTU, EXLS, ZION, GOOS, ACMR, ENOV, MMYT, IRDM, DFS, VERV, VMW, TSLA, ROL, BEAM, GPC, WNR and SMTC
  

Stocks With Unusual Put Option Activity:

• 1) DM 2) OZK 3) HCP 4) PTEN 5) KEY
  

Stocks With Most Negative News Mentions:

• 1) DFS 2) ORGN 3) LRCX 4) PCT 5) NSSC
  

Charts:

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

Bull Radar

Style Outperformer:

• Large-Cap Growth +.5%
  

Sector Outperformers:

• 1) Regional Banks +1.9% 2) Airlines +1.1% 3) Restaurants +1.0%

Stocks Rising on Unusual Volume:

• PTCT, NFLX, SAVA, SUM, LBRT, T, RARE, RGEN, SPR, CVBF, KEY, LVS, EFX, UNP and AAL
  

Stocks With Unusual Call Option Activity:

• 1) QD 2) AEO 3) SMTC 4) DVA 5) LRCX

Stocks With Most Positive News Mentions:

• 1) NFLX 2) MDAI 3) T 4) SUM 5) PODC
  

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:

• (AXP)/2.95
• (ALV)/1.79
• (CMA)/1.69
• (IPG)/.73
• (RF)/.58
• (SLB)/.77
  

After the Close: 

• None of note
  

Economic Releases  

9:00 am EST:

• Bloomberg Oct. US Economic Survey.
  

Upcoming Splits 

• (MLI) 2-for-1
  

Other Potential Market Movers

• The PBOC rate decision could also impact global trading tomorrow.

US Equity Market Hours

• 9:30 am - 4:00 pm EST