Friday Watch

 Night Trading 

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

• Asia Ex-Japan Investment Grade CDS Index 72.0 (new series).

• China Sovereign CDS 56.75 -1.25 basis points.
  
• China Iron Ore Spot 91.2 USD/Metric Tonne +.%

• Bloomberg Emerging Markets Currency Index 39.94 -.%.
• Bloomberg Global Risk-On/Risk Off Index 52.0 +%.
• Volatility Index(VIX) futures 18.1 +.3%.
• Euro Stoxx 50 futures -.18%.

• S&P 500 futures -.19%.

• NASDAQ 100 futures -.24%.  

Morning Preview Links

BOTTOM LINE: Asian indices are higher, boosted by industrial and technology shares in the region. I expect US stocks to open modestly lower and to rally into the afternoon, finishing mixed.  The Portfolio is 100% net long heading into the day.

Stocks Up Substantially into Final Hour on US Economic Data, Fed Rate-Cut Hopes, Technical Buying, Tech/Financial Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Higher
  

• Sector Performance: Almost Every Sector Rising
  

• Volume: Around Average
  

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 17.0 -6.8%
• DJIA Intraday % Swing .79 unch.
  
• Bloomberg Global Risk On/Risk Off Index 53.0 +4.8%

• Euro/Yen Carry Return Index 175.9 +.7%

• Emerging Markets Currency Volatility(VXY) 8.62 +1.2%

• CBOE S&P 500 Implied Correlation Index 18.0 -7.7% 

• ISE Sentiment Index 122.0 -11.0 points
  

• Total Put/Call .95 unch.

• NYSE Arms 1.06 -.93%
  
• NYSE Non-Block Money Flow +$280.8M 
  

Credit Investor Angst:

• North American Investment Grade CDS Index 47.6 -3.0%
  

• US Energy High-Yield OAS 320.0 -1.3%
• Bloomberg TRACE # Distressed Bonds Traded 276 -16
  

• European Financial Sector CDS Index 58.59 -3.4%
  
• Deutsche Bank Subordinated 5Y Credit Default Swap 159.3 -2.0%
  

• Italian/German 10Y Yld Spread 136.0 basis points -2.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 94.2 -2.3%
  

• Emerging Market CDS Index 153.4 -4.3%
  
• Israel Sovereign CDS 132.6 +3.0%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 24.92 +.40%

• 2-Year SOFR Swap Spread -20.75 basis points -.5 basis point
  

• 3M T-Bill Treasury Repo Spread -59.5 basis points -2.5 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -1.25 +.25 basis point
  
• MBS  5/10 Treasury Spread 119.0 -6.0 basis points
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 711.0 -1.0 basis point
  
• Avg. Auto ABS OAS 67.0 +1.0 basis point
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 39.1 +.28%
• 3-Month T-Bill Yield 4.73% -2.0 basis points
  

• China Iron Ore Spot 93.8 USD/Metric Tonne +1.2%
• Dutch TTF Nat Gas(European benchmark) 33.1 euros/megawatt-hour -6.1%

• Citi US Economic Surprise Index -8.8 +2.5 points
  

• Citi Eurozone Economic Surprise Index -27.8 +.4 point

• Citi Emerging Markets Economic Surprise Index -7.3 -.3 point
• S&P 500 Current Quarter EPS Growth Rate YoY(5 of 500 reporting) +12.9% -.4 percentage point
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 266.60 -.23:  Growth Rate +14.1% +.1 percentage point, P/E 21.4 +.3
  
• S&P 500 Current Year Estimated Profit Margin 12.66% -1.0 basis point
  
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(0 of 10 reporting) n/a n/a
  
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 350.42 +.14: Growth Rate +23.1% +.1 percentage point, P/E 32.9 +1.2
  
• Bloomberg US Financial Conditions Index .50 -9.0 basis points
  
• Bloomberg Euro-Zone Financial Conditions Index .68 +1.0 basis point
  
• US Yield Curve 13.5 basis point (2s/10s) +4.75 basis points
  
• US Atlanta Fed 3Q GDPNow Forecast +2.93% unch.
  
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 66.7% -2.8 percentage points
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +2.77% unch.: CPI YoY +2.27% unch.
  
• 10-Year TIPS Spread 2.16 +4.0 basis points
  
• Highest target rate probability for Dec. 18th FOMC meeting: 49.5%(+.8 percentage point) chance of 4.0%-4.25%. Highest target rate probability for Jan. 29th meeting: 43.0%(unch.) chance of 3.75%-4.0%. (current target rate is 4.75-5.0%)
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +610 open in Japan 
• China A50 Futures: Indicating +30 open in China

• DAX Futures: Indicating +25 open in Germany

Portfolio:

• Higher:  On gains in my consumer discretionary/tech/biotech/industrial sector longs
  

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

• Market Exposure: Moved to 100% Net Long
  

Bear Radar

 Style Underperformer:

• Large-Cap Value +1.2%
  

Sector Underperformers:

• 1) Utilities -.7% 2) REITs -.2% 3) Insurance -.2%

Stocks Falling on Unusual Volume: 

• RKT, SCS, DAVA, BYRN, HE, FDMT, KSPI and PGNY
  

Stocks With Unusual Put Option Activity:

• 1) EDR 2) NFE 3) INFN 4) BKLN 5) BYON
  

Stocks With Most Negative News Mentions:

• 1) FIVE 2) SPIR 3) VERV 4) DXC 5) SMCI
  

Sector ETFs With Most Negative Money Flow:

• 1) XLU 2) SOXX 3) XLI 4) XLF 5) ITB

Charts:

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

Bull Radar

Style Outperformer:

• Large-Cap Growth +2.7%
  

Sector Outperformers:

• 1) Semis +5.3% 2) Networking +3.6% 3) Construction +3.2%

Stocks Rising on Unusual Volume:

• EWTX, MBLY, FUTU, GCT, ASPN, MSTR, MNSO, ZK, QTRX, TITN, DRI, COHR, URGN, GDS, W, BZ, STRL, HLX, MOD, TSLA, BEKE, DAVE, WEAV, VRT, CRM, COIN, BMA, CMCO, MNDY, GFS, ASML, BKR, JD, SPHR, LRCX, CG, SVCO, CAMT, RXO, DUOL, CGON, CRM, SNAP, XHR, BILL, MCHP, UPS, PTVE, PK, SPRY, ANRO, CAT, TRML, MTZ, TROX, CVNA, CRS, EXPI, SNDX, PI, NVT, RRX, WAL, VCEL, DFS, INOD, ICHR, FDS, DQ, SHOP, TM, ACLX, FDS, PAM, PSLV, ODFL, HUBS, LOVE, AHR, CNM, DYN, INTC, COF, RH, FLEX, RACE, RBRK, BHP, FDS and FRSH
  

Stocks With Unusual Call Option Activity:

• 1) ELAN 2) NOV 3) MBLY 4) CSX 5) RIO

Stocks With Most Positive News Mentions:

• 1) EWTX 2) AMD 3) MBLY 4) AVGO 5) CAT
  

Sector ETFs With Most Positive Money Flow:

• 1) SMH 2) XLP 3) RSPT 4) XHB 5) PHO
  

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:

• None of note
  

After the Close: 

• None of note
  

Economic Releases

• None of note
  

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Fed's Harker speaking, BOJ meeting, US Baker Hughes Rig Count and the CFTC speculative net positioning reoprts could also impact global trading tomorrow.

US Equity Market Hours

• 9:30 am - 4:00 pm EST

Mid-Day Market Internals

NYSE Composite Index:

• Volume Running +7.2% Above 100-Day Average 
• Nasdaq/NYSE Volume Ratio 11.4 -2.1
  
• 3 Sectors Declining, 8 Sectors Rising
• 79.2% of Issues Advancing, 19.4% Declining 
• TRIN/Arms 1.06 -.93%
  
• Non-Block Money Flow +$274.0M
  
• 357 New 52-Week Highs, 6 New Lows
• 61.1% (+4.1%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 65.0 unch.
  

Other:

• Bloomberg Global Risk-On/Risk-Off Index 53.3 +5.6%
• Bloomberg Cyclicals/Defensives Index 229.1 +2.3%
  
• Russell 1000: Growth/Value 19,800.4 +1.7%
• CNN Fear & Greed Index 67.0 (GREED) +10.0
  
• 1-Day Vix 13.0 -29.4%
  
• Vix 16.6 -9.2%
  
• Total Put/Call .94 -1.1%