Bear Radar

Style Underperformer:

• Small-Cap Value -2.6%

Sector Underperformers:

• 1) Oil Service -6.0% 2) Retail -3.8% 3) Banks -3.7%

Stocks Falling on Unusual Volume: 

• IVR, MYGN, M, WK, HSBC, AKAM, VIAB, G, GOOS, CAE, VIA, LK, PCI, BCO, WES, NSIT, CLM, KBR, PTY, EAT, IOTS, CBS, RUN, UBER, W, CDK, HSC, CVET, REAL, OSTK and KSS

Stocks With Unusual Put Option Activity:

• 1) DELL 2) AGNC 3) IYT 4) M 5) XRT

Stocks With Most Negative News Mentions:

• 1) LB 2) M 3) MYGN 4) LYFT 5) CVET

Charts:

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

Bull Radar

Style Outperformer:

• Large-Cap Value -2.2%

Sector Outperformers:

• 1) Gold & Silver +.7% 2) Utilities unch. 3) REITs -.8%

Stocks Rising on Unusual Volume:

• PSDO, CHNG, DCPH, AMEH, PFGC, UGLD, ZLAB, RING, USLV, APPN, CTRA, AEM, D, ANAB, AU, MNRO, ADVM, INMD and GO

Stocks With Unusual Call Option Activity:

• 1) JCI 2) XON 3) CHGG 4) ADS 5) MET

Stocks With Most Positive News Mentions:

• 1) GO 2) PFGC 3) NVAX 4) LMT 5) UNH

Charts:

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

Mid-Day Market Internals

NYSE Composite Index:

• Volume Running +25.5% Above 100-Day Average
• 1 Sector Rising, 10 Sector Declining
• 16.8% of Issues Advancing, 82.0% Declining
• 102 New 52-Week Highs, 289 New Lows
• 50.7% of Issues Above 200-day Moving Average
• Average 14-Day RSI 43.8%
• Vix 21.8 +24.0%
• Total Put/Call 1.11 +20.7%
• TRIN/Arms 1.90 +115.1%

Wednesday Watch

Evening Headlines

Bloomberg:  

• Trump Bows to Economic Fears in Move to Delay China Tariffs.

• Stocks to Rally in Asia on Tariff-Delay Relief. Asian stocks were primed to rally after the Trump administration de-escalated its trade war with China, providing relief to risk assets that had been under pressure earlier in the week. Treasuries retreated. Japanese futures were more than 2% higher after the S&P 500 Index had its biggest intraday gain in more than two months. Washington said it was delaying until mid-December the 10% tariff on some Chinese-made products that are high on many holiday-shopping lists such as phones, laptops and toys. A stronger-than-expected CPI data and easing in trade tensions sent 10-year yields higher. The dollar strengthened. The S&P 500 Index rose 1.5% on Tuesday. Futures were little changed. Futures on Japan’s Nikkei 225 climbed 2.2%. Hang Seng Index futures earlier advanced 1.6%. Futures on Australia’s S&P/ASX 200 Index added 0.7%.   

• Five Things You Need to Know to Start Your Day.  

• Trump Flinches, U.S. Inflation Quickens, Somber Merkel: Eco Day.

• Jeffrey Epstein Asset Forfeitures Wouldn’t Guarantee Payout for Accusers.

Wall Street Journal:

• U.S. Retreats on Chinese Tariff Threats, Stocks Soar.

• Hong Kong Protesters and Police Clash at Airport.

• Mortgage Debt Hits Record, Eclipsing 2008 Peak.

• States Sue Trump Administration Over Rollback of Power-Plant Rules.

• San Francisco, Santa Clara County File Suit to Block Rule on Green Cards.

• Russia Urges Villagers to Leave Radioactive Blast Site.

Fox News:

• Royal's link to Jeffrey Epstein draws new scrutiny after suicide, document dump.

• Harris, Warren take heat for claim Michael Brown was murdered.

CNBC:

• CBS and Viacom have finally agreed to merge — here’s what they could buy next.

• Trump just blinked, giving China a possible edge in trade war, some big Wall Street names say.

• A $1 trillion US budget deficit is one big reason the Fed may have to cut rates.

• Cramer breaks down the biggest winning stocks from Trump’s tariff delay.

• Why activist investor Carl Icahn is taking a big stake in 11-year-old ‘big data’ company Cloudera.

• Main yield curve nearly inverts as 10-year yield tops 2-year rate by just 2 basis points.

• Stocks making the biggest moves after hours: RealReal, Tilray, and Myriad.

Zero Hedge:

• Tesla(TSLA) Stock-Sellers Bank $2.75 Billion As Carmaker Is Now The Most Profitable US Short This Year.

• San Francisco Fentanyl-Related Deaths Spiked 150% Last Year.

• India's Car Market Just Crashed, Had Its Worst Month In 18 Years.

• WTI Slides After 2nd Surprise Crude Build In A Row.

• Facebook(FB) Is Collecting User Audio, Paying Contractors To Transcribe It.

• Beijing Refuses American Warships Entry To Hong Kong Ports.

• Trump Trade Blink Sparks Stock, Yuan Spike But Treasury Curve Collapses To 12-Year Lows.

Night Trading 

• Asian equity indices are +.75% to +1.5% on average.

• Asia Ex-Japan Investment Grade CDS Index 68.25 -1.75 basis points.

• China Sovereign CDS 50.25 -3.25 basis points.

• Bloomberg Emerging Markets Currency Index  66.12 +.01%.

• FTSE 100 futures +.19%.

• S&P 500 futures -.13%.

• NASDAQ 100 futures -.11%.

Morning Preview Links 

Earnings of Note 
Company/Estimate

Before the Open:

• (GOOS)/-.24

• (LK)/-.45

• (M)/.45

After the Close:

• (A)/.72

• (CACI)/2.17

• (CGC)/-.41

• (CSCO)/.82

• (NTAP)/.58

• (VIPS)/1.04

Economic Releases
8:30 am EST

• The Import Price Index MoM for July is estimated to fall -.1% versus a -.9% decline in June.

• The Import Price Index ex Petrol MoM for July is estimated to fall -.1% versus a -.4% decline in June. 

• The Export Price Index MoM for July is estimated to fall -.1% versus a -.7% decline in June.
  

Upcoming Splits

• None of note

Other Potential Market Movers

• The China Retail Sales/Industrial Production reports, Eurozone Industrial Production/GDP reports,  weekly MBA Mortgage Applications report and the (IDXX) investor day could also impact trading today.

BOTTOM LINE: Asian indices are higher, boosted by industrial 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 Surging into Final Hour on Diminished China Trade Deal Tensions, US Economic Data, Less European/Emerging Markets/US High-Yield Debt Angst, Tech/Healthcare Sector Strength

 Broad Equity Market Tone:

• Advance/Decline Line: Substantially Higher
  

• Sector Performance: Almost Every Sector Rising
  

• Volume: Above Average

• Market Leading Stocks: Performing In Line

Equity Investor Angst:

• Volatility(VIX) 17.9 -3.2%

• Euro/Yen Carry Return Index 123.77 +.9%

• Emerging Markets Currency Volatility(VXY) 8.7 +.8%

• S&P 500 Implied Correlation 43.4 -10.4%

• ISE Sentiment Index 92.0 +24.3%
  

• Total Put/Call .92 -23.3%

• NYSE Arms .88 -58.7%

Credit Investor Angst:

• North American Investment Grade CDS Index 57.3 -6.65%
  

• America Energy Sector High-Yield CDS Index 402.0 +1.0%

• European Financial Sector CDS Index 70.25 -5.7%

• Italian/German 10Y Yld Spread 222.75 -6.75 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 69.27 -.55%
  

• Emerging Market CDS Index 203.44 +2.1%
  

• iBoxx Offshore RMB China Corporate High Yield Index 164.85 +.03%

• 2-Year Swap Spread -1.0 -.25 basis point

• TED Spread 19.5 unch.

• 3-Month EUR/USD Cross-Currency Basis Swap -19.75 -5.5 basis points

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 66.11 +.19%
• 3-Month T-Bill Yield 1.99% +2.0 basis points

• Yield Curve 2.0 -4.5 basis points

• China Iron Ore Spot 89.25 USD/Metric Tonne +2.82%

• Citi US Economic Surprise Index -19.8 +7.0 points

• Citi Eurozone Economic Surprise Index -62.90 -10.1 points

• Citi Emerging Markets Economic Surprise Index -15.9 -.2 point

• 10-Year TIPS Spread 1.64 +3.0 basis points
• 100.0% chance of Fed rate cut at Oct. 30th meeting, 100.0% chance of cut at Dec. 11th meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating +260 open in Japan 
• China A50 Futures: Indicating +153 open in China

• DAX Futures: Indicating +33 open in Germany

Portfolio:

• Higher: On gains in my tech/biotech/retail/medical/industrial sector longs

• Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges and some of my emerging market shorts

• Market Exposure: Moved to 100% Net Long

Bear Radar

Style Underperformer:

• Small-Cap Value +1.0%

Sector Underperformers:

• 1) Gold & Silver -1.6% 2) Agriculture +.3% 3) REITs +.3%

Stocks Falling on Unusual Volume: 

• CVET, EAT, WK, TWNK and CIT

Stocks With Unusual Put Option Activity:

• 1) NEM 2) TXMD 3) MAT 4) TPR 5) SIG

Stocks With Most Negative News Mentions:

• 1) BE 2) ATRC 3) FICO 4) OXY 5) TRBC

Charts:

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