Monday, August 31, 2020

Tuesday Watch

Evening Headlines
Bloomberg:    
Wall Street Journal:
Fox News:
CNBC.com:
MarketWatch.com:            
Zero Hedge: 
Night Trading 
  • Asian equity indices are -1.0%  to -.25% on average.
  • Asia Ex-Japan Investment Grade CDS Index 61.0 -1.0 basis point.
  • China Sovereign CDS 33.75 -1.5 basis points.
  • Bloomberg Emerging Markets Currency Index 60.68 +.03%.
  • Bloomberg Global Risk-On/Risk Off Index 412.0 +21.0 points.
  • Volatility Index(VIX) futures 33.20 -.08%
  • FTSE 100 futures -.53%.
  • S&P 500 futures -.03%.
  • NASDAQ 100 futures +.18%.
Morning Preview Links

Earnings of Note 
Company/Estimate

Before the Open:
  • None of note
After the Close:
  • (HOME)/1.31
  • (HRB)/.33
  • (SCVL)/.62
Economic Releases
10:00 am EST
  • ISM Manufacturing for August is estimated to rise to 54.6 versus 54.2 in July.
  • ISM Prices Paid for August is estimated to rise to 54.3 versus 53.2 in July.
  • Construction Spending MoM for July is estimated to rise 1.0% versus a -.7% decline in July.
Afternoon:
  • Wards Total Vehicle Sales for August is estimated to fall to 14.9M versus 14.5M in July.
Upcoming Splits
  • None of note
Other Potential Market Movers
  • The Fed's Brainard speaking, Treasury's Mnuchin testifying on COVID-19 response, Eurozone PMI report, German Unemployment report,  weekly US retail sales reports, Jefferies Semi/IT Hardware/Communications Summit and the (NVDA) special event could also impact trading today.
Market Hours
Normal:
  • 9:30 am - 4:00 pm EST
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 to weaken into the afternoon, finishing modestly lower. The Portfolio is 50% net long heading into the day.

 

Stocks Slightly Higher into Final Hour on Falling Biden Presidency Odds, Global Stimulus Hopes, Momentum Chasing, Tech/Biotech Sector Strength

 Broad Equity Market Tone:
  • Advance/Decline Line: Lower
  • Sector Performance: Most Sectors Declining
  • Volume: Below Average
  • Market Leading Stocks: Underperforming
Equity Investor Angst:
  • Volatility(VIX) 24.8 +8.0%
  • Bloomberg Global Risk On/Risk Off Index 548.0 -72.0 points
  • Euro/Yen Carry Return Index 130.97 +.76%
  • Emerging Markets Currency Volatility(VXY) 11.14 +.91%
  • S&P 500 Implied Correlation 41.8 +16.9%
  • ISE Sentiment Index 102.0 -22.0 points
  • Total Put/Call .77 +.10%
  • NYSE Arms 1.11 +80.3%
Credit Investor Angst:
  • North American Investment Grade CDS Index 67.12 -1.22%
  • US Energy High-Yield OAS 760.65 +.07%
  • European Financial Sector CDS Index 61.42 +.2%
  • Italian/German 10Y Yld Spread 145.5 +2.0 basis points
  • Asia Ex-Japan Investment Grade CDS Index  61.16 -1.5%
  • Emerging Market CDS Index 172.08 -1.66%
  • iBoxx Offshore RMB China Corporate High Yield Index 177.82 +.13%
  • 2-Year Swap Spread 8.75 -.25 basis point
  • TED Spread 14.5 -1.5 basis points
  • 3-Month EUR/USD Cross-Currency Basis Swap -5.25 -.75 basis point
  • MBS  5/10 Treasury Spread  92.0 -1.5 basis points
  • IHS Markit CMBX BBB- 6 68.25 unch.
Economic Gauges:
  • Bloomberg Emerging Markets Currency Index 60.66 -.36%
  • 3-Month T-Bill Yield .10% unch.
  • Yield Curve 60.0 -1.5 basis points
  • China Iron Ore Spot 118.74 USD/Metric Tonne +.34%
  • Citi US Economic Surprise Index 242.50 -31.7 points
  • Citi Eurozone Economic Surprise Index 132.6 -19.3 points
  • Citi Emerging Markets Economic Surprise Index 9.1 -15.9 points
  • 10-Year TIPS Spread 1.79 +2.0 basis points
  • 100.0% chance of no change at Nov. 5th meeting, 100.0% chance of no change at Dec. 16th meeting
Overseas Futures:
  • Nikkei 225 Futures: Indicating +11 open in Japan 
  • China A50 Futures: Indicating -174 open in China
  • DAX Futures: Indicating +17 open in Germany
Portfolio:
  • Higher: On gains in my tech/biotech/medical sector longs and emerging market shorts
  • Disclosed Trades: None
  • Market Exposure: 50% Net Long

 

Bear Radar

Style Underperformer:
  • Small-Cap Value -1.3%
Sector Underperformers:
  • 1) Airlines -3.4% 2) Energy -2.3% 3) Banks -2.1%
Stocks Falling on Unusual Volume: 
  • SPWR, BMCH, MGP, OLLI, FSLY, NARI, LRCX, AXSM, BLDR, PEN, PLT, BPYU, W, FSLR, LEVI, BE, AMSWA, UCTT, PLCE, CALM, MBUU, CNK, BIG, CELH, ACHO, VVI, RUTH, FHC, LL, PRTS, CWH, ODT, BIGC, OSTK, DK, CALX and CHEF
Stocks With Unusual Put Option Activity:
  • 1) XLB 2) EAT 3) TSLA 4) USB 5) FSLR
Stocks With Most Negative News Mentions:
  • 1) CACC 2) NPTN 3) KGJI 4) UAL  5) FSLY
Charts:

Bull Radar

Style Outperformer:
  • Large-Cap Growth +.7%
Sector Outperformers:
  • 1) Gold & Silver +2.1% 2) Biotech +1.9% 3) Computer Hardware +.9%
Stocks Rising on Unusual Volume:
  • AIMT, AKCA, WKHS, RYTM, RXT, RXPI, ALXN, PASG, PSNL, EXAS and TRNE
Stocks With Unusual Call Option Activity:
  • 1) RST 2) ALXN 3) GNW 4) TSCO 5) CALX
Stocks With Most Positive News Mentions:
  • 1) AFIB 2) GME 3) ZM 4) CASA 5) IONS
Charts:

 

Mid-Day Market Internals

NYSE Composite Index:

 

Sunday, August 30, 2020

Monday Watch

Today's Headlines
Bloomberg:    
Wall Street Journal:
Fox News:
CNBC:
Zero Hedge:
  MarketWatch.com: 
Business Insider:
Night Trading
  • Asian indices are -.25% to +.75% on average.
  • Asia Ex-Japan Investment Grade CDS Index 62.0 -.75 basis point.
  • China Sovereign CDS 35.25 -.5 basis point.
  • Bloomberg Emerging Markets Currency Index 60.89 +.03%.
  • Bloomberg Global Risk-On/Risk Off Index 640.0 +20.0 points.
  • Volatility Index(VIX) futures 26.65 -1.11%. 
  • Euro Stoxx 50 futures +.78%.
  • S&P 500 futures +.47%.
  • NASDAQ 100 futures +.68%.

Earnings of Note
Company/Estimate

Before the Open:
  • None of note
After the Close:
  • (ZM)/.45
  • (SCSC)/.21
Economic Releases
10:30 am EST
  • The Dallas Fed Manufacturing Activity Index for Aug. is estimated to rise to 0.0 versus -3.0 in July.
Upcoming Splits
  • None of note
Other Potential Market Movers
  • The China Manufacturing PMI and the German Inflation Data report could also impact trading today.
Market Hours
Normal:
  • 9:30 am - 4:00 pm EST
BOTTOM LINE: Asian indices are mostly higher, boosted by technology and consumer shares in the region. I expect US stocks to open modestly higher and to weaken into the afternoon, finishing mixed.  The Portfolio is 50% net long heading into the week.