Morning Market Internals

NYSE Composite Index:

• Volume Running -8.2% Below 100-Day Average
• 9 Sectors Rising, 2 Sectors Declining
• 51.5% of Issues Advancing, 45.2% Declining
• 109 New 52-Week Highs, 8 New Lows
• 49.4% of Issues Above 200-day Moving Average
• Average 14-Day RSI 50.0% 
• Bloomberg Global Risk-On/Risk-Off Index 355.0 -104.0 points
• Vix 26.5 +1.5%
• Total Put/Call .59 -6.35%
• TRIN/Arms 1.38 +20.0%

 

Wednesday Watch

Evening Headlines

Bloomberg:   

• Xi Doubles Down on Domestic Focus as Relations with U.S. Fray.
• U.K. Faces October Cliff Edge With End of Wage and Loan Support.    
• Euro Surge Is ECB’s Newest Complication for Pandemic Economy.
• Asia Shares to Open Mixed After Fresh U.S. Record: Markets Wrap. Asian stocks looked poised for a mixed start despite another record high for their U.S. peers as tech shares advanced and investors snapped up work-from-home winners. Futures rose in Japan and Australia, and declined in Hong Kong. S&P 500 contracts were little changed after gains in Apple Inc. again pulled the benchmark to an all-time high. Zoom Video Communications Inc. earlier led a rally in companies well positioned for stay-at-home orders. The dollar erased losses as data showed U.S. manufacturing expanded last month at the fastest pace since 2018. The euro retreated after breaching $1.20 for the first time in over two years. Treasury yields fell. S&P 500 futures were little changed as of 7:15 a.m. in Tokyo. The index rose 0.8% on Tuesday. Futures on Japan’s Nikkei 225 advanced 0.3%. Hang Seng futures earlier slipped 0.4%. Futures on Australia’s S&P/ASX 200 Index climbed 0.4%.
• Five Things You Need to Know to Start Your Day.
• U.S. Cases Rise 0.7%; Plasma Treatment in Dispute: Virus Update.
• Mnuchin Talks With Pelosi, Signals Urgency on New U.S. Stimulus.
• White House Says CDC Will Halt Evictions Using Quarantine Rules.
• Visa Says U.S. Spending on Cards Up Despite Drop in Jobless Aid.  
• Dating App Bumble Preparing for $6 Billion-Plus IPO.  
• U.S. Election Priced as Worst Event Risk in VIX Futures History.

Wall Street Journal:

• Key to Preventing Covid-19 Indoors: Ventilation.
• TikTok Deal Talks Hit a Snag Over App’s Algorithms.
• Trump’s Strongest Line of Attack.
• Spare Us More of the Arrogance of ‘Expertise’.
• Trump Visits Kenosha Amid Clash Over Race Relations, Public Safety.
• New York City Delays School Reopening.
• Insurance Firms Gain Early Lead in Coronavirus Legal Fight With Businesses.
• Pentagon Says China Could Double Nuclear Weapons in Decade.
  

Fox News:

• Panel calls for changes to Washington Monument, Jefferson Memorial.
• EXCLUSIVE: Owner of COVID-shuttered salon in lather after Pelosi gets shampoo and style.
• Ohio school district bans ‘thin blue line’ banners after gridder honored coach.
  

CNBC.com:

• White House moves to halt evictions as fears of coronavirus-fueled housing crisis grow.
• Stocks making the biggest moves after hours: AMC Entertainment, At Home, Shoe Carnival & more.

MarketWatch.com:    

• This stock-market metric has correctly predicted presidential election results since 1984.
  
• The pros are getting ready for a market crash — retail investors, not so much, top economist warns.

Zero Hedge: 

• A Deal To Sell TikTok Probably Isn't Happening Tuesday - Or Any Time Soon.
• Philadelphia Mayor Shamed After Eating Indoors In Maryland While His City Remains Shut Down.
• Systemic Chaos.
• Maryland, Texas Move To Reopen Businesses As Midwestern COVID-19 Hotspots Flare: Live Updates.
• Angry Robinhood Traders Unleash Tsunami Of Complaints.
• Recent Wave Of Job Losses Casts Shadow On Recovery.
• How "Silence Is Violence" Is The Ultimate Expression Of Entitlement.
• "Option Insanity" Leads To Furious Meltup: Apple Bigger Than Russell, Emini New Record High.
• State Department Illegally Monitored Trump Jr., Hannity, Ingraham, Posobiec And Others From Kiev: FOIA.
• Bill De Blasio Says NYC Indoor Dining May Not Happen Until June 2021.
• The True Costs Of Zombie Companies And Easy Money.

 Business Insider:  

• San Francisco rents are plunging to the lowest levels in 6 years, even as the US housing market stages a comeback.
• Tesla moved into the No. 7 spot for most valuable US companies by market cap.
• A third of Americans say they wouldn't take a coronavirus vaccine.
• A grieving daughter in Wuhan is suing China, saying its early cover-up of COVID-19 killed her father. In response, the authorities reportedly intimidated her family.

The Epoch Times:

• Texas University Expels China-Funded Visiting Scholars Amid US-China Tensions.
• India, China Trade Blame Over New Border Activity as Tensions Remain High.
  

Digital Blackboard:

• Daily New Cases by Region.

Worldometer:

• New Cases/Deaths by state.

Rt Covid-19:

• How fast virus is growing by state.

KFF:

• State Data(Tests/Hospitalizations).

Night Trading 

• Asian equity indices are unch.  to +.5% on average.

• Asia Ex-Japan Investment Grade CDS Index 59.75 -1.25 basis points.

• China Sovereign CDS 33.25 -.5 basis point.

• Bloomberg Emerging Markets Currency Index 60.95 +.01%.
• Bloomberg Global Risk-On/Risk Off Index 492.0 +32.0 points.
• Volatility Index(VIX) futures 33.36 -.49%
• FTSE 100 futures +.68%.

• S&P 500 futures +.26%.

• NASDAQ 100 futures +.46%.

Morning Preview Links

Earnings of Note 
Company/Estimate

Before the Open:

• (BF/B)/.30
• (GES)/-.58
• (M)/-1.80
• (VRA)/-.07
  

After the Close:

• (AMBA)/-.02
• (CLDR)/.07
• (CPRT)/.39
• (CRWD)/-.01
• (FIVE)/.14
• (MDB)/-.40
• (PVH)/-2.53
  

Economic Releases

8:15 am EST

• The ADP Employment Change report for Aug. is estimated to rise to 1000K versus 167K in July.
  

10:00 am EST:

• Factory Orders for July are estimated to rise +6.1% versus a +6.2% gain in June.
  

10:30 am EST

• Bloomberg consensus estimates call for a weekly crude oil inventory decline of -2,137,300 barrels versus a -4,689,000 barrel decline the prior week. Gasoline supplies are estimated to fall by -2,830,600 barrels versus a -4,583,000 barrel decline the prior week. Distillate inventories are estimated to fall by -694,400 barrels versus a +1,388,000 barrel gain the prior week. Finally, Refinery Utilization is estimated to fall by -4.35% versus a +1.1% gain prior.

2:00 pm EST

• US Fed Beige Book report release.
  

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The China Services PMI report, German Retail Sales report, weekly MBA Mortgage Applications report, Barclays Tech/Media/Telecom conference and the (COST) Aug. sales results could also impact trading today.

Market Hours
Normal:

• 9:30 am - 4:00 pm EST
  

BOTTOM LINE: Asian indices are modestly higher, boosted by technology and commodity shares in the region. I expect US stocks to open modestly higher and to weaken into the afternoon, finishing mixed. The Portfolio is 75% net long heading into the day.

Stocks Rising into Afternoon on Falling Biden Presidency Odds, Earnings Optimism, Short-Covering, Tech/Homebuilding Sector Strength

 Broad Equity Market Tone:

• Advance/Decline Line: Modestly Lower
  

• Sector Performance: Mixed
  

• Volume: Below Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 25.8 -2.4%
• Bloomberg Global Risk On/Risk Off Index 478.0 +88.0 points

• Euro/Yen Carry Return Index 130.84 -.13%

• Emerging Markets Currency Volatility(VXY) 11.24 +1.54%

• S&P 500 Implied Correlation 43.4 -2.4%

• ISE Sentiment Index 120.0 +18.0 points

• Total Put/Call .60 -23.1%

• NYSE Arms 1.15 -14.8%

Credit Investor Angst:

• North American Investment Grade CDS Index 63.45 -2.57%
  

• US Energy High-Yield OAS 760.45 +.19%

• European Financial Sector CDS Index 58.47 -4.86%

• Italian/German 10Y Yld Spread 148.5 +3.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index  60.31 -1.5%
  

• Emerging Market CDS Index 163.66 -4.65%
  

• iBoxx Offshore RMB China Corporate High Yield Index 177.56 -.14%

• 2-Year Swap Spread 9.0 +.25 basis point

• TED Spread 15.0 +.5 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -3.75 -1.5 basis points
  
• MBS  5/10 Treasury Spread  89.25 -2.75 basis points
  
• IHS Markit CMBX BBB- 6 68.25 unch.

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 60.98 +.52%
• 3-Month T-Bill Yield .09% -1.0 basis point

• Yield Curve 57.75 -2.25 basis points
  

• China Iron Ore Spot 120.10 USD/Metric Tonne +.43%

• Citi US Economic Surprise Index 206.80 -4.0 points

• Citi Eurozone Economic Surprise Index 107.20 -25.4 points

• Citi Emerging Markets Economic Surprise Index 11.2 +2.1 points

• 10-Year TIPS Spread 1.78 -1.0 basis point
• 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 +12 open in Japan 
• China A50 Futures: Indicating -74 open in China

• DAX Futures: Indicating -21 open in Germany

Portfolio:

• Slightly Higher: On gains in my tech/industrial sector longs
  

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

• Market Exposure: Moved to 75% Net Long

 

Bear Radar

Style Underperformer:

• Large-Cap Value -.3%

Sector Underperformers:

• 1) Biotech -2.2% 2) Pharma -1.8% 3) Utilities -1.4%

Stocks Falling on Unusual Volume: 

• CVS, TSLA,PRPL, WGO, WBA, ARWR, NGM, KRTX, RVNC, ABBV, FLGT, REGN, RYTM, OMER, OSUR, PRTS, CUE, QDEL, ICPT, VIR and ARCT
  

Stocks With Unusual Put Option Activity:

• 1) TRGP 2) MITT 3) CLDR 4) TRIP 5) ASHR
  

Stocks With Most Negative News Mentions:

• 1) MSLP 2) ABBV 3) WINS 4) FINV  5) RST
  

Charts:

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

Bull Radar

Style Outperformer:

• Mid-Cap Growth +1.1%

Sector Outperformers:

• 1) Internet +2.7% 2) Homebuilding +2.1% 3) Retail +2.1%

Stocks Rising on Unusual Volume:

• ZM, HOME, SWBI, DOCU, REGI, SPWH, APPS, CHWY, CRWD, BLMN, ATNX, PD, CALX, PTON, ZUO and WMT
  

Stocks With Unusual Call Option Activity:

• 1) COMM 2) SMAR 3) GOGO 4) HRB 5) DOCU

Stocks With Most Positive News Mentions:

• 1) ZM 2) BBW 3) BLMN 4) ZEN 5) CPST

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running -7.5% Below 100-Day Average
• 6 Sectors Rising, 5 Sectors Declining
• 58.9% of Issues Advancing, 37.6% Declining
• 65 New 52-Week Highs, 12 New Lows
• 48.1% of Issues Above 200-day Moving Average
• Average 14-Day RSI 48.6% 
• Bloomberg Global Risk-On/Risk-Off Index 465.0 +73.0 points
• Vix 25.9 -1.6%
• Total Put/Call .55 -29.5%
• TRIN/Arms 1.01 -25.9%