Stocks Slightly Lower into Final Hour on Global 2nd Wave Virus Worries, US Election Uncertainties, Oil Decline, Energy/Transport Sector Weakness

 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) 26.4 +.8%
• Bloomberg Global Risk On/Risk Off Index 97.0 -59.0 points

• Euro/Yen Carry Return Index 128.57 +.82%

• Emerging Markets Currency Volatility(VXY) 12.1 -.08%

• S&P 500 Implied Correlation 56.9 0 -.45%

• ISE Sentiment Index 115.0 +6.0 points
  

• Total Put/Call .80 +3.9%

• NYSE Arms 1.34 +19.6%

Credit Investor Angst:

• North American Investment Grade CDS Index 59.41 +3.45%
  

• US Energy High-Yield OAS 878.50 +.1%

• European Financial Sector CDS Index 80.17 +1.64%

• Italian/German 10Y Yld Spread 140.0 -1.0 basis point
  

• Asia Ex-Japan Investment Grade CDS Index 77.22 -1.52%
  

• Emerging Market CDS Index 237.41 +.78%
  

• iBoxx Offshore RMB China Corporate High Yield Index 178.05 -.01%

• 2-Year Swap Spread 9.5 +.25 basis point

• TED Spread 13.25 -1.0 basis point
  

• 3-Month EUR/USD Cross-Currency Basis Swap -16.0 -10.75 basis points
  
• MBS  5/10 Treasury Spread  93.25 -1.25 basis points
  
• IHS Markit CMBX BBB- 6 66.25 unch.

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 58.96 +.24%
• 3-Month T-Bill Yield .09% unch.

• Yield Curve 53.0 -1.0 basis point
  

• China Iron Ore Spot 117.85 USD/Metric Tonne +.91%

• Citi US Economic Surprise Index 168.2 -2.2 points

• Citi Eurozone Economic Surprise Index 48.60 +.8 point

• Citi Emerging Markets Economic Surprise Index 47.4 -3.1 points

• 10-Year TIPS Spread 1.64 +2.0 basis points
• 100.0% chance of no change at Dec. 16th meeting, 100.0% chance of no change at Jan. 27th meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating -20 open in Japan 
• China A50 Futures: Indicating +86 open in China

• DAX Futures: Indicating -16 open in Germany

Portfolio:

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

• Disclosed Trades: None
  

• Market Exposure: 50% Net Long

Bear Radar

Style Underperformer:

• Small-Cap Value -1.3%

Sector Underperformers:

• 1) Oil Service -3.5% 2) Airlines -3.5% 3) Gaming -2.7%

Stocks Falling on Unusual Volume: 

• NOVA, CHDN, COG, NUVA, JWN, STL, EPRT, GRAF, BCSF, SBNY, KSS, PENN, SPR, MTN, CLR, CZR, GES, EOG, SSP, NKLA, SLB, WLL, SUI, AXSM, FLXN, BEAM, ARCH, EQT and UNFI
  

Stocks With Unusual Put Option Activity:

• 1) ARMK 2) AR 3) ON 4) CZR 5) ALXN
  

Stocks With Most Negative News Mentions:

• 1) IVDN 2) BTU 3) NKLA 4) WPX  5) DVN
  

Charts:

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

Bull Radar

Style Outperformer:

• Mid-Cap Growth +.2%

Sector Outperformers:

• 1) Gold & Silver +1.7% 2) Alt Energy +1.6% 3) Computer Hardware +1.0%

Stocks Rising on Unusual Volume:

• ANGO, SRNE, IPOB, BYND, AMSC, AXNX, FRG, HGEN and PTON
  

Stocks With Unusual Call Option Activity:

• 1) FIT 2) EMB 3) UNFI 4) TAP 5) PEP

Stocks With Most Positive News Mentions:

• 1) SRNE 2) ANGO 3) AYRO 4) ASC 5) SWM

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running -22.4% Below 100-Day Average
• 38 Sectors Rising, 6 Sectors Declining
• 40.0% of Issues Advancing, 66.4% Declining
• 38 New 52-Week Highs, 6 New Lows
• 42.5% of Issues Above 200-day Moving Average
• Average 14-Day RSI 43.7% 
• Bloomberg Global Risk-On/Risk-Off Index 80.0 -75.0 points
• Vix 26.7 +2.0%
• Total Put/Call .67 -13.0%
• TRIN/Arms 1.13 unch.

 

Tuesday Watch

Night Trading 

• Asian equity indices are -.25% to +.5% on average.

• Asia Ex-Japan Investment Grade CDS Index 77.25 + basis points.

• China Sovereign CDS 49.25 + basis points.

• Bloomberg Emerging Markets Currency Index 59.41 .
• Bloomberg Global Risk-On/Risk Off Index -31.0 - points.
• Volatility Index(VIX) futures 31.95 -.%
• FTSE 100 futures +.24%.

• S&P 500 futures +.23%.

• NASDAQ 100 futures +.27%.

Morning Preview Links

Earnings of Note 
Company/Estimate

Before the Open:

• (ANGO)/-.07
• (INFO)/.69
• (MKC)/1.52
  

After the Close:

• (CMTL)/.06
• (HTZ)/-3.48
• (MU)/.94
• (PRGS)/.77
• (SNX)/2.26
  

Economic Releases

8:30 am EST

• Advance Goods Trade Balance report for August is estimated at -$81.7B versus -$79.2B in July.
• Wholesale Inventories MoM for Aug. is estimated to fall -.1% versus a -.3% decline in July.
• Retail Inventories MoM for Aug. is estimated to rise +1.1% versus a +1.2% gain in July.
  

9:00 am EST

• S&P CoreLogic CS 20-City MoM for July is estimated to rise +.1% versus unch. in June.

10:00 am EST

• The Conference Board Consumer Confidence Index for Sept. is estimated to rise to 90.0 versus 84.8 in Aug.

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Fed's Quarles speaking, Fed's Clarida speaking, US weekly retail sales reports, Eurozone inflation data report and the China Manufacturing PMI 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 consumer and technology 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 day.

 

Morning Market Internals

NYSE Composite Index:

• Volume Running -11.6% Below 100-Day Average
• 11 Sectors Rising, 0 Sectors Declining
• 87.3% of Issues Advancing, 11.0% Declining
• 30 New 52-Week Highs, 5 New Lows
• 38.1% of Issues Above 200-day Moving Average
• Average 14-Day RSI 39.2% 
• Bloomberg Global Risk-On/Risk-Off Index 151.0 +60.0 points
• Vix 26.5 +.5%
• Total Put/Call .63 -27.6%
• TRIN/Arms 1.35 +12.5%