Bear Radar

 Style Underperformer:

• Large-Cap Growth +.9%

Sector Underperformers:

• 1) Biotech -.2% 2) Pharma +.2% 3) Education +.3%

Stocks Falling on Unusual Volume: 

• WMG, KAR, WW, FB, COUR, SAVA, LCID, AGIL, INCY, SGFY, PTON and FDX
  

Stocks With Unusual Put Option Activity:

• 1) AMLP 2) SFIX 3) SKX 4) FDX 5) UAA
  

Stocks With Most Negative News Mentions:

• 1) SMMT 2) INNV 3) OSUR 4) WKHS 5) RKLY
  

Charts:

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

Bull Radar

 Style Outperformer:

• Small-Cap Value +1.6%

Sector Outperformers:

• 1) Energy +3.7% 2) Gambling +3.6% 3) Airlines +3.3%

Stocks Rising on Unusual Volume:

• DVAX, SFIX, ATER, PBF, SOFI, CENX, SPIR, AMBA, PDSB, MGM and MNTS
  

Stocks With Unusual Call Option Activity:

• 1) NLY 2) SEEL 3) MRIN 4) DISCK 5) SFIX

Stocks With Most Positive News Mentions:

• 1) DVAX 2) AEMD 3) MRIN 4) SOFI 5) XPOF
  

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running -12.8% Below 100-Day Average 
• 11 Sectors Rising, 0 Sectors Declining
• 81.2% of Issues Advancing, 15.1% Declining
• 29 New 52-Week Highs, 15 New Lows
• 54.0% of Issues Above 200-day Moving Average
• Average 14-Day RSI 39.9%
  
• Bloomberg Global Risk-On/Risk-Off Index 2,694.0 +180.0 points
• Russell 1000: Growth/Value 17,900 -.45%
  
• Vix 21.5 -11.6%
• Total Put/Call .92 +3.4%
• TRIN/Arms .42 -68.9%

Wednesday Watch

Evening Headlines

Bloomberg:      

• EU, U.S. Aim to Pledge More Enforcement to Curb China Risk.  
• Citi, JPMorgan Seen Evading Evergrande Crisis in China Push.
• Asia Stocks Set for Muted Open With Focus on China: Markets Wrap.
• Democrats Push to Suspend U.S. Debt Ceiling to Late 2022 as GOP Balks.  
• Blizzard Exec Overseeing Hit Game Leaves in Latest Exodus.  
• Powell Draws Scorn From Key GOP Senator Over Politicized Fed.  
• Bitcoin Drops Below $40,000 as Regulatory Drumbeat Grows.  
• Bitcoin Crashed to $5,402 in Error on Network Backed by Quants.  
• Treasury’s Borrowing Committee Warns Yellen of Debt-Limit Risks.
• Senior Republican Dismisses Default Risk, Says Treasury Can Act.
• Software Firm Freshworks Considers Pricing IPO at $36 a Share.

Wall Street Journal:    

• The Destructive Legacy of the Great Society.
• Facebook’s Rules for High-Profile Users Under Review.
  
• Abolish the FBI 
• Biden, the U.N. and Afghan Women.
• China’s Regulatory Storm Risks Triggering Wider Economic Damage.
• Taliban Add Minorities, Technocrats to Afghan Government, but No Women.

Fox News:  

• Spokesman for Taliban might have just gotten stunning promotion.
  

CNBC.com:

• The Fed will try to soothe markets Wednesday, while preparing investors for end to bond buying.
• Rep. Bush, Sen. Warren introduce bill to reinstate federal eviction moratorium.
• U.S. committee is reviewing Zoom’s $14.7 billion deal for Five9 on national-security grounds.
• Stocks making the biggest moves after the bell: Stitch Fix, Hyatt Hotels, FedEx and more.

Zero Hedge:

• '10 For The Big Guy': Politico Confirms Hunter Biden's China, Ukraine Emails Are Legit. 
• Kyle Bass: President Xi Wants Evergrande Blowup To Help Lower Housing Prices.
• Billionaire Financier John Paulson Divorces Wife Of 20 Years.
• Crypto Crashes As SEC/OCC Warn Of 'Reckoning', Question "Long-Term Viability" Of Private Forms Of Money.
• WTI Extends Gains After Across The Board Inventory Draws.
• FedEx, UPS Raises Rates At Fastest Pace In Decade.
• "We Hit Headwinds" - Disney Shares Tumble After CEO Says Subscriber Growth Slowed.
• Stocks Pump'n'Dump As Crypto Slumps Ahead Of Taper-Talk, Debt-Ceiling Doubts.

Reuters:

• COVID creates shortages of an array of U.S. medical supplies.

Newsmax:

• Sen. Rand Paul: Dem Open Borders 'Insanity'.
• Biden WH Endures Fierce Bipartisan Backlash on Haitian Migrant Surge.

TheGatewayPundit.com:

• Melbourne, Australia Consistently Voted the Most Livable City in the World – Explodes Over COVID Mandates.
• EXCLUSIVE: Maricopa County Supervisor Steve Chucri on 2020 Election in Leaked Recording: “I Think It Was Done Through DEAD PEOPLE Voting. I Think IT WAS MULTIFACETED – BALLOT HARVESTING” (AUDIO).
• White House Reporters Launch “Formal Objection” to Joe Biden Refusing to Take Questions (VIDEO).
• New Study Shows 1 in 1000 Develop Heart Inflammation After Covid Vaccination; Myocarditis and Other Related Heart Conditions Have Increased Death Rate Within 5 Years.
• American Airlines CEO Says Biden Admin Should Not Require Proof of Covid Vaccination for Domestic Travel (VIDEO). 
• Why are US Politicians Weak on China? Bannon Says We Should be Demanding Reparations As a Result of COVID.
• Biden Finally Admits Border Out of Control, Says “We Will Get It Under Control”.

The Epoch Times:

• Beijing Unleashes Sweeping Bid to Remold Society.

Covid-19(Data, Maps, Graphs):

• Our World in Data:  New Global Covid-19 Cases(7-day rolling average graphs). New US Covid Hospital Admissions/ICU Admissions/Deaths
  
• FT.com:  Fully Vaccinated by Country(graph). Global Lockdown Stringency Index(map).
• Bloomberg.com:  International Travel Restrictions.  Case Graphs by State.
  
• NYTimes.com:  County Trends and Clusters. Local ICU Occupancy.
  
• Brown School of Public Health:  Covid Severity by State/County(map).  US Hospital Capacity(region).
  
• CovidActNow:  Covid Severity/Infection Rate by Metro Area.
  
• KFF:  US Vaccinations by Race/Ethnicity.
  
• Carnegie Mellon: Covid-Like Symptoms in Community. Covid Symptom Searches on Google. Covid-Related Dr.Visits.  Restaurant Visits. Wearing Masks. (graphs)
  
• Safegraph.com:  Commerce Patterns(graphs).

Night Trading 

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

• Asia Ex-Japan Investment Grade CDS Index 87.75 -5.0 basis points.

• China Sovereign CDS 45.25 -3.75 basis points.
  

• Bloomberg Emerging Markets Currency Index 59.52 -.01%.
• Bloomberg Global Risk-On/Risk Off Index 2,507.0 -6.0 points.
• Volatility Index(VIX) futures 24.3 +3.5%.
• FTSE 100 futures -.44%.

• S&P 500 futures -.36%

• NASDAQ 100 futures -.42%. 

Morning Preview Links

Earnings of Note 
Company/Estimate 

 

Before the Open: 

• (GIS)/.89

After the Close:

• (BB)/-.07
• (FUL)/.79
• (KBH)/1.63
• (SCS)/.24
  

Economic Releases

10:00 am EST

• Existing Home Sales for Aug. is estimated to fall to 5.88M versus 5.99M in July.
  

10:30 am EST

• Bloomberg consensus estimates call for a weekly crude oil inventory decline of -3,016,700 barrels versus a -6,422,000 barrel decline the prior week. Gasoline supplies are estimated to fall by -1,396,890 barrels versus a -1,857,000 barrel decline the prior week. Distillate inventories are estimated to fall by -1,286,780 barrels versus a -1,689,000 barrel decline the prior week. Finally, Refinery Utilization is estimated to rise by +1.33% versus a .2% gain prior. 

2:00 pm EST

• The FOMC is expected to leave the benchmark Fed Funds Rate at 0.0-.25%.

Upcoming Splits

• (RJF) 3-for-2
  

Other Potential Market Movers

• The Fed's statement/press conference, Eurozone PMI report, weekly MBA Mortgage Applications report, DA Davidson Industrials/Services Conference, Wells Fargo Consumer Conference, Sidoti Small Cap Fall Investor Conference, (YUMC) investor day, (MSFT) Surface Event, (WY) investor day and the (BSX) investor day could also impact global trading today.

US Equity Market Hours

• 9:30 am - 4:00 pm EST
  

BOTTOM LINE: Asian indices are lower, weighed down by commodity and industrial shares in the region. I expect US stocks to open modestly lower and to maintain losses into the afternoon. The Portfolio is 50% net long heading into the day.

Stocks Modestly Higher into Final Hour on Housing Data, Declining US Covid Cases, Bargain-Hunting, Biotech/Tech Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Higher
  

• Sector Performance: Mixed
  

• Volume: Around Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 23.8 -7.4%
• Bloomberg Global Risk On/Risk Off Index 2,556.0 +84.0 points

• Euro/Yen Carry Return Index 132.16 -.16%

• Emerging Markets Currency Volatility(VXY) 8.97 -.22%.

• S&P 500 Implied Correlation 57.67 +1.6%

• ISE Sentiment Index 111.0  +6.0 points
  

• Total Put/Call .91 -18.0%

• NYSE Arms 1.09 -31.9%

Credit Investor Angst:

• North American Investment Grade CDS Index 53.18 -1.3%
  

• US Energy High-Yield OAS 390.69 -.38%

• European Financial Sector CDS Index 58.29 -1.3%

• Italian/German 10Y Yld Spread 101.0 -3.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 88.04 -5.1%
  

• Emerging Market CDS Index 168.19 -1.47%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 37.13 -.35%

• 2-Year Swap Spread 11.5 +.5 basis point
  

• TED Spread 10.5 +1.25 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -3.0 +1.25 basis points
  
• MBS  5/10 Treasury Spread  75.5 +.5 basis point
  
• IHS Markit CMBX BBB- 6 71.75 unch.
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 59.52 +.24%
• 3-Month T-Bill Yield .02% unch.
  

• Yield Curve 111.0 -1.0 basis point
  

• China Iron Ore Spot 95.35 USD/Metric Tonne +.2%

• Citi US Economic Surprise Index -29.5 +9.7 points

• Citi Eurozone Economic Surprise Index -24.5 -1.2 points
  

• Citi Emerging Markets Economic Surprise Index 3.4 -.4 point

• 10-Year TIPS Spread 2.30 -1.0 basis point
• 100.0% chance of no change at Nov. 3rd meeting, 100.0% chance of no change at Dec. 15th meeting

US Covid-19:

• 294 new infections/100K people(last 7 days total) -20/100K people
• 55% of Jan. 7th, 2021 peak(highest daily avg. new infections) -4.0 percentage points
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +61 open in Japan 
• China A50 Futures: Indicating -442 open in China

• DAX Futures: Indicating -48 open in Germany

Portfolio:

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

• Disclosed Trades: None
  

• Market Exposure: 50% Net Long
  

Bear Radar

 Style Underperformer:

• Mid-Cap Value -.2%

Sector Underperformers:

• 1) Gambling -2.0% 2) Computer Hardware -1.3% 3) Airlines -1.2%

Stocks Falling on Unusual Volume: 

• CODI, WYNN, CBRL, ASAN, OSK, DIBS, AMR, JBLU, DKNG, BILL, IRNT, AA, COLD and GREE
  

Stocks With Unusual Put Option Activity:

• 1) CRVS 2) SIX 3) SKX 4) VFC 5) EMB
  

Stocks With Most Negative News Mentions:

• 1) ROLL 2) EDSA 3) VRCA 4) BIG 5) OSK
  

Charts:

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