Stocks Surging into Afternoon on Declining Rate-Hike Odds, US Economic "Soft-Landing" Hopes, Short-Covering, Tech/Alt Energy Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Higher
  

• Sector Performance: Almost Every Sector Rising
  

• Volume: Below Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 14.6 -3.1%
• DJIA Intraday % Swing .77%
  
• Bloomberg Global Risk On/Risk Off Index 69.6 -.1%

• Euro/Yen Carry Return Index 168.0 +.03%

• Emerging Markets Currency Volatility(VXY) 8.6 -1.7%

• CBOE S&P 500 Implied Correlation Index 20.9 -2.5% 

• ISE Sentiment Index 117.0 +15.0 points
  

• Total Put/Call .89 -17.6%

• NYSE Arms .97 +31.1%

Credit Investor Angst:

• North American Investment Grade CDS Index 62.9 -2.1%
  

• US Energy High-Yield OAS 318.34 +.34%
• Bloomberg TRACE # Distressed Bonds Traded 330.0 -7.0
  

• European Financial Sector CDS Index 80.2 -4.9% 
• Deutsche Bank Subordinated 5Y Credit Default Swap 261.2 -.81%
  

• Italian/German 10Y Yld Spread 164.0 basis points -2.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 135.6 +2.24%
  

• Emerging Market CDS Index 194.64 -1.9%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 24.67 -.05%

• 2-Year SOFR Swap Spread -8.25 basis points +4.5 basis points
  

• TED Spread 24.0 basis points +3.0 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -12.75 unch.
  
• MBS  5/10 Treasury Spread 171.0 unch.
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 778.0 +6.0 basis points
  
• Avg. Auto ABS OAS 72.0 +1.0 basis point
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 42.81 +.05%
• 3-Month T-Bill Yield 5.43% -6.0 basis points
  

• China Iron Ore Spot 111.0 USD/Metric Tonne +.69%
• Dutch TTF Nat Gas(European benchmark) 35.20 euros/megawatt-hour -8.4%

• Citi US Economic Surprise Index 45.2 -7.8 points

• Citi Eurozone Economic Surprise Index -55.8 +2.6 points

• Citi Emerging Markets Economic Surprise Index -2.2 -1.9 points
• S&P 500 Current Quarter EPS Growth Rate YoY(487 of 500 reporting) -6.2%  -.1 percentage point
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 237.60 +.09:  Growth Rate +8.1% unch., P/E 18.9 +.3
  
• S&P 500 Current Year Estimated Profit Margin 12.22% +1.0 basis point
  
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(10 of 10 reporting) +24.3% unch.
  
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 243.20 +.24: Growth Rate +46.7% +.2 percentage point, P/E 31.8 +1.0
  
• Bloomberg US Financial Conditions Index .36 -10.0 basis points
  
• Bloomberg Euro-Zone Financial Conditions Index -.65 -67.0 basis points
  
• US Yield Curve -77.5 basis points (2s/10s) +6.75 basis points
  
• US Atlanta Fed 2Q GDPNow Forecast +5.91% unch.
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +4.23% unch.: CPI YoY +3.82% -1.0 basis point
  
• 10-Year TIPS Spread 2.29 -1.0 basis point
  
• Highest target rate probability for Nov. 1st FOMC meeting: 52.6%(+14.8 percentage points) chance of 5.25%-5.5%. Highest target rate probability for Dec. 13th meeting: 51.7%(+12.7 percentage points) chance of 5.25%-5.5%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +183 open in Japan 
• China A50 Futures: Indicating +48 open in China

• DAX Futures: Indicating +42 open in Germany

Portfolio:

• Higher:  On gains in my tech/industrial/medical/transport 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:

• Large-Cap Value +.9%
  

Sector Underperformers:

• 1) Education -.1% 2) Foods +.2% 3) Utilities +.3%

Stocks Falling on Unusual Volume: 

• GPCR, NIO, VRRM, HKIT and VFS
  

Stocks With Unusual Put Option Activity:

• 1) BIG 2) BBY 3) SGEN 4) PDD 5) SNDL
  

Stocks With Most Negative News Mentions:

• 1) NIO 2) RIDEQ 3) HE 4) SCVL 5) HEI
  

Charts:

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

Bull Radar

Style Outperformer:

• Large-Cap Growth +1.9%
  

Sector Outperformers:

• Alt Energy +4.1% 2) Semis +2.7% 3) Airlines +2.6%

Stocks Rising on Unusual Volume:

• MARA, RIOT, COIN, ONTO, JXN, INBX, MSTR, BLFS, NOVA, CDLX, RUN, NSSC, ELF, ARRY, USM, IONQ, AFRM, INOD, TSLA, CTLT, CHWY, NEP, BBY, SMCI, PODD, NVDA, SAVA, AA, FWRD, PK, FSLY, ORCL, ETR, MODG and AMBA
  

Stocks With Unusual Call Option Activity:

• 1) GSAT 2) SAVE 3) TIGR 4) DNA 5) BIG

Stocks With Most Positive News Mentions:

• 1) AXLA 2) TSHA 3) TIGR 4) DIGP 5) DNA
  

Charts:

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

Tomorrow's Earnings/Economic Releases of Note; Market Movers

Earnings of Note 
Company/Estimate 

Before the Open:

• (BF.B)/.53
• (CONN)/-1.53
• (PDCO)/.40
  

After the Close: 

• (CHWY)/-.05
• (COO)/3.34
• (CRWD)/.56
• (FIVE)/.83
• (OKTA)/.22
• (CRM)/1.90
• (VEEV)/1.13
• (VSCO)/.26
  

Economic Releases  

8:15 am EST

• The ADP Employment Change for Aug. is estimated to fall to 195K versus 324K in July.
  

8:30 am EST

• Advance Goods Trade Balance for July is estimated to widen to -$90.0B versus $87.8B in June.
• Wholesale Inventories MoM for July is estimated to fall -.3% versus -.5% decline in June. 
• Retail Inventories MoM for July is estimated to rise +.5% versus a +.7% gain in June.
• 2Q GDP revisions.
  

10:00 am EST

• Pending Home Sales MoM for July is estimated to fall -1.0% versus a +.3% gain in June.
  

10:30 am EST

• Bloomberg consensus estimates call for a weekly crude oil inventory decline of -1,595,500 barrels versus a -6,134,000 barrel decline the prior week. Gasoline supplies are estimated to fall by -720,250 barrels versus a +1,468,000 barrel gain the prior week. Distillate inventories are estimated to fall by -943,000 barrels versus a +945,000 barrel gain the prior week. Finally, Refinery Utilization is estimated to rise by +.3% versus a -.2% decline prior.
  

Upcoming Splits 

• (DSGR) 2-for-1
  

Other Potential Market Movers

• The Eurozone Consumer Confidence report, weekly MBA Mortgage Applications report and the DB Tech Conference could also impact global trading tomorrow.

US Equity Market Hours

• 9:30 am - 4:00 pm EST

Mid-Day Market Internals

NYSE Composite Index:

• NYSE Volume Running -10.0% Below 100-Day Average 
• Nasdaq/NYSE Volume Ratio 11.0 +1.9
  
• 1 Sector Declining, 10 Sectors Rising
• 68.6% of Issues Advancing, 28.1% Declining
• 48 New 52-Week Highs, 20 New Lows
• 48.5%(+4.8%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 53.0 +5.0
  
• Bloomberg Global Risk-On/Risk-Off Index 69.6 +.08%
  
• Russell 1000: Growth/Value 17,577.6 +1.0%
• 1-Day Vix 10.7 -5.6%
  
• Vix 14.5 -3.9%
  
• Total Put/Call .86 -20.4%
• TRIN/Arms .94 +27.0%
  

Tuesday Watch

Evening Headlines

Bloomberg:

• Economists Turn Even More Downbeat on China’s Growth Outlook.
• Asian Loan Volumes Plunge to Six-Year Low on China Slowdown.
• Japan’s Jobless Rate Rises in Slight Negative Signal for BOJ.
• Asian Stocks Set for Gains With Economy in Focus: Markets Wrap.
• Iron Ore’s Unexpected Resilience Shows Pockets of China Strength.
• Oil Steadies Near $80 as Traders Seek Clues on Demand Outlook.
• Citadel Vets 69,000 Intern Applicants to Find Next Math Geniuses.
• Hedge Funds at War for Top Traders Dangle $120 Million Payouts.
• Ex-FTC Commissioner Faces Storm of Sexual Harassment Accusations.
• Goldman Is Selling a Wealth-Advisory Unit to $240 Billion Money Manager.
• San Francisco Fed Bank-Supervision Chief to Depart. 
• Musk, Zuckerberg Set to Attend Schumer’s Forum on Future of AI.
• Why Tractor Supply Is One of the Most Interesting Retailers on the Planet.

Zero Hedge:

• Biden's Cringe Whiteboard Presentation Memed Into Oblivion.
• Fists Fly, Bodies Slammed As Antifa Crashes Anti-Migrant Protest At NYC Mayor's Mansion.
• Rising Supermarket Thefts: A Symptom Of Deeper Moral Decline.
• NYU, Columbia And Other Top Med Schools Face Discrimination Complaints By White, Asian Teens.
• The Western World Is About To Deliver Some Very Bad News To Its Young Adults.
• Las Vegas Is A Top Destination For Californians Moving Out Of State.
• Save The Rule Of Law By Destroying It?
• Watch: Big Government Raids Small-Town Amish Farm.
• ChatGPT Topples Joe Biden's "House Of Cards".
• DHS Refuses To Disclose Number Of Illegals Let Go After Interacting With Border Agents.
• Quinn: End Game For The American Empire.
• 5 Months After SVB's Collapse, SF Fed's Bank Supervisor 'Retires'.
• US stocks managed to hold onto their gains while the US curve bull steepened - Newsquawk Asia-Pac Market Open.
• "Way Worse Than Watergate" - All Aboard The Impeachment Express.
• 28th August 2023: Stocks catch a bid with APAC optimism seeping through to Europe and the US.
• Bonds & The Buck Quiet, Stocks Squeeze Higher As Event-Risk-Heavy Week Looms.

Wall Street Journal:

• No Covid Compliance This Time Around. I went along with ‘social distancing’ and avoided my father’s house as he was dying of cancer. Never again.
• You’ve Heard of Quiet Quitting. Now Companies Are Quiet Cutting.
• Biden Rewrites the History of Covid School Closings. The President takes credit for reopening he did nothing to help.
• Storm of Climate Coverage Approaches. U.S. President expected to advance theory despite lack of support from government scientists. 
• Americans Are Bailing on Their Home Insurance.
• Student Loans Are Emerging From Deep Freeze, and Borrowers Are Confused.

CNBC.com:

• Goldman Sachs unloads another business acquired under CEO David Solomon
• Google to begin selling maps data to companies building solar products
• Tech IPOs are coming back — now they have to perform
• Bitcoin trading volume is at its lowest in more than four years
• Electric utilities face billions in wildfire liability with aging power lines risking another blaze.
• OpenAI launches ChatGPT Enterprise, the company’s biggest announcement since ChatGPT’s debut.
• Mysterious new California city backed by some of the biggest names in Silicon Valley, report says.
• Hawaiian Electric points finger at Maui County over devastating wildfires, stock jumps 40%.

Newsmax:

• Rep. Rosendale: Biden 'Shut Down' US Energy.
• Feds to Probe Biden Decision to Keep Space Command in Colo. Over Ala.
• Mark Morgan: No Endgame to Migrant Influx.
  

Fox News:

• White House pressed over potential limit recommendation on Americans’ beer intake.
• Violence erupts among groups protesting migrant crisis outside Dem mayor’s home.
  

TheGatewayPundit.com:

• Maui Officials Reveal Cause of the Devastating Wildfires – Blowing Up Leftist Democrats’ “Climate Change” Narrative
• BREAKING: New COVID-19 Vaccines Coming, “We Will FORCE Them on You” | Elijah Schaffer’s Top 5 (VIDEO).
• JUST IN: President Trump SLAMS Far Left DC Judge, Jack Smith and January 6 Committee “Lowlifes” – Will Appeal January 6 Trial Date Set for March 4, ONE DAY Before Super Tuesday.
• EV Fail: Car Dealers Turning Away From Electric Vehicles After Learning Harsh Economics Lesson.
• US-Ukraine Brass Write off Counteroffensive After 57.000 Casualties, Focus on Force-Drafting New Conscripts for 2024.
• ‘Joe the Plumber’ – Man Who Confronted Barack Obama on 2008 Campaign Trail About His Socialist Tax Plan, Dead at 49.
• Colorado Democrats Appoint Marxist Teacher Who Called for ‘FORCEFUL Cultural Revolution’ Against ‘Whiteness’ to State Legislature.
• UPDATE: UNC Graduate Tailei Qi from Wuhan Universtiy in China Identified as Person of Interest in Campus Shooting; Suspect Taken Into Custody.
• Alabama Mayor Calls for Defunding Library Unless They Remove Graphic LGBT Books From Kids Section.
• Dirty Brad Raffensperger Ordered to Testify Against Mark Meadows in Georgia Case – After Raffensperger’s Office Leaked Fabricated Transcript of Trump Call to Far-Left WaPo.
• Vogue Includes Transgender Cyclist on List of ‘Powerhouse Women’ of 2023.
• 41-Year-Old GOP Activist Alexander Talcott Stabbed to Death in His New Hampshire Home.
• Robert F. Kennedy, Jr. Stuns Democrats and Soulless Elites as He Surges to 31% in New Hampshire.
• Is ERIC Using DMV Lists to Create Targeted Unregistered Voter Lists – And Who Gets These Lists?

The Epoch Times:

• 'Boxed' China Needs 'Helicopter Money' to Restore Confidence: Expert.

 

Twitter: 

• @DC_Draino - President Trump’s support among black voters has nearly tripled from 8% to 20%. Now you know why the media is obsessing over the “racially motivated” shooting in Jacksonville. They’re trying to scare black voters back into the Democrat mind prison.
• @zerohedge - "The More You Indict, The More We Unite!" - Black Social Media Erupts For Trump.
• @TheMilkBarTV - They said the quiet part out loud = DEPOPULATION. (video)
• @stillgray - This is the 12th District police station in Chicago. World class city. First world country. (pic)
• @KobeissiLetter - Below is a chart of the US money supply. Since 2020, the US has printed nearly 80% of ALL US Dollars in circulation. To put that in perspective, at the start of 2020 we had ~$4 trillion in circulation. Now, there is nearly $19 TRILLION in circulation, a 375% jump in 3 years. (graph)
• ProdigalThe3rd - Biden’s Green New Deal wasted trillions to cripple US energy independence, while empowering China: US Trade Rep. Katherine Tai: “China’s dominant position in the world market now in [rare earths] means that it is able to turn on the faucet and turn off the faucet …we remain entirely vulnerable to that leverage.” (video)
• @CarolynRyanTV - GEORGIA BREAKING. Gov. Brian Kemp admits to a Republican voter: "If you give anybody a voting machine, they can hack it". The exchange took place today at the 8th district GOP fish fry in Perry, GA. (video)
• @Risemelbourne - Maui The Insanity Continues. Locals are finding Mysteriously Burnt out vehicles located outside the Fire Zones...Somehow, they're Burnt to a crisp, in Liquid Metal Form and are located in between 𝙐𝙉𝘽𝙐𝙍𝙉𝙏 Houses....Something Very Fishy is going on in Hawaii. (video)
• @HumanDilemma_ Maui Fire - NEW FOOTAGE FROM MAUI FIRE. (video) Maui Fire - David Vance: Something very wrong in Maui. (video) 
• @alx - For an administration so concerned about a “New COVID variant”, they don’t seem to mind sending Joe Biden out to schools to hack and cough multiple times into his hand while touching the railing and shaking hands with every student in the school. (video)
• @The_Real_Fly - Nearly 99% of the COVID-19 deaths reported by the Centers for Disease Control and Prevention last week were not primarily caused by the coronavirus, new data shows.

OpenVAERS:

• VAERS US COVID Vaccine Adverse Event Reports. 979,870 Reports(+2,329 from prior week) Through August 11th, 2023.

SKirsch.com:

• Using the MGH numbers with our own VAERS queries, we have 247 cases per million doses from the MGH study divided by 5.97 cases per million doses from VAERS. 247/5.97 = 41. This suggests that the VAERS under-reporting factor (URF) is 41X.

Night Trading 

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

• Asia Ex-Japan Investment Grade CDS Index 132.0 +1.25 basis points. 

• China Sovereign CDS 81.25 unch.
  
• China Iron Ore Spot 112.6 USD/Metric Tonne +.3%.

• Bloomberg Emerging Markets Currency Index 42.9 +.16%.
• Bloomberg Global Risk-On/Risk Off Index 70.1 +.63%. 
• Bloomberg US Financial Conditions Index 27.0 -18.0 basis points.
  
• Volatility Index(VIX) futures 16.5 +.11%.
• Euro Stoxx 50 futures +.07%.

• S&P 500 futures +.05%.

• NASDAQ 100 futures +.0%.  

Morning Preview Links

BOTTOM LINE: Asian indices are mostly 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.