BETWEEN THE HEDGES

Wednesday Watch

2026-09-08T21:14:13.397-04:00

Night Trading

Asian equity indices are -.25% to +.75% on average.
Asia Ex-Japan Investment Grade CDS Index 65.075 -.25 basis point.
China Sovereign CDS 35.0 +.25 basis point.
China Iron Ore Spot 100.4 USD/Metric Tonne -.7%.
Crude Oil 9.62/bbl. +1.7%
Gold 4,390.20 USD/t oz. -1.1%.
Swiss Franc/Offshore Chinese Renminbi Cross 8.29 -.05%.
Bloomberg Emerging Markets Currency Index 34.29 unch.
Bloomberg Global Risk-On/Risk Off Index 130.0 +.4%.
US 10-Year Yield 4.79% +1.0 basis point.
Japan 30-Year Yield 3.98% +1.0 basis point.
Volatility Index(VIX) futures 18.5 +.5%.
Euro Stoxx 50 futures -.48%.
S&P 500 futures -.03%.
NASDAQ 100 futures -.01%.

Morning Preview Links

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

Stocks Lower into Final Hour on Escalating Mideast War Tensions, Mideast War-Induced Inflation Fears, Technical Selling, Pharma/Consumer Discretionary Sector Weakness

2026-09-08T15:31:57.855-04:00

Economic/Market Gauges:

North American Investment Grade CDS Index 52.0 +.4%
BofA Private Credit Proxy Index 72.4 -1.5%
Bloomberg US Securitized MBS/ABS/CMBS Avg. OAS .30 -1.0 basis point
BofA Global Financial Stress Indicator -.15 -2.0 basis points
European Financial Sector CDS Index 53.8 +.4%
Emerging Market CDS Index 136.5 -.3%
Israel Sovereign CDS 52.2 -.3%
Bloomberg Global Trade Policy Uncertainty Index .6 -.1
US Morning Consult Daily Consume Sentiment Index 86.7 -3.3

Citi US Economic Surprise Index 26.0 +.1

Citi Eurozone Economic Surprise Index 79.3 -.9

Citi Emerging Markets Economic Surprise Index 19.2 -1.4
S&P 500 Current Quarter EPS Growth Rate YoY(493 of 500 reporting) +53.2% unch.
S&P 500 Blended Forward 12 Months Mean EPS Estimate 399.56 +1.78: Growth Rate +21.7% +.5 percentage point, P/E 19.3 -.2
S&P 500 Current Year Estimated Profit Margin 16.29% unch.
NYSE FANG+ Current Quarter EPS Growth Rate YoY(10 of 10 reporting) +131.6% +.1 percentage point
NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 974.60 +3.20: Growth Rate +45.1% +.4 percentage point, P/E 19.1 -.4
Bloomberg US Financial Conditions Index 1.24 -1.0 basis point
US Yield Curve 40.25 basis points (2s/10s) -2.5 basis points
Bloomberg Industrial Metal Index 184.1 +1.6%
Dutch TTF Nat Gas(European benchmark) 77.3 euros/megawatt-hour +5.2%
US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 11.3 -.7 percentage point
US Atlanta Fed GDPNow Q3 Forecast +4.7% unch.
US 10-Year T-Note Yield 4.80% +1.0 basis point
1-Year TIPS Spread 2.42 +7.0 basis points

Highest target rate probability for Oct. 28th FOMC meeting: 54.9% (+.5 percentage point) chance of 3.75%-4.0%. Highest target rate probability for Dec. 9th meeting: 41.0%(-.4 percentage point) chance of 3.75%-4.0%. (current target rate is 3.5-3.75%)

Overseas Futures:

Nikkei 225 Futures: Indicating -45 open in Japan
China A50 Futures: Indicating -58 open in China
KOSPI 200 Futures: Indicating +13 open in South Korea

DAX Futures: Indicating -66 open in Germany

Portfolio:

Higher: On gains in my tech/energy sector longs, index hedges and emerging market shorts
Disclosed Trades: None
Market Exposure: 75% net long

Bear Radar

2026-09-08T14:47:48.022-04:00

Style Underperformer:

Mid-Cap Value -.5%

Sector Underperformers:

1) Medical Equipment -3.2% 2) Pharma -2.7% 3) Retail -2.1%

Stocks Falling on Unusual Volume:

SHIP, IONS, SNN, SBLK, ALMS, SHEN, INBX, RPRX, LNG, STZ, BRZE, WAFD, PLSE, EXPE, BIDU, SYK, HWM, AMGN, BEAM, GPCR, NVS, DYN and SGML

Stocks With Unusual Put Option Activity:

1) GT 2) XLV 3) XRT 4) BILI 5) NVS

Stocks With Most Negative News Mentions:

1) AMGN 2) CAN 3) GDDY 4) SYK 5) WAFD

Sector ETFs With Most Negative Money Flow:

1) DRAM 2) XLY 3) IGV 4) KRE 5) XLB

Charts:

Bull Radar

2026-09-08T14:37:23.882-04:00

Style Outperformer:

Small-Cap Growth +.4%

Sector Outperformers:

1) Lithography/Photonics +4.6% 2) Nuclear +4.6% 3) Space +3.8%

Stocks Rising on Unusual Volume:

GMTL, FCEL, ROIV, SEI, SMR, AXTI, CRWV, LITE, EROC, BE, MLYS, SMTC, LPTH, ERO, ALM, REAX, NNE, INTC, RVI, IOND, INFQ, NBIS, COHR, CIFR, AAOI, CHA, BRUN, ABM, ENOV, IREN, NOK, BILI, PHVS, CLS, BRVE, HUT, XE, EVMN, OKLO, QBTS, MARA, AEHR, LIFE, INIO, SHAZ, PGNY, AMBA, HRI, ZIM, TECK, EIX, TH, QVCG, ABVX, PAYP, FRVO, GRDN, QCOM, PBR, ATRC, GPRK, BG, NEXA, PCG, XYL, SSMR, TKO, ARQT, AVAV, TSLA, TRLV and VIST

Stocks With Unusual Call Option Activity:

1) IAG 2) REI 3) ANGX 4) XME 5) PRMW

Stocks With Most Positive News Mentions:

1) SEI 2) BE 3) LITE 4) ROIV 5) BNC

Sector ETFs With Most Positive Money Flow:

1) SMH 2) PAVE 3) XLF 4) MAGS 5) IYF

Charts:

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

2026-09-08T14:19:53.870-04:00

Earnings of Note
Company/Estimate

Before the Open:

(ASO)/2.07
(CHWY)/.18
(JMKE)/.22
(KFY)/1.36
(SIG)/1.74

After the Close:

(AVAV)/.22
(AEO)/.22
(COO)/1.12

Economic Releases

None of note

Upcoming Splits

None of note

Other Potential Market Movers

The 10Y T-Note auction, weekly ADP employment change, weekly US retail sales reports, Thomson Reuters IPSOS PCSI for Sept., weekly MBA Mortgage Applications report, API weekly crude oil stock report, Deutsche Bank Tech Conference, Goldman Sachs Communacopia Conference, JPMorgan Rising Tech Leaders Forum, Citibank TMT Conference, StoneX TMT Forum, B. Riley Consumer/TMT Conference, Barclays Consumer Staples Conference, (NTAP) annual meeting and the Jefferies Industrial Conference could also impact global trading tomorrow.

US Equity Market Hours

9:30 am - 4:00 pm EST