As I mentioned to an investor last night, I feel that I am getting the ability of buying great companies at good prices.

Stock prices are not low enough for me to say that I am getting the ability of buying great companies at great prices -- at least not yet!

But I have been buying equities into the weakness of the last two months, and I will start tomorrow morning's diary with a warning.

Thanks for reading my diary today.

Enjoy your evening.

Be safe.

Really great day for those that were on the field.

Congrats to all!

PINS (PINS)  is getting jiggy.

Do you your own primary research on the Apple (AAPL) demand issue!

Here you go: All you have to do is put in any zip code into this real time Apple Store inventory checker. iphonechecker.herokuapp.com/q/10153/i14Pro/att

Bottom line: It's hard to get an iPhone 14 Pro.

I am out of all my short (SPY) puts and calls now.

Mid-morning musings from Sir Arthur Cashin:

As I just told Carl Quintanilla and Morgan Brennan on CNBC's Squawk on the Street, the market remains clearly bipolar. The internal technicals are screaming for a bear market rally - one of those 5 or 6% multiday moves, but, conversely, geopolitics and headlines have not cooperated.

We started both Monday and Tuesday strongly and then faded, but avoided the trapdoor freefall later in the day. As I told Carl, I will be carefully watching what happens after the European markets close at 11:30. It is very clear that the surprise action by the Bank of England this morning, in basically reversing stance and buying the long bond has slashed yields everywhere, importantly, including our ten-year and that has been basis for a good part of this morning's reversal.

So, we will see what happens after 11:30 when the bond boys might not be able to work any arbitrage with Europe and see where we pick up from there.

The bulls are happy that the VIX is staying up above 30.

Arthur

We made some good new buys yesterday - (TLT) , (HLT) , (DAL) and (UAL) .

Lets hope these gains hold today - as there are many more hours in the trading session!

Evercore questions the Bloomberg report on Apple (AAPL) . Was it "fake news?":

An Evercore ISI analyst is noting that Bloomberg report that Apple has told suppliers to pull back on efforts to increase iPhone 14 production by as many as 6 million units, but he wonders if this is "fake news" and would "always take supply chain articles" regarding Apple "with a grain of salt."

He thinks units are stable, but that the mix is skewing toward the higher end, and suspects that Apple is trying to shift its production mix toward the higher-end Pro and Pro Max models where demand is stronger.

He sticks with his call for second half upside for Apple due to a lift in average selling prices, not units, and keeps an "Outperform" rating and $190 price target on the shares.

Market rallies are often borne out of bad news (March 2009, December 2018 and April 2020) -- especially out of crises conditions.

(Improving) breadth, biggest movers and heat map at 1011 a.m.:

Breadth

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Movers

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Heat Map

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I added to (SPY) at $363.40.

Talking out loud, will the perceived weakness at Apple (AAPL) result in monies moving out of the name and into depressed tech (read: (META) , (AMZN) , (MSFT) and (GOOGL) )?

I took my bank stock positions close to the highest weighting of the year on this morning's whoosh lower.

I have two research calls between 3:00 and 4:30 this afternoon.

Radio silence during that timeframe.

We are seeing short covering in the short end of the US treasury market... 2 years and 3 years are better by 15+ 10 years are rallying through 3.875...

UK LONG GILTS BETTER BY ALMOST 100 BASIS POINTS FROM 30-50 YEARS... BOE HAD TO STEP IN TO HELP THE PENSION FUNDS AND MARGIN CALLS...

Capitulation in bonds? Sounding like it... Again short base is Maximum short... We will see what happens...

From our morning calls... Muni Trader saw 39% increase in trading...sounded like capitulation to him.... Corporate trader saw margin call selling, volumes soared in the secondary market

Though there is a lot of panic and general lack of understanding of policy and market gyrations, we may be closer to a market bottom than many expect.

I also suspect we are closer to the end of the Fed's tightening today than we were a few days ago.

And closer to a peak in US bond yields.

This should be bullish (the hardest trade?) for equities (market rallies/inflection points are often borne out of bad news).

I am trading/investing dispassionately in an increasingly complex investment mosaic.

Most, with more conservative risk profiles, will do well buying short-dated Treasuries (TATA).

Upside:
- (AMV) +241% (momentum following IPO)
- (ABOS) +85% (strength off BIIB LECANEMAB Phase 3 results)
- (PRTA) +63% (strength off BIIB LECANEMAB Phase 3 results)
- (BIIB) +48% (reports LECANEMAB Phase 3 confirmatory clarity ad results meeting primary endpoints; aiming to file for US approval of drug and for marketing authorization applications in Japan and Europe by March31, 2023)
- (NNOX) +21% (submits 510k premarket notification to FDA as part of application for Nanox.ARC)
- (TCRR) +9.5% (Gavo-cel continues to demonstrate clinical benefit in solid tumors with additional RECIST responses in ovarian cancer and mesothelioma)
- (OCGN) +9.3% (enters agreement with Washington University in St. Louis for commercialization of intranasal Covid-19 vaccine in US, Europe and Japan)
- (LLY) +7.5% (strength off BIIB LECANEMAB Phase 3 results)
- (AYTU) +5.3% (earnings)
- (THO) +1.8% (earnings, guidance)Downside:
- (MNMD) -39% (prices 7.1 million shares at $4.25/share)
- (IBIO) -35% (earnings)
- (PHAS) -34% (SFJ elects to cause the company's business related to bentracimab to be transferred to SFJ as a result of the company's failure to remedy its Going Concern Condition)
- (GMDA) -21% (prices 12.9 million shares at $1.55/share; enters into Commitment Letter with Highbridge for $25 million financing)
- (CGNT) -11% (earnings)
- (IPW) -7.0% (earnings)
- (DB) -5.6% (US regulators expected to announce settlement with Wall Street firms for failure to monitor employees using unauthorized messaging apps)
- (PATH) -4.5% (provides financial targets ahead of Investor Day)
- (AAPL) -3.9% (said to have given up plans on increased new iPhone production this year)
- (BB) -3.7% (earnings)
- (LYFT) -2.9% (reportedly halts all US hiring through end of the year amid stock slump and economic concerns)

The Bank of England is now distributing some of the details of its gilt purchase program -- this has stabilized equity futures and US fixed income.

US bond yields just took a quick move to the downside in the last 15 minutes -- no news but one has to wonder if something may come out...

The yield on the US 10-year note is now -5 basis points to 3.917% (it cleared 4% earlier this mornng) and the two-year US note yield is -13 basis points lower on the day.

I purchased iShares 20+ Year Treasury Bond ETF (TLT) late in the day on Tuesday.

My pal Peter Boockvar, chief investment officer with Bleakley Advisory Group, chimes in on what I wrote earlier about central bank mistakes (and the subject of the morning): 

We're witnessing the further unraveling of the grand experiment of central banks over the past 15 years, originally championed and led by Ben Bernanke. The accidents continue to pile up in its reversal and in response, they can never really leave. In the BoE press release today, "In line with its financial stability objective, the Bank of England stands ready to restore market functioning and reduce any risks from contagion to credit conditions for UK households and businesses. To achieve this, the Bank will carry out temporary purchases of long dated UK government bonds from September 28th. The purpose of these purchases will be to restore orderly market conditions. The purchases will be carried out on whatever scale is necessary to effect this outcome. The operation will be fully indemnified by HM Treasury."

Now to avoid the look that the BoE is now conducting a new form of QE, so soon after they ended it and right before they planned on QT via outright sales, they emphasized that "These purchases will be strictly time limited. They are intended to tackle a specific problem in the long dated government bond market...The purchases will be unwound in a smooth and orderly fashion once risks to market functioning are judged to have subsided."

With respect to their planned gilt sales, the BoE said it "has postponed the beginning of gilt sale operations that were due to commence next week. The first gilt sale operations will take place on October 31st and proceed thereafter." Me: how in the heck are they going to shift from trying to calm markets today via bond buying to selling gilts one month from now?

So, after they ended QE they'll sprinkle in a little QE right before QT all on top of the rate hikes. Welcome to the Hotel California.

Now it's easy to think that this is a UK specific event but be sure that this is coming to a US Fed theater near you if this volatility and violence of bond moves continues. I seen now NO chance the Fed gets far with QT, let alone much more with rate hikes.

The pound is selling off on the bond buying plan and on the heels of worries about the Truss tax cuts but it's not like the US is any more prudent with its budget, especially with the $400b cost of student loan forgiveness without the approval of Congress. And when the IMF criticizes the Truss tax plan, it tells me she's on to something that will be long term good for the competitiveness of the UK economy. The UK debt to GDP ratio is about 75%. It is 125% for the US. The market and commentary response to the Truss budget is WAY overdone I believe. The US 10 yr yield did kiss 4% just before the news and has now backed off to 3.93%.

Here are the intraday move in 2 yr and 10 yr gilt yields:

2 yr yield

10 yr yield

While the S&P 500 is testing its June lows, the lowest rung of high yield has seen its credit spreads blow out above its July highs. The Bloomberg CCC credit spread index is now at 1150 bps vs 1100 then. That's the highest since July 2020. It's wider by 100 bps in the past two weeks.

CCC Credit Spread

Positively, Apartment List.com yesterday released its October National Rent Report and it showed a .2% m/o/m drop in rents in September, "marking the first time this year that the national median rent has declined m/o/m. The timing of this slight dip in rents is consistent with a seasonal trend that was typical in pre-pandemic years. Assuming that trend continues, it is likely that rents will continue falling in the coming months as we enter the winter slow season for the rental market."

Now be sure, rent growth is still historically heady as they are still up 7.5% y/o/y but that is well down from the 18% pace seen in the beginning of the year. Apartment List went on to say, "This cooldown in rent growth is being mirrored by continued easing on the supply side of the market. Our vacancy index now stands at 5.2%, after nearly a year of gradual increases from a low of 4.1% last fall. That said, today's vacancy rate remains well below the pre-pandemic norm, and spiking mortgage rates that continue sidelining first time homebuyers could contribute additional tightness to the rental market." They also said that the slowdown in rent growth "has been geographically widespread."

As for what this means for the Fed, unfortunately they are conducting policy looking at the backward looking BLS calculations of rent in CPI and PCE. So the rental market is now driving down one side of the street and the Fed and its analysis is driving right by them down the other side of the same street.

With a further rise in the average 30 yr mortgage rate to 6.52%, refi's fell 10.9% w/o/w and are down by 84% y/o/y. Purchases held in, down just .4% w/o/w but still weaker by 29% y/o/y. No need for added color here.

The Bank of Thailand joins the parade of rate hikes, but they are going slow with its 25 bps move to 1% as expected.

Consumer confidence in Germany and France weakened further as it did in Italy. We should not be surprised but just confirms the tough spot they are in.

* Because of serial mistakes in policy...

Equipped with 400 Ph.Ds, errant US monetary policy and its contagious ramifications over the last few years have contributed to market volatility and economic instability. Poorly timed fiscal largesse added fuel to the inflation fire.

Basically a wrong-footed Federal Reserve had implemented an ex-ante strategy/policy looking forward based on deeply flawed forecasts. After being wrong for several years while fiscal largesse continued unabated, it has now front-ended monetary policy on an ex-post basis looking backward based on results/history.

Powell and Yellen should be fired.

The moves by the Fed and Treasury over the last few years have complicated the outlook for our capital markets, as in a world that is flat and interconnected the tables have turned quickly and have contributed to a response of a series of ill-aligned policies outside the sphere of the US central bankers.

In order to respond to market instability, the Bank of England here on Wednesday morning blinked by carrying out a temporary purchase of long-dated UK bond. As such, it has tied itself into knots, producing a conflicted set of policy decisions that this morning delivered a dramatic decline in its bond yields but with having a negative (-1%) impact on its currency.

These developments hurt confidence, raise volatility and increase the range of economic and market outcomes, some of which are adverse.

This is a good resource for short-term traders:

View Chart »View in New Window »

* The Apple news produced/contributed to another risk off evening -- with a decline in stock futures taking markets to a new 2022 low and back to November 2020 levels.

* Six consecutive losses in the S&P looks to become seven today.

* The unprecedented instability of currencies and interest rates continue to underscore the likely end of the salad days of easy financial conditions and hold the key to the prospective course of global equity markets during the near term.

* Overnight, we continued to experience weakness in non-U.S. currencies (especially the Eurodollar) and rapidly rising worldwide bond yields -- the byproduct of ill-timed (2021-22) and now hawkish monetary policy (and what appear to be related reverse currency wars) -- are moving multiple standard deviations from the mean.

* Investor sentiment remains sour. Previous bullish strategists (Goldman and others) are now confidently bearish, bulls are now talking about limited downside (and not so much about the upside), put buying set a record on Friday, AAII Bears are at March 2009 levels and last night the S&P oscillator dropped dramatically to -12.64% (from prior day -13.81%) and about -2.50% for most of the previous week. This is still a deep oversold reading -- but sentiment is not a good timing tool.

* Goodbye TINA, hello TATA ("Treasuries Are The Alternative"): I believe the bond rout continues to create an opportunity in both fixed income and, in the fullness of times, in equities. Depending on one's risk profile, short-dated Treasuries are a reasonable place to be.

* The yield on the U.S. 2-Year Note is lower by seven basis points overnight after having advanced for 14 consecutive sessions. But the yield on the 10-Year is +4.8 bps -- the yield is now at 4.01%.

* While market inflation data has noticeably moderated (softening labor and commodities) in recent months. This morning soft commodities and energy product prices are mixed to lower -- but, for now the market is not focused on these factors.

"Workin' on our night moves
Trying to lose the awkward teenage blues
Workin' on our night moves
In the summertime
And oh the wonder
Felt the lightning
And we waited on the thunder
Waited on the thunder." The market (and money) never sleeps -- and neither do I, it appears!

- Bob Seger, "Night Moves"

I described the importance that overnight futures trading holds for me here. It is a guidepost to my strategy in the regular trading session.

Moreover, the overnight/early morning futures hold opportunities as they are (1) inefficient, though liquid, and (2) it seems fear and greed is often exaggerated outside the regular trading session.

Brent oil is unchanged at $78.45.

S&P futures were stable early in the evening session but a combination of a strengthening U.S. dollar, rising global interest rates and the Apple news reversed futures lower before the end of the Yankees game.

Going forward, during these volatile markets, I will now keep a bead on volatility (as well as currency rates). This morning VIX is +2 to $34.60.

Gold, which collapsed last week and early this week, rallied (weakly) yesterday but is down again, -$10.30. I still can't work it up to buy precious metals.

Bond yields continue to represent the greatest risk to equities, and with rates spiraling ahead equities grow harder to value. Bond yields (the equity market's nemesis) are likely responsible for a portion of the market's drubbing recently, and are ever higher.

The S&P oscillator gapped higher (more negative) last Wednesday (finally breaking out of a range) and Friday's close moved it to an even more oversold level -- at -10.66%. This morning the oscillator is at a huge oversold at -13.81%. The oscillator has been a good short-term trading tool over the last few months! While I am still at only 20% net long, the oversold and other factors have me leaning to add -- but I was demonstrably slow in doing that over the last two days given the unprecedented currency and rate movement. This may change soon if the rate rise abates!

Cryptocurrencies continue to break down.

S&P futures peaked at +15 and bottomed at -47. At 5:53 a.m. ET futures were -40 handles.

Nasdaq futures peaked at +72 and bottomed at -199. At 5:55 a.m. ET futures were -170 handles.

Here is a synopsis to some of my columns I believe were important, or in the event you were out yesterday. The principal intent is to review the logic of my market moves and other factors:

As Bonds Go, So Do Equities.

Here were Tuesday's trades (I was a relatively active buyer):

* Sep 27, 2022 ' 10:25 AM EDT DOUG KASS

More Tech Trades

I've added to Meta (META) , Amazon (AMZN) and Alphabet (GOOGL) on the pullback.

* Added to banks, (SPY) and Treasuries.

Important: