At 4:20 p.m.:

Closing Breadth

% Movers

Nasdaq 100 Heat Map

S&P 500 Sectors

NASD Advance-Decline Intraday

I am adding to selective individual shorts late in the day, with concentration in private equity and homebuilders.

I am also super sizing my  (MSOS)  long.

Equities were weighted down by the conflict in the Middle East.

However, as of 3 p.m., the S&P halved its large losses.

Today's "things":

* Added to  (MSOS)  at $7.01,  (CURLF)  $2.97 and  (GTBIF)  $10.28.

* With S&P cash -68 handles I covered all my short Index common and calls on the whoosh lower.

* I first added to  (OXY)  at $51.07 and then reduced OXY common and calls on the oil-influenced spike.

* I took off my  (OIH)  long and reduced  (SLB) ,  (XOM)  and  (CVX)  for nice short-term gains.

* Traded around private equity and homebuilder shorts.

Wolf Street howls about a changing labor market.

An impressive rally off of the lows.

I am preparing to re-short...

From Peter Boockvar:

US manufacturing remains in a recession/Job openings lift but...

The September ISM manufacturing index remained in contraction at 47.2, unchanged with August and .3 pts below the estimate. New orders and backlogs remained well below 50 and inventories fell by 6.4 pts to 43.9 after jumping by 5.8 pts in August. Customer inventories were exactly at 50 vs 48.4 in August. Export orders fell by 3.3 pts to 45.3 and is below 50 for a 4th straight month. The employment component was down by 2.1 pts to 43.9, well below 50 and the 2nd lowest read since the summer of 2020. Supplier deliveries were above 50 for a 3rd month (implying slowing delivery times), ahead of the port strikes. The prices paid index though did dip below 50 at 48.3, down from 54 in August. That’s the lowest since December.

With respect to industry breadth, only 5 industries saw growth, the same number seen in August while 13 were in contraction vs 12 in the month before.

Bottom line, US manufacturing, along with most of the rest of the world outside of India and a few others, remains in a recession.

Here were some comments on specific components:

On new orders, “Panelists noted a continued level of uncertainty and concern about a lack of new order activity and their confidence in the future economic environment remains at its lowest levels since the coronavirus pandemic recovery.” Just 2 of 18 industries saw a lift in new orders. 11 saw a decline.

On employment, “Respondents’ companies are continuing to reduce head counts through layoffs, attrition and hiring freezes.” Just 2 of 18 industries saw an increase in employment growth. 11 saw a decrease.

On prices, “Commodity prices were less volatile, with (1) petroleum-derived products showing weakness, (2) aluminum indicating slowing growth, (3) corrugate and ocean freight continuing growth and (4) steel and steel products prices easing. Thirteen percent of companies reported higher prices in September, compared to 21 percent in August.” 7 industries saw a rise, while 6 said prices fell.

On exports, they “remain sluggish as international trading partners continue to struggle with weak economies.”

Industry wise, chemicals is always a go to since its products go into mostly everything that is manufactured.

To this, “North America demand has started to weaken. Asian demand is slightly higher but shows signs of weakness in future months. Comments tied to automotive builds.” [Chemical Products]

The slower demand for EVs has been a government induced industrial policy mess.

To this, “Global demand continues to remain soft. Fourth-quarter forecasts have been further reduced, with several new programs shifted from 2024 to 2025. Manpower, working capital and supplies are being flexed down in response. The previously anticipated shift from internal combustion engine to electric vehicle (EV) technology has been pushed out due to market response. Long-range plans are being adjusted to incorporate traditional products for longer, while new EV product offerings are being planned for slower rollouts.” [Transportation Equipment]

Elsewhere:

“A continuing low order rate is resulting in ongoing manufacturing adjustments to balance output with demand.” [Machinery]

“The fourth quarter is slower than anticipated. We won’t realize the effect of interest rate adjustments with new project starts until the first quarter of 2025.” [Fabricated Metal Products]

“Business is flat. Waiting for interest rates to drop and the election outcome in November before we confirm our 2025 plans. Currently planning on a flat 2025.” [Furniture & Related Products]

“Our sales continue to be flat. Our customers are telling us that although our products perform very well, they are forced to seek lower-cost components to maintain their sales.” [Textile Mills]

“The strategy of customer push-outs last year enabled those customers to adapt to the market. Now, while most companies are seeing a slowdown, we are seeing solid growth. The general slowdown in the economy is allowing for prices to continue to stabilize.” [Computer & Electronic Products]

Job openings in August bounced back above 8mm at 8.04mm vs 7.71 in July. A bounce in the need for construction workers was the main reason for the lift. The government induced need for them is the likely main reason as it’s not from other areas of commercial real estate.

Of particular note though, the hiring rate fell back to 3.3% and that matches the lowest since October 2013 not including Covid. The quit rate dropped to 1.9% from 2% in the two prior months. That is the lowest since 2015 not including Covid.

Job Openings

Hiring Rate

Quit Rate

robbo

respectfully, Dougie, I thought your OXY position was an investment, not a trading long. Even if selling a small amount on the spike, is this not a tad contrary to an investment. Why not just sell a few calls, and retain your long term position? Just asking. You know I love your stuff.

Dougie Kass

i am always in doubt and often wrong

unlike the fools on fin tv right now

i make mistakes, i reentered oxy too high after 7-8 successful trades in the stock (i had always called it and commodities stocks trading sardines)

i said oxy was not a trade at this time and at this price because i thought there was a buffett put

thus far there has been no buffett put

perhaps tonite in a filing

perhaps not for a while.

stay tuned.

Added to  (MSOS)  at $7.04,  (CURLF)  $2.97 and  (GTBIF)  $10.28.

Occidental Petroleum  (OXY)  has traded +$3/share from Friday's lows.

Yesterday I observed the unusual volume in the shares and speculated that Berkshire  (BRK.A)  BRK.B might be filing tonite:

Dusty Springfield Meets The Beach Boys

* "Wishin' And Hopin'"

* "Wouldn't It Be Nice?"

* If Berkshire was the buyer of Occidental today...

Wishin' and hopin' and thinkin' and prayin'
Plannin' and dreamin' each night of his charms
That won't get you into his arms
So if you're lookin' to find love you can share
All you gotta do is hold him, and kiss him and love him
And show him that you care

- Dusty Springfield, Just Wishin' and Hopin'

Between 11 a.m. and 11:30 a.m. Occidental Petroleum (OXY) traded a large amount of volume (over 5 million shares), taking the shares from about $52 to $50.65. See below!

Wouldn't it be nice if the buyer was Berkshire Hathaway (BRK.A) (BRK.B) ?

Wouldn't it be nice if we were older?
Then we wouldn't have to wait so long
And wouldn't it be nice to live together
In the kind of world where we belong?

You know it's gonna make it that much better
When we can say goodnight and stay together

- The Beach Boys, Wouldn't It Be Nice Wouldn't It Be Nice (Remastered 1999) (youtube.com)

Position: Long OXY common (L) and calls (L)

By Doug Kass Sep 30, 2024 2:15 PM EDT

                                                       ***

That said, as discretion is the better part of valor, I have just taken down my outsized OXY position at $53.30 (+$1.75 today) in order to take advantage of the crude oil inspired run today.

rolf

Dougie always chickens out on index short early -:) I am sure he is making more money than I shorting indexes but I am keeping mine on. This Iran thing will get worse before it gets better IMHO.

Dougie Kass

shorts are trading sardines not eating sardines

• New York Stock Exchange volume is 6% above its one-month average;

• Nasdaq volume is 17% above its one-month average

• Volatility Index is up 14.41% to 19.24

I am taking off half of my positions in  (SLB) ,  (CVX)  and  (XOM) .

And I am eliminating my  (OIH)  long for a nice profit as well.

With S&P cash -68 handles I have taken all of my Index shorts (common and short calls).

I plan to re-short on a rally.

I now have no Index positions.

* Goes to Randorama

Pete Rose's career batting average against Sandy Koufax was .175.

Video Ad (youtube.com)

Crude ripping on growing Mideast tensions and talk that Iran is planning an attack on Israel.

The price of crude was -$1.60 around 5 AM and now is +$1.00.

I thought the late-day rally was artificial and influenced heavily (to the upside) by the JPMorgan Collar Trade and by the month-end markups.

Here is what I wrote about the near term market outlook very early this morning in "An Overbought and Greedy Market" at TheStreet Pro.

Upside:

-SGMT +16% (receives FDA Breakthrough Therapy Designation for Denifanstat in MASH)

-ARCO +11% (exercises renewal option for 20-year Master Franchise Agreement with McDonald’s, effective Jan 1st 2025)

-IVDA +9.0% (launches IvedaESS, a portable, plug-and-play security solution that enables users to tap into the power of IvedaAI from anywhere)

-UNFI +7.0% (earnings, guidance)

-VRAR +6.8% (earnings)

-DJT +6.4% (expands TV Streaming Delivery Network to Multi-site Operation)

-AISP +5.7% (announces $4M Contract Award within the Department of Homeland Security for Full Suite of Airship AI Software, Hardware and Integrated Technical Solutions)

-TRAK +5.6% (earnings)

-HSAI +4.7% (Hesai and SAIC Volkswagen Sign New Partnership on Automotive Lidar Program)

-PINS +4.6% (Goldman Sachs Adds PINS to Conviction Buy List; Removes Buy rated AMZN, and GWRE)

-ZK +4.0% (reports Sept deliveries)

-NIO +3.8% (reports Sept deliveries)

-VXRT +3.5% (initiates Sentinel Cohort for Phase 2b Study evaluating COVID-19 Oral Pill Vaccine Candidate)

-LI +3.0% (reports Sept deliveries)

-TEAM +2.6% (Raymond James Raised TEAM to Outperform from Market Perform, price target: $200)

-PAYX +2.5% (earnings, guidance)

-XPEV +2.5% (reports Sept deliveries)

-CVS +2.3% (reportedly working with financial advisors to explore options including a potential breakup)

-F +2.2% (Goldman raised to Buy from Neutral, price target $13)

-MKC +2.1% (earnings, guidance)

-AYI +2.0% (earnings, guidance)

Downside:

-STTK -59% (further development of SL-172154 discontinued with restructuring expected to extend cash runway into 2027)

-IGMS -25% (to focus exclusively on Autoimmunity under leadership of newly appointed CEO Mary Beth Harler, M.D.)

-ARQQ -18% (announces $13.6M registered direct offering for sale and purchase of 5.4M ordinary shares)

-PMTS -17% (prices 1.2M shares by selling holders at $21.00/shr)

-GRTS -16% (announces Interim Phase 2 Data for GRANITE Individualized Neoantigen Targeting Immunotherapy in Frontline Metastatic Microsatellite Stable Colorectal Cancer)

-ZIM -5.1% (Dockworkers at all US East Coast and Gulf of Mexico ports started their first International Longshoremen's Association (ILA) strike since 1977)

-PNTG -4.8% (files to sell 3.5M common share public offering)

Charts from 8:24 a.m. ET:

Hedgeye's David Salem on Bloomberg's Market Surveillance with Sir Thomas Keene ... now.

Must listen radio.

David is brilliant.

Chart from 8:43 a.m.:

From Peter Boockvar:

Never a boring day

Pete Rose should be in the Hall of Fame, even with his rule breaking on bets as he paid his reputational price years ago, and it should have happened while he was alive. He's the most consequential hitter in the history of the game. 

With about a $3.8-$4.5b daily cost of the strike according to a JP Morgan estimate I've seen, the big question is how much of this is lost forever in terms of lost sales of the stuff coming in and out of the 14 ports on strike or can it be recaptured, however much delayed. Of course right before the holidays, every lost day can move closer to being a lost or heavily discounted sale. Lori Ann LaRocco at CNBC in a piece yesterday had a good stat that "On average, it takes one week to clear out one day of a port closure." And, "As much as 43% to 49% of total containerized goods entering the US are processed through ports on the East Coast and Gulf Coast." https://www.nbcnews.com/business/business-news/ports-strike-imminent-east-coast-gulf-truckers-rails-are-scrambling-rcna173233

After yesterday's Jay Powell induced lift in Treasury yields, they are falling back down, following a drop in European rates and maybe in response to the strikes and the worst possible time to have them in terms of clogging up economic activity across many supply chains. If something is going to put a bottom though in goods price inflation, it is this strike being long lasting and Chinese officials successfully putting a floor under their economy.

Also, having an impact on European bond yields, the September Eurozone CPI was as expected but reflected further deceleration with headline inflation slowing to 1.8% y/o/y vs 2.2% in August. The slowdown is being led by lower energy prices as the prices for food/alcohol/tobacco has been consistently rising by around 2.4-2.5% y/o/y. The core rate, while still elevated because of higher services, was up by 2.7% y/o/y vs 2.8% in the month before. Services inflation specifically remains persistent, higher by 4% y/o/y vs 4.1% in August and 4% in July. The Eurozone 5 yr 5 yr euro inflation swap is unchanged in response at 2.09%. While off its high of 2.67% in 2023, it was at 1.35% in January 2020. 

Rather than waiting to see if the slowdown in headline inflation is sustainable, and in the face of continued services inflation, the ECB seems to want to keep cutting rates as Governing Council member Oli Rehn said today, "We have received further confirmation from recent statistical data that inflation is slowing down. This means, at least in my eyes, that there have been more grounds for lowering rates at our October meeting. The recent weakening of the euro area's growth prospects tilts the scales in the same direction." The euro is lower too in response. 

Euro 5 yr 5 yr Inflation Swap

Eurozone Core CPI y/o/y

Here were the September manufacturing PMI's seen in Asia and they mostly fell m/o/m:

Taiwan 50.8 vs 51.5

Vietnam 47.3 vs 52.4

Thailand 50.4 vs 52

Indonesia 49.2 vs 48.9

Malaysia 49.5 vs 49.7

Philippines 53.7 vs 51.2

Specifically with Taiwan, S&P Global said "Amid reports of a growing hesitancy amongst clients, reflecting in part geopolitical and macroeconomic uncertainties, sales rose to a softer degree and firms began to take a more circumspect approach to decision making. Indeed, with confidence in the outlook sinking to its lowest in nearly a year, manufacturers were keen to limit expenses and focus on productivity improvements, meaning that job cuts were seen in the sector for the first time in three months."

The PMI's out of the Eurozone, UK, Japan, Australia and India were just revisions to a prior print and only very slightly revised if at all.

Talking Macau again, ahead of Golden Week where many hotels are fully booked, September casino revenues rose 15.5% y/o/y, above the estimate of up 14.2% and the stocks rallied again overnight. The Chinese love to gamble.

Japan reported its quarterly Tankan report for Q3 and it was little changed with Q2. The large manufacturing index was 13, unchanged q/o/q while the services index rose 1 pt. Small businesses, both in manufacturing and services, saw a slight q/o/q rise. Capital spending plans were up 10.6% vs 11.1% in the quarter before and below the estimate of 11.9%. Nothing market moving here.

They also reported August labor market data and their unemployment rate fell to 2.5% from 2.7% but the job to applicant ratio slipped to 1.23 from 1.24. The Nikkei rallied by 2% with the yen down slightly and JGB yields a touch lower.

From Carnival, and reflecting still a bright spot in the economy:

"Our third quarter by all accounts was phenomenal, breaking multiple records and outperforming on every measure. Revenues hit an all time high of almost $8 billion, $1 billion more than last year's record levels."

"Looking forward, the momentum continues as we actively manage the demand curve. At this point in time, 2025 is at a historical highs on both occupancy and price. All core deployments are at higher prices than the prior year. Every brand in the portfolio is well booked at higher prices in 2025."

Also, "While early days, the benefit of our enhanced commercial performance is carrying nicely into 2026, as we just achieved record booking volumes in the last three months for sailing that far out."

Lastly, "onboard spending levels were not only up strong again this quarter, our y/o/y improvement in onboard per diems actually accelerated from the prior quarter."

We'll see to what extent the Fed cutting short term interest rates will clip the interest income of many savers and retirees and how that might impact their spending. On a $1mm of savings, that $50,000 of pre tax income that becomes $40,000 or even $30,000 if the market is right about Fed rate cuts could be a cruise trip that doesn't take place.

From Shadd Dales of The Dales Report (on cannabis):

According to a leaked dossier, JD Vance's negative stance on cannabis policy has been identified as a potential "vulnerability" during his evaluation for the Vice Presidential spot. This isn't entirely surprising; our firsthand discussions with him reveal that while he's not an outright prohibitionist, he opposes broader cannabis reform. With both Vice Presidential candidates in tonight's debate hailing from states with legalized adult-use cannabis, there's a strong possibility that cannabis policy could surface as a topic on the national stage.

But don’t hold your breath.

* One for Sarge...

What was the great Pete Rose's batting average against Cousin Sandy Koufax lifetime?

Winner gets a signed book but you are not allowed to Google the answer!

Please answer in the Comments Section! 

· Powell: Economy `Solid,' Intend To Use Tools To Keep It There

· Powell: Don't Need Further Job Mkt Cooling To Get 2% Inflation

· Powell: Revisions To Incomes Remove Downside Risk To Consumer

· Powell: There's Nothing Suggesting Downturn Is More Likely Now

· Powell: Higher Unemployment Projections Reflect Less Job Growth

· Powell: If Economy As Expected, Sep Shows Two More 25 Bps Cuts

· Bostic: Says He Will Be Watching Upcoming Jobs Data Closely; If Employment Growth Slows Much Below 100,000 Jobs, It Would Warrant Closer Questioning Of What Is Happening

· Bostic: Says Open To 50 bps Rate Cut If Labor Is Weak

· Bostic: Baseline Case Is For An 'Orderly' Easing With Inflation Expected To Continue Slowing And Job Market To Hold Up

· Bowman: Core Inflation Still 'Uncomfortably Above' 2% Target

· Goolsbee: Job Market At Steady State, Close To Full Employment

· Goolsbee: Cautionary Indicators In Job Mkt, Can't Wait To React

· Goolsbee Says Would Be Worried If Dockworker Strike Drags On

· Goolsbee: Rate-Cutting Process To Take Over A Year Or More

This is a valuable table for momentum-based short-term traders:

From JPMorgan:

US: Futs are off a touch as we enter Q4, with NDX leading and RTY lagging, a familiar pattern from 24H1. YTD, SPX is +20.8%, NDX +19.2%, and RTY +10.0%. Pre-mkt, Mag7 names are mixed with Semis holding a slight bid. Bond yields are lower as the yield curve bull steepens, and USD is higher. Cmdtys are mixed with Ags/Energy under pressure and Precious Metals are leading Base. Today’s macro data focus is on ISM-Mfg, JOLTS, Construction Spending, and Vehicle Sales. There are 5x Fedspeakers today. The East Coast/Gulf port strikes launched today with economic costs estimated to be up to $5bn/day; hurricane recovery continues in the Southeast.

and...

EQUITY AND MACRO NARRATIVE: There are not too many incremental changes to the macro narrative from Fedspeak and with the next FOMC meeting coming during Election Week, expect some more bond volatility as investors focus on the path of monetary policy. As we kick off Q4, it is consensus for the rally to continue albeit with some Election-induced choppiness. What is less clear is sector performance and whether Tech/Mag7/AI can resume the outperformance witnessed in 24H1. Answers to sector leadership may begin to form next week when earnings kick off.

* As the company prepares for a share offering as much as $10 billion...

Over the last two months I have fielded a number of questions regarding "bottom fishing" and buying Boeing  (BA) .

I repeatedly responded that buying (at the then prices) was sub-optimal and one should at least wait for a large offering of shares to refurbish Boeing's balance sheet.

This morning, in the premarket, BA's shares are -$4 based on Bloomberg sources that the company is about to undertake a possible share offering.

I am now getting interested.

Kamala Harris Says 'We Need To Legalize' Marijuana For First Time As Democratic Presidential Nominee - Marijuana Moment

"If you understand the major trend in the market, then everything will fall into place."

- Ralph Acampora

Bonus — Here are some great links:

The Bulls Take September

Weekly Market Strategy 

Copper Joins the Volatility Club

From "Jazzy" Jeff Hirsch

I added to  (OXY)  at $51.07.

* As Chair Powell downgrades a more aggressive easing of monetary policy (that was an incorrect and growing consensus)...

The Short Range S&P Oscillator continues in overbought — at 3.41% vs. 4.26%.

And greed prevails:

I am growing more negative on the near-term prospects for the U.S. stock market.

Stay tuned.