8/12/2019 Midday Update 23.10.2013

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1. Another day and another all-time high for the S&P 500. It was pretty remarkable really considering

many of the market's favorite momentum names were under profit-taking pressure, none more so

than Netflix(NFLX), which soared 34 points, or 9.6%, shortly after the start of trading and closed

down 32 points or 9.2%.

2. Still, that doesn't mean the market has to go down. We saw that yesterday as money coming out of

highflyers didn't stop the broader market from rising, most likely on some reallocation trades and thearrival of sidelined cash from investors fearful of missing out on another leg higher.

3. The overt level of bullishness in words (think investor surveys) and deeds (think rising stock prices on

bad news that is good news because it means the Fed is in it for longer) is a near-term concern for

us. If nothing else, the ground is ripe for a consolidation move considering the S&P 500 has soared

6.0% in the last ten sessions alone.

4. Mr. Icahn's profit-taking move and reports that China's largest banks have written off $3.7 bln in bad

debt in the first six months -- nearly three times more than the same period a year ago -- have

garnered most of the blame for the expected weakness at the start of trading.

5. Many markets in Asia were down noticeably, led by Japan's Nikkei, which slipped almost 2.0% with

added pressure applied from a stronger yen.

6. 1743 short

7. 1741 long

8. Also of note, following yesterday's 9.2% plunge in the shares ofNetflix (NFLX 316.00, -6.52), activist

investor Carl Icahn announced that he cut his stake in the company to 4.5% from 9.4% following a

dizzying 457% advance over 14 months.

Quarterly earnings have continued pouring in today. Dow component Boeing (BA 126.55, +4.07)

holds a pre-market gain of 3.3% after beating on earnings and revenue. Another Dow

member, Caterpillar (CAT 84.20, -4.97), is lower by 5.7% after missing top and bottom line

expectations.

9. As expected, equities began the session in the red with energy (-1.0%), materials (-0.5%), and

financials (-0.7%) weighing on the broader market. Meanwhile, all four countercyclical sectors

consumer staples, health care, telecom services, and utilitiesoutperform with losses limited to no

more than 0.4%.

10. The heavily-weighted sector now trades with a loss of 1.4% while no other group sports a loss larger

than 1.0%. Crude oil has also displayed weakness, trading lower by 1.8% at $96.50 per barrel.

11. Commodities have taken a hit this morning on broad market weakness.

12.