Friday Watch

Night Trading 

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

• Asia Ex-Japan Investment Grade CDS Index 51.50 -1.0 basis point.

• China Sovereign CDS 29.75  -.5 basis point.

• Bloomberg Emerging Markets Currency Index  66.38 -.02%.

• FTSE 100 futures +.26%.

• S&P 500 futures +.05%.

• NASDAQ 100 futures +.07%.

Morning Preview Links

Earnings of Note 

Company/Estimate

Before the Open:

• (FAST)/.31

• (JBHT)/1.53

• (KSU)/1.85

• (RF)/.39

• (SLB)/.37

• (STT)/1.69

After the Close:

• None of note

Economic Releases 

8:30 am EST

• Housing Starts for Dec. is estimated to rise to 1380K versus 1365K in Nov.

• Building Permits for Dec. is estimated to fall to 1469K versus 1482K in Nov.
  

9:15 am EST

• Industrial Production MoM for Dec. is estimated to fall -.2% decline versus a +1.1% gain in Nov.

• Capacity Utilization for Dec. is estimated to fall to 77.0% versus 77.3% in Nov.

• Manufacturing Production for Dec. is estimated to fall -.1% versus a +1.1% gain in Nov.
  

10:00 am EST

• Univ. of Mich. Consumer Sentiment for Jan. is estimated at 99.3 versus 99.3 in Dec. 

• JOLTS Job Openings for Nov. is estimated to fall to 7250 versus 7267 in Oct.
  

Upcoming Splits

• None of note

Other Potential Market Movers

• The Fed's Quarles speaking and the Eurozone CPI report could also impact trading today.

Market Hours

Normal:

• 9:30 am - 4:00 pm EST
  

BOTTOM LINE: Asian indices are mostly higher, boosted by technology and commodity shares in the region. I expect US stocks to open modestly higher and to weakend into the afternoon, finishing mixed. The Portfolio is 100% net long heading into the day.

Stocks Surging into Final Hour on US Economic Data, Earnings Optimism, Oil Gain, Tech/Transport Sector Strength

 Broad Equity Market Tone:

• Advance/Decline Line: Substantially Higher
  

• Sector Performance: Almost Every Sector Rising
  

• Volume: Around Average

• Market Leading Stocks: Outperforming

Equity Investor Angst:

• Volatility(VIX) 12.3 -.6%

• Euro/Yen Carry Return Index 127.27 +.07%

• Emerging Markets Currency Volatility(VXY) 6.18 -2.2%

• S&P 500 Implied Correlation 37.7 +1.4%

• ISE Sentiment Index 95.0 -1
  

• Total Put/Call .64 -14.7%

• NYSE Arms 1.09 -14.2%

Credit Investor Angst:

• North American Investment Grade CDS Index 44.1 -1.27%
  

• America Energy Sector High-Yield CDS Index 548.0 +1.74%

• European Financial Sector CDS Index 52.09 +1.15%

• Italian/German 10Y Yld Spread 165.5 +5.5 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 52.13 -1.27%
  

• Emerging Market CDS Index 177.68 -1.26%
  

• iBoxx Offshore RMB China Corporate High Yield Index 168.95 +.05%

• 2-Year Swap Spread 7.0 -.25 basis point

• TED Spread 29.5 +2.25 basis points

• 3-Month EUR/USD Cross-Currency Basis Swap -3.0 -1.75 basis point

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 66.38 -.14%
• 3-Month T-Bill Yield 1.55% -1.0 basis point

• Yield Curve .23 -1.0 basis point

• China Iron Ore Spot 94.18 USD/Metric Tonne -.33%

• Citi US Economic Surprise Index 4.6 +10.0 points

• Citi Eurozone Economic Surprise Index 40.10 -.4 point

• Citi Emerging Markets Economic Surprise Index -3.0 +.3 basis point

• 10-Year TIPS Spread 1.75 unch.
• .7% chance of Fed rate cut at March 18th meeting, 8.4% chance of cut at April 29th meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating +126 open in Japan 
• China A50 Futures: Indicating +50 open in China

• DAX Futures: Indicating +19 open in Germany

Portfolio:

• Higher: On gains in my tech/industrial/medical/retail sector longs

• Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges

• Market Exposure: Moved to 100% Net Long

Bear Radar

Style Underperformer:

• Large-Cap Growth +.5%

Sector Underperformers:

• 1) Gold & Silver -.4% 2) Drugs unch. 3) Steel unch.

Stocks Falling on Unusual Volume: 

• SDC, WING, BCOR, TWST, DTIL, BK, AAOI and AA

Stocks With Unusual Put Option Activity:

• 1) BK 2) UNIT 3) AA 4) IRBT 5) SPCE

Stocks With Most Negative News Mentions:

• 1) TSLA 2) DDD 3) BYND 4) UBER 5) PPC

Charts:

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

Bull Radar

Style Outperformer:

• Small-Cap Value +1.3%

Sector Outperformers:

• 1) I-Banks +1.9% 2) Airlines +1.6% 3) Disk Drives +1.5%

Stocks Rising on Unusual Volume:

• XPO, NLTX, NVCR, TPTX, CCXI, MS, RUN, YMAB, NTRA, SAVE, PSNL, EGHT, IRDM, BL, MNTA, MRNA, PINS, HOMB, VECO, COHU, CUE, DNLI, XLRN, PI, MC, HSC, AMBC, APPN, AVYA, BLUE, NSTG and EVR

Stocks With Unusual Call Option Activity:

• 1) VER 2) MS 3) EMB 4) TFC 5) CSX

Stocks With Most Positive News Mentions:

• 1) SIG 2) MS 3) SCHW 4) SPLK 5) APTV

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running +11.2% Above 100-Day Average
• 11 Sectors Rising, 0 Sectors Declining
• 69.8% of Issues Advancing, 27.2% Declining
• 231 New 52-Week Highs, 4 New Lows
• 66.7% of Issues Above 200-day Moving Average
• Average 14-Day RSI 51.0%
• Vix 12.2 -1.9%
• Total Put/Call .68 -9.3%
• TRIN/Arms .91 -28.4%

Thursday Watch

Evening Headlines

Bloomberg:        

• China to Hit 2019 Economic Targets as Trade Deal Lifts Outlook.

• U.S. and China Sign Phase One of Trade Deal.

• China’s State TV Gives Trump Live Airtime for Trade Deal Signing. 

• Stocks Mixed in Asia After U.S.-China Trade-Deal. Stocks in Asia were mixed Thursday in wake of the signing of the U.S.-China trade deal, expectations for which had driven global equities to record highs and propelled a recovery in the yuan. Shares in Japan and South Korea were largely flat, while Australian equities were modestly higher. Hong Kong and Shanghai saw a muted open. U.S. futures were little changed after the S&P 500 Index Wednesday notched a fresh record high. Treasuries held gains, with 10-year yields below 1.8%, and West Texas Intermediate hovered around $58 a barrel. Futures on the S&P 500 Index were little changed as of 10:34 a.m. in Tokyo. The underlying gauge rose 0.2% on Wednesday. Japan’s Topix index dipped 0.2%. South Korea’s Kospi index was little changed. Australia’s S&P/ASX 200 Index advanced 0.6%. Shanghai Composite index was flat. Hang Seng index dipped 0.2%.

• Five Things You Need to Know to Start Your Day.

• Smith & Wesson Maker Replaces CEO After Non-Financial Misconduct.  

• TeslaTSLA) Is Once Again the Most Shorted American Stock.

Wall Street Journal:

• U.S., China Sign Agreement Easing Trade Tensions.

• The Best and Worst U.S. Airlines of 2019.

• Can Trump Earn Black Support?

• Pelosi’s Impeachment Offenses.

Fox News:

• Pelosi 'played into' McConnell's hands, 'destroyed' her impeachment case, Turley says.

MarketWatch.com: 

• The Dow just closed above 29,000 for first time in a brisk 40 trading days.

• The ‘best job in America’ for 2020 pays $105,000 a year — and you’ve probably never even heard of it.  

• Millennials prefer White Claw over wine — and it’s shaking up the alcohol industry.

CNBC:

• Here’s what China agreed to buy from the US in the phase one trade deal.

• Facebook(FB) stock is about to ride a big upside move, trader predicts.

• The real warning in Target’s holiday sales: Toys are in trouble.

• Shares of XPO Logistics(XPO) soar 15% after announcing possible spin-offs.

• Twitter(TWTR) CEO Jack Dorsey: ‘I eat seven meals every week, just dinner’.

Zero Hedge:

• Epstein Trafficked Girls As Recently As 2018 - Some As Young As 11, According To Lawsuit By Virgin Islands AG. 

• Northam Declares State Of Emergency In Virginia Because "Armed Militia Groups Plan To Storm The Capitol".

• The Cannabis Industry's Dirty Energy Secret.

• House Delivers Articles Of Impeachment To Senate, 'Trial' To Start Tuesday.

• #CNNIsTrash Trends As Pushback Grows Against Oligarchic Election Meddling.

• 18 Signs That Social Decay In America Is Worse Than It's Ever Been Before.

• "Sell The News"? Stocks, Dollar, & Bond Yields Slide After Signing Trade Deal.

Night Trading 

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

• Asia Ex-Japan Investment Grade CDS Index 52.50 -.5 basis point.

• China Sovereign CDS 30.25  -1.0 basis point.

• Bloomberg Emerging Markets Currency Index  66.50 +.03%.

• FTSE 100 futures -.01%.

• S&P 500 futures +.11%.

• NASDAQ 100 futures +.16%.

Morning Preview Links

Earnings of Note 
Company/Estimate

Before the Open:

• (BK)/1.00

• (SCHW)/.62

• (MS)/1.02

• (PPG)/1.34

• (TSM)/4.12

After the Close:

• (CSX)/.98

• (PRGS)/.75

Economic Releases 
8:30 am EST

• The Philly Fed Business Outlook Index for Jan. is estimated to rise to 3.6 versus .3 in Dec.

• The Import Price Index MoM for Dec. is estimated to rise +.3% versus a +.2% gain in Nov.

• The Export Price Index MoM for Dec. is estimated to rise +.2% versus a +.2% gain in Nov.

• Retail Sales Advance MoM for Dec. is estimated to rise +.3% versus a +.2% gain in Nov.

• Retail Sales Ex Autos MoM for Dec. is estimated to rise +.5% versus a +.1% gain in Nov.

• Retail Sales Ex Autos and Gas for Dec. is estimated to rise +4% versus unch. in Nov.

• Initial Jobless Claims for last week are estimated to rise to 218K versus 214K the prior week.

• Continuing Claims are estimated to fall to 1750K versus 1803K prior.
  

10:00 am EST

• Business Inventories for Nov. is estimated to fall -.2% versus a +.2% gain in Oct.

• The NAHB Housing Market Index for Jan. is estimated to fall to 74 versus 76 in Dec.
  

4:00 pm EST

• Net Long-Term TIC Flows for Nov.
  

Upcoming Splits

• None of note

Other Potential Market Movers

• The Fed's Bowman speaking, BoE Survey, weekly EIA natural gas inventory report, (WING) investor day and the (CMCSA) streaming service investor meeting could also impact trading today.

Market Hours
Normal:

• 9:30 am - 4:00 pm EST
  

BOTTOM LINE: Asian indices are slightly higher, boosted by technology and commodity 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.