Wednesday Watch

Evening Headlines

Bloomberg: 

• Alternative Data Show Europe Slowing, U.S. Gaining.  
• U.S. Says It Has Evidence of Forced Labor in Chinese Sweetener.
• ECB’s Lagarde Says Virus Resurgence Is a Clear Risk to Economy.
• Apartment Rents Are Plunging in the World's Richest Cities. It's Time For You to Negotiate.
• U.S. Futures Push Higher Amid Stimulus Talks: Markets Wrap. Asian stocks rose and U.S. futures extended overnight gains amid optimism about progress on stimulus talks in Washington. The dollar dipped. Shares climbed in Japan, Australia and South Korea. S&P 500 contracts edged higher after House Speaker Nancy Pelosi said she remains hopeful of a deal before the election. The gauge bounced back from Monday’s selloff on Tuesday. Tech shares mostly shook off the U.S. Justice Department’s decision to sue Google for allegedly abusing its power. Netflix Inc. plunged in late trading after it added fewer subscribers than predicted in the third quarter and issued a forecast that missed Wall Street estimates. Elsewhere, Treasuries continued to retreat, with the 10-year yield rising toward 0.8%. Oil slipped.  S&P 500 futures rose 0.4% as of 9:02 a.m. in Tokyo. The S&P 500 Index gained 0.5%. Topix index rose 0.5%. Australia’s S&P/ASX 200 Index rose 0.2%. South Korea’s Kospi index rose 0.4%. Hong Kong’s Hang Seng Index futures rose 0.2% earlier.
• Oil Climbs While U.S. Lawmakers Discuss a Potential Aid Package.
• Pelosi, Mnuchin Move Closer to Stimulus Deal Amid Senate Doubts.
  
• Netflix Slides After Results Suggest Pandemic Boom Is Waning.
• Amazon to Let Employees Work From Home Through June 2021.  
• What Al Fresco Dining May Look Like When It’s Cold.  
• In New 60/40 Portfolio, Riskier Hedges Are Displacing U.S. Debt.  
• Trump Nemesis Mary Nichols on Short List to Run Biden EPA.

Wall Street Journal:

• Google’s Exclusive Search Deals With Apple at Heart of Antitrust Lawsuit.
• The Bidens and China Business.
• End the School Shutdown.
• States Prepare to File Own Antitrust Cases Against Google.
• Pioneer Natural Resources to Buy Parsley Energy for $4.5 Billion.
• Uber Weighs California Overhaul if Ballot Measure on Workers Fails.
• Top Universities Took Billions in Unreported Foreign Funds, U.S. Finds.
• Trump Urges Barr to Initiate Investigation Into Joe Biden and Son.

Fox News:

• Investigators have laptop with Hunter Biden's purported emails, agree they're not linked to Russia
  

CNBC.com:

• Pelosi and Mnuchin make progress in stimulus talks, but big differences remain, Meadows says.
• Stocks making the biggest moves after hours: Netflix, Snap, Texas Instruments & more.
• GM unveils Hummer EV as ‘world’s first supertruck’ for $112,600 starting in 2021.
• A Democratic wave could make things much easier for the marijuana industry, Jim Cramer says.
  

MarketWatch.com:         

• Snap stock rockets 20% after surprise profit and huge revenue beat.  
• AT&T stock notches worst losing streak since 2010 amid fears of iPhone subsidies’ effects on earnings.  
• Complacency warning? ‘Election premium’ in currency market collapses much like it did in 2016.

Zero Hedge:

• Trump Abruptly Ends Interview With Leslie Stahl: "You'll Have To Watch What We Do To 60 Minutes".
• 'I Refuse To Work For This Socialist City Council': Seattle Cops Go Scorched Earth In Exit Interviews.
• Trump Vs Biden: The Race Tightens, "Suddenly Looks Like 2016".
• First Tests Of New "Immunity Passports" Will Take Place Wednesday.
• Feds Confirm Biden Emails Are "Authentic"; '50 Former Intel Officials' Wrong On Russian Disinfo.
• Playing Chicken In The High Yield Market.
• Bloomberg In Talks To Go Public Through A Bill Ackman SPAC.
• Food Shortages Hit China: There Is "Not...Enough Fresh Food To Go Around".
• Here's 3 Reasons Why Very Few Experts Trust The National Polls Showing Biden With A Huge Lead.
• "Growth Has Slowed": Netflix Crashes After Huge Miss On EPS, New Subs As Covid Boom Ends.
• San Diego School District Announces It Will Eliminate Grading Standards To "Combat Racism".
• How Hysterical Punditry Failed America.
• Big-Tech, Banks, Bitcoin, & Bullion Jump As Dollar & Bonds Dump.

Town Hall:

• Here Are Hunter Biden's Alleged Text Messages Giuliani Just Turned Over to the Delaware State Police.

The Epoch Times:  

• US Orders Seizure of Imports of Chinese Sweetener After Finding Forced Labor Was Used.

Digital Blackboard:

• Daily New Cases by Region.

Worldometer:

• New Cases/Deaths by state.

Rt Covid-19:

• How fast virus is growing by state.

KFF:

• State Data(Tests/Hospitalizations).

Night Trading 

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

• Asia Ex-Japan Investment Grade CDS Index 65.75 unch.

• China Sovereign CDS 38.75 -.75 basis point.

• Bloomberg Emerging Markets Currency Index 59.64 +.05%.
• Bloomberg Global Risk-On/Risk Off Index 80.0 -3.0 points.
• Volatility Index(VIX) futures 29.65 -1.08%
• FTSE 100 futures -.04%.

• S&P 500 futures +.47%.

• NASDAQ 100 futures +.57%.

Morning Preview Links

Earnings of Note 
Company/Estimate

Before the Open:

• (ABT)/.90
• (AN)/1.65
• (AVY)/1.50
• (BKR)/.04
• (BIIB)/8.09
• (KEY)/.36
• (KNX)/.64
• (TMO)/3.23
• (NDAQ)/1.45
• (VZ)/1.21
• (WGO)/.93
  

After the Close:

• (ALGN)/.70
• (CMG)/3.43
• (CCI)/1.44
• (CSX)/.93
• (DFS)/1.51
• (EW)/.44
• (KMI)/.20
• (LRCX)/4.12
• (LSTR)/1.42
• (LVS)/-.63
• (SLG)/1.54
• (SAVE)/-2.67
• (TSLA)/.60
• (VMI)/1.72
• (WHR)/3.97
• (XLNX)/.77
  

Economic Releases

10:30 am EST

• Bloomberg consensus estimates call for a weekly crude oil inventory decline of -1,288,580 barrels versus a -3,818,000 barrel decline the prior week. Gasoline supplies are estimated to fall by -1,476,090 barrels versus a -1,626,000 barrel decline the prior week. Distillate inventories are estimated to fall by -1,946,910 barrels versus a -7,245,000 barrel decline the prior week. Finally, Refinery Utilization is estimated to rise by +.54% versus a -2.0% decline prior.
  

2:00 pm EST

• The US Fed Beige Book release.

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Fed's Brainard speaking, UK Inflation Data report and the weekly MBA Mortgage Applications report could also impact trading today.

Market Hours
Normal:

• 9:30 am - 4:00 pm EST
  

BOTTOM LINE: Asian indices are modestly higher, boosted by financial and technology shares in the region. I expect US stocks to open modestly higher and to weaken into the afternoon, finished mixed. The Portfolio is 50% net long heading into the day.

Stocks Higher into Final Hour on Stimlus Hopes, Oil Gain, Short-Covering, Energy/Financial Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Higher
  

• Sector Performance: Almost Every Sector Rising
  

• Volume: Around Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 28.7 -1.7%
• Bloomberg Global Risk On/Risk Off Index 125.0 +107.0 points

• Euro/Yen Carry Return Index 129.24 +.55%

• Emerging Markets Currency Volatility(VXY) 10.9 -.91%

• S&P 500 Implied Correlation 51.60 -1.2%

• ISE Sentiment Index 109.0 +24.0 points
  

• Total Put/Call .72 -12.2%

• NYSE Arms .68 -44.0%

Credit Investor Angst:

• North American Investment Grade CDS Index 57.07 -2.0%
  

• US Energy High-Yield OAS 806.44 -.17%

• European Financial Sector CDS Index 72.52 +.12%

• Italian/German 10Y Yld Spread 133.0 -2.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 65.97 +.94%
  

• Emerging Market CDS Index 203.29 -2.1%
  

• iBoxx Offshore RMB China Corporate High Yield Index 179.50 +.05%

• 2-Year Swap Spread 9.0 +.25 basis point

• TED Spread 12.75 +.5 basis point
  

• 3-Month EUR/USD Cross-Currency Basis Swap -11.75 -1.0 basis point
  
• MBS  5/10 Treasury Spread  81.5 -.25 basis point
  
• IHS Markit CMBX BBB- 6 68.25 unch.

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 59.66 +.33%
• 3-Month T-Bill Yield .09% unch.

• Yield Curve 62.0 +1.25 basis points
  

• China Iron Ore Spot 116.23 USD/Metric Tonne +.36%

• Citi US Economic Surprise Index 128.1 -2.5 points

• Citi Eurozone Economic Surprise Index 16.40 -5.3 points
  

• Citi Emerging Markets Economic Surprise Index 40.80 -.6 point

• 10-Year TIPS Spread 1.73 +2.0 basis points
• 100.0% chance of no change at Dec. 16th meeting, 100.0% chance of no change at Jan. 27th meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating -63 open in Japan 
• China A50 Futures: Indicating -25 open in China

• DAX Futures: Indicating +19 open in Germany

Portfolio:

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

• Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges and then added them back
  

• Market Exposure: 50% Net Long

Bear Radar

 Style Underperformer:

• Small-Cap Growth +.4%

Sector Underperformers:

• 1) Computer Services -1.1% 2) Tobacco -.4% 3) Biotech -.2%

Stocks Falling on Unusual Volume: 

• SBNY, PSNL, SYF, ZM, UNFI, ICPT, PM, PXD, HXL, HYLN, FLWS, ARVN, ACCD, LMPX, IBM, DRNA, SPAQ, CVNA, PACB, CVM, DPHC and BCLI
  

Stocks With Unusual Put Option Activity:

• 1) PBF 2) ADI 3) LUMN 4) NLSN 5) BX
  

Stocks With Most Negative News Mentions:

• 1) BTHR 2) HXL 3) VXRT 4) BLNK 5) CXO
  

Charts:

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

Bull Radar

Style Outperformer:

• Small-Cap Value +1.6%

Sector Outperformers:

• 1) Oil Service +3.5% 2) Banks +2.9% 3) Computer Hardware +2.7%

Stocks Rising on Unusual Volume:

• NTGR, CRSR, CAR, KSS, EGAN, IRBT, GM, CCK, PE, SPCE, RF, CIT, CIT, WGO, ACI, VIAV, CARA, IRDM, FIZZ and HALO
  

Stocks With Unusual Call Option Activity:

• 1) PBI 2) RL 3) FLEX 4) CAR 5) IBM

Stocks With Most Positive News Mentions:

• 1) FTNT 2) XPO 3) TRV 4) LII 5) CTG
  

Charts:

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

Mid-Day Market Internals

NYSE Composite Index:

• Volume Running -13.2% Below 100-Day Average
• 11 Sectors Rising, 0 Sectors Declining
• 73.5% of Issues Advancing, 23.9% Declining
• 45 New 52-Week Highs, 7 New Lows
• 51.6% of Issues Above 200-day Moving Average
• Average 14-Day RSI 46.4% 
• Bloomberg Global Risk-On/Risk-Off Index 88.0 +69.0 points
• Vix 29.1 -.4%
• Total Put/Call .69 0 -15.5%
• TRIN/Arms .79 -33.9%

Tuesday Watch

Evening Headlines

Bloomberg:  

• Fear of Job Loss Haunts Half of World’s Workers as Crisis Rages.  
• India Infection Peak Seen; Green Lane Travel: Virus Update.
• U.S. Futures Tick Higher; Asian Stocks Drift: Markets Wrap.  U.S. futures rose Tuesday as investors held out some hope of a deal on stimulus talks. Asian stocks were little changed after a weak session on Wall Street overnight. S&P 500 Index futures climbed after a spokesman for House Speaker Nancy Pelosi said differences were narrowing in talks. Shares dipped in Japan and fluctuated in South Korea and Australia. The 10-year Treasury yield steadied around 0.77% and the dollar held losses versus major peers. Earlier, the S&P 500 Index fell to the lowest in almost two weeks as time draws short to reach agreement on a bill that could pass by Election Day on Nov. 3. Elsewhere, the Australian dollar slid after comments from the central bank’s assistant governor that short-term rates could fall below zero. Oil extended losses after an OPEC+ meeting made no mention of any changes to a plan to further ease output cuts from January. Global virus cases surpassed 40 million. S&P 500 futures rose 0.6% as of 9:03 a.m. in Tokyo. The S&P 500 Index slipped 1.6%. Topix index fell 0.2%. Australia’s S&P/ASX 200 Index was little changed. South Korea’s Kospi index slipped 0.4%. Hong Kong’s Hang Seng Index futures lost 0.6% earlier.
• Oil Edges Lower With OPEC+ Warning of Precarious Market Outlook.
• Intel Agrees to Sell Storage Unit to SK Hynix for $9 Billion.
• Piedmont Lithium to Issue U.S. Shares as Tesla Drives Interest.  
• California Sees Rise in Insurers Refusing Home-Policy Renewals.  
• Cut-Price Deals Show Shale’s Rapid Decline From Debt-Fueled Boom.

Wall Street Journal:

• The Myth of Moderate Democrats.
• Tax Raid in Arizona.
• Electric-Car Battery Fires Complicate Wider Rollout.
• Farmers Stick With Trump, Despite Trade-War Pain.
• Wisconsin Judge Restores Restrictions on Bars, Restaurants.
• CEOs of Moderna and Abbott Discuss Vaccines and Testing.
• France Vows to Root Out Islamist Extremism After Beheading of Teacher.
• Why Social Media Is So Good at Polarizing Us.

Fox News:

• Barr urged to investigate Biden's alleged ties to son Hunter's business dealings.
  

CNBC.com:

• Pelosi and Mnuchin make progress in stimulus talks, plan to speak again Tuesday.
• Biden’s tax plan could boost tax rates to 62% for some New Yorkers and Californians, studies show.
  

MarketWatch.com:      

• The ‘smart money’ just reversed its bets against tech stocks in a huge way.  
• 20 stocks to help you play a big ‘restocking’ of consumer goods, according to Jefferies.

Zero Hedge: 

• Hunter Biden Is Not The Problem, The Problem Is His Dad.
• Hunter Biden's Laptop "Is Not Some Russian Disinformation Campaign"; DNI Ratcliffe Slams Schiff.
• Streisand Effect: Twitter Ban On Biden Laptop Scandal Nearly Doubled Visibility According To MIT.
• TSA Passenger Traffic Tops One Million Sunday As Return To Normalcy Continues.
• "WHAT THE F*CK! IM OUT": Rapper 50 Cent Melts Down Over Biden-Harris Tax Plan, Endorses Trump.
• CNN, New Yorker Suspend Jeffrey Toobin For Masturbating During A Zoom Call.
• Bonuses For Wall Street Traders, Dealmakers Expected To Shrink In 2020 Despite Surge In IB Profits.
• Futures Rise After Pelosi, Mnuchin "Narrow Differences" On Stimulus.
• IBM Reports Lowest Revenue This Century, Slowdown In Cloud, And Another Grotesque EPS Fudge.
• Black-ish Monday: Stimulus Stumble Sparks Big-Tech's Worst Streak In 14 Months.

The Epoch Times:  

• As Xi Calls on Troops to Prepare for War, Chinese City Orders Residents To Prepare Emergency Supplies. 
• Hunter Biden’s Business Associates Helped Chinese Tycoons Meet With Obama White House Officials, Emails Show.
  

Digital Blackboard:

• Daily New Cases by Region.

Worldometer:

• New Cases/Deaths by state.

Rt Covid-19:

• How fast virus is growing by state.

KFF:

• State Data(Tests/Hospitalizations).

Night Trading 

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

• Asia Ex-Japan Investment Grade CDS Index 65.75 -.25 basis point.

• China Sovereign CDS 39.5 +1.0 basis point.

• Bloomberg Emerging Markets Currency Index 59.46 unch..
• Bloomberg Global Risk-On/Risk Off Index 31.0 +13.0 points.
• Volatility Index(VIX) futures 29.75 -1.57%
• FTSE 100 futures -.1%.

• S&P 500 futures +.58%.

• NASDAQ 100 futures +.71%.

Morning Preview Links

Earnings of Note 
Company/Estimate

Before the Open:

• (CP)/4.23
• (CMA)/.84
• (LMT)/6.10
• (MAN)/.65
• (NVR)/59.89
• (OMC)/1.05
• (PCAR)/.96
• (PM)/1.36
• (PG)/1.42
• (RF)/.33
• (TRV)/3.10
  

After the Close:

• (IBKR)/.55
• (IRBT)/.97
• (NFLX)/2.14
• (SNAP)/-.05
• (THC)/.24
• (TER)/1.12
• (TXN)/1.29
• (WDFC)/1.13
  

Economic Releases

8:30 am EST

• Housing Starts for Sept. is estimated to rise to 1465K versus 1416K in Aug.
• Building Permits for Sept. is estimated to rise to 1520K versus 1470K in Aug.
  

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Fed's Brainard speaking, Fed's Quarles speaking, Italy Industrial Output report and the US weekly retail sales reports could also impact trading today.

Market Hours
Normal:

• 9:30 am - 4:00 pm EST
  

BOTTOM LINE: Asian indices are mostly lower, weighed down by financial and technology shares in the region. I expect US stocks to open modestly higher and to weaken into the afternoon, finished mixed. The Portfolio is 50% net long heading into the day.

Stocks Reversing Lower into Afternoon on Biden Presidency/Tax Hike Fears, Diminished Stimulus Hopes, Virus Worries, Road & Rail/Biotech Sector Weakness

 Broad Equity Market Tone:

• Advance/Decline Line: Lower
  

• Sector Performance: Most Sectors Declining
  

• Volume: Around Average

• Market Leading Stocks: Outperforming
  

Equity Investor Angst:

• Volatility(VIX) 28.3 +3.3%
• Bloomberg Global Risk On/Risk Off Index 87.0 -75.0 points

• Euro/Yen Carry Return Index 128.66 +.6%

• Emerging Markets Currency Volatility(VXY) 11.0 unch.

• S&P 500 Implied Correlation 50.9 +10.1%

• ISE Sentiment Index 90.0 -34.0 points
  

• Total Put/Call .69 -20.7%

• NYSE Arms .88 +15.8%

Credit Investor Angst:

• North American Investment Grade CDS Index 57.64 +1.98%
  

• US Energy High-Yield OAS 807.47 -.23%

• European Financial Sector CDS Index 72.44 +.98%

• Italian/German 10Y Yld Spread 135.0 +8.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 65.32 -2.24%
  

• Emerging Market CDS Index 206.74 +.61%
  

• iBoxx Offshore RMB China Corporate High Yield Index 179.26 +.09%

• 2-Year Swap Spread 8.75 unch.

• TED Spread 12.75 +.5 basis point
  

• 3-Month EUR/USD Cross-Currency Basis Swap -10.75 -1.5 basis points
  
• MBS  5/10 Treasury Spread  81.75 -.5 basis point
  
• IHS Markit CMBX BBB- 6 68.25 +.25 basis point

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 59.49 +.32%
• 3-Month T-Bill Yield .09% unch.

• Yield Curve 60.75 +1.5 basis points
  

• China Iron Ore Spot 116.20 USD/Metric Tonne +.66%

• Citi US Economic Surprise Index 130.6 -3.6 points

• Citi Eurozone Economic Surprise Index 21.70 -9.8 points
  

• Citi Emerging Markets Economic Surprise Index 41.40 -1.6 points

• 10-Year TIPS Spread 1.71 unch.
• 100.0% chance of no change at Dec. 16th meeting, 100.0% chance of no change at Jan. 27th meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating -71 open in Japan 
• China A50 Futures: Indicating -33 open in China

• DAX Futures: Indicating -55 open in Germany

Portfolio:

• Slightly Higher: On gains in my tech sector longs and index hedges
  

• Disclosed Trades: Added to my (IWM)/(QQQ) hedges
  

• Market Exposure: Moved to 25% Net Long

Bear Radar

Style Underperformer:

• Large-Cap Growth -.8%

Sector Underperformers:

• 1) Biotech -1.5% 2) Road & Rail -1.1% 3) Energy -1.1%

Stocks Falling on Unusual Volume: 

• VFC, RH, WLL, PZZA, DECK, AEO, CHRS, OPI, LEGN, SCPL, VLDR, VIR, RCUS, HGEN, MD, ICPT, BCLI, AERI and AEL
  

Stocks With Unusual Put Option Activity:

• 1) IRBT 2) UNFI 3) HTZ 4) XLNX 5) PM
  

Stocks With Most Negative News Mentions:

• 1) MD 2) LOOP 3) AERI 4) BLNK 5) VFC
  

Charts:

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

Bull Radar

 Style Outperformer:

• Mid-Cap Growth +.2%

Sector Outperformers:

• 1) Airlines +2.7% 2) Alt Energy +2.4% 3) Oil Service +1.2%

Stocks Rising on Unusual Volume:

• RESI, OSUR, STAA, SPWR, EGAN, ATHA, CIT, ANAB, LASR, CREE and FUBO
  

Stocks With Unusual Call Option Activity:

• 1) MPW 2) FLEX 3) HTZ 4) CNP 5) AMC

Stocks With Most Positive News Mentions:

• 1) ENDP 2) TSE 3) TEAM 4) CREE 5) KRNY
  

Charts:

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

Mid-Day Market Internals

NYSE Composite Index:

• Volume Running -4.8% Below 100-Day Average
• 1 Sector Rising, 10 Sectors Declining
• 48.5% of Issues Advancing, 48.1% Declining
• 83 New 52-Week Highs, 16 New Lows
• 54.0% of Issues Above 200-day Moving Average
• Average 14-Day RSI 48.7% 
• Bloomberg Global Risk-On/Risk-Off Index 121.0 -41.0 points
• Vix 28.0 +2.2%
• Total Put/Call .68 -21.8%
• TRIN/Arms .61 -19.7%