Stocks Rising into Final Hour on Dollar Weakness, Short-Covering, Vaccine Optimism, Energy/Airlines Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Higher
  

• Sector Performance: Almost Every Sector Rising
  

• Volume: Above Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 23.2 -8.4%
• Bloomberg Global Risk On/Risk Off Index 1,037.0 +84.0 points

• Euro/Yen Carry Return Index 128.15 -.27%

• Emerging Markets Currency Volatility(VXY) 10.56 -1.1%

• S&P 500 Implied Correlation %

• ISE Sentiment Index 114.0 +104.0 points
  

• Total Put/Call .76 -18.3%

• NYSE Arms 1.13 -12.4%

Credit Investor Angst:

• North American Investment Grade CDS Index 54.30 -.88%
  

• US Energy High-Yield OAS 737.27 +.60%

• European Financial Sector CDS Index 66.63 -1.48%

• Italian/German 10Y Yld Spread 121.0 -1.0 basis point
  

• Asia Ex-Japan Investment Grade CDS Index 59.64 +2.47%
  

• Emerging Market CDS Index 174.99 -1.42%
  

• iBoxx Offshore RMB China Corporate High Yield Index 180.82 -.02%

• 2-Year Swap Spread 8.5 unch.

• TED Spread 13.5 +1.0 basis point
  

• 3-Month EUR/USD Cross-Currency Basis Swap -16.5 -1.75 basis points
  
• MBS  5/10 Treasury Spread  72.75 -2.25 basis points
  
• IHS Markit CMBX BBB- 6 70.25 -.25 basis point

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 60.86 +.13%
• 3-Month T-Bill Yield .09% unch.

• Yield Curve 69.5 -5.75 basis points
  

• China Iron Ore Spot 118.05 USD/Metric Tonne -.95%

• Citi US Economic Surprise Index 77.60 -8.9 points

• Citi Eurozone Economic Surprise Index 92.9 +.6 point
  

• Citi Emerging Markets Economic Surprise Index 59.3 -3.6 points

• 10-Year TIPS Spread 1.73 +1.0 basis point
• 100.0% chance of no change at Jan. 27th meeting, 100.0% chance of no change at March 17th meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating +160 open in Japan 
• China A50 Futures: Indicating +12 open in China

• DAX Futures: Indicating +19 open in Germany

Portfolio:

• Slightly Lower: On losses in my index hedges and emerging market shorts
  

• Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges and some of my emerging market shorts
  

• Market Exposure: Moved to 50% Net Long

Bear Radar

Style Underperformer:

• Large-Cap Growth +.3%

Sector Underperformers:

• 1) Software +.2% 2) Telecom +.4% 3) Restaurants +.5%

Stocks Falling on Unusual Volume: 

• STMP, TDOC, NSTG, DLTH, ARCT, ONEM, DDOG, ZM, PEN, FPRX, CINF, PLMR, RVLV, DNLI, SPH, ADVM, WKHS, CYTK, BIGC, KOD, AMWL, MGEN, REV and GFF
  

Stocks With Unusual Put Option Activity:

• 1) RRC 2) HST 3) FCEL 4) PANW 5) OPK
  

Stocks With Most Negative News Mentions:

• 1) AMWL 2) REV 3) SFT 4) KOD 5) CCMP
  

Charts:

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

Bull Radar

Style Outperformer:

• Mid-Cap Value +1.6%

Sector Outperformers:

• 1) Gaming +4.2% 2) Airlines +3.6% 3) Energy +3.2%

Stocks Rising on Unusual Volume:

• FSR, U, XPEL, FLGT, VIVO, CSCO, CCL, GBT, PLTR, ENR, XRAY, PLTR and APPN
  

Stocks With Unusual Call Option Activity:

• 1) XSPA 2) WY 3) CYRX 4) HWM 5) FCEL

Stocks With Most Positive News Mentions:

• 1) FTCH 2) PDD 3) CSCO 4) CCL 5) UTZ
  

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running +13.0% Above 100-Day Average
• 11 Sectors Rising, 0 Sectors Declining
• 79.8% of Issues Advancing, 17.4% Declining
• 25 New 52-Week Highs, 2 New Lows
• 70.8% of Issues Above 200-day Moving Average
• Average 14-Day RSI 52.8% 
• Bloomberg Global Risk-On/Risk-Off Index 981.0 +28.0 points
• Vix 23.8 -6.1%
• Total Put/Call .77 -17.2%
• TRIN/Arms .67 -48.1%

Friday Watch

Evening Headlines

Bloomberg:                           

• Hong Kong Home Buyers Seeking Haven in the U.K. Look Beyond London.  
• Japan Has Worst Day of Covid Cases Yet Amid Fears of Winter Wave.
• Asian Stocks Slip After U.S. Losses; Bonds Steady: Markets Wrap. Asian stocks followed their U.S. counterparts lower Friday as a resurgence in coronavirus cases added to concern that tougher restrictions may slow down the economic recovery without further stimulus. Treasuries held on to overnight gains. Shares dipped in Japan and Australia and were steady in South Korea. S&P 500 futures were little changed after the benchmark fell 1% as New York City prepared for the possibility of closing its schools and Chicago urged residents to stay at home. Meantime, the Trump administration is stepping back from talks on a relief package and leaving it up to Congress to revive negotiations with House Speaker Nancy Pelosi, according to people familiar. Benchmark 10-year Treasury yields were steady below 0.90%, and the dollar and gold were little changed. Oil retreated. S&P 500 futures rose 0.2% as of 9:16 a.m. in Tokyo. The gauge dropped 1% on Thursday. Japan’s Topix Index fell 0.7%. South Korea’s Kospi Index rose 0.2%. Australia’s S&P/ASX 200 Index fell 0.2%.  
• Orr’s Big ‘If,’ Powell Recovery Alert, Trump China Ban: Eco Day.
• California Tops 1 Million Cases; Japan on Watch: Virus Update.
• Powell Warns of U.S. Economy Risk With Pandemic at Deadliest Yet.
• Chicago Stay-at-Home Advisory to Begin Nov. 16 Amid Covid Surge.
• NYC Schools Headed Toward Shutdown, Teachers Union Head Says.  
• Hedge Funds Loading Up on Darling Stocks Got a Rude Awakening.

Wall Street Journal:

• Home Prices Are Rising Everywhere in the U.S.
• Joe Biden’s Lockdown Lobby.
• Goldman Sachs’s 60 New Partners Are the Happiest People on Wall Street Today.
• States Order New Restrictions as Covid-19 Cases Soar.
• China’s President Personally Scuttled Jack Ma’s Ant IPO.

Fox News: 

• With Senate balance of power at stake, Republicans are pouring all resources into twin runoff elections.
  

CNBC.com:

• Five test positive for Covid on first cruise ship to resume sailing in the Caribbean.
• Jim Cramer on Thursday’s decline: ‘We have too many bulls’.
• TikTok can continue to operate in the U.S., Commerce Department says.
• Stocks making the biggest moves after the bell: Cisco Systems, Disney, Applied Materials & more.

MarketWatch.com:            

• Disney suffers first annual loss in more than 40 years, but stock jumps as losses are not as bad as feared.
  
• Cisco stock rallies 8% as results, outlook top Street view.

Zero Hedge:

• Amid Voting Irregularity Challenges, Democrats Call For People To Move To Georgia To Stack The Vote.
• PA Judge Rules Some Late Ballots Don't Count; Secretary Of State 'Lacked Authority' To Extend ID Deadline.
• Official Overseeing Arizona Vote-Count Process Previously Tweeted About Trump's "Neo-Nazi Base".
• How Quibi's Boomer Execs Sabotaged A $2BN Company By Being Completely Out Of Touch.
• Beijing Faces Extreme Pressure To Publish Promising COVID-19 Vaccine Data.
• US Tops 150k Daily COVID-19 Cases For First Time: Live Updates.
• Trump Campaign Highlights Alleged Dead Voters Casting Ballots In Pennsylvania.
• Supermarkets Limit Toilet Paper Purchases As COVID Cases Hit New Highs.
• Black Lives Matter Leader Demands Biden Follow BLM Agenda.
• Trump Bans Americans From Investing In Chinese PLA-Linked Firms With Executive Order.
• Target Reopens Looted Store In Minneapolis With Goal Of Being Less "Racist".
• Feud Breaks Out On Wall Street Over Lockdowns: JPM Says "No Benefit' While BofA Sees Urgent Need.
• Bonds Bid, Stocks Skid As Lockdowns Loom, Stimulus Doomed.
  

The Epoch Times:

• US Professor Pleads Guilty to Using Federal Funds to Help China’s Medical Research.
• Chinese Netizens Debate Alleged US Election Fraud, Posts Get Censored.

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 -.75% to -.25% on average.

• Asia Ex-Japan Investment Grade CDS Index 59.75 +2.25 basis points.

• China Sovereign CDS 30.25 +2.5 basis points.

• Bloomberg Emerging Markets Currency Index 60.75 -.05%.
• Bloomberg Global Risk-On/Risk Off Index 868.0 -84.0 points.
• Volatility Index(VIX) futures 26.60 +.09%
• FTSE 100 futures -1.19%.

• S&P 500 futures -.08%.

• NASDAQ 100 futures +.14%.

Morning Preview Links

Earnings of Note 
Company/Estimate 

 

Before the Open: 

• (DKNG)/-.63
• (SPB)/1.28
• (VIPS)/1.70
  

After the Close:

• None of note
  

Economic Releases

8:30 am EST

• PPI Final Demand MoM for Oct. is estimated to rise +.2% versus a +.4% gain in Sept. 
• PPI Ex Food & Energy MoM for Oct. is estimated to rise +.2% versus a +.4% gain in Sept.

10:00 am EST

• Univ. of Mich. Consumer Sentiment for Nov. is estimated to rise to 82.0 versus 81.8 in Oct.

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The China Yuan Data, Bloomberg Nov. US Economic Survey and the Eurozone GDP report 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 technology and industrial shares in the region. I expect US stocks to open mixed and to weaken into the afternoon, finishing modestly lower. The Portfolio is 25% net long heading into the day.

Stocks Falling into Final Hour on Mounting US Election Fraud Evidence, Virus Economic Shutdown Fears, Diminished Stimulus Hopes, Energy/Financial Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Lower
  

• Sector Performance: Almost Every Sector Declining
  

• Volume: Above Average

• Market Leading Stocks: Underperforming
  

Equity Investor Angst:

• Volatility(VIX) 25.2 +7.6%
• Bloomberg Global Risk On/Risk Off Index 958.0 -248.0 points

• Euro/Yen Carry Return Index 128.52 -.04%

• Emerging Markets Currency Volatility(VXY) 10.72 -.09%

• S&P 500 Implied Correlation 43.4 +9.5%

• ISE Sentiment Index 10.0 +9.0 points
  

• Total Put/Call .87 -14.7%

• NYSE Arms .93 -45.6%

Credit Investor Angst:

• North American Investment Grade CDS Index 54.90 +3.12%
  

• US Energy High-Yield OAS 728.50 +1.6%

• European Financial Sector CDS Index 67.63 +5.95%

• Italian/German 10Y Yld Spread 122.0 -3.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 58.18 +1.11%
  

• Emerging Market CDS Index 175.47 +2.18%
  

• iBoxx Offshore RMB China Corporate High Yield Index 180.85 +.01%

• 2-Year Swap Spread 8.5 unch.

• TED Spread 12.5 +.75 basis point
  

• 3-Month EUR/USD Cross-Currency Basis Swap -14.75 unch.
  
• MBS  5/10 Treasury Spread  75.0 +3.5 basis points
  
• IHS Markit CMBX BBB- 6 70.5 unch.

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 60.80 +.02%
• 3-Month T-Bill Yield .09% unch.

• Yield Curve 75.25 +.5 basis point
  

• China Iron Ore Spot 118.81 USD/Metric Tonne -.87%

• Citi US Economic Surprise Index 86.50 -12.7 points

• Citi Eurozone Economic Surprise Index 92.3 -.4 point
  

• Citi Emerging Markets Economic Surprise Index 55.7 +3.3 points

• 10-Year TIPS Spread 1.72 -3.0 basis points
• 100.0% chance of no change at Jan. 27th meeting, 100.0% chance of no change at March 17th meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating -180 open in Japan 
• China A50 Futures: Indicating -15 open in China

• DAX Futures: Indicating -91 open in Germany

Portfolio:

• Slightly Higher: On gains in my index hedges and emerging market shorts
  

• Disclosed Trades: Added to my (IWM)/(QQQ) hedges and to my emerging market shorts
  

• Market Exposure: Moved to 25% Net Long

Bear Radar

Style Underperformer:

• Small-Cap Value -2.3%

Sector Underperformers:

• 1) Energy -3.0% 2) Banks -3.0% 3) Airlines -2.8%

Stocks Falling on Unusual Volume: 

• EBIX, MCD, RETA, BAC, MNR, PRVB, FUBO, PRTS, EBS, FTAI, LE, INTC, ABR, APLE, HBI, FRC, GRA, BEN, PING, REAL, APAM, AUB, HWM, PBCT, SPG, MET, GDRX, CMA, PLMR, NLSN, HQY, HIBB, TRIP, CUK, SAVE, PSX, SSYS, REYN, JOE, WYNN, APD, REPL, FOX, NEO, CCL, RARE, FSK, BDTX, MTOR, ADPT, SLQT, PLTR, RVLV, VRM, BEAM, HRMY, ENR and GOCO
  

Stocks With Unusual Put Option Activity:

• 1) AEO 2) TSN 3) BBY 4) GRWG 5) FOXA
  

Stocks With Most Negative News Mentions:

• 1) RVLV 2) COHR 3) APD 4) PBR 5) HPQ
  

Charts:

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

Bull Radar

Style Outperformer:

• Large-Cap Growth -.9%

Sector Outperformers:

• 1) Gold & Silver +1.4% 2) Video Gaming +1.3% 3) Social Media +.6%

Stocks Rising on Unusual Volume:

• FLGT, CELH, FPRX, GRWG, MTEM, ATRA, EPC, JWS, FSR, UTZ, REV, MRNA, RGEN, HALO and XPEL
  

Stocks With Unusual Call Option Activity:

• 1) PS 2) PK 3) TCO 4) EPR 5) AES

Stocks With Most Positive News Mentions:

• 1) XPEV 2) PDD 3) EPC 4) HD 5) NOW
  

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running +5.7% Above 100-Day Average
• 3 Sectors Rising, 8 Sectors Declining
• 35.7% of Issues Advancing, 61.4% Declining
• 23 New 52-Week Highs, 3 New Lows
• 73.8% of Issues Above 200-day Moving Average
• Average 14-Day RSI 55.2% 
• Bloomberg Global Risk-On/Risk-Off Index 1,073.0 -134.0 points
• Vix 23.9 +1.9%
• Total Put/Call .79 -22.6%
• TRIN/Arms .85 -50.3%

Thursday Watch

Evening Headlines

Bloomberg:                  

       

• U.K. Steps Up Talks With Industry as Brexit Disruption Closes In.
• U.K. Real Estate Agents See Property Market Weakening in 2021.
• Trump’s National Security Advisor Warns China on Hong Kong.  
• Stock Rally Fizzles After Recent Charge Higher: Markets Wrap.
• Oil Extends Gains on Signs OPEC+ Edging Toward Keeping Cuts.
• Moderna Vaccine Trial Reaches Key Goal to Gauge Shot’s Merit.  
• Richest New Yorkers Will Devastate City If They Leave With $133 Billion.  
• Growth-Stock Scare Looking Like a False Alarm to Options Market.

Wall Street Journal:

• OPEC Deepens Forecast for Drop in Global Oil Demand.
• Trump Suits Aim to Block Certification in Key States.
• Smaller House Majority Poses Headaches for Democrats.
• N.Y. Sets Curfew for Restaurants, Bars, Gyms as Covid-19 Cases Rise.

Fox News: 

• Black Lives Matter co-founder requests meeting, has a message for Biden, Harris.
  

CNBC.com:

• Biden Covid advisor says U.S. lockdown of 4 to 6 weeks could control pandemic and revive economy.
• The market is ‘being very cavalier’ about risks the U.S. faces, Jim Cramer says.
• U.S. prepares for worst four months of the pandemic as it stares down the ‘darkest’ days yet.
• Pfizer CEO sold $5.6 million of stock as company announced vaccine data that sent shares soaring.
• Stocks making the biggest moves after hours: Moderna, Revolve, Fossil & more.

MarketWatch.com:          

• ‘Unprecedented’ selloff in hot-streak stocks could become ‘self-fulfilling prophecy,’ says quant who warned of Monday’s rotation.

Zero Hedge:

• Goldman Spots An "Early Indicator" US Economy Is Rolling Over Due To Covid Resurgence
• JPMorgan Finds No Benefits From COVID Lockdowns.
• Deutsche Bank Proposes A 5% "Work From Home" Privilege Tax.
• Once "Immune" To The Pandemic, The Financial Industry Is About To Face A Wave Of Layoffs.
• Georgia Announces Hand Recount As Razor-Thin Margins Persist.
• Professor Declares "Legal Vote" A Racist Term Like "Handouts" & "Personal Responsibility".
• Toobin Fired From New Yorker For Jerking Off During Zoom Call.
• Martin Armstrong Warns Cashless World Signals Global End To Privacy.
• 17 People Were Shot In Chicago On Monday Alone.
• With Bonds Away, Tech Bulls Will Play.

OANN:

• Ga. Democrat Senate hopeful Warnock voiced praise for controversial preacher.
• Evidence of alleged voter fraud appears in Mich., Pa.

@kylenabecker:

• DOMINION Voting Systems. (video). "This image-cast evolution voting machine has the physical ability to mark votes onto the ballot after the last time the voter sees the ballot... and that's a DISASTER. " Princeton comp. science prof Andrew Appel shreds Dominion voting systems. America was warned.

The Epoch Times:

• Beijing Took Advantage of Pandemic to Interfere With US Election: China Expert.
• China’s Tianjin City Declares State of Emergency After Confirming COVID-19 Cases.
  

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 -.25% to +.5% on average.

• Asia Ex-Japan Investment Grade CDS Index 57.5 -.75 basis point.

• China Sovereign CDS 27.75 -1.0 basis point.

• Bloomberg Emerging Markets Currency Index 60.79 unch.
• Bloomberg Global Risk-On/Risk Off Index 1,193.0 -13.0 points.
• Volatility Index(VIX) futures 25.08 +.42%
• FTSE 100 futures -.60%.

• S&P 500 futures -.01%.

• NASDAQ 100 futures -.09%.

Morning Preview Links

Earnings of Note 
Company/Estimate 

 

Before the Open: 

• (CCL)/-1.90
• (ENR)/.81
• (IGT)/-.23
• (SINA)/.77
• (SSYS)/-.07
• (TNK)/.19
• (WB)/.60
  

After the Close:

• (AMAT)/1.17
• (CSCO)/.70
• (DLPH)/.10
• (DDS)/-.51
• (DIS)/-.65
  

Economic Releases

8:30 am EST

• The CPI MoM for Oct. is estimated to rise +.1% versus a +.2% gain in Sept.
• The CPI Ex Food and Energy MoM for Oct. is estimated to rise +.2% versus a +.2% gain in Sept.
• Real Avg. Weekly Earnings YoY for Oct.
• Initial Jobless Claims for last week are estimated to fall to 734K versus 751K the prior week.
• Continuing Claims are estimated to fall to 6900K versus 7285K prior.
  

2:00 pm EST

• Monthly Budget Deficit for Oct. is estimated to widen to -$275.0B versus -$124.6B prior.

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Eurozone PMI report, UK GDP report, German inflation data, 30Y T-Bond auction, weekly Bloomberg Consumer Comfort Index, Berenberg Conference, (QDEL) investor day, (DPZ) Investor Q&A and the JPMorgan Consumer/Retail Conference 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 consumer shares in the region. I expect US stocks to open mixed and to weaken into the afternoon, finishing modestly lower. The Portfolio is 50% net long heading into the day.