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

Broad Equity Market Tone:

• Advance/Decline Line: Around Even
  

• Sector Performance: Mixed
  

• Volume: Around Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 22.5 -2.7%
• Bloomberg Global Risk On/Risk Off Index 1,025.0 +9.0 points

• Euro/Yen Carry Return Index 127.45 -.07%

• Emerging Markets Currency Volatility(VXY) 10.22 -.29%

• S&P 500 Implied Correlation 39.45 -.4%

• ISE Sentiment Index 100.0 +2.0 points
  

• Total Put/Call .67 -9.5%

• NYSE Arms .99 +12.5%

Credit Investor Angst:

• North American Investment Grade CDS Index 55.95 +4.08%
  

• US Energy High-Yield OAS 710.93 +.1%

• European Financial Sector CDS Index 64.95 +1.38%

• Italian/German 10Y Yld Spread 122.0 +1.0 basis point
  

• Asia Ex-Japan Investment Grade CDS Index 62.42 +2.85%
  

• Emerging Market CDS Index 169.43 -.41%
  

• iBoxx Offshore RMB China Corporate High Yield Index 180.82 +.05%

• 2-Year Swap Spread 9.25 +1.0 basis point.

• TED Spread 15.0 -1.5 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -18.25 -1.5 basis points
  
• MBS  5/10 Treasury Spread  74.0 +.25 basis point
  
• IHS Markit CMBX BBB- 6 70.5 +.5 basis point

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 61.31 -.15%
• 3-Month T-Bill Yield .06% unch.

• Yield Curve 66.85 -1.25 basis points
  

• China Iron Ore Spot 126.11 USD/Metric Tonne +.31%

• Citi US Economic Surprise Index 67.7 -1.5 points

• Citi Eurozone Economic Surprise Index 107.3 -1.0 point
  

• Citi Emerging Markets Economic Surprise Index 58.1 -.1 point

• 10-Year TIPS Spread 1.70 unch.
• 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 +197 open in Japan 
• China A50 Futures: Indicating +12 open in China

• DAX Futures: Indicating -17 open in Germany

Portfolio:

• Slightly Lower: On losses in my industrial sector longs and emerging market shorts
  

• Disclosed Trades: None
  

• Market Exposure: 25% Net Long

Bear Radar

Style Underperformer:

• Small-Cap Value -.6%

Sector Underperformers:

• 1) Gaming -2.4% 2) Airlines -2.3% 3) Oil Service -2.1%

Stocks Falling on Unusual Volume: 

• CUK, CW, FE, GWW, PLAN, HZO, CCL, CAL, LYFT, BKE, HVT, FL, FSR, GKOS, BJ, HA, FL, SONO, POST, RCKT, WDAY and FOSL
  

Stocks With Unusual Put Option Activity:

• 1) MAC 2) FUV 3) WDAY 4) BLNK 5) TBT
  

Stocks With Most Negative News Mentions:

• 1) BTU 2) PRLD 3) NBHC 4) FE 5) SHAK
  

Charts:

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

Bull Radar

Style Outperformer:

• Mid-Cap Growth +.7%

Sector Outperformers:

• 1) Digital Health +1.6% 2) Alt Energy +1.4% 3) Social Media +1.2%

Stocks Rising on Unusual Volume:

• BLNK, DTIL, GMHI, FUV, NVCR, SBE, WSM, FUBO, CRNC, TCS, BRBR, FEYE, APPN, TRNE, PSNL, MCHP and VERI
  

Stocks With Unusual Call Option Activity:

• 1) BGCP 2) INTU 3) AYRO 4) WDAY 5) PPL

Stocks With Most Positive News Mentions:

• 1) WSM 2) HIBB 3) AMTX 4) VRTX 5) URI
  

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running -1.6% Below 100-Day Average
• 3 Sectors Rising, 8 Sectors Declining
• 41.6% of Issues Advancing, 54.6% Declining
• 69 New 52-Week Highs, 1 New Low
• 79.7% of Issues Above 200-day Moving Average
• Average 14-Day RSI 55.5% 
• Bloomberg Global Risk-On/Risk-Off Index 1,049.0 +33.0 points
• Vix 22.3 -3.4%
• Total Put/Call .69 -6.8%
• TRIN/Arms .98 +11.4%

Friday Watch

 Night Trading 

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

• Asia Ex-Japan Investment Grade CDS Index 62.5 +2.0 basis points.

• China Sovereign CDS 32.75 +.75 basis point.

• Bloomberg Emerging Markets Currency Index 61.41 +.02%.
• Bloomberg Global Risk-On/Risk Off Index 1,031.0 +15.0 points.
• Volatility Index(VIX) futures 24.95 +1.94%
• FTSE 100 futures +.18%.

• S&P 500 futures -.64%.

• NASDAQ 100 futures -.12%.

Morning Preview Links

Earnings of Note 
Company/Estimate 

 

Before the Open: 

• (BKE)/.55
• (FL)/.62
• (HIBB)/.45
• (JKS)/.85
  

After the Close:

• None of note
  

Economic Releases

• None of note
  

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Eurozone Consumer Confidence Index 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 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 Reversing Higher into Afternoon on Stimulus Hopes, US Housing Data, Short-Covering, Energy/Retail Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Around Even
  

• Sector Performance: Mixed
  

• Volume: Around Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 23.2 -2.6%
• Bloomberg Global Risk On/Risk Off Index 1,021.0 -18.0 points

• Euro/Yen Carry Return Index 127.44 +.02%

• Emerging Markets Currency Volatility(VXY) 10.4 -.5%

• S&P 500 Implied Correlation 41.4 -3.3%

• ISE Sentiment Index 98.0 -36.0 points
  

• Total Put/Call .70 -6.7%

• NYSE Arms .75 -41.9%

Credit Investor Angst:

• North American Investment Grade CDS Index 53.20 -1.33%
  

• US Energy High-Yield OAS 709.02 -.04%

• European Financial Sector CDS Index 64.10 +1.9%

• Italian/German 10Y Yld Spread 121.0 unch.
  

• Asia Ex-Japan Investment Grade CDS Index 60.72 +.69%
  

• Emerging Market CDS Index 169.93 -.66%
  

• iBoxx Offshore RMB China Corporate High Yield Index 180.74 -.29%

• 2-Year Swap Spread 8.25 unch.

• TED Spread 16.5 +2.5 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -16.75 -2.75 basis points
  
• MBS  5/10 Treasury Spread  74.0 +.25 basis point
  
• IHS Markit CMBX BBB- 6 70.25 -.75 basis point

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 61.40 +.31%
• 3-Month T-Bill Yield .06% -2.0 basis points

• Yield Curve 68.0 unch.
  

• China Iron Ore Spot 123.58 USD/Metric Tonne +.06%

• Citi US Economic Surprise Index 69.2 +2.8 points

• Citi Eurozone Economic Surprise Index 108.3 -.9 point
  

• Citi Emerging Markets Economic Surprise Index 58.2 -.3 point

• 10-Year TIPS Spread 1.70 -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 -71 open in Japan 
• China A50 Futures: Indicating -3 open in China

• DAX Futures: Indicating +8 open in Germany

Portfolio:

• Slightly Higher: On gains in my biotech/medical/tech sector longs
  

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

• Market Exposure: Moved to 50% Net Long

Bear Radar

Style Underperformer:

• Small-Cap Value -.7%

Sector Underperformers:

• 1) Healthcare Providers -1.5% 2) Utilities -1.5% 3) Agriculture -1.1%

Stocks Falling on Unusual Volume: 

• FLIR, CDW, MCK, LEGN, WRB, EL, GLDD, CCS, TSN, CUB, MOD, JAMF, DLTH, CODX, XPEL, AVYA, RHI, NTLA, TPC, GPRE and TTCF
  

Stocks With Unusual Put Option Activity:

• 1) FCEL 2) BLNK 3) LB 4) AEO 5) JNK
  

Stocks With Most Negative News Mentions:

• 1) BTU 2) VCTR 3) RHI 4) TSN 5) ZION
  

Charts:

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

Bull Radar

Style Outperformer:

• Mid-Cap Growth +.9%

Sector Outperformers:

• 1) Video Gaming +2.9% 2) Alt Energy +2.2% 3) Gaming +1.9%

Stocks Rising on Unusual Volume:

• SONO, BLNK, CIIC, SBE, NUAN, LB, ATKR, FOSL, GDRX, MGNI, VERI, APPN, REZI, RVP, XENT, KOD, FUBO, DMYT, SBGI, SPG and PCVX
  

Stocks With Unusual Call Option Activity:

• 1) WPX 2) CORT 3) AYRO 4) LB 5) FUV

Stocks With Most Positive News Mentions:

• 1) SONO 2) LB 3) CREE 4) NUAN 5) BILI
  

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running +5.2% Above 100-Day Average
• 2 Sectors Rising, 9 Sectors Declining
• 47.2% of Issues Advancing, 49.3% Declining
• 47 New 52-Week Highs, 5 New Lows
• 79.0% of Issues Above 200-day Moving Average
• Average 14-Day RSI 54.9% 
• Bloomberg Global Risk-On/Risk-Off Index 1,031.0 -8.0 points
• Vix 23.4 -1.7%
• Total Put/Call .64 -14.7%
• TRIN/Arms .94 -27.1%

Thursday Watch

Evening Headlines

Bloomberg:                             

• Australia PM Defiant After China Airs 14 Grievances.
• Asia Stocks Slip on Virus Curbs; Treasuries Gain: Markets Wrap.  Asian stocks are poised to end their longest winning run since 1988 as restrictions to curb the coronavirus spread overshadowed progress toward a vaccine. Treasuries gained. Stocks had modest declines in Japan, Australia and South Korea. S&P 500 futures were little changed with the benchmark closing at its session low after New York City shut schools because of rising infections. Pfizer Inc. advanced after saying its vaccine was 95% effective, paving the way to apply for the first U.S. regulatory authorization for a coronavirus shot within days. The Bloomberg Dollar Spot Index headed higher after earlier falling to the lowest since April 2018 as vaccine optimism lifted commodity prices and resource-linked currencies. An MSCI gauge of Asian stocks had risen for 13 consecutive sessions to Wednesday. S&P 500 futures were little changed as of 9:10 a.m. in Tokyo. The S&P 500 Index fell 1.2%. Topix index fell 0.4%. The MSCI Asia Pacific Index fell 0.4%. Australia’s S&P/ASX 200 Index fell 0.4%. Kospi index fell 0.5%. Hong Kong’s Hang Seng Index futures were little changed earlier.
• China Absorbs Yuan, Dimon Scolds, Virus Hotspots’ Rates: Eco Day.
• Oil Pares Gains as Fresh Virus Curbs Stoke Demand Concerns.
• U.S. Deaths Surpass 250,000; NYC to Shut Schools: Virus Update.  
• Covid Ravaging Long-Term Care Centers at Fastest Pace Since May.
• NYC Recovery at Risk on Double Whammy of School-and-Subway Pain.  
• Fannie-Freddie Watchdog Demands Capital Above $280 Billion.  
• Victoria’s Secret Owner Rises as Quarterly Sales Beat Estimates.

Wall Street Journal:

• Gretchen Whitmer Strikes Again.
• 2020 Reshapes Black Friday.
• In Minnesota and Beyond, ‘Defund the Police’ Weighed on Democrats.

Fox News: 

• How many of his own COVID restrictions did Newsom break at party as Calif. cases rise?
  

CNBC.com:

• Payment company Affirm files to go public with revenues doubling year-over-year.
• Nvidia beats on both earnings and revenue, sales up 57%.
• Stocks making the biggest moves after hours: Sonos, L Brands, Palantir & more.

MarketWatch.com:         

• Trump calls Georgia recount a ‘joke’ as certification date looms.

Zero Hedge:

• Georgia Recount Monitor Catches 9,626-Vote Error During Hand Recount.    
• "No One Is Bigger Than The Party": At Crucial Juncture In US/China Relations, Xi Aims To Consolidate Power.
• Iran Is Already Warming Up To Biden, Suggesting Cancelling Sanctions And Rejoining The Nuclear Deal.
• Parler CEO Defends Free Speech: "It's Not Against The Law To Have Those Opinions".
• China Used 'Secret Microwave Pulse Weapon' Against Indian Troops In Border Battle.
• US COVID-19 Deaths Top 250,000 As Mortality Worst Since Spring: Live Updates.
• As Clock Ticks On Election Certifications, Here's Where Trump Legal Challenges Stand.
• NYC Restaurants Face 'Double Whammy' Of New Restrictions And Old Man Winter 
• Ten Geopolitical Risks To Watch In The Coming Year.
• GM Recalling Over 50,000 Chevy Bolts That Can "Catch Fire When Charged To Nearly Full Capacity"
• Bitcoin Jumps, Stocks Dump After Vaccine-Pop Flops.

Newsmax:

• Pa. High Court to Hear Trump Challenge to Thousands of Votes.
• Dick Morris to Newsmax TV: 'Georgia May Well Be Overturned'.

@kylenabecker:

• Dominion Voting Systems. "Results are loaded directly from the encrypted Memory Card"... This is the first of SIX Dominion Training Videos leaked from a NON-PUBLIC SOURCE. They reveal just how *shockingly* vulnerable the voting system is. Dominion does *not* wants us to see this. Watch:

 @RealDonaldTrump: 

• Look at this in Wisconsin! A day AFTER the election, Biden receives a dump of 143,379 votes at 3:42AM, when they learned he was losing badly. This is unbelievable!

The Epoch Times:

• McKinsey Under Pressure for Its China Ties.
• Chinese-American Raytheon Engineer Sentenced to Prison for Technology Exports.
  

Protectthevote.com:

• Trump campaign seeks recount in liberal Milwaukee and Dane.

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 60.5 +.25 basis point.

• China Sovereign CDS 32.0 -1.0 basis point.

• Bloomberg Emerging Markets Currency Index 61.16 -.08%.
• Bloomberg Global Risk-On/Risk Off Index 1,046.0 +6.0 points.
• Volatility Index(VIX) futures 24.85 -.10%
• FTSE 100 futures -.94%.

• S&P 500 futures -.04%.

• NASDAQ 100 futures -.13%.

Morning Preview Links

Earnings of Note 
Company/Estimate 

 

Before the Open: 

• (BJ)/.65
• (CPB)/.91
• (CSIQ)/-.24
• (M)/-.82
• (NTES)/2.93
• (SINA)/.77
• (PLCE)/.51
• (WB)/.60
  

After the Close:

• (HP)/-.75
• (INTU)/.42
• (POST)/.77
• (ROST)/.62
• (WSM)/1.48
• (WDAY)/.67
  

Economic Releases

8:30 am EST

• Initial Jobless Claims for last week are estimated to fall to 700K versus 709K the prior week.
• Continuing Claims are estimated to fall to 6400K versus 6786K prior.
  

10:00 am EST

• The Leading Index for Oct. is estimated to rise +.7% versus a +.7% gain in Sept.
• Existing Home Sales for Oct. is estimated to fall to 6.46M versus 6.54M in Sept.
  

11:00 am EST

• Kansas City Fed Manufacturing Activity for Nov. is estimated to fall to 11.0 versus 13.0 in Oct.

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Japan Inflation Data report, Bloomberg Economic Expectations Index for Nov., weekly Bloomberg Consumer Comfort Index, weekly EIA natural gas inventory report, BofA Consumer/Retail Conference, Deutsche Bank Gaming/Loding/Leisure/Restaurant Conference, Canaccord Medtech/Diagnostics Forum, (DOV) investor meeting, (TRN) investor day and the JPMorgan Services Investor Conference could also impact trading today.

Market Hours
Normal:

• 9:30 am - 4:00 pm EST
  

BOTTOM LINE: Asian indices are 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 Reversing Lower into Final Hour on Mounting US Voter Fraud Evidence, Virus Shutdown Worries, Technical Selling, Biotech/Metals&Mining Sector Weakness

 Broad Equity Market Tone:

• Advance/Decline Line: Around Even
  

• Sector Performance: Mixed
  

• Volume: Above Average

• Market Leading Stocks: Outperforming
  

Equity Investor Angst:

• Volatility(VIX) 23.1 +1.7%
• Bloomberg Global Risk On/Risk Off Index 1,101.0 -10.0 points

• Euro/Yen Carry Return Index 127.48 -.36%

• Emerging Markets Currency Volatility(VXY) 10.47 -.19%

• S&P 500 Implied Correlation 38.9 -2.7%

• ISE Sentiment Index 134.0 +11.0 points
  

• Total Put/Call .70 -18.6%

• NYSE Arms 1.06 +24.7%

Credit Investor Angst:

• North American Investment Grade CDS Index 52.97 +.66%
  

• US Energy High-Yield OAS 712.89 -1.39%

• European Financial Sector CDS Index 62.90 -1.15%

• Italian/German 10Y Yld Spread 121.0 +1.0 basis piont
  

• Asia Ex-Japan Investment Grade CDS Index 60.31 +.25%
  

• Emerging Market CDS Index 170.04 -2.08%
  

• iBoxx Offshore RMB China Corporate High Yield Index 181.27 -.15%

• 2-Year Swap Spread 8.25 -.5 basis point

• TED Spread 14.0 -.5 basis point
  

• 3-Month EUR/USD Cross-Currency Basis Swap -14.0 -1.0 basis points
  
• MBS  5/10 Treasury Spread  73.75 +.5 basis point
  
• IHS Markit CMBX BBB- 6 71.0 +1.0 basis point

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 61.28 +.20%
• 3-Month T-Bill Yield .08% unch.

• Yield Curve 68.0 -5.5 basis points
  

• China Iron Ore Spot 123.50 USD/Metric Tonne +.46%

• Citi US Economic Surprise Index 66.4 -1.5 points

• Citi Eurozone Economic Surprise Index 109.2 +6.8 points
  

• Citi Emerging Markets Economic Surprise Index 58.5 -.8 point

• 10-Year TIPS Spread 1.71 -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 +72 open in Japan 
• China A50 Futures: Indicating +10 open in China

• DAX Futures: Indicating -53 open in Germany

Portfolio:

• Slightly Lower: On losses in my biotech/medical sector longs
  

• Disclosed Trades: None
  

• Market Exposure: 50% Net Long