Weekly Scoreboard*

Indices

• S&P 500 2,090.11 +.43%

• DJIA 17,798.49 +.37%

• NASDAQ 5,127.52 +1.06%

• Russell 2000 1,202.38 +3.05%

• S&P 500 High Beta 31.44 +.49%

• Goldman 50 Most Shorted 109.43 +4.17% 

• Wilshire 5000 21,674.27 +.74%

• Russell 1000 Growth 1,023.39 +.81%

• Russell 1000 Value 990.43 +.24%

• S&P 500 Consumer Staples 510.69 +.79%

• Solactive US Cyclical 129.55 +.02%

• Morgan Stanley Technology 1,112.13 +.26%

• Transports 8,215.32 -.69%

• Utilities 563.02 -1.07%

• Bloomberg European Bank/Financial Services 104.36 +.4%

• MSCI Emerging Markets 34.16 -1.52%

• HFRX Equity Hedge 1,166.21 +.28%

• HFRX Equity Market Neutral 1,037.79 -.10%

Sentiment/Internals

• NYSE Cumulative A/D Line 234,905 +.88%

• Bloomberg New Highs-Lows Index -130 +151

• Bloomberg Crude Oil % Bulls 36.17 n/a

• CFTC Oil Net Speculative Position 228,555 n/a

• CFTC Oil Total Open Interest 1,662,829 n/a

• Total Put/Call 1.12 +19.15%

• OEX Put/Call 3.61 +86.08%

• ISE Sentiment 134.0 +47.25%

• NYSE Arms 1.89 +68.75%

• Volatility(VIX) 15.12 -11.0%

• S&P 500 Implied Correlation 56.83 -1.66%

• G7 Currency Volatility (VXY) 10.0 +2.77%

• Emerging Markets Currency Volatility (EM-VXY) 10.63 +4.52%

• Smart Money Flow Index 18,078.28 -.19%

• ICI Money Mkt Mutual Fund Assets $2.724 Trillion +.44%

• ICI US Equity Weekly Net New Cash Flow -$4.470 Billion

• AAII % Bulls 32.4 +5.2%

• AAII % Bears 26.0 -14.8%

Futures Spot Prices

• CRB Index 183.24 -.48%

• Crude Oil 41.71 +3.01%

• Reformulated Gasoline 139.05 +7.97%

• Natural Gas 2.21 -2.30%

• Heating Oil 135.24 -1.64%

• Gold 1,056.20 -2.32%

• Bloomberg Base Metals Index 134.95 -.68%

• Copper 205.05 -1.18%

• US No. 1 Heavy Melt Scrap Steel 139.0 USD/Ton unch.

• China Iron Ore Spot 44.5 USD/Ton -.91%

• Lumber 247.40 -.52%

• UBS-Bloomberg Agriculture 1,046.72 +.18%

Economy

• ECRI Weekly Leading Economic Index Growth Rate -2.0% +60.0 basis points

• Philly Fed ADS Real-Time Business Conditions Index -.0247 +30.22%

• S&P 500 Blended Forward 12 Months Mean EPS Estimate 125.83 unch.

• Citi US Economic Surprise Index -15.50 -6.4 points

• Citi Eurozone Economic Surprise Index 28.20 +4.2 points

• Citi Emerging Markets Economic Surprise Index 5.40 +3.3 points

• Fed Fund Futures imply 28.0% chance of no change, 72.0% chance of 25 basis point hike on 12/16
• # of Months to 1st Fed Rate Hike(Morgan Stanley) 1.85 -31.48%

• US Dollar Index 100.02 +.41%

• Euro/Yen Carry Return Index 135.93 -.50%

• Yield Curve 130.0 -5.0 basis points

• 10-Year US Treasury Yield 2.22% -4.0 basis points

• Federal Reserve's Balance Sheet $4.439 Trillion -.22%

• U.S. Sovereign Debt Credit Default Swap 20.63 +2.65%

• Illinois Municipal Debt Credit Default Swap 275.0 +1.92%

• Western Europe Sovereign Debt Credit Default Swap Index 17.74 -6.58%

• Asia Pacific Sovereign Debt Credit Default Swap Index 69.04 +1.74%
  

• Emerging Markets Sovereign Debt CDS Index 159.96 +5.93%
  

• Israel Sovereign Debt Credit Default Swap 78.50 +1.29%

• Iraq Sovereign Debt Credit Default Swap 823.98 +1.26%

• Russia Sovereign Debt Credit Default Swap 267.95 +5.95%

• iBoxx Offshore RMB China Corporates High Yield Index 124.14 -.01%

• 10-Year TIPS Spread 1.64% unch.

• TED Spread 24.25 -3.5 basis points

• 2-Year Swap Spread 6.0 unch.

• 3-Month EUR/USD Cross-Currency Basis Swap -53.25 -5.5 basis points

• N. America Investment Grade Credit Default Swap Index 84.48 +1.86%

• America Energy Sector High-Yield Credit Default Swap Index 1,314.0 +1.17%

• European Financial Sector Credit Default Swap Index 68.61 -2.33%
  

• Emerging Markets Credit Default Swap Index 319.29 +2.43%
  

• CMBS AAA Super Senior 10-Year Treasury Spread  to Swaps 130.0 +2.5 basis points

• M1 Money Supply $3.092 Trillion n/a

• Commercial Paper Outstanding 1,057.0 -.80%

• 4-Week Moving Average of Jobless Claims 271,000 +250

• Continuing Claims Unemployment Rate 1.6% unch.

• Average 30-Year Mortgage Rate 3.95% -2.0 basis points

• Weekly Mortgage Applications 419.90 -3.23%

• Bloomberg Consumer Comfort 40.9 -.3 point

• Weekly Retail Sales +1.30% +10.0 basis points

• Nationwide Gas $2.05/gallon -.05/gallon

• Baltic Dry Index 581.0 +16.67%

• China (Export) Containerized Freight Index 750.54 -3.24%

• Oil Tanker Rate(Arabian Gulf to U.S. Gulf Coast) 37.50 +7.14%

• Rail Freight Carloads 264,702 -3.0%

Best Performing Style

• Small-Cap Growth +3.7%

Worst Performing Style

• Large-Cap Value +.2%

Leading Sectors

• Hospitals +7.8%

• Retail +5.3%

• HMOs +4.1%

• Alt Energy +3.6%

• Homebuilders +2.7%

Lagging Sectors

• Road & Rail -1.6% 

• Steel -3.2%

• Gold & Silver -3.4%

• Disk Drives -3.8%

• Coal -4.5%

Weekly High-Volume Stock Gainers (17)

• AMWD, KIRK, TSN, BECN, GES, SRPT, BDBD, ANF, UVE, MENT, ADRO, CPRT, CMG, GMCR, PAHC, ESL and ETM

Weekly High-Volume Stock Losers (5)

• BLOX, DBD, TECD, GME and PSTG

Weekly Charts

ETFs

• High-Volume Gainers

• High-Volume Losers

Stocks

• High-Volume Gainers

• High-Volume Losers

*5-Day Change

Stocks Slightly HIgher into Final Hour on Central Bank Hopes, Seasonal Strength, Less European Debt Angst, Healthcare/Tech Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Modestly Higher
  

• Sector Performance: Mixed
  

• Volume: Light

• Market Leading Stocks: Performing In Line

Equity Investor Angst:

• Volatility(VIX) 15.29 +.39%

• Euro/Yen Carry Return Index 135.95 +.04%

• Emerging Markets Currency Volatility(VXY) 10.47 unch.

• S&P 500 Implied Correlation 56.61 -1.51%

• ISE Sentiment Index 134.0 unch.

• Total Put/Call 1.30 +26.21%

• NYSE Arms 1.70 +4.34% 

Credit Investor Angst:

• North American Investment Grade CDS Index 84.50 -.06%

• America Energy Sector High-Yield CDS Index 1,320.0 -.05%

• European Financial Sector CDS Index 68.23 +.34%

• Western Europe Sovereign Debt CDS Index 17.77 -4.36%

• Asia Pacific Sovereign Debt CDS Index 69.04 +.75%

• Emerging Market CDS Index 319.33 +.41%
  

• iBoxx Offshore RMB China Corporate High Yield Index 124.14 -.13%

• 2-Year Swap Spread 5.25 +.5 basis point

• TED Spread 22.25 -1.25 basis points

• 3-Month EUR/USD Cross-Currency Basis Swap -53.25 -6.25 basis points

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 70.37 -.31%
• 3-Month T-Bill Yield .16% -1.0 basis point

• Yield Curve 130.0 unch.

• China Import Iron Ore Spot $44.50/Metric Tonne +1.18%

• Citi US Economic Surprise Index -15.5 +1.0 point

• Citi Eurozone Economic Surprise Index 28.20 +6.0 points

• Citi Emerging Markets Economic Surprise Index 5.4 +1.4 points

• 10-Year TIPS Spread 1.63 -1.0 basis point
• # of Months to 1st Fed Rate Hike(Morgan Stanley) 1.85 -.03

Overseas Futures:

• Nikkei 225 Futures: Indicating -3 open in Japan 
• China A50 Futures: Indicating -119 open in China

• DAX Futures: Indicating +2 open in Germany

Portfolio: 

• Higher: On gains in my biotech/medical/tech sector longs and emerging markets shorts 

• Disclosed Trades: None

• Market Exposure: 50% Net Long

Morning Market Internals

NYSE Composite Index:

• Volume Running -36.3% Below 100-Day Average
• 7 Sectors Rising, 3 Sectors Declining
• 59.8% of Issues Advancing, 37.4% Declining
• 73 New 52-Week Highs, 39 New Lows
• 38.5% of Issues Above 200-day Moving Average
• Average 14-Day RSI 44.1
• Vix 15.3
• Total Put/Call 1.3
• TRIN/Arms 1.65

Friday Watch

Evening Headlines
Bloomberg:

• Terror Suspect on the Loose Leaves Fearful Brussels in Bind. Authorities put Brussels on its highest terror alert because they feared Salah Abdeslam was on the loose and planning a murderous attack on the city. He hasn’t been found. Now what? With Abdeslam, a suspect linked to the Nov. 13 massacre that left 130 people dead in Paris, probably at large in the Belgian capital, the government wasted no time on Saturday warning people of an “imminent” terror strike on multiple targets. It closed schools, shopping centers and the subway network, advised cafes to shut early and told people to avoid large gatherings. Soldiers patrolled the streets. On Wednesday, after four days of lockdown, the government allowed schools, malls and public transport to re-open with increased security, while keeping the terror threat level for Brussels at the maximum of 4, as Abdeslam continued to elude police. “The Belgian government is in a bind,” said Roland Freudenstein, policy director of the Martens Centre for European Studies in Brussels. “They probably did not anticipate a situation in which they would have to lift the lockdown -- for obvious economic, financial and even psychological reasons -- without any substantial new arrests or discovery of weapons caches, let alone finding Abdeslam.”  
• Terror and Refugees May Weigh on Euro-Area Economy, EU Says. Conflict in the Middle East, the biggest wave of refugees to Europe since World War II and the terrorism threat is having an impact on the euro area’s economy, the European Commission said, underscoring the fragile nature of the region’s recovery. With euro-area growth forecast to be 1.8 percent in 2016, compared to 2.8 percent in the U.S., the European Union warned that international instability could further undermine efforts to resuscitate the currency zone’s economy. “There are a number of conflicts in our neighborhood and, as regards security challenges, of course this is something we need to pay particular attention to in the aftermath of the Paris terror attacks,” European Commission Vice President Valdis Dombrovskis told a press conference in Brussels. “It’s premature at this stage to draw far-reaching conclusions as regards the impact of those factors on the economy,” he said.  
• Cameron Urges Syria Strikes to Counter Islamic State Threat. David Cameron appealed to lawmakers to back his calls for British airstrikes in Syria, saying Islamic State poses an “urgent” threat that will intensify the longer the organization is allowed to grow. The prime minister addressed Parliament on Thursday, setting out his case for action against the terrorist group, also known as ISIL, in the wake of the attacks on Paris and following progress at Syrian peace talks in Vienna. If the government believes it has enough support, Cameron has suggested he wants to call a vote in the House of Commons next week.
• Russia Retaliates for Jet Downing as Erdogan Calls for Calm. Russia began retaliating for the downing of one of its warplanes by Turkey, whose president made conciliatory gestures while reiterating that his military would do the same again if its airspace was violated. Turkey hasn’t apologized for its “treacherous stab in the back” or offered compensation after shooting down the jet, President Vladimir Putin said Thursday in Moscow at a meeting with new ambassadors to Russia. “It seems that the Turkish government is deliberately pushing Russian-Turkish relations into deadlock. We regret that.”
• China to Probe Largest Brokerage for Alleged Rule Violations. China’s securities regulator will probe Citic Securities Co. for alleged rule violations in the latest move against the country’s largest brokerage, where some top executives have already been placed under investigation. The firm received a notice from the China Securities Regulatory Commission on Thursday saying it will be investigated because it allegedly violated regulations on the supervision and administration of securities firms, Citic said in a Shanghai stock exchange statement. The brokerage said it will fully cooperate with the probe and that all of its operations are normal.
• China seen warning bond market about overheating with rules. The new regulations from the China Securities Depository and Clearing Corp. apply to exchange market investors who use existing noteholdings as collateral to borrow funds for new debt purchases. China is adjusting rules concerning the use of borrowed money to buy certain bonds, prompting speculation authorities are signalling that they won’t tolerate overheating. The new regulations from the China Securities Depository and Clearing Corp apply to exchange market investors who use existing noteholdings as collateral to borrow funds for new debt purchases, it said in a statement on its website Wednesday. CSDC may adjust the amount of borrowing that’s allowed in proportion to the face value of the debentures used as collateral, based on the number of holders of the pledged notes, their trading volume and the issuer credit profile, it said without giving more details.   
• Morgan Stanley(MS) Sees 11% Won Drop as Euro Hammers Asian Exports. When Morgan Stanley’s top currency strategist visited Asia last week he told clients their fixation with the U.S. Federal Reserve was causing them to overlook risks in Europe. Asian currencies will weaken next year as declines in the euro, already at a seven-month low on bets the European Central Bank will step up monetary stimulus on Dec. 3, acts as a drag on the region’s export-driven economies, Hans Redeker, New York-based global head of foreign-exchange strategy, said in an interview in Singapore. Overseas shipments shrank in eight months this year in China, 10 months in South Korea and nine months in Taiwan. In the euro-area, September marked an eighth straight gain from year-earlier levels. “You shouldn’t underestimate the impact of the euro," Redeker said, adding that Europe has a “significant manufacturing base.” Asian companies face high debt levels and excess capacity as economies reel from a slowdown in China, he said. 
• IMF Ratio Concern Depresses Yuan as Mizuho Warns of Further Drop. The yuan fell toward a three-month low amid concern China will win a smaller weighting in the IMF’s Special Drawing Rights than some analysts predict. While International Monetary Fund staff estimate a weighting of 14 to 16 percent, the market consensus is for 10 percent because of the currency’s limited usability, according to Mizuho Bank Ltd. Anything less than that will spark a decline, said Ken Cheung, a Hong Kong-based strategist at the Japanese lender. Many observers are still going by the IMF projection, said Sue Trinh, head of Asia foreign-exchange strategy at Royal Bank of Canada.
• China Brokerages Lead Drop as Haitong Securities Halts Trading. Chinese stocks slumped as some of the nation’s largest brokerages disclosed regulatory probes and falling profit at industrial companies signaled no improvement in the country’s economic slowdown. The Shanghai Composite Index dropped for a second day, while the Hang Seng China Enterprises Index sank 2 percent. Citic Securities Co. and Guosen Securities Co. plunged at least 6 percent in Shanghai after saying they were under investigation by the China Securities Regulatory Commission for alleged rule violations, while Haitong Securities Co. suspended trading in its shares without giving a reason. Industrial profits slid 4.6 percent last month, data showed Friday, compared with a 0.1 percent drop in September. The Shanghai Composite dropped 1.5 percent to 3,580.18 at the 11:30 a.m. local-time break, while the Hang Seng China Enterprises Index headed for its lowest close in almost two months. The Hang Seng Index retreated 1.2 percent.   
• Emerging-Market Assets Head for Weekly Decline as China Tumbles. Emerging-market stocks and currencies headed for a weekly decline as China’s economy showed further signs of slowing. The Turkish lira was poised for its biggest weekly drop since March as Russia began retaliating for the downing of a warplane this week. The MSCI Emerging Markets Index lost 0.7 percent at 12:15 p.m. Hong Kong time, and a gauge of developing-nations currencies decreased for a third day. Chinese stocks declined and the yuan fell toward a three-month low as industrial profits tumbled and brokerages said they were under official investigation for rule violations. Citic Securities Co. slumped the most in two months in Hong Kong, while Air Asia Bhd. slid after swinging to a quarterly loss. A decline in China’s industrial earnings adds to signs the country’s worst economic slowdown in 25 years is deepening.
• China Pig Iron Maker Says It May Miss Bond Payments Next Month. A Chinese producer of pig iron said it may not be able to repay bonds next month if investors demand their early redemption as it struggles with a cash shortage. Sichuan Shengda Group Ltd., based in the southwestern province of Sichuan, is uncertain it can repay the notes due in 2018 that holders can opt to sell back to the company early on Dec. 5, it said in a statement on Chinamoney’s website Thursday. Sichuan Shengda issued the 300 million yuan ($46.9 million) of securities in 2012 with a 7.25 percent coupon.
• Don't Catch the Metals Knife. The China Nonferrous Metals Industry Association has asked the government's National Development and Reform Commission to buy nickel, aluminum and other metals to prop up prices, people with knowledge of the matter told Bloomberg News. They're also pushing regulators to investigate short-selling of metals contracts, according to other people. Chinese nickel and copper producers will meet Friday and Saturday to discuss their response to the price slump, people familiar with companies in those industries said. Nickel and aluminum contracts traded in London, and copper traded in Chicago, all gained more than 2 percent Thursday on the news. This won't end well.
• Black Friday Retailers Pile on Discounts to Lure Frugal Shoppers. The shaky condition of U.S. retail will be put to the test this weekend, when Wal-Mart Stores Inc., Macy’s Inc. and other chains roll out their Black Friday specials. About 135.8 million Americans are expected to shop in stores or online over the four-day weekend, according to the National Retail Federation, the largest U.S. retail trade organization. The amount they’ve spent has declined over the past two years, dropping 11 percent to $50.9 billion in 2014.

Wall Street Journal: 

• Paris Attacks: Plot Was Hatched in Plain Sight. Terrorists used tools of everyday modern life to plan the attacks on the French capital undetected. Three days before the attacks that ripped through Paris, Djazira Boulanger handed the keys to her row house, across the street from a kindergarten, to a guest who had booked it over the website Homelidays.com. His name was Brahim Abdeslam. She didn’t know that Mr. Abdeslam was a central figure in plotting the deadly assault.
• Big Banks Cut Back on Loans to Small Business. Small businesses get fewer loans from banks, turning to alternative lenders that charge significantly higher rates. The biggest banks in the U.S. are making far fewer loans to small businesses than they did a decade ago, ceding market share to alternative lenders that charge significantly higher rates.

Fox News:

• FBI using elite surveillance teams to track at least 48 high risk ISIS suspects. With as many as 1000 active cases, Fox News has learned at least 48 ISIS suspects are considered so high risk that the FBI is using its elite tracking squads known as the mobile surveillance teams or MST to track them domestically.

Zero Hedge: 

• A Heatmap Of Global CapEx 'Shrinkage'. (graph)
• A Look At The Coming Collapse Of The European Union.
• As If The French Did Not Have Enough Problems. (graph)
• Oil Jobs Lost: 250,000 And Counting, Texas Likely To See Massive Layoffs Soon. (graph) 

Business Insider:

• Donald Trump fires off epic statement, tweetstorm after being accused of mocking reporter's physical disability.

CNN:

• Turkey Won't Apologize for Russian Warplane, Erdogan Says. Turkish President Recep Tayyip Erdogan says in interview with CNN, published on its website, that Russia needs to apologize. "I think if there is a party that needs to apologize, it is not us." "Those who violated our airspace are the ones who need to apologize. Our pilots and our armed forces, they simply fulfilled their duties, which consisted of responding" to "violations of the rules of engagement."

Evening Recommendations 

• None of note

Night Trading 

• Asian equity indices are -1.25% to -.25% on average.
• Asia Ex-Japan Investment Grade CDS Index 128.75 -1.75 basis points.
• Asia Pacific Sovereign CDS Index 68.50 -1.5 basis points.
• Bloomberg Emerging Markets Currency Index 70.56 -.04%.
• S&P 500 futures +.18%.
• NASDAQ 100 futures +.23%.

Morning Preview Links 

Earnings of Note 
Company/Estimate

• None of note

Economic Releases

• None of note

Upcoming Splits

• None of note

Other Potential Market Movers

• The UK GDP report could also impact trading today.

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