Bear Radar

Style Underperformer:

• Small-Cap Growth -1.5%

Sector Underperformers:

• 1) Semis -4.6% 2) Disk Drives -3.8% 3) Gaming -3.1%

Stocks Falling on Unusual Volume: 

• KNSL, BAH, GES, RXN, CIVI, XNCR, BEAV, WGL, BUD, Q, PSTG, VWR, JBT, GIMO, MAA, SITE, MCHP, DG, PAC, CVGW, BTI, MEOH, MGRC, SPGI, ELLI, PCTY, SSNC, STZ, WDAY, APFH, Q, ULTI, SPB, FAF, RXN, NVDA, MTSI, SNPS, ZG, AEIS, QUOT, FIVN, PFPT, VWR, LRCX, GIMO, IPHI, CRUS, PSTG, GES, QUAD and EXPR

Stocks With Unusual Put Option Activity:

• 1) SMH 2) KBE 3) ORCL 4) WDAY 5) Z

Stocks With Most Negative News Mentions:

• 1) CERN 2) CCL 3) VRX 4) GES 5) Q

Charts:

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

Bull Radar

Style Outperformer:

• Large-Cap Value +.1%

Sector Outperformers:

• 1) Oil Service +2.7% 2) Banks +1.9% 3) Energy +1.6%

Stocks Rising on Unusual Volume:

• CLC, PVTB, TLYS, CM, DCI, SMTC, BLUE, SKX, COL, LAZ, COTV, GM, F, HEES, LQ, BLUE, CRC, FLS, XLRN, WCC and AME

Stocks With Unusual Call Option Activity:

• 1) TAP 2) KR 3) CCI 4) SKX 5) TRUE

Stocks With Most Positive News Mentions:

• 1) SKX 2) CBRL 3) LB 4) COST 5) SMTC

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running +48.9% Above 100-Day Average
• 4 Sectors Rising, 6 Sectors Declining
• 44.5% of Issues Advancing, 53.4% Declining
• 215 New 52-Week Highs, 87 New Lows
• 55.1% of Issues Above 200-day Moving Average
• Average 14-Day RSI 43.9%
• Vix 13.9 +4.3%
• Total Put/Call .88 -2.22%
• TRIN/Arms .51 -15.5%

Thursday Watch

Evening Headlines

Bloomberg:

• China Slaps 10% Tax on Ferrari, Bentley Cars to Curb Luxury. China is slapping a 10 percent tax on cars like the Ferrari GTC4Lusso, Bentley Bentayga and Aston Martin DB9 in a bid to combat conspicuous consumption and promote more fuel-efficient vehicles. Buyers of autos costing 1.3 million yuan ($189,000) or more will be hit with the tax starting Thursday, according to the Ministry of Finance. The levy on “super luxury” vehicles is meant to “guide reasonable consumption,” lower emissions and save energy, the ministry said in a statement on its website.
• China Risks Stagnation, Ex-Goldman Dealmaker Says. China risks economic stagnation unless it quickly removes barriers hampering entrepreneurs seeking to enter industries from health care to education to financial services. That’s according to Fred Hu, a former Greater China chairman for Goldman Sachs Group Inc. who has advised the central government on financial, pension and state-enterprise reforms. "Economic reforms have been slow-paced, way short of expectations," said Hu, founder and chairman of Beijing-based investment firm Primavera Capital Group. "China should discard outdated regulations and policies that have hampered new business formation. Unfortunately doing so means taking power away from over-extending government agencies and bureaucrats. Right now, the bureaucracy just has no appetite to undertake such reforms."
• China Factory Gauge Matches Post-2012 High as Large Firms Lead. China’s official factory gauge matched a post-2012 high as a credit-fueled recovery of smokestack industries gained momentum and signaled a pickup in inflation expectations.
• Is the Emerging-Market Bond Selloff Out of Control? (video)
• Asian Stocks Rise on Oil Deal, Dollar Gains as Bond Rout Deepens. Asian equities rallied as a deal to cut global oil output fueled gains in energy shares, while evidence of strength in the U.S. economy sank bonds and supported the dollar. The MSCI Asia Pacific Index added .8% as of 10:57 am Tokyo time, ending a two-day decline as a sub-gauge of energy stocks jumped 4.3%. 
• Texas Shale Is Big Winner as OPEC Deal Brightens Oil Outlook. (video) Hangover Awaits as OPEC Celebrates Its Biggest Accord in Years. Let OPEC celebrate. For now. The oil club is dizzy with its own success after a harmonious meeting in Vienna, where it surprised the world by agreeing to its first production cut in eight years. Oil prices up 10 percent? Check. Saudi Arabia and Iran in agreement? Check. OPEC and Russia working together? Check. After being left for dead, OPEC pulled it off once again.
• From IndyMac to OneWest: Steven Mnuchin's Big Score. (March 2012) Wall Street veteran Steven Mnuchin rode into Pasadena and bought what was left of IndyMac. Now he’s making a killing. 

Wall Street Journal:

• Steven Mnuchin’s Defining Moment: Seizing Opportunity From the Financial Crisis. Donald Trump’s nominee for Treasury secretary made millions buying failed IndyMac and has résumé at odds with president-elect’s campaign rhetoric.
• Schumer Deflects Blame To IndyMac, Regulator. (July 2008) Sen. Charles Schumer, hit with criticism from a federal regulator that he contributed to the failure of IndyMac Bank, said he may have caused some depositors to withdraw their money but said he wasn't responsible for the bank's downfall. The saga started in late June, when Sen. Schumer's letters to the FHFB, OTS and the Federal Deposit Insurance Corp. rang alarms that IndyMac "could face failure if prescriptive measures are not taken quickly." He noted the thrift's falling stock price, climbing delinquency rate and recent downgrading by analysts. Sen. Schumer's office publicized the letter June 27, providing it to The Wall Street Journal and other publications. A June 28 story in IndyMac's hometown newspaper, the Pasadena Star-News, had a "very inflammatory headline," Sen. Schumer said. It read: "IndyMac appears close to collapse." The story in the California newspaper mentioned Sen. Schumer's letters, as well as a shareholder lawsuit and other signs of trouble at IndyMac. The newspaper didn't immediately respond to a request for comment. IndyMac on July 1, a Tuesday, said Mr. Schumer's statements caused "elevated customer inquiries and withdrawals" on June 27 and June 28, and that about $100 million had been withdrawn.
• U.S. to Forgive at Least $108 Billion in Student Debt in Coming Years. GAO report offers first full cost estimate of debt-relief programs, berates Education Department over accounting methods.
• Damascus Presses Offensive Against Aleppo Rebels. Syrian regime shelling killed at least 40 civilians in east Aleppo, opposition officials and activists said.

Fox News:

• Europe's Trump moment: Countries see rise of populist leaders amid anger over economy, migrant crisis.

CNBC:

• How Chuck Schumer Caused the Second Largest Bank Failure in US History. (July 2008)
• OPEC just burned short sellers and injected life into US fracking stocks. (video)
• Guess shares plunge after earnings miss, disappointing guidance. (video)

Zero Hedge

• $1 Trillion Money Manager Downplays The OPEC Deal.
• "Metals Traders On Red Alert" - Chinese Commodity Bubble 2.0 Just Imploded. (graph)
• Obama Still Can't Process Hillary's Loss; Blames "Fox News In Every Bar And Restaurant".
• Angry Mobs Lock Up Indian Bankers As Cash Chaos Soars: "We Are Fearing The Worst".
• ESPN Still Bleeding Subs As 1.2mm People Ditch Service In Past 2 Months Alone.
• Carrier Issues Statement On Trump Deal: "Incentives Offered Were An Important Consideration".
• UBS Warns "One-Sided" Sentiment Is Pure Contrarian Indicator, Upside Limited. (graph)
• Mortgage Refinancings Collapse To 2016 Lows As Rates Top 4.00%.
• A Second Look At The OPEC Deal: Here's What Can Go Wrong.
• Steven Mnuchin Roils Bond Markets With Suggestion Of 100 Year Treasury Bond. (graph)
• November To Remember - Unprecedented Month In Markets Ends Weak. (graph)

Breitbart.com:

• IndyMac Attack: Did Schumer, Paulson, Soros, and the CRL Kill the Bank and Profit From Its Collapse? (April 2010)

Night Trading 

• Asian equity indices are +.5% to +1.5% on average.
• Asia Ex-Japan Investment Grade CDS Index 125.0 -1.0 basis point.
• Asia Pacific Sovereign CDS Index 41.5 -2.0 basis points.
• Bloomberg Emerging Markets Currency Index 69.37 +.03%. 
• S&P 500 futures +.08%. 
• NASDAQ 100 futures +.18%.

Morning Preview Links

Earnings of Note
Company/Estimate 

• (CBK)/-.14
• (DG)/.93
• (DCI)/.35
• (KR)/.41
• (TD)/1.22
• (LE)/-.06
• (ISLE)/.19
• (AMBA)/.94
• (CENT)/.05
• (GIII)/1.54
• (SWHC)/.58
• (ULTA)/1.37
• (WDAY)/-.05
• (ZUMZ)/.36

Economic Releases 
7:30 am EST

• Challenger Job Cuts YoY for November.

8:30 am EST

• Initial Jobless Claims for last week are estimated to rise to 253K versus 251K the prior week.
• Continuing Claims are estimated to fall to 2033K versus 2043K prior.

9:45 am EST

• Final Markit US Manufacturing PMI for November is estimated at 53.9 versus a prior estimate of 53.9.

10:00 am EST

• Construction Spending MoM for October is estimated to rise +.6% versus a -.4% decline in September.
• ISM Manufacturing for November is estimated to rise to 52.4 versus 51.9 in October.
• ISM Prices Paid for November is estimated at 54.5 versus 54.5 in October. 

Afternoon:

• Total Vehicle Sales for November is estimated to fall to 17.7M versus 17.9M in October.

Upcoming Splits 

• None of note

Other Potential Market Movers

• The Fed's Mester speaking, Eurozone Unemployment Rate, weekly Bloomberg Consumer Comfort Index, weekly EIA natural gas inventory report, (CBG) Business Outlook Day, (F) November sales call, (SKX) Analyst Meeting, (URI) Analyst Day, (JEC) Analyst Day and the (LB) November sales report could also impact trading today.

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

Stocks Reversing Lower into Final Hour on Rising Long-Term Rates, Technical Selling, Profit-Taking, Biotech/Homebuilding Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Lower
  

• Sector Performance: Mixed
  

• Volume: Above Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 13.36 +3.57%

• Euro/Yen Carry Return Index 126.42 +1.11%

• Emerging Markets Currency Volatility(VXY) 10.76 -.92%

• S&P 500 Implied Correlation 53.79 -4.31%

• ISE Sentiment Index 85.0 +7.89%
  

• Total Put/Call .90 -5.26%

• NYSE Arms .42 -65.81%

Credit Investor Angst:

• North American Investment Grade CDS Index 72.76 -1.07%
  

• America Energy Sector High-Yield CDS Index 562.0 -4.04%

• European Financial Sector CDS Index 107.50 -.94%

• Western Europe Sovereign Debt CDS Index 23.48 +.54%

• Asia Pacific Sovereign Debt CDS Index 41.44 -4.81%

• Emerging Market CDS Index 265.31 -1.51%
  

• iBoxx Offshore RMB China Corporate High Yield Index 132.98 +.01%

• 2-Year Swap Spread 20.75 +1.0 basis point

• TED Spread 44.75 -1.0 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -59.0 -2.75 basis points
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 69.36 +.05%
• 3-Month T-Bill Yield .48% +1.0 basis point

• Yield Curve 125.0 +4.0 basis points
  

• China Import Iron Ore Spot $72.08/Metric Tonne -6.75%

• Citi US Economic Surprise Index 17.80 +1.0 point

• Citi Eurozone Economic Surprise Index 58.90 -4.7 points

• Citi Emerging Markets Economic Surprise Index -4.4 +.3 point

• 10-Year TIPS Spread 1.97% +7.0 basis points
• 100.0% chance of Fed rate hike at Feb. 1 meeting, 100.0% chance at March 15 meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating +297 open in Japan 
• China A50 Futures: Indicating +30 open in China

• DAX Futures: Indicating -29 open in Germany

Portfolio: 

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

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

• Market Exposure: Moved to 25% Net Long

Morning Market Internals

NYSE Composite Index:

• Volume Running +37.7% Above 100-Day Average
• 4 Sectors Rising, 6 Sectors Declining
• 45.0% of Issues Advancing, 52.8% Declining
• 171 New 52-Week Highs, 39 New Lows
• 56.6% of Issues Above 200-day Moving Average
• Average 14-Day RSI 44.5%
• Vix 12.7 -1.6%
• Total Put/Call .74 -22.1%
• TRIN/Arms .46 -62.3%