Weekly Scoreboard*

Indices

• S&P 500 2,234.78 -1.15%

• DJIA 19,753.12 -.93%

• NASDAQ 5,382.82 -1.31%

• Russell 2000 1,355.33 -.48%

• S&P 500 High Beta 36.49 -1.80%

• Goldman 50 Most Shorted 120.31 -.51%

• Wilshire 5000 23,262.70 -1.03%

• Russell 1000 Growth 1,051.55 -1.11%

• Russell 1000 Value 1,100.14 -1.05%

• S&P 500 Consumer Staples 530.90 -.67%

• Vanda Cyclicals-Defensives 1.2853 -.15%
  

• Morgan Stanley Technology 1,214.39 -1.15%

• Transports 9,029.55 -1.43%

• Utilities 660.60 +.07%

• Bloomberg European Bank/Financial Services 91.89 -1.71%

• MSCI Emerging Markets 35.15 +2.37%

• HFRX Equity Hedge 1,154.54 -.40%

• HFRX Equity Market Neutral 989.94 -.12%

Sentiment/Internals

• NYSE Cumulative A/D Line 273,524 +.1%

• Bloomberg New Highs-Lows Index 40 -52

• Bloomberg Crude Oil % Bulls 44.83 +258.64%

• CFTC Oil Net Speculative Position 436,661 +3.29%

• CFTC Oil Total Open Interest 2,029,807 -3.56%

• Total Put/Call .98 +11.63%

• OEX Put/Call 2.1 +41.0%

• ISE Sentiment 64.0 -33.98%

• NYSE Arms 1.56 +13.18%

• Volatility(VIX) 14.24 +23.4%

• S&P 500 Implied Correlation 50.95 +4.73%

• G7 Currency Volatility (VXY) 11.23 +2.18%

• Emerging Markets Currency Volatility (EM-VXY) 11.34 +.09%

• Smart Money Flow Index 19,262.20 -.66%

• ICI Money Mkt Mutual Fund Assets $2.728 Trillion +.59%

• ICI US Equity Weekly Net New Cash Flow -$5.106 Billion

• AAII % Bulls 45.6 +2.1%

• AAII % Bears 25.7 -11.7%

Futures Spot Prices

• CRB Index 192.41 +1.12%

• Crude Oil 53.59 +1.82%

• Reformulated Gasoline 167.05 +4.38%

• Natural Gas 3.71 +4.70%

• Heating Oil 170.42 +2.86%

• Gold 1,152.50 +2.0%

• Bloomberg Base Metals Index 166.65 -1.07%

• Copper 250.40 -.14%

• US No. 1 Heavy Melt Scrap Steel 248.33 USD/Ton unch.

• China Iron Ore Spot 78.87 USD/Ton +.93%

• Lumber 316.70 +2.56%

• UBS-Bloomberg Agriculture 1,131.76 +1.31%

Economy

• Atlanta Fed GDPNow Forecast +2.5% unch.
• ECRI Weekly Leading Economic Index Growth Rate +11.8% +50.0 basis points
  

• Philly Fed ADS Real-Time Business Conditions Index -.2956 +8.43%

• S&P 500 Blended Forward 12 Months Mean EPS Estimate 131.31 +.21%

• Citi US Economic Surprise Index 23.30 +1.3 points

• Citi Eurozone Economic Surprise Index 53.1 -3.2 points

• Citi Emerging Markets Economic Surprise Index 18.1 +10.2 points

• Fed Fund Futures imply 87.6% chance of no change 12.4% chance of 25 basis point hike on 2/1

• US Dollar Index 102.29 -.8%
• MSCI Emerging Markets Currency Index 1,506.09 +.30%

• Euro/Yen Carry Return Index 128.51 +.34%

• Yield Curve 125.0 -9.0 basis points

• 10-Year US Treasury Yield 2.45% -9.0 basis points

• Federal Reserve's Balance Sheet $4.413 Trillion -.4%

• U.S. Sovereign Debt Credit Default Swap 26.75 -1.87%

• Illinois Municipal Debt Credit Default Swap 358.0 -.05%

• Western Europe Sovereign Debt Credit Default Swap Index 20.87 +2.38%

• Asia Pacific Sovereign Debt Credit Default Swap Index 36.11 -2.99%
  

• Emerging Markets Sovereign Debt CDS Index 79.62 -1.74%
  

• Israel Sovereign Debt Credit Default Swap 75.50 +9.8%

• Iraq Sovereign Debt Credit Default Swap 703.52 -7.42%

• Russia Sovereign Debt Credit Default Swap 177.50 +3.03%

• iBoxx Offshore RMB China Corporate High Yield Index 133.21 +.06%

• 10-Year TIPS Spread 1.97% -3.0 basis points
  

• TED Spread 45.0 +1.0 basis point

• 2-Year Swap Spread 26.0 -4.0 basis points

• 3-Month EUR/USD Cross-Currency Basis Swap -56.0 +6.25 basis points

• N. America Investment Grade Credit Default Swap Index 67.76 +1.44%

• America Energy Sector High-Yield Credit Default Swap Index 458.0 +1.0%

• European Financial Sector Credit Default Swap Index 93.56 +1.55%
  

• Emerging Markets Credit Default Swap Index 241.99 -1.35%
  

• CMBS AAA Super Senior 10-Year Treasury Spread to Swaps 134.0 unch.
  

• M1 Money Supply $3.298 Trillion -1.28%

• Commercial Paper Outstanding 986.50 +2.1%

• 4-Week Moving Average of Jobless Claims 263,000 -750

• Continuing Claims Unemployment Rate 1.5% unch.

• Average 30-Year Mortgage Rate 4.32% +2.0 basis points

• Weekly Mortgage Applications 407.30 +2.47%

• Bloomberg Consumer Comfort 46.0 -.7 point

• Weekly Retail Sales +1.3% +20.0 basis points

• Nationwide Gas $2.32/gallon +.05/gallon

• Baltic Dry Index 961.0 +1.59%

• China (Export) Containerized Freight Index 811.14 +3.80%

• Oil Tanker Rate(Arabian Gulf to U.S. Gulf Coast) 45.0 -14.3%

• Rail Freight Carloads 252,716 -6.14%

Best Performing Style

• Small-Cap Growth -.2%

Worst Performing Style

• Large-Cap Growth -.8%

Leading Sectors

• Gold & Silver +9.8%

• Tobacco +1.8%

• REITs +1.3%

• Drugs +.7%

• Agriculture +.5%

Lagging Sectors

• Alt Energy -1.6% 

• Restaurants -1.7%

• Gaming -2.0%

• Disk Drives -2.3%

• Coal -3.0%

Weekly High-Volume Stock Gainers (3)

• KATE, PTLA and WMK

Weekly High-Volume Stock Losers (1)

• BAS

Weekly Charts

ETFs

• High-Volume Gainers

• High-Volume Losers

Stocks

• High-Volume Gainers

• High-Volume Losers

*5-Day Change

Stocks Reversing Lower into Final Hour on Pension Rebalancing, Profit-Taking, Technical Selling, Tech/Biotech Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Lower
  

• Sector Performance: Most Sectors Declining
  

• Volume: Light

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 14.29 +6.88%

• Euro/Yen Carry Return Index 128.41 +.55%

• Emerging Markets Currency Volatility(VXY) 11.34 -.18%

• S&P 500 Implied Correlation 51.03 -1.14%

• ISE Sentiment Index 56.0 -33.33%
  

• Total Put/Call 1.0 +7.53%

• NYSE Arms 1.55 +30.72%

Credit Investor Angst:

• North American Investment Grade CDS Index 67.48 -.39%
  

• America Energy Sector High-Yield CDS Index 458.0 +.98%

• European Financial Sector CDS Index 93.57 -1.53%

• Western Europe Sovereign Debt CDS Index 20.87 +1.78%

• Asia Pacific Sovereign Debt CDS Index 36.11 -4.33%

• Emerging Market CDS Index 241.99 +.39%
  

• iBoxx Offshore RMB China Corporate High Yield Index 133.21 +.01%

• 2-Year Swap Spread 26.0 +1.0 basis points

• TED Spread 50.0 -3.0 basis points

• 3-Month EUR/USD Cross-Currency Basis Swap -56.0 -2.0 basis points
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 69.79 unch.
• 3-Month T-Bill Yield .50% +5.0 basis points

• Yield Curve 126.0 unch.
  

• China Import Iron Ore Spot $78.87/Metric Tonne -1.94%

• Citi US Economic Surprise Index 23.30 -.6 point

• Citi Eurozone Economic Surprise Index 53.10 -1.0 basis point

• Citi Emerging Markets Economic Surprise Index 18.10 +.2 point

• 10-Year TIPS Spread 1.97% +1.0 basis point
• 31.3% chance of Fed rate hike at March 15 meeting, 42.0% chance at May 3 meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating -29 open in Japan 
• China A50 Futures: Indicating +2 open in China

• DAX Futures: Indicating -35 open in Germany

Portfolio: 

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

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

• Market Exposure: Moved to 25% Net Long

Bear Radar

Style Underperformer:

• Large-Cap Growth -.3%

Sector Underperformers:

• 1) Gold & Silver -2.5% 2) Semis -1.0% 3) Steel -.8%

Stocks Falling on Unusual Volume: 

• CAB, LIVE, NVDA and TTD

Stocks With Unusual Put Option Activity:

• 1) ZNGA 2) DXJ 3) MDLZ 4) DLTR 5) YELP

Stocks With Most Negative News Mentions:

• 1) GILD 2) CLD 3) EGN 4) AGTC 5) PRU

Charts:

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

Bull Radar

Style Outperformer:

• Mid-Cap Value unch.

Sector Outperformers:

• 1) Oil Service +.7% 2) REITs +.6% 3) Banks +.5%

Stocks Rising on Unusual Volume:

• KATE and ACOR

Stocks With Unusual Call Option Activity:

• 1) HCA 2) UUP 3) BSX 4) YUM 5) MYL

Stocks With Most Positive News Mentions:

• 1) AVID 2) AVGO 3) CEMP 4) WMT 5) ENDP

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running -39.6% Below 100-Day Average
• 1 Sector Rising, 9 Sectors Declining
• 45.4% of Issues Advancing, 51.2% Declining
• 32 New 52-Week Highs, 5 New Lows
• 57.5% of Issues Above 200-day Moving Average
• Average 14-Day RSI 40.7%
• Vix 14.1 +5.4%
• Total Put/Call 1.08 +16.1%
• TRIN/Arms .72 -38.3%

Friday Watch

Evening Headlines

Bloomberg:

• Easing China’s Housing Bubble Has Unintended Side Effects. In China’s two-speed property market, prescriptions for deflating big-city bubbles are having unintended side-effects in smaller towns. Soaring prices in megacities Beijing and Shanghai both snapped 20 months of gains in November after authorities tightened restrictions to reduce excessive speculation. Meanwhile, real estate in the northwestern rust belt cities of Jilin and Harbin also declined, posting their first drops in four months. Signs that prices stopped rising is good news for major cities as it shows policies are having the desired effect, but they’re less welcome in smaller towns still battling to fill millions of empty homes that weigh on prices. That disparity poses a new challenge for policy makers just as they pledge to ensure stability and step up the fight against speculation.
• Scissors: U.S. Will Win Trade War With China. (video)
• Why China's Maritime Disputes Could Lead to War. (video)
• Japan Wants Its "Overworked" Citizens to Start Weekends Early. Government wants 3pm clock-off on last Friday of each month.
• Euro Climbs Along With Oil as Japan Stocks Decline. Japan’s Topix fell 0.6 percent and is set for a 2.4 percent decline in 2016. The Nikkei 225 index was down 0.7 percent on Friday. Australia’s S&P/ASX 200 Index dropped 0.5 percent, while New Zealand’s S&P/NZX 50 was off by 0.2 percent. FTSE China A50 futures gained 0.3 percent, as did futures for Korea’s Kospi gauge. Hang Seng Index futures slid 0.1 percent in most recent trading.
• Get Set for the Year Ahead: Here’s Your QuickTake Guide to Navigating 2017.
• Tillerson Climate-Change Testimony Set Before Trump Sworn In. Lawyers for teenagers claiming the U.S. government failed to protect the environment from global warming plan to question under oath President-elect Donald Trump’s pick for secretary of state on his knowledge of climate change.

Wall Street Journal:

• U.S. Sanctions Russia Over Election Hacking; Russia Threatens to Retaliate. Sanctions follow U.S. assessment Russia used cyberattacks to interfere with election.
• Syrian Rebel Group Rejects Cease-Fire Hours Before Its Start. Fragile truce engineered by Russia and Turkey goes into effect but is already thrown into doubt.
• Snap’s IPO Roadshow Message: We’re the Next Facebook, Not the Next Twitter. Virtual-messaging service’s pitch designed to convince investors that platform can evolve into a content powerhouse.
• The VA Hooked Veterans on Opioids, Then Failed Them Again.
• The War on Israel Never Ends. Settlements aren’t the issue. Many of the Jewish state’s enemies don’t even believe in its right to exist.

Fox News:

• Obama orders sanctions against Russia, expels operatives, in response to hacking. (video)
• Best pictures of the year.

Zero Hedge:

• Mainstream Media Is Now Whining About The "Fake News" Hysteria It Created.
• Trump Responds To Obama's Russian Sanctions: "Time To Move On".
• Central Bankers Are Losing Faith In Their Own Alchemy.
• Anthony Bourdain Slams "Privileged" Liberals For Their "Utter Contempt" Of Working-Class America.
• GWU Eliminates U.S. History As A Requirement For History Majors.
• Obama's Vacation Costs Expected To Top $90 Million Over 8 Years.
• Inside Another Record-Setting Streak For The S&P 500.
• 3 Things: Records Are Records For A Reason. (graph)
• Bonds & Bullion Bounce But Banks Bruised As Dollar Dumps. (graph)

Business Insider:

• Russia responds to US sanctions: 'If Washington takes new hostile steps, it will receive an answer'.
• Russia expert: New US sanctions 'clearly meant to throw a wrench into' Trump's dealings with Moscow.
• Homebuyers are feeling the heat as mortgage rates rise.

Night Trading 

• Asian equity indices are -.50% to -.50% on average.
• Asia Ex-Japan Investment Grade CDS Index 121.75 +.5 basis point.
• Asia Pacific Sovereign CDS Index 37.75 unch.
• Bloomberg Emerging Markets Currency Index 69.97 +.26%. 
• S&P 500 futures +.04%. 
• NASDAQ 100 futures +.08%.

Morning Preview Links

Earnings of Note
Company/Estimate

• None of note

Economic Releases
9:45 am EST

• Chicago Purchasing Manager for December is estimated to fall to 57.0 versus 57.6 in November.     

Upcoming Splits 

• None of note

Other Potential Market Movers

• The China Current Account Balance 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 mixed and to weaken into the afternoon, finishing modestly lower. The Portfolio is 50% net long heading into the day.