Bull Radar

Style Outperformer:

• Large-Cap Growth -.1%

Sector Outperformers:

• 1) Hospitals +2.5% 2) Gold & Silver +1.5% 3) Biotech +1.1%

Stocks Rising on Unusual Volume:

• ETRM, ARIA, WOOF, SCAI, DDD, NLNK, EXAS, AXGN, GPN, FRAN, GKOS, BABY, UCTT, INCY and GCO

Stocks With Unusual Call Option Activity:

• 1) ARIA 2) DDD 3) EXAS 4) HLF 5) ANTM

Stocks With Most Positive News Mentions:

• 1) VALE 2) MPEL 3) AXP 4) EXAS 5) ST

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running -16.9% Below 100-Day Average
• 8 Sectors Rising, 2 Sectors Declining
• 34.1% of Issues Advancing, 62.4% Declining
• 49 New 52-Week Highs, 7 New Lows
• 59.8% of Issues Above 200-day Moving Average
• Average 14-Day RSI 42.4%
• Vix 11.9 +4.8%
• Total Put/Call 1.06 +10.4%
• TRIN/Arms 1.05 -2.44%

Monday Watch

Today's Headlines

Bloomberg:

• China Reserves Slumped $320 Billion Last Year as Yuan Tumbled. China’s foreign currency holdings fell for a sixth month in December, bringing last year’s drop to $320 billion as the yuan posted its steepest annual slide in more than two decades. Reserves decreased $41.1 billion to a fresh five-year low of $3.01 trillion, the People’s Bank of China said Saturday. That was in line with estimates in Bloomberg’s survey of economists. The central bank’s effort to stabilize the yuan was the main reason for the drop last year, the State Administration of Foreign Exchange said in a statement. The world’s largest stockpile has fallen for 10 straight quarters from a record $4 trillion in June 2014, while eroding confidence in the yuan has pushed the currency to the lowest levels in eight years.
• Asia Stocks Set to Follow U.S. Gains, Pound Slips. Futures showed most Asian equity markets strengthening after U.S. stocks rose to a record high at the end of last week, while Britain’s pound fell following comments by Prime Minister Theresa May on the U.K.’s European Union negotiations. The greenback held firm against most major peers in Asian trading Monday after signs of strength in the monthly U.S. labor market report helped drive up the Bloomberg Dollar Index on Friday for the first time in three days. Australian and New Zealand bond rates climbed following an increase in U.S. yields at the end of last week. West Texas Intermediate crude oil slid for the first time in four sessions. Markets in Japan are closed for a holiday. Nikkei 225 Index futures added 1 percent in Osaka, while Kospi index contracts rose 0.2 percent in latest trading. FTSE China A50 futures held steady and Hang Seng futures were off 0.2 percent.
• Potential Fed Chairs Suggest They Would Pursue Tighter Policy. Potential candidates to head the Federal Reserve in 2018 suggested that monetary policy would be tighter if they were in charge. Speaking at the annual American Economic Association meeting that ended Sunday, Glenn Hubbard of Columbia University, along with Stanford University’s John Taylor and Kevin Warsh, criticized the central bank for trying to do too much to help an economy struggling with problems that monetary policy can’t solve.

Wall Street Journal:

• Two Senate Republicans to Seek Added Sanctions on Russia Over Hacking. The move by Lindsey Graham and John McCain threatens to deepen the divide between Capitol Hill and Donald Trump over relations with the Kremlin.
• Senate Looks to Move Fast on Trump Administration Hearings, Health Law. Republican-controlled chamber has at least nine confirmation hearings this week.

Fox News:

• Trump's Cabinet nominees get their day before Senate, as partisan wrangling intensifies. (video)

CNBC:

• Fiat to invest $1 billion in Michigan, Ohio plants, create 2000 jobs.

Zero Hedge:

• Surveillance Footage Shows Moment Of Deadly Jerusalem Truck Attack.
• Santelli 'Meets The Press': "You Picked Sides... On Election Night, I've Never Seen You So Unhappy".
• The Problem With Forecasts.
• The Surveillance State Did Not Disappear With The Trump Victory: "It Is Still Lurking And Completely Intact".
• TrimTabs Says "Insatiable" ETF Buying Is Unlike It Has Anything Ever Seen, Issues A Warning.
• It's The Debt, Stupid - Massive Borrowing Binge Producing Fake Recovery. (graph)
• 5,000 National Guard Deployed At Inauguration As Michael Moore Calls For "100 Days Of Resistance" Against Trump. (video)
• Union Servitude Ends In Kentucky: State Kills Prevailing Wages, Passes Right-To-Work.
• North Korea Warns Of ICBM Launch "At Any Time, Anywhere".
• Traders May "Sell The Inauguration" But BofA Is Not Calling For "A BIg Short" Yet.
• Trump To Meet With UK Prime Minister, As May Denies Her Brexit Plans Are "Muddled".
• Priebus: Trump "Accepts" That Russia Played A Role In Election Hacking.
• Steven Mnuchin Donated To One Democrat In 2016 – The Woman Who Declined To Prosecute His Bank. While $2,000 is a small amount of money, the entire thing stinks. Kamala Harris should resign from her Senate seat immediately unless she can provide a reasonable explanation of why she let OneWest off the hook. Likewise, Steven Mnuchin should be replaced by Trump as Treasury Secretary nominee. Both are swamp creatures, and we should demand better than these two.
• Florida Shooter Charged, Could Face Death Penalty; Had Gun Returned After Found Mentally Stable.

Business Insider: 

• Inside Sears' death spiral: How an iconic American brand has been driven to the edge of bankruptcy.
• Obama: 'I take some responsibility' for massive Democratic losses during my presidency.

Reuters:

• Australia forecasts dramatic drop in iron ore prices through 2018. The Department of Industry, Innovation and Science forecasts iron ore to average $51.60 a ton this year and $46.70 in 2018, compared with current spot prices of around $80, double the price a year ago. The department predicted a price of $44.10 in 2016. The country's chief forecaster said the price rise is being caused by a temporary lift in Chinese steel production and run ups caused by speculative commodities trading in China that will not last.

Night Trading

• Asian indices are -.25% to +.5% on average.
• Asia Ex-Japan Investment Grade CDS Index 114.25 +.25 basis point.
• Asia Pacific Sovereign CDS Index 33.75 +.5 basis point.
• Bloomberg Emerging Markets Currency Index 69.95 -.04%.
• S&P 500 futures +.09%.
• NASDAQ 100 futures +.13%.

Morning Preview Links

Earnings of Note

Company/Estimate

• (AYI)/2.18
• (CMC)/.16
• (GPN)/.84
• (APOL)/.19
• (CUDA)/.14
• (WDFC)/.87

Economic Releases
3:00 pm EST

• Consumer Credit for November is estimated to rise to $18.225B versus $16.018B in October.

Upcoming Splits

• None of note

Other Potential Market Movers

• The Fed's Rosengren speaking, Fed's Lockhart speaking, China CPI report, Eurozone Industrial Production report, Eurozone Unemployment report and the JPMorgan Healthcare Conference could also impact trading today.

BOTTOM LINE: Asian indices are mostly higher, boosted by commodity 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 50% net long heading into the week.

Weekly Outlook

• Wall St. Week Ahead by Reuters.
• Weekly Economic Calendar by Briefing.com.

BOTTOM LINE: I expect US stocks to finish the week modestly lower on rising European/Emerging Markets/US high-yield debt angst, earnings outlook worries, yen strength, technical selling, profit-taking and rising long-term rates. My intermediate-term trading indicators are giving neutral signals and the Portfolio is 50% net long heading into the week.

Today's Headlines

Bloomberg:

• Fed’s Powell Urges Congress to Take Another Look at Volcker Rule. Federal Reserve Governor Jerome Powell urged Congress to rewrite the Volcker Rule that restricts proprietary trading, while urging “a high degree of vigilance” against the buildup of financial risks amid improving U.S. growth. “What the current law and rule do is effectively force you to look into the mind and heart of every trader on every trade to see what the intent is,” Powell said Saturday at the American Finance Association meeting in Chicago. “Is it propriety trading or something else? If that is the test you set yourself, you are going to wind up with tremendous expense and burden.”
• Winter Storm Slams Southeast Leaving Canceled Flights in Wake. Airlines including Delta Air Lines Inc. and American Airlines Group Inc. canceled hundreds of flights early Saturday as an icy winter storm struck U.S. southeast cities. The National Weather Service warned of hazardous conditions in areas including Atlanta, a Delta hub, and Charlotte, North Carolina, an American hub. As ice and snow piled up, more than 350 flights were canceled at Hartsfield-Jackson Atlanta International Airport and more than 100 at Charlotte Douglas International Airport, according to flight-tracking website FlightAware.com.

Wall Street Journal:

• Six Tweets in 80 Minutes: Trump Gives New Congress a Taste of What’s to Come. President-elect’s rapid-fire missives don’t conform to typical Washington political tactics.

Barron's:

• Had bullish commentary on (NXPI), (EXPE), (KKR), (GOOGL), (C), (ALLY), (APA) and (NVDA).

Fox News:

• Ft. Lauderdale airport shooting suspect charged; feds won't rule out terror. (video)

CNBC:

• 2016 was a terrible year for stock picking, and 2017 may not get much better. (video)

Zero Hedge:

• Ft. Lauderdale Airport Shooting: Gunman Kills 5, Injures 8; Is Unharmed And In Custody; No Second Shooter.
• Florida Shooter Had Been Sent To A Mental Hospital Over "ISIS Ties", Was Investigated For Child Porn.
• "They Lost So Big" - Trump Blasts "Embarrassed Democrats" For Russian Hacking Report.
• German Vice Chancellor Says "European Break Up No Longer Unthinkable".
• China's $3 Trillion In Reserves Questioned After PBOC Reports $41 BIllion In December Outflows. (graph)
• Goldman Slams Reports Of A "Great Rotation" From Bonds To Stocks As "Fake News".
• Pedro Da Costa Warns "Markets Are Ignoring Risk Of Devastating Trump Trade War".
• Citi: "There Is Something Strange Going On... Something Doesn't Smell Right".
• The False Economic Recovery Narrative Will Die In 2017.
• Worst. Recovery. Ever. (graph)
• China Launches Bitcoin Crackdown: PBOC Will Probe Abnormal Investor Behavior "And Rectify Misbheavior".
• In Stunning Last Minute Power Grab, Obama Designates Election Systems As "Critical Infrastructure".
• NYC Homelessness Record High Despite Falling Unemployment Rate.
• Wall Street's Top Permabull Suddenly Becomes Its Biggest Bear.
• How The US Could Win A Trade War With China.
• Here Is The US Intel Report Accusing Putin Of Helping Trump Win The Election By "Discrediting" Hillary Clinton.
• This Won't End Well.
• John Harwood Asks "Who Do You Believe America?" - Gets Surprising Answer.
• Weekend Reading: The Beginning Of The Ending.
• "19,999.63!". (graph)

Business Insider:

• In a revealing interview with Henry Blodget, Ray Dalio offers a radical solution to the threat of 'fake news' and details life inside Bridgewater.
• The biggest healthcare investor conference is happening next week — here are the 5 things we expect to get out of it.
• The 'car recession' is sinking America's largest automakers.
• US gasoline demand could be headed towards permanent decline.
• Joe Biden steamrolled Democrats objecting to Trump’s Electoral College victory.
• Here's which parts of Mexico's economy will get slammed if Trump puts his Twitter threats into action.

Fortune:

• Amazon(AMZN) and Other Online Grocers Will Start Accepting Food Stamps.

AP:

• Blizzards, Icy Weather Continue Their Grip on Europe. Heavy snowfall and below-freezing temperatures continued to sweep across the European continent Saturday causing more than a dozen deaths, and grounding airplanes and crippling ferries in Italy and Turkey.

Market Week in Review

• S&P 500 2,279.30 +1.34%*

The Weekly Wrap by Briefing.com.

*5-Day Change