Bull Radar

Style Outperformer:

• Large-Cap Growth -.1%

Sector Outperformers:

• 1) Utilities +1.4% 2) REITs +.5% 3) Medical Equipment +.1%

Stocks Rising on Unusual Volume:

• MYO, WTW, VRX, GGP, EVBG, ATHM, CRC, XOMA, FANH, ALTR, CBS, FOXA, SOHU, PTGX, FRPT, LCI, RMAX, ATH, EXPD, SLCA, PSDO, AMC, VIRT, TVTY, CIFS, HAE, NKTR, CBM, FRPT, TISI, WLK, MAC, IFF, ETM, PLYA and STMP

Stocks With Unusual Call Option Activity:

• 1) SEAS 2) BHGE 3) GGP 4) EFA 5) TRP

Stocks With Most Positive News Mentions:

• 1) CRC 2) WTW 3) BAH 4) GDDY 5) AMPY

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running +25.1% Above 100-Day Average
• 6 Sectors Rising, 4 Sectors Declining
• 41.3% of Issues Advancing, 55.1% Declining
• 138 New 52-Week Highs, 39 New Lows
• 45.8% of Issues Above 200-day Moving Average
• Average 14-Day RSI 36.6%
• Vix 9.6 +1.7%
• Total Put/Call .84 -7.7%
• TRIN/Arms 1.03 +25.5%

Tuesday Watch

Evening Headlines

Bloomberg:

• Trump Heads to Seoul, Bringing Him Near to Kim Jong Un’s Doorstep. (video) President Donald Trump departed Tokyo on Tuesday morning for a two-day visit to South Korea, bringing him near North Korean leader Kim Jong Un on a stop that will also feature talks on a trade deal he says hurts U.S. workers. The second leg of his five-nation Asia trip includes a visit with U.S. troops, a joint press briefing with President Moon Jae-in and an address to South Korea’s parliament. In contrast to Trump’s warm relationship with Japanese Prime Minister Shinzo Abe, his dealings with Moon got off to rocky start due to differences over trade and dialogue with North Korea.

• Asia Stocks Trade at Decade High as Oil Holds Gain. Equities rallied from Japan -- where earnings have propelled the Nikkei 225 Stock Average to near its highest level since 1992 -- to Sydney and Hong Kong, after a muted gain in the S&P 500 Index overnight. The kiwi advanced after New Zealand’s new, left-of-center government kept the central bank’s existing target for the pace of inflation. Australia’s dollar was flat ahead of a policy meeting where the central bank is expected to keep interest rates at record lows. A political power play in Saudi Arabia contributed to oil climbing to its highest in more than two years. The Topix index rose 0.4 percent as of 10:46 a.m. in Tokyo. The S&P/ASX 200 Index added 0.7 percent.
  South Korea’s Kospi index was little changed. Hong Kong’s Hang Seng Index was up 0.9 percent.

• Five Things You Need to Know to Start Your Day. (video)

Wall Street Journal:

• Broadcom(BRCM) Bid Marks Upheaval in Chip Industry. The California-based chip maker offered made an unsolicited $105 billion takeover bid for Qualcomm(QCOM).

MarketWatch.com:

• Micron Technology(MU) and Starbucks(SBUX) are among 20 companies that are a better value today than a year ago.

Fox News:

• Texas church shooter reportedly fractured stepson's skull on purpose. (video)

CNBC:

• The US has regained Middle East influence thanks to Trump, says Egyptian president.

• Stocks making the biggest moves after hours: TRIP, PCLN & more.

• PayPal(PYPL) CEO: Fintech will change more in the next 5 years than it has in the last 30. (video)

• Salesforce(CRM) CEO Marc Benioff announces deeper tie-up with Google(GOOGL).

• Top House tax writer Kevin Brady says he's effectively closing the loophole for hedge funds. (video)

Zero Hedge:

• First Comey Memo Concluded Hillary Was "Grossly Negligent," Punishable By Jail.

• On The Verge Of Catastrophe: Saudi Arabia Says Lebanon Declared War.

• These Are The Two Heroes Who Stopped Texas Church Shooter Devin Patrick Kelley.

• Intel Committee Demands Fusion GPS Bank Records; Suspects Journalists Paid To Spread "Russian Collusion" Claims.

• Making Sense Of Saudi's 'Game Of Thobes'.

• Second Saudi Prince Confirmed Killed During Crackdown.

• Trump Defends Saudi Actions: "Some Have Been Milking Their Country For Years".

• Trump Says Trade With Japan Is Not Fair And Not Open - Awkward Moments Ensue.

• Saudi Arabia Is About To Confiscate $33 Billion From Four Of Its Richest People.

Business Insider: 

• Bill Clinton says the media was 'straighter' when he ran in 1992.

Night Trading 

• Asian equity indices are unch. to +.75% on average.

• Asia Ex-Japan Investment Grade CDS Index 75.0 +1.25 basis points. 

• Asia Pacific Sovereign CDS Index 15.25 +.5 basis point.

• Bloomberg Emerging Markets Currency Index 72.79 +.02%.

• S&P 500 futures +.02%.

• NASDAQ 100 futures +.08%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (AAWW)/1.16

• (CBOE)/.88

• (DF)/.21

• (EMR)/.80

• (EXPD)/.60

• (HAE)/.41

• (HAIN)/.23

• (MZOR)/-.11

• (RCL)/3.40

• (SMG)/-.29

• (SINA)/.74

• (VRX)/.90

• (WB)/.63

• (AGU)/-.05

• (AAOI)/1.02

• (COHR)/3.45

• (FOSL)/-.25

• (JAZZ)/2.89

• (MAR)/.99

• (MYGN)/.21

• (PHH)/-.72

• (ZG)/.17

Economic Releases 

10:00 am EST

• JOLTS Job Openings for Sept. are estimated to fall to 6050 versus 6082 in August.

3:00 pm EST

• Consumer Credit for Sept. is estimated to rise to $17.750B versus $13.065B in August.
  

Upcoming Splits

• None of note

Other Potential Market Movers

• The Eurozone Retail Sales report, $42B 3Y T-Note auction, weekly US retail sales reports, Baird Industrial Conference, Stephens Fall Investment Conference, Wells Fargo Tech/Media/Telecom Conference and the RBC Tech/(PSMT) monthly sales report could also impact trading today.

BOTTOM LINE:  Asian indices are mostly higher, boosted by industrial and technology shares in the region. I expect US stocks to open mixed and to rally into the afternoon, finishing modestly higher.  The Portfolio is 100% net long heading into the day.

Stocks Modestly Higher into Final Hour on Buyout Speculation, Economic Optimism, Oil Gain, Commodity/Tech Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Slightly Higher
  

• Sector Performance: Most Sectors Rising
  

• Volume: Above Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 9.47 +3.61%

• Euro/Yen Carry Return Index 137.62 -.30%

• Emerging Markets Currency Volatility(VXY) 8.05 -.74%

• S&P 500 Implied Correlation 14.66 +1.95%

• ISE Sentiment Index 73.0 -27.0%
  

• Total Put/Call .88 -4.35%

• NYSE Arms .69 -28.0%

Credit Investor Angst:

• North American Investment Grade CDS Index 53.04 -.37%
  

• America Energy Sector High-Yield CDS Index 366.0 +.49%

• European Financial Sector CDS Index 50.70 +.63%

• Western Europe Sovereign Debt CDS Index 3.98 +1.02%

• Asia Pacific Sovereign Debt CDS Index 15.21 +2.39%

• Emerging Market CDS Index 180.40 -.26%
  

• iBoxx Offshore RMB China Corporate High Yield Index 145.06 +.05%

• 2-Year Swap Spread 21.0 +.25 basis point

• TED Spread 21.0-1.25 basis points

• 3-Month EUR/USD Cross-Currency Basis Swap -42.25 +1.0 basis point

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 72.62 +.41%
• 3-Month T-Bill Yield 1.18% +1.0 basis point
  

• Yield Curve 70.5 -1.75 basis points

• China Import Iron Ore Spot $63.36/Metric Tonne +5.81%

• Citi US Economic Surprise Index 39.80 -1.1 points

• Citi Eurozone Economic Surprise Index 61.80 +3.1 basis points

• Citi Emerging Markets Economic Surprise Index 17.0 -1.3 points

• 10-Year TIPS Spread 1.87 unch.
  
• 100.0% chance of Fed rate hike at Jan. 31 meeting, 100.0% chance at March 21 meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating +53 open in Japan 
• China A50 Futures: Indicating +49 open in China

• DAX Futures: Indicating +2 open in Germany

Portfolio: 

• Higher: On gains in my tech/retail sector longs

• Disclosed Trades: None

• Market Exposure: 100% Net Long

Today's Headlines

Bloomberg:

• Saudi Corruption Purge Snares $33 Billion of Net Worth in Riyadh. Crown Prince Mohammed bin Salman’s crackdown on some of Saudi Arabia’s richest and most powerful men has put $33 billion of personal wealth at risk. The stunning series of arrests has implicated three of the country’s richest people, including Prince Alwaleed bin Talal, who’s No. 50 on the Bloomberg Billionaires Index ranking of the world’s 500 richest people, with $19 billion. Also being held are the kingdom’s second- and fifth-wealthiest people, as well as a travel-agency mogul and Bakr Binladin, a scion of a one of the country’s biggest construction empires.

• CIC Is Said to Join Goldman for $5 Billion U.S. Investment Fund. China’s sovereign wealth fund has tapped Goldman Sachs Group Inc. to help invest as much as $5 billion in the U.S. manufacturing industry, according to people briefed on the matter. Goldman Sachs will run a newly established private equity fund and invest some money alongside China Investment Corp., said the people, who asked not to be identified because the effort hasn’t been publicly announced. The fund is expected to be unveiled this week, when Goldman Sachs Chief Executive Officer Lloyd Blankfein will be in China as part of President Donald Trump’s visit, one of the people said.

• Your Evening Briefing.

Wall Street Journal:

• In Saudi Purge, Echoes of Putin and Xi. With crackdown on elites, the kingdom’s heir to the throne appeals to young Saudis.

• Tax Reform and ObamaCare. How killing the individual mandate can finance rate cuts.

• Sprint, Without T-Mobile Deal, Says It Will Spend Billions More on Network. The wireless carrier plans to increase outlays on its network to $5 billion to $6 billion from $3.5 billion to $4 billion this fiscal year.

• It’s All About (Lack of) Supply As Global Stocks Hit Records. When the supply of stocks is fixed, even modest increases in demand drive prices higher.

Fox News: 

• Texas church shooter Devin Patrick Kelley served in Air Force, was court-martialed for assaulting wife, child. (video)

• Texas church shooting youngest victim was 18-month-old, suspect had threatened mother-in-law. (video)

CNBC:

• Thomas Friedman: 'We're seeing the end of the Saudi ruling family' in its current form.

• 21st Century Fox has been holding talks to sell most of the company to Disney: Sources. (video)

• Goldman Sachs(GS) has a new 'Trump trade' that rides surging small-business confidence.

• Homelessness soars on West Coast as cities struggle to cope.

• Trump era ushered in wave of M&A on hope for deregulation and tax reform.

• There may be a 'Game of Thrones' in Saudi Arabia now and that has big implications for oil. (video)

Zero Hedge:

• Second Saudi Prince Confirmed Killed During Crackdown.

• Israel Begins "Largest-Ever Aerial Military Drill", As Saudis Consider Missile Strike "Act Of War".

• Netflix(NFLX) Slides, Fox Spikes On Disney Acquisition Headlines.

• Here's What We Know About Texas Church Shooter Devin Kelley.

• Gold Spikes Above Key Technical Level As USDJPY, Bitcoin Tumble. (graph)

• WTI Spikes Over $57 For The First Time Since July 2015.

• Twitter(TWTR) Revises Terms Of Service, No Longer Believes In "Speaking Truth To Power".

• Saudi Banks Begin Freezing Accounts Of Arrested Royals, Private Jets Grounded.

• Trump: Texas Massacre A "Mental Health" Problem, Not A "Guns Situation".

• Trump Drafting Executive Order To Kill Obamacare's Individual Mandate, Report.

Reuters:

• European shares take a breather near two-year highs. The pan-European STOXX 600 rose a little more than 0.1 percent to 396.59 points, within range of two-year highs.

The Telegraph:

• Bitcoin is on the same path as every bubble in history.