Bear Radar

Style Underperformer:

• Small-Cap Value Growth -.5%

Sector Underperformers:

• 1) Steel -3.0% 2) Oil Service -2.8% 3) Biotech -2.2%

Stocks Falling on Unusual Volume: 

• NCSM, RPD, LOXO, DKS, GE, QUOT, ARMK, BMA, TJX, CALA, ATUS, PRTK, KBR, JD, ACM, CXW and SAGE

Stocks With Unusual Put Option Activity:

• 1) TWNK 2) AMJ 3) BKD 4) IGT 5) ANF

Stocks With Most Negative News Mentions:

• 1) GE 2) CF 3) GNC 4) BHI 5) ALB

Charts:

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

Bull Radar

Style Outperformer:

• Mid-Cap Growth -.1%

Sector Outperformers:

• 1) Utilities +1.0% 2) Restaurants +.7% 3) Networking +.6%

Stocks Rising on Unusual Volume:

• KLIC, TCO, AAP, BWLD, DQ, IGT, VOD, NTB, JACK, SKTR, AMWD, TRHC, MMI, SATS, PLYA, DEL, HOLI, PETQ, VCRA, VSAT, WING, ZYNE, ZION, IAC, MAT, VERI, EVHC, SYNT, TCO, JNPR, CIT and NKTR

Stocks With Unusual Call Option Activity:

• 1) SSYS 2) AAP 3) BBBY 4) IGT 5) JNPR

Stocks With Most Positive News Mentions:

• 1) FENG 2) ADMA 3) FENG 4) CAT 5) KO

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running +18.1% Above 100-Day Average
• 3 Sectors Rising, 7 Sectors Declining
• 37.2% of Issues Advancing, 60.3% Declining
• 74 New 52-Week Highs, 90 New Lows
• 59.0% of Issues Above 200-day Moving Average
• Average 14-Day RSI 46.0%
• Vix 11.7 +1.7%
• Total Put/Call 1.0 +7.7%
• TRIN/Arms 1.7 +63.2%

Tuesday Watch

Evening Headlines

Bloomberg:

• Australian Business Conditions Surge to Highest on Record. Australian business conditions surged to the highest on record, reinforcing signs of a strengthening labor market and pickup in investment. The sentiment index jumped seven points to 21 in October and was driven by spikes in sales and profitability gauges, according to a National Australia Bank Ltd. survey of more than 400 firms conducted in the last week of the month. The business confidence index was unchanged at a revised 8.

• Eastern EU Economic Growth Seen Speeding Up on Consumer Spending. Economic growth in the European Union’s eastern members probably picked up in the third quarter as rising wages propelled consumer spending. Four of the region’s six countries releasing third-quarter gross domestic product data on Tuesday will report accelerating annual growth rates, raging from 3.4 percent in Slovakia to 6.2 percent in Romania, according to Bloomberg surveys. Growth in the Czech Republic was unchanged at 4.7 percent and in Hungary it was 3.7 percent, according to estimates.

• Stocks in Asia Open Mixed Ahead of China Data. Equity markets in Asia fluctuated at the open ahead of a deluge of economic data due in China. U.S. stocks edged up overnight, the dollar was flat and benchmark Treasury yields held recent gains as investors awaited clues on monetary policy and tax reform. Japanese stock benchmarks swung between gains and losses, halting a slump in Tokyo that began Thursday afternoon. Australia’s stocks fell, while futures in Hong Kong were little changed. Short-term U.S. Treasury yields climbed ahead of key U.S. economic data this week. The pound remained weak amid renewed political pressure on U.K. Prime Minister Theresa May. Bitcoin clawed back some losses after extending its slump from last week’s record high to as much as 29 percent. The Topix index was little changed as of 9:26 a.m. in Tokyo, while the Nikkei 225 Stock Average rose 0.2 percent. Australia’s S&P/ASX 200 index was down 0.8 percent and the Kospi index in Seoul was little changed. Hang Seng Index futures fell 0.1 percent.

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

• IEA Sees U.S. Shale Surge as Biggest Oil and Gas Boom in History. The supply surge from U.S. shale oil and gas will beat the biggest gains seen in the history of the industry, the International Energy Agency predicted. By 2025, the growth in American oil production will equal that achieved by Saudi Arabia at the height of its expansion, and increases in natural gas will surpass those of the former Soviet Union, the agency said in its annual World Energy Outlook. The boom will turn the U.S., still among the biggest oil importers, into a net exporter of fossil fuels.

Wall Street Journal:

• WSJ CEO Council 2017 -- Full Coverage.

• Nearly Half of U.S. Adults Have High Blood Pressure Under New Guidelines. Hypertension will now be defined as a reading of 130/80 and above, a threshold that will include 103.3 million people.

• The Great Progressive Tax Escape. IRS data show an accelerating flight from high-tax states.

• Senators Support Rollback of Bank Oversight. Bipartisan deal raises threshold dictating which banks would face heightened oversight from the Federal Reserve.

• IPOs Roar Back World-Wide, With Asia Driving the Boom. This year is on track to be busiest in a decade for new listings.

MarketWatch.com: 

• Why strong earnings aren’t just a U.S. story—in one chart.

Fox News:

• Sessions directs prosecutors to 'evaluate certain issues' involving Uranium One and Clinton, leaves door open on special counsel. (video)

CNBC:

• Wal-Mart(WMT) is having its best year since 1999, and it’s still a buy. (video)

• Wal-Mart(WMT) raising prices online shows the difference between it and Amazon, strategists say. (video)

Zero Hedge:

• S&P Downgrades Venezuela To "Selective Default" After Bondholder Meeting Devolves Into Total Chaos.

• How The Fed Destroyed The Functioning American Democracy And Bankrupted The Nation.

• Federal Prosecutors Are Running Amok.

• "Hotbed For Racist Behavior": 100 Tesla(TSLA) Employees File Lawsuit Alleging "Severe And Pervasive Harassment".

• Goldman Discovers Something Odd: Stock Moves Are Increasing Even As Index Moves Are Decreasing.

• Welcome To The Sue-nited States Of America.

• Dow Closes Green: GE Crashes, Bitcoin Bounces, & Junk Bonds Suffer Record Outflows. (graph)

Business Insider:

• Buffalo Wild Wings(BWLD) explodes 28% on report that it has received a takeover offer.

• 4 charts perfectly illustrate the bitcoin bubble.

• Apple(AAPL) could give shareholders a huge dividend if tax reform actually happens.

Night Trading 

• Asian equity indices are -.5% to +.5% on average.

• Asia Ex-Japan Investment Grade CDS Index 79.25 -.25 basis point. 

• Asia Pacific Sovereign CDS Index 16.25 +.25 basis point.

• Bloomberg Emerging Markets Currency Index 72.49 +.04%.

• S&P 500 futures -.1%.

• NASDAQ 100 futures -.04%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (AAP)/1.22

• (DKS).,26

• (HD)/1.82

• (IGT)/.24

• (KLIC)/.39

• (SSYS)/.34

• (TJX)/1.00

• (BZH)/.53

Economic Releases 

6:00 am EST

• The NFIB Small Business Optimism Index for October is estimated to rise to 104.0 versus 103.0 in September.

8:30 am EST

• PPI Final Demand MoM for October is estimated to rise +.1% versus a +.4% gain in September.

• PPI Ex Food and Energy MoM for October is estimated to rise +.2% versus a +.4% gain.

Upcoming Splits

• (UFPI) 3-for-1

Other Potential Market Movers

• The Fed's Bullard speaking, Eurozone Industrial Production report, China Retail Sales report, German GDP report, UK Retail Sales report, weekly US retail sales reports, UBS Transport/Industrials Conference, UBS Healthcare Conference, Stifel Healthcare Conference, Morgan Stanley Consumer/Retail Conference, Scotiabank Transport/Industrials Conference, JP Morgan Services Investor Conference, Goldman Sachs Industrials Conference, BofA Merrill Financials Conference, Needham Networking/Security Conference and the Morgan Stanley Chemicals/Ag Conference 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 mixed and to rally into the afternoon, finishing modestly higher.  The Portfolio is 100% net long heading into the day.

Stocks Reversing Slightly Higher into Final Hour on Tax Reform Hopes, Economic Optimism, Technical Buying, Homebuilding/Bank Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: About Even
  

• Sector Performance: Mixed
  

• Volume: Around Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 11.08 -1.86%

• Euro/Yen Carry Return Index 138.18 +.09%

• Emerging Markets Currency Volatility(VXY) 8.18 +.49%

• S&P 500 Implied Correlation 17.49 -6.04%

• ISE Sentiment Index 80.0 -3.61%
  

• Total Put/Call .90 -22.41%

• NYSE Arms 1.21 +37.65%

Credit Investor Angst:

• North American Investment Grade CDS Index 56.24 +.42%
  

• America Energy Sector High-Yield CDS Index 363.0 +.04%

• European Financial Sector CDS Index 52.03 -.32%

• Western Europe Sovereign Debt CDS Index 3.83 -5.43%

• Asia Pacific Sovereign Debt CDS Index 16.33 +1.68%

• Emerging Market CDS Index 192.95 +.24%
  

• iBoxx Offshore RMB China Corporate High Yield Index 145.29 +.05%

• 2-Year Swap Spread 19.5 -.75 basis point

• TED Spread 19`.25 +.5 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -49.0 -1.25 basis points

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 72.34 -.08%
• 3-Month T-Bill Yield 1.20% -2.0 basis points
  

• Yield Curve 71.75 -2.75 basis points

• China Import Iron Ore Spot $62.19/Metric Tonne -.65%

• Citi US Economic Surprise Index 38.10 -.4 point

• Citi Eurozone Economic Surprise Index 57.80 -1.1 basis points

• Citi Emerging Markets Economic Surprise Index 13.10 -1.0 point

• 10-Year TIPS Spread 1.91 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 +45 open in Japan 
• China A50 Futures: Indicating +20 open in China

• DAX Futures: Indicating +31 open in Germany

Portfolio: 

• Slightly Higher: On gains in my tech/medical sector longs

• Disclosed Trades: None

• Market Exposure: 100% Net Long

Today's Headlines

Bloomberg:

• IMF Says Europe's Recovery Is Spilling Over to Rest of World. The global economy can thank Europe’s robust growth for the improving outlook, according to the International Monetary Fund. Forecasting 2.4 percent expansion in the region this year, up from 1.7 percent in 2016, the Washington-based lender said the brighter prospects accounted for the bulk of an upward revision to its global outlook published in October. It also said the difference in growth rates within the 19-nation euro area is the lowest in nearly two decades. “This recovery in many countries of Europe is now increasingly solidifying and strengthening,” Jorg Decressin, deputy director of the IMF’s European Department, said at a briefing for its Regional Economic Outlook, published Monday.
• Roku(ROKU) Founder Becomes Billionaire After Shares Double in Three Days.
• Amazon(AMZN) to Produce ‘Lord of the Rings’ TV Series With New Plots.

Wall Street Journal:

• Qualcomm(QCOM) Rejects Broadcom’s(BRCM) Takeover Bid. Qualcomm’s board says Broadcom’s $105 billion offer dramatically undervalues them.
• Earthquake Near Iran-Iraq Border Kills More Than 400. Rescue efforts continue and the death toll is expected to rise.

MarketWatch.com:

• Best and worst earnings surprises for the S&P 500 this quarter — newly updated.

Fox News:

• Roy Moore blasts McConnell, WaPo, as calls to leave Senate race grow. (video)

CNBC:

• Attention bitcoin bears: You'll be able to bet against the digital currency in one month.
• Let's end the 'Joe Biden for president' delusion right now.
• Apple(AAPL) is launching three iPhones next year, including one with a huge 6.5-inch screen, KGI says.
• Missouri is taking page from Europe and investigating Google(GOOGL).
• Trump nominates former drug company executive Alex Azar as next Health and Human Services secretary. (video)

Zero Hedge:

• "I Believe The Women" - Mitch McConnell Calls For Moore To "Step Aside".
• Are Electric Cars As Clean As They Seem?
• The Truth About Wall Street Analysis.
• OPEC Reports 151Kbpd Drop In October Crude Output; Raises Demand Forecast For 2018.
• Pension Ponzi Bailout: Democrats Sponsor US Treasury Bailout Scheme.
• Philly Fed President Unconvincing As He "Lightly" Pencils In December Hike.
• GE(GE) Is Crashing.