Bear Radar

Style Underperformer:

• Mid-Cap Growth -.2%

Sector Underperformers:

• 1) Utilities -1.4% 2) Gaming -1.3% 3) Social Media -1.1%

Stocks Falling on Unusual Volume: 

• CASY, NCS, IRM, CLDR, ONCE, EIX, JUNO, GBT, NEWR and CRCM

Stocks With Unusual Put Option Activity:

• 1) GD 2) MNKD 3) AKS 4) BSX 5) CMCSA

Stocks With Most Negative News Mentions:

• 1) ONCE 2) JUNO 3) EA 4) MAT 5) CSIQ

Charts:

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

Bull Radar

Style Outperformer:

• Large-Cap Value +.5%

Sector Outperformers:

• 1) Banks +1.4% 2) Drugs +.8% 3) Oil Service +.8%

Stocks Rising on Unusual Volume:

• ARGX, GLYC, RIOT, GNK, KMG, NX, SRI, TRN, AMSF, EGOV, NEWA, ST, ATNX, HLG, XNET, VRX, BFR, KMT, MSB, CUTR, MSCI, PUMP, HMNY, VECO, KNOP, THC and CNCE

Stocks With Unusual Call Option Activity:

• 1) LC 2) MAR 3) STZ 4) MOS 5) BLUE

Stocks With Most Positive News Mentions:

• 1) PTI 2) GLYC 3) THC 4) FCX 5) ZAYO

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running +3.2% Above 100-Day Average
• 8 Sectors Rising, 2 Sectors Declining
• 53.8% of Issues Advancing, 42.1% Declining
• 79 New 52-Week Highs, 15 New Lows
• 62.0% of Issues Above 200-day Moving Average
• Average 14-Day RSI 50.4%
• Vix 9.5 +1.6%
• Total Put/Call .92 +15.0%
• TRIN/Arms .91 +25.0%

Tuesday Watch

Evening Headlines

Bloomberg:

• Choking on Beijing's Clean Air Costs. The Asian Infrastructure Investment Bank, conceived as China's answer to the World Bank, approved a $250 million loan to Beijing Gas Group Co., to reduce coal use by connecting more than 200,000 rural households to the natural gas distribution network. It's the AIIB's first investment within China. The bank had better keep its checkbook handy: This new environmental protection drive could cost the Chinese government and its financing vehicles as much as 381 billion yuan ($57.6 billion) in subsidies. Authorities have realized that persuading villagers to stop burning coal is a more effective way of improving air quality in northern China than shutting coal-powered plants, a step that inevitably hurts economic growth.
• Asia Stocks Mixed Ahead of Central Bank Meetings. Benchmarks in Tokyo sat on recent gains, while Korean shares slipped, after U.S. stock indexes hit fresh highs overnight. Most major American gauges advanced, led by more than 1 percent increases in media, telephone and technology-hardware shares. Investors shrugged off a non-fatal explosion in New York in what was called a terrorist attack. Volumes remain lackluster ahead of the year’s final Federal Reserve and European Central Bank meetings. The Topix index and the Nikkei 225 Stock Average were little changed as of 9:26 a.m. in Tokyo. Australia’s S&P/ASX 200 Index rose 0.2 percent and the Kospi index fell 0.5 percent. Futures on Hong Kong’s Hang Seng Index added 0.1 percent. The MSCI Asia Pacific Index was little changed.
• Five Things You Need to Know to Start Your Day. (video)

Wall Street Journal: 

• Botched Suicide Bombing Jolts New York Rush Hour, Injures Four. Police say 27-year-old Akayed Ullah detonated a low-tech explosive device near the Port Authority Bus Terminal.
• U.S. Shoppers Wield Smartphones to Keep a Lid on Consumer Prices. Web-driven comparison shopping complicates Federal Reserve decisions on how much and how fast to raise interest rates; savvy consumers weaken retailers’ pricing power and tamp down inflation.

Fox News: 

• Wife of demoted DOJ official worked for firm behind anti-Trump dossier. (video)

CNBC:

• Why stocks could rip higher on the heels of the Fed meeting this week. (video)
• 'Bitcoin Jesus' is 'really, really concerned' about the future of the digital currency. (video)
• People are taking out mortgages to buy bitcoin, says securities regulator. (video)
• Boeing(BA) lifts dividend, sets new $18 billion share buyback.
• Cisco(CSCO) CEO Chuck Robbins thinks he's finally found the key to growing in China.

Zero Hedge: 

• Ex-Spy Chief Admits Role In 'Deep State' Intelligence War On Trump.
• Bitcoin Futures Tumble As Spot-Arbitrage Collapses. (graph)
• "I Feel Tremendous Guilt": Former Facebook Exec Says Company Is "Ripping Apart The Social Fabric Of Society".
• "It's A Crisis Situation": One Chart Explains Why Obamacare Is Locked In An Inescapable Death Spiral.
• Bond Bears Beware As Ag Prices Hit Record Low. (graph)
• Amazon's 75,000 New Robots Are Your Answer To No Wage Inflation.
• Stocks Soar To Most-Overbought In 22 Years But Bitcoin Futures Debut Dominate. (graph)

Business Insider:

• Obama is campaigning for Roy Moore's Democratic opponent in the Alabama Senate race.

Night Trading 

• Asian equity indices are -.25% to +.25% on average.

• Asia Ex-Japan Investment Grade CDS Index 71.75 -.75 basis point. 

• Asia Pacific Sovereign CDS Index 14.0 -.25 basis point

• Bloomberg Emerging Markets Currency Index 73.0 -.02%.

• S&P 500 futures +.08%.

• NASDAQ 100 futures +.11%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (PAY)/.43

Economic Releases

6:00 am EST:

• The NFIB Small Business Optimism Index for November is estimated to rise to 104.0 versus 103.8 in October.
  

8:30 am EST

• PPI Final Demand MoM for November is estimated to rise +.3% versus a +.4% gain in October.
• PPI Ex Food and Energy MoM for November is estimated to rise +.2% versus a +.4% gain in October.
  

2:00 pm EST

• The Monthly Budget Statement for November is estimated at -$135.0B versus -$136.7B in October.
  

Upcoming Splits

• (NSP) 2-for-1

Other Potential Market Movers

• The Eurozone ZEW Survey, UK CPI report, Wasde Crop report, $12B 30Y Bond auction, weekly US retail sales reports, Cowen Tech/Media/Telecom conference, (CVS) analyst day, (GE) investor meeting, (MMM) Outlook Meeting, (HI) investor day and the (KMT) investor day could also impact trading today.

BOTTOM LINE:  Asian indices are mostly lower, weighed down by consumer and industrial 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 Rising into Final Hour on Economic Optimism, Oil Gain, Seasonality, Tech/Energy Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Slightly Lower
  

• Sector Performance: Mixed
  

• Volume: Below Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 9.51 -.73%

• Euro/Yen Carry Return Index 139.41 +.12%

• Emerging Markets Currency Volatility(VXY) 7.87 -1.13%

• S&P 500 Implied Correlation 36.42 +1.73%

• ISE Sentiment Index 109.0 +17.2%
  

• Total Put/Call .76 -20.0%

• NYSE Arms .71 +36.57%

Credit Investor Angst:

• North American Investment Grade CDS Index 50.48 -1.02%
  

• America Energy Sector High-Yield CDS Index 374.0 +.19%

• European Financial Sector CDS Index 45.39 -.63%

• Western Europe Sovereign Debt CDS Index 3.41 -.87%

• Asia Pacific Sovereign Debt CDS Index 14.04 -1.34%

• Emerging Market CDS Index 177.26 -.02%
  

• iBoxx Offshore RMB China Corporate High Yield Index 145.99 +.07%

• 2-Year Swap Spread 19.25 -.25 basis point

• TED Spread 27.25 +1.25 basis points

• 3-Month EUR/USD Cross-Currency Basis Swap -57.75 +3.0 basis points

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 73.03 +.04%
• 3-Month T-Bill Yield 1.29% +1.0 basis point
  

• Yield Curve 56.5 -2.0 basis points

• China Iron Ore Spot 504.0 CNY/100 Metric Tonnes +.80%

• Citi US Economic Surprise Index 63.10 -2.1 points

• Citi Eurozone Economic Surprise Index 55.40 -4.7 basis points

• Citi Emerging Markets Economic Surprise Index 9.50 +.8 point

• 10-Year TIPS Spread 1.90 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 -13 open in Japan 
• China A50 Futures: Indicating +40 open in China

• DAX Futures: Indicating +21 open in Germany

Portfolio: 

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

• Disclosed Trades: None

• Market Exposure: 100% Net Long

Today's Headlines

Bloomberg:

• China Credit Growth Exceeds Estimates as Funding Remains Buoyant. China’s broadest gauge of new credit and an index of loan growth both exceeded projections, signaling that a government push against leverage hasn’t crimped lending.
• How China's Debt Crackdown Could Start Weighing on the Economy. (video) China’s sweeping deleveraging push is poised to inflict more pain next year. Authorities tightening funding in financial markets and reining in excessive borrowing will likely deal a blow to investment in infrastructure and property, while soaring corporate funding costs may damp business expansion. That could add to headwinds facing an economy expected to grow at the slowest pace in more than a quarter century next year, complicating the balancing act for policy makers who want to defuse the country’s debt bomb without derailing the expansion. Six charts show how the purge will pressure the economy:
• Chinese Regulator Cracks Down on Booming Hedge-Fund Industry.
• Trump to Direct NASA to Send Astronauts Back to Moon and to Mars. President Donald Trump on Monday will direct the National Aeronautics and Space Administration to send American astronauts back to the moon and eventually to Mars, shifting the agency’s mission from the study of Earth and a longer-range plan to explore Mars.

Wall Street Journal:

• The Future Is Bumpy: High-Tech Hedge Fund Hits Limits of Robot Stock Picking. Voleon is among investors deploying machine learning, a technology in which computers develop trading strategies. It’s harder than it sounds.
• FDA Plans New Medical-Device Approval Processes. Move would speed products’ entry to the U.S. market, mirroring the desires of industry, President Trump.

MarketWatch.com:

• 18 small-cap stocks that analysts expect to rise at least 50% in 2018.
• Analysts expect these large-cap U.S. stocks to rise at least 25% in 2018.

Fox News:

• Port Authority explosion suspect: What we know about Akayed Ullah. (video)
• Trump accusers band together, seek congressional probe of 'sexual misconduct'. (video)

CNBC:

• UBS: Cryptocurrencies like bitcoin are ‘the bubble to end all bubbles’. (video)
• Celgene(CELG) CEO: New therapies for a certain type of cancer boost survival rates 10-fold.
• The charts are pointing to a Santa Claus rally for small caps. (video)
• A top VC explains which technologies will change society the most in 10 years.
• Manufacturing CEO survey shows record high optimism on prospect of tax reform.
• Bitcoin smells like a bubble to CNBC advisor council.
• Bluebird(BLUE) could be on the way to a cure for sickle cell disease. (video)

Zero Hedge:

• Times Square Terrorist Planned Attack For Years, Told Police "Motive Was Revenge".
• Moment Of Port Authority Explosion Caught On Tape. (video)
• Interactive Brokers Allows Long-Only Bitcoin Futures Trading (At 50% Margin).
• Treasury Forecasts Tax Reform Will Lead To Longest Period Without Recession In History.
• Greenwald: The U.S. Media Just Suffered Its Most Humiliating Debacle in Ages.
• Pentagon Disses Trump, Will Allow Transgender People To Enlist In Military.
• WTI-Brent Crude Spread Snaps After Forties Pipeline Closure For "Weeks, Not Days". (graph)
• Near Record 5.6 Million Americans Were Hired In October, Most In Over 16 Years. (graph)