Bull Radar

Style Outperformer:

• Large-Cap Growth unch.

Sector Outperformers:

• 1) Internet +.4% 2) Alt Energy +.3% 3) Shipping +.2%

Stocks Rising on Unusual Volume:

• ARGX, GHDX, NDSN, TEVA, FOXA, FOX, MYL, DIS, GWPH, CLLS, TWTR, RIOT, TCP, WPP, NBLX, WPZ, XPER, DIOD, FND, HIIQ, GBT, NOVT, PRAH, SEMG and RDY

Stocks With Unusual Call Option Activity:

• 1) SYMC 2) MAC 3) LABD 4) LLY 5) EXPR

Stocks With Most Positive News Mentions:

• 1) MITL 2) ESRX 3) VNTV 4) MU 5) NKE

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running -1.5% Below 100-Day Average
• 6 Sectors Rising, 4 Sectors Declining
• 51.0% of Issues Advancing, 45.3% Declining
• 70 New 52-Week Highs, 31 New Lows
• 61.4% of Issues Above 200-day Moving Average
• Average 14-Day RSI 50.2%
• Vix 10.1 -1.1%
• Total Put/Call .68 -9.3%
• TRIN/Arms 1.08 -18.1%

Thursday Watch

Evening Headlines

Bloomberg:

• China Factory Output, Investment Slow Amid Pollution, Debt Curbs. Industrial output rose 6.1 percent from a year earlier in November, in line with the projection in Bloomberg’s survey and edging down from 6.2 percent the prior month. Retail sales expanded 10.2 percent from a year earlier, less than the estimated 10.3 percent. Fixed-asset investment excluding rural households rose 7.2 percent in the first 11 months of the year over the same period in 2016, in line with estimates.

• PBOC Raises Market Borrowing Costs in Surprise Move After Fed.

• Japan Plans Carrot-and-Stick Tax Changes to Drive Wage Gains.

• Asia Stocks Mixed; Dollar Steady on Fed's Outlook. Asian stocks were mixed and the dollar maintained losses after the Federal Reserve raised its outlook for U.S. growth and held its forecast for the number of interest-rate increases next year amid benign inflation. The Australian dollar jumped after the release of better-than-expected jobs figures. Equity indexes in Japan fluctuated, while they rose in Hong Kong, Australia and South Korea. The S&P 500 Index ended lower after a swoon in the final 15 minutes of trading. The Fed increased interest rates and raised its outlook for economic growth in 2018 without lifting its forecast for the number of hikes next year, while Chair Janet Yellen struck a dovish tone in her final scheduled press conference. The Bloomberg dollar index nudged lower as Treasury yields were slightly higher in Asia. The Topix index was down 0.1 percent as of 10:35 a.m. in Tokyo, as was the Nikkei 225 Stock Average. Australia’s S&P/ASX 200 Index rose 0.1 percent and the Kospi index in Seoul was up 0.8 percent. Hong Kong’s Hang Seng Index rose 0.2 percent, while the Shanghai Composite Index was little changed.

• Five Things You Need to Know to Start Your Day.

• Yellen Pans Bitcoin Boom, Shows Scant Worry Over Surging Stocks. (video)

• Famed Short-Seller Jim Chanos Says Tesla(TSLA) Headed for ‘Brick Wall’. (video)

Wall Street Journal:

• House, Senate Republicans Reach Deal on Final Tax Bill. Agreement lowers top individual rate to 37%, sets 21% corporate rate.

• Disney(DIS) Nears Pact to Acquire Assets From 21st Century Fox. Deal would value assets Disney is acquiring at $60 billion, including debt.

• From German Faucets to Italian Chocolate, Trade Barriers Are Rising Again in Europe. The rise of economic nationalism is clashing with the open-market ideals of the EU’s original founders.

• Bulldozer Dealers to Congress: Don’t Tax Us Like Tractor Dealers. Construction-equipment dealers object to a tax provision offered to farm-equipment dealers; last-minute tweaks for one industry can throw up problems for another.

MarketWatch.com:

• Here’s what’s in the Republican tax deal.

CNBC:

• Trump: Americans will see 'bigger paychecks beginning in February' if GOP finishes tax bill by Christmas. (video)

• Markets are skeptical Fed will stick to its rate hiking plan. (video)

• Jamie Dimon says tax cut will cause companies to buy back their own stock and that's not a 'bad thing'. (video)

• 3 ETFs are testing key levels, and they could be about to break out. (video)

Zero Hedge:

• FBI Texts Reveal "Insurance Policy" To Prevent Trump Presidency.

• New York City Developers Are Relying On A Shrinking Pool Of Buyers.

• Bloomberg Pronounces The Early Death Of The Traditional Long-Short Hedge Fund Model.

• Global Negative Yielding Debt Surges To $9.7 Trillion Despite ECB's QE Taper.

• The Enemy Within - The "Intelligence Community".

• Gold Pops As Bitcoin Drops, Dollar Snaps Longest Win Streak Since Jan 2016.

Business Insider:

• PBS suspends 'Tavis Smiley' following sexual misconduct investigation.

Night Trading 

• Asian equity indices are -.25% to +.75% on average.

• Asia Ex-Japan Investment Grade CDS Index 70.25 -.25 basis point. 

• Asia Pacific Sovereign CDS Index 13.75 unch.

• Bloomberg Emerging Markets Currency Index 73.23 +.03%.

• S&P 500 futures +.08%.

• NASDAQ 100 futures +.12%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (SAFM)/3.52

• (SCHL)/1.75

• (ADBE)/1.16

• (COST)/1.35

• (JBL)/.78

• (ORCL)/.68

Economic Releases

8:30 am EST

• Initial Jobless Claims for last week are estimated at 236K versus 236K the prior week.

• Continuing Claims are estimated to fall to 1900K versus 1908K prior. 

• Retail Sales Advance MoM for November is estimated to rise +.3% versus a +.2% gain in October.

• Retail Sales Ex Autos MoM for November is estimated to rise +.6% versus a +.1% gain in October.

• Retail Sales Ex Autos and Gas for November is estimated to rise +.4% versus a +.3% gain in October.

• The Import Price Index MoM for November is estimated to rise +.7% versus a +.2% gain in October.

• The Export Price Index MoM for November is estimated to rise +.3% versus unch. in October.

9:45 am EST

• The Preliminary Markit US Manufacturing PMI for December is estimated at 53.9 versus 53.9 in November.

• The Preliminary Markit US Services PMI for December is estimated to rise to 54.7 versus 54.5 in November. 

10:00 am EST

• Business Inventories for October are estimated to fall -.1% versus unch. in September.
  

Upcoming Splits

• (NSP) 2-for-1

Other Potential Market Movers

• The China Retail Sales/Industrial Production reports, Australia Unemployment report, weekly Bloomberg Consumer Comfort Index, weekly EIA natural gas inventory report, BMO Healthcare Conference and the (DAL) investor day could also impact trading today.

BOTTOM LINE:  Asian indices are mostly higher, boosted by technology 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 Tax Reform Hopes, Short-Covering, Seasonality, Biotech/Retail Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Higher
  

• Sector Performance: Most Sectors Rising
  

• Volume: Slightly Above Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 9.85 -.71%

• Euro/Yen Carry Return Index 138.67 -.19%

• Emerging Markets Currency Volatility(VXY) 7.68 -1.41%

• S&P 500 Implied Correlation 35.83 +.31%

• ISE Sentiment Index 141.0 +1.44%
  

• Total Put/Call .71 -17.4%

• NYSE Arms 1.26 +94.1%

Credit Investor Angst:

• North American Investment Grade CDS Index 50.32 -.15%
  

• America Energy Sector High-Yield CDS Index 375.0 +.71%

• European Financial Sector CDS Index 46.15 +1.59%

• Western Europe Sovereign Debt CDS Index 3.41 -.29%

• Asia Pacific Sovereign Debt CDS Index 13.87 +.07%

• Emerging Market CDS Index 124.88 n/a
  

• iBoxx Offshore RMB China Corporate High Yield Index 145.52 -.20%

• 2-Year Swap Spread 20.75 +1.0 basis point

• TED Spread 24.0 +1.25 basis points

• 3-Month EUR/USD Cross-Currency Basis Swap -66.75 -2.25 basis points

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 73.19 +.5%
• 3-Month T-Bill Yield 1.30% -2.0 basis points
  

• Yield Curve 57.5 unch.

• China Iron Ore Spot 491.0 CNY/100 Metric Tonnes -.5%

• Citi US Economic Surprise Index 63.40 -5.6 points

• Citi Eurozone Economic Surprise Index 53.30 -.6 basis point

• Citi Emerging Markets Economic Surprise Index 3.20 -3.1 points

• 10-Year TIPS Spread 1.89 +2.0 basis points
  
• 100.0% chance of Fed rate hike at Jan. 31 meeting, 100.0% chance at March 21 meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating -28 open in Japan 
• China A50 Futures: Indicating +54 open in China

• DAX Futures: Indicating -19 open in Germany

Portfolio: 

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

• Disclosed Trades: None

• Market Exposure: 100% Net Long

Today's Headlines

Bloomberg:

• May Suffers Humiliating Loss on Brexit Law as Tories Rebel. (video) U.K. Prime Minister Theresa May suffered a serious defeat for her key Brexit law on Wednesday after pro-European lawmakers in her own party defied her orders in a vote in Parliament. Lawmakers voted 309 to 305 to change the government’s bill so that it guarantees Parliament will get a “meaningful vote” on the final Brexit deal at the end of negotiations in 2019.
• Earnings Estimates for Companies Around the Globe Are Hitting Record Highs. (video)
• GOP Tax Compromise Would Repeal Obamacare’s Individual Mandate.
• UPS(UPS) Can’t Keep Up With All That Online Shopping.
• Steve Cohen's New Hedge Fund Could Have a Lockup of Up to Three Years.

Wall Street Journal:

• Fusion DoJ. It’s getting hard to tell where the Clinton campaign ends and the federal law enforcement apparatus begins.

Fox News:

• Rosenstein stands by Mueller probe as Republicans fume over 'insider bias'. (video)
• Alabama's Doug Jones facing early pressure to vote with GOP, after upset victory. (video)

CNBC:

• Republicans reach a tentative tax deal; Trump says he'd sign a bill with 21% corporate rate.
• Here's what changed in the new Fed statement.
• Apple(AAPL) has a $1 billion fund for US manufacturers, but it's ready to spend more, said COO Jeff Williams.
• Fed raises rates a quarter point, hikes growth outlook for economy. (video)
• Bitcoin futures briefly halted after plunging 10%. (video)
• Gundlach says if you bet against bitcoin today 'you'll make money'. (video) He said he doesn't own bitcoin and doubted the legitimacy of cryptocurrencies. Gundlach also mentioned digital currencies may get hacked some day. "I have no interest in this type of maniacal type of trading market," he said.
• Wall Street analysts love these stocks this holiday season.
• Massachusetts regulator lists 7 dangers with bitcoin, calls it potentially ‘worthless’.

Zero Hedge:

• "Trump Should Go F Himself" - Texts Leak From FBI Agents On Russia Probe, Hillary Emails Investigation.
• Crypto Is Suddenly Crashing - Bitcoin Back Below $16,000. (graph)
• America's Wage Hope Hammered - Real Earnings Suffer Longest Slump Since 2009. (graph)
• Core Consumer Price Growth Comes In Cold - Apparel Prices Plunge Most Since 1998. (graph)
• WTI/RBOB Steady Despite Huge Gasoline Build, New Crude Production Record. (graph)
• Watch Live: Rosenstein Takes The Hot Seat As Republican Fury Over FBI Bias Heats Up.
• OPEC Reports Lowest Oil Output In Six Months; Fears Shale Production Surge. (graph)
• CNN's Anderson Cooper Blames "Pathetic Loser Trump" Tweet On Hackers.
• House, Senate Republicans Reach Tax Deal: Here Are The Initial Details.