Bear Radar

Style Underperformer:

• Large-Cap Value +.7%

Sector Underperformers:

• 1) Utilities -.8% 2) Insurance -.3% 3) Software unch.

Stocks Falling on Unusual Volume: 

• EEFT, PENN and IPXL

Stocks With Unusual Put Option Activity:

• 1) SYF 2) FOX 3) GGP 4) JBLU 5) RIOT

Stocks With Most Negative News Mentions:

• 1) EEFT 2) EGL 3) NWN 4) LNT 5) NEE

Charts:

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

Bull Radar

Style Outperformer:

• Small-Cap Value +1.2%

Sector Outperformers:

• 1) Oil Service +3.0% 2) Steel +2.7% 3) Retail +2.4%

Stocks Rising on Unusual Volume:

• BETR, LNCE, SIEB, IEFA, APPN, VIPS, BY, ECH, AKAM, EFV, EOCC, RIOT, BSAC, SRI, GMLP, CADE, EFAV, XPER, YEXT, TWTR, BLD, CCU, SQM, RFP, OSTK, TWI, GTT, CVA, RESI and BGS

Stocks With Unusual Call Option Activity:

• 1) RF 2) AEO 3) LEN 4) AA 5) FEYE

Stocks With Most Positive News Mentions:

• 1) AKAM 2) VIPS 3) KLAC 4) COF 5) JD

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running +17.8% Above 100-Day Average
• 9 Sectors Rising, 1 Sector Declining
• 72.0% of Issues Advancing, 24.6% Declining
• 243 New 52-Week Highs, 15 New Lows
• 61.1% of Issues Above 200-day Moving Average
• Average 14-Day RSI 50.4%
• Vix 9.3 -1.6%
• Total Put/Call .63 -35.7%
• TRIN/Arms .59 -7.7%

Monday Watch

Today's Headlines

Bloomberg:

• Japan's November Exports Rise 16.2% Year-on-Year, Beating Estimates. Japan’s exports grew for a 12th straight month in November, as external demand fueled the nation’s longest stretch of economic growth since the 1990s. The value of exports rose 16.2 percent from a year earlier (forecast +14.7 percent). Imports increased 17.2 percent (forecast +18 percent). The trade surplus was 113.4 billion yen ($1 billion). The forecast was for a deficit of 40 billion yen.

• EU Banks Told to Get Crisis-Ready by Removing Wind-Down Hurdles. Big euro-area lenders face a choice; clean up the complicated corporate structures that make them difficult to wind down in a crisis, or watch Elke Koenig do it for them. Koenig, head of the Brussels-based Single Resolution Board, said in an interview that streamlining banks’ architecture and ensuring they can fund their own demise without taxpayers’ help will be priorities in the year ahead. “You have banks where you end with something that looks more like a spider web than a clean structure,” Koenig said. The message that those banks will receive is: “Please tidy up,” she said.

• Asia Stocks Set to Open Higher on U.S. Tax Plans. Futures contracts in Japan and Hong Kong advanced, and Australia’s equities opened higher, after the S&P 500 Index, Dow Jones Industrial Average and Nasdaq 100 Stock Index closed at records last week. Mid-week votes in the House and Senate are planned on the legislation that will reduce corporate and individual tax rates. Lawmakers are aiming for the bill to land on President Donald Trump’s desk for a signature before Christmas. Futures on the Nikkei 225 Stock Average were up about 0.7 percent as of 8:09 a.m. Tokyo time. Australia’s S&P/ASX 200 Index rose 0.5 percent in early trading. Contracts on the Hang Seng Index were up 0.5 percent.

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

• ‘Star Wars: The Last Jedi’ Reaps $105 Million in Friday Opening.

Wall Street Journal:

• Delivery Companies Brace for the Pre-Christmas Crush. FedEx(FDX), UPS(UPS) and Postal Service expect record number of packages; a Monday Christmas adds complication.

• Humana(HUM) and Private-Equity Firms in Talks to Buy Kindred Healthcare. TPG and Welsh, Carson would take over long-term care facilities in deal valuing Kindred at $4 billion including debt.

• Prosecutors Treat Opioid Overdoses as Homicides, Snagging Friends, Relatives.

• Congress Faces Crunch Time on Spending, Immigration. Government-funding deadline gives Democrats leverage on so-called Dreamers.

• Deduction Rollback Hurts High-Tax States, But Exodus Isn’t Assured. Taxes look to be just one of many factors in Americans’ decisions about where to live.

• Banks to Funds: Have Some Leverage With That Deal. Funds get financing to lever up risky loans and esoteric investments.

• The Fast and the Financed: China’s Well-Funded Auto Startups Race to Overtake Tesla(TSLA). Shanghai-based NIO’s first production car, the ES8, launched Saturday to rival Tesla’s Model X.

• Chinese IPOs in the U.S. Are Saddling Investors With Big Losses. Ten of the 16 Chinese firms debuting on the New York Stock Exchange or Nasdaq this year are trading below their IPO prices.

• Democrats Against Tax Reform. Unlike the past, the GOP has had no help passing these tax cuts.

Barron's:

• Had bullish commentary on (ETP), (VZ), (T), (RIG), (SUI), (AMCX), (ONCE), (TCO), (SPG) and (EPD). 

Fox News:

• Mnuchin says 'no doubt' Congress will pass tax reform bill this week. (video)

• Gregg Jarrett: Mueller's allegedly lawless acts have corrupted his probe and demand his removal.

CNBC: 

• Second-ranking Senate Republican expects tax bill to pass Tuesday.

• Does Pentagon still have a UFO program? The answer is a bit mysterious.

• Power outage at Atlanta airport grounds flights.

• The Global Sports Financial Exchange trades pro-sports teams like stocks.

Zero Hedge:

• Top FBI And DOJ Officials To Be Subpoenaed: McCabe, Strzok, Page In The Crosshairs.

• Former NBC Staffer Paid Off After Accusing Chris Matthews Of Sexual Harassment: Report.

• Pandemonium: Atlanta Airport Power Outage Grounds Flights, Traps Travelers; Evacuation Underway.

• Bitcoin Futures Open Above $20,000... Then Dump. (graph)

• Putin Called Trump To Thank Him For CIA Tip That Prevented Terrorist Bombings.

• Uh-Oh Canada! (graph)

• President Trump: "I'm Not" Considering Firing Robert Mueller, But It's "Not Looking Good".

• Stunning Visualization Of The Explosion Of ICO Activity In The Last Four Years. (video)

• Goldman Sachs: 2017 In 100 Charts. (graph)

• The Media's Reign Of Error Exposed.

• McCain To Miss Critical Tax Vote, Returning To Arizona After Chemo Treatment.

Business Insider:

• Here's what 12 Wall Street pros are predicting for the stock market in 2018.

• JPMorgan's quant guru says traders are waiting for tax cuts to unleash more stock market gains.

• Bitcoin's illiquidity is going to be a huge problem when the bubble bursts.

Night Trading

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

• Asia Ex-Japan Investment Grade CDS Index 70.0 -1.0 basis point.

• Asia Pacific Sovereign CDS Index 13.5 -.25 basis point.

• Bloomberg Emerging Markets Currency Index 73.21 -.01%.

• S&P 500 futures +.15%.

• NASDAQ 100 futures +.24%.

Morning Preview Links

Earnings of Note

Company/Estimate

• (HEI)/.58

Economic Releases   
10:00 am EST

• The NAHB Housing Market Index for December is estimated at 70.0 versus 70.0 in November.
  

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The China November Property Price Report, China CPI report and the Eurozone CPI report 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 modestly higher and to maintain gains into the afternoon.  The Portfolio is 100% net long heading into the week.

Weekly Outlook

• Wall St. Week Ahead by Reuters. 
• Stocks to Watch Next Week by Seeking Alpha.
• Weekly Economic Calendar by Briefing.com.

BOTTOM LINE: I expect US stocks to finish the week modestly higher on tax reform hopes, yen weakness, seasonal strength, buyout speculation, short-covering and economic optimism. My intermediate-term trading indicators are giving neutral signals and the Portfolio is 100% net long heading into the week.

Today's Headlines

Bloomberg:

• GOP Charges to Tax-Cut Finish Line. Republicans rallied around their plan to couple a sweeping, permanent tax cut for U.S. corporations with temporary benefits for individuals as they completed a six-week sprint to fashion a rewrite of the U.S. tax code. GOP lawmakers posted their 503-page bill on Friday evening after gaining key votes from two Republican senators who’d threatened to oppose it. Now, with votes planned in the House and Senate by the middle of next week, President Donald Trump is closing in on his first major legislative victory. The bill -- hammered out behind closed doors by Republican leaders -- would slash the corporate tax rate to 21 percent, the lowest that rate has been since 1939. It would provide across-the-board tax cuts for most individuals, but then wipe them off the books by 2026. Whether to extend them would be up to a future Congress.

• A Look at the Corporate Winners and Losers in Final Tax Measure.

• Hunter Harrison, Lauded Railroad Turnaround CEO, Dies at 73. E. Hunter Harrison, who turned around three railroad carriers during a five-decade career before being tapped by CSX Corp. to improve the company’s lackluster performance, has died days after taking medical leave. He was 73.

Wall Street Journal:

• GOP Tax Plan: Live Coverage.

• A Tax Reform for Growth. The GOP bill will spur investment and make the U.S. more competitive.

• Small Investors Rejoice After Lawmakers Cut Controversial Tax Provision. Critics said provision in Senate bill would have resulted in higher costs, less autonomy for investors.

MarketWatch.com: 

• Here come CME bitcoin futures: What you need to know.

Fox News: 

• Gregg Jarrett: Did the FBI and the Justice Department, plot to clear Hillary Clinton, bring down Trump? (video)

CNBC:

• Trump defends tax plan, says economy set 'to rock'.

• GOP releases its final tax plan — here's what's in it. (video)

• Here are the $5 trillion worth of winners and losers in the tax bill heading for a vote.

• Tax package could bring on a strong year-end Santa rally in stocks.

• Seth Klarman calls bitcoin a ‘trading sardine,’ others say ‘speculative mania’ — They are right.

Zero Hedge:

• Mueller "Improperly" Obtained "Tens of Thousands" Of Trump Transition Emails.

• Sessions Balks At Second Special Counsel: Says Recent FBI Bombshell May Have "Innocent Explanation".

• Scheme To Pay For Trump Accusers Emerges, One Woman Was Offered $750,000.

• Here Is The Full Text Of The Final Republican Tax Bill.

• Ex-FBI Assistant Director: Strzok Fabricated Information And "Belongs In Leavenworth".

• $19,000: Bitcoin Hits New All Time High After Burst Of Asian Buying; Bigger Than Wells, Wal-Mart.

• FBI Edits To Clinton Exoneration Go Far Beyond What Was Previously Known; Comey, McCabe, Strzok Implicated.

• Trump Set To Accuse China Of "Economic Aggression" On Monday.

• DOJ, AT&T Head To Court As Settlement Talks Collapse.

• Facebook(FB) Really Is Bad For You, Researchers Say

• What We Learned This Week...

• World's Largest Oil-Pipeline Company Uncovers Illegal Crypto Mining Operation.

• Stocks Surge To All Time High As Corker Unexpectedly Joins Rubio In Supporting GOP Tax Bill.

• Weekend Reading: Ignorance Is No Excuse.

• US Yield Curve Crashes Most In 6 Years As Stocks, Bitcoin Hit Record Highs. (graph)

Business Insider:

• Walmart(WMT) and Amazon's(AMZN) long-simmering feud exploded in 2017 — and it's redefining retail.

• Facebook(FB) admits that social media can be bad for you.

• Sears(SHLD) is teetering on the edge of bankruptcy and Kmart could be its first casualty.