Bear Radar

Style Underperformer:

• Small-Cap Growth unch.

Sector Underperformers:

• 1) Biotech -1.3% 2) Gold & Silver -1.1% 3) Airlines -.9%

Stocks Falling on Unusual Volume: 

• TCX, PLAY, BABY, OXFD, DQ, EDIT, APPN, EXAS, NTLA, NUVA, SHPG, ICPT, RGNX, TDOC, SEM, FIVE, INOV, BOLD and PLAY

Stocks With Unusual Put Option Activity:

• 1) GPRO 2) FEYE 3) SGYP 4) FIVE 5) WTW

Stocks With Most Negative News Mentions:

• 1) ALQA 2) DAVE 3) APPN 4) SNAP 5) P

Charts:

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

Bull Radar

Style Outperformer:

• Mid-Cap Growth +.5%

Sector Outperformers:

• 1) Road & Rail +1.2% 2) Steel +1.2% 3) Semis +.9%

Stocks Rising on Unusual Volume:

• SKY, ALDR, ABLX, STX, WU, KALA, WTW, NVRO, CCK, USAK, WATT, FWRD, PTCT, PKX, KSS, HELE, AVHI, IART, MZOR, CALM, FOGO, CCS, DSLV, CORE, GLMD, PODD, KALA, CROX, OLED, WING, WU, RXN, SCHN, NXEO and SCMP

Stocks With Unusual Call Option Activity:

• 1) JCI 2) VUZI 3) FOSL 4) UTX 5) KRE

Stocks With Most Positive News Mentions:

• 1) KSS 2) STX 3) CROX 4) CERS 5) CAT

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running +3.3% Above 100-Day Average
• 6 Sectors Rising, 4 Sectors Declining
• 42.9% of Issues Advancing, 53.3% Declining
• 186 New 52-Week Highs, 17 New Lows
• 65.5% of Issues Above 200-day Moving Average
• Average 14-Day RSI 54.1%
• Vix 9.67 +4.9%
• Total Put/Call .46 -49.5%
• TRIN/Arms 1.3 +38.8%

Monday Watch

Today's Headlines

Bloomberg:

• Earnings Could Boost Asia Stocks to New Record Highs. Asian equities may be at record highs but analysts see earnings season, which gets under way this week, providing a further boost. Profit estimates for all Asian stock sectors were increased over the last three months of 2017, with cyclical shares seeing the steepest upgrades from analysts, according to data compiled by Bloomberg. Companies that tend to track economic and business cycles -- from technology and energy to consumer and industrials -- had their profit estimates lifted an average 5 percent by analysts, the data show. That compares with an increase of 4.4 percent for the wider MSCI Asia Pacific Index.

• China’s Foreign Reserves Extend Rising Streak Amid Capital Curbs. China’s foreign-exchange reserves posted an 11th straight monthly increase, capping a year of recovery amid tighter capital controls, a stronger yuan and resilient economic growth. The reserves climbed $20.7 billion to $3.14 trillion in December, according to a People’s Bank of China statement on Sunday, compared with a $3.13 trillion median estimate in a Bloomberg survey. That brought the full-year increase to $129 billion.

• Asia Stocks Point Higher as Earnings Season Begins. Asian equities looked set to extend gains as the region’s earnings season ramps up this week, with investors betting that the outlook for economic growth and profits is strong enough to support record-high stock prices. Futures on Australian and Hong Kong shares rose in most recent trading, with markets in Tokyo closed Monday for a holiday. Samsung Electronics Co. and a slew of Japanese retailers and manufacturers are among companies giving profit updates this week. Australian bonds fell on Monday, tracking Friday’s move in Treasuries. Most recent futures trading, from late Friday, saw contracts on Australia’s S&P/ASX 200 Index rising 0.3 percent and those on Hong Kong’s Hang Seng Index climb 0.4 percent.

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

• White House Doesn't See Need for Faster Fed Hikes. The Federal Reserve won’t need to pick up the pace of its planned interest-rate increases in response to the recently-passed tax overhaul package, White House chief economist Kevin Hassett said. The administration’s computer modeling of the economic effects of the tax plan result in interest rates that “aren’t inconsistent with the Fed’s current guidance,’’ he said during a Jan. 6 session at the annual meeting of the American Economic Association in Philadelphia.

• Trump Allies Flood Airwaves to Defend the President. “I’ve had to put up with the Fake News from the first day I announced that I would be running for President. Now I have to put up with a Fake Book, written by a totally discredited author,” Trump said. “Ronald Reagan had the same problem and handled it well. So will I!”

• Celgene(CELG) to Buy Cancer Drugmaker Impact for $1.1 Billion Upfront. Celgene Corp. agreed to buy closely held Impact Biomedicines for $1.1 billion upfront to gain an experimental blood cancer treatment. The price could reach as much as $7 billion over time if the drug reaches certain milestones.

Wall Street Journal:

• Iran’s Guard Declares Victory Over Protesters, but Signs of Dissent Remain. Dozens of videos have shown up on social media; faces of those setting documents on fire are never shown.

• Little Guys and Big Trading Firms Square Off in Bitcoin Futures Arena. Retail investors are more likely to hold bullish bets on bitcoin, while big players tend to be short.

• Zuckerberg’s Dilemma: When Facebook’s Success Is Bad for Society. Facebook’s chief has signaled he will do what it takes to curb the social network’s negative effects—but how far will he go? 

• iPhones and Children Are a Toxic Pair, Say Two Big Apple Investors. Two activist shareholders want Apple to develop tools and research effects on young people of smartphone overuse and addiction.

• Improving Economy Sparks Rebound In Inflation Bets. Market-based inflation expectations top key threshold as investors respond to higher energy prices, tax cuts.

Fox News:

• CIA boss Pompeo vehemently defends Trump against 'Fire and Fury,' calls book 'absurd'. (video)

• Say goodbye to Alexa and Siri, resist the temptations of Google Home and make your life more human! (video)

• Trump slams 'flunky' CNN star Jake Tapper after Stephen Miller grilling flies off the rails.

CNBC: 

• Asian stocks look set for gains after strong start to 2018.

• Trump jokes Dow 30K will be the next big milestone. Here’s how long it could take. (video)

• Williams paints benign picture of Fed rate hikes, strong US economy.

• Why Federated thinks 2018 could be the year of the barbell stock market. (video)

• Holiday debt piles onto already-high credit card balances. (video)

• Michael Wolff's 'Fire and Fury': Some of the facts just don't stack up.

Zero Hedge: 

• CNN's Jake Tapper Abruptly Cuts Off White House Adviser Stephen Miller.

• Iranian Oil Tanker Bursts Into Flames After Colliding With Chinese Ship Near South Korea.

• Bitcoin Futures Traders Are Quietly Building A Big Short Position. (graph)

• Robots Have Replaced Humans In 25% Of China's Ammunition Factories.

• Global Debt Hits Record $233 Trillion, Up $16Tn In 9 Months. (graph)

• Bannon Apologizes: "Donald Trump Jr. Is A Patriot And A Good Man".

• Upcoming OIG Report Likely To Trigger Second Special Counsel; Comey, Lynch And Clinton In Crosshairs.

• Buckle Up: NYSE Files For Leveraged, Inverse Bitcoin ETFs.

Business Insider:

• Never mind the gadgets, here's what to look for at CES.

• A cryptocurrency created as a joke about a dog meme now has a market cap above $2 billion.

Night Trading

• Asian indices are unch. to +.25% on average.

• Asia Ex-Japan Investment Grade CDS Index 62.75 -2.0 basis points.

• Asia Pacific Sovereign CDS Index 11.50 -.5 basis point.

• Bloomberg Emerging Markets Currency Index 74.31 +.04%.

• S&P 500 futures +.13%.

• NASDAQ 100 futures +.07%.

Morning Preview Links

Earnings of Note

Company/Estimate

• (HELE)/2.12

• (SHLM)/.44
  

Economic Releases
3:00 pm EST

• Consumer Credit for November is estimated to fall to $17.8B versus $20.519B in October.
  

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Fed's Rosengren speaking, China Foreign Investment report, German Factory Orders report, Eurozone Retail Sales report, (PSMT)/(URBN) monthly sales updates, JPMorgan Biotech Conference, JPMorgan Healthcare Conference, Citi TMT Conference and the Morgan Stanley China Tech/Media/Telecom Conference could also impact trading today.

BOTTOM LINE: Asian indices are modestly 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 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 mixed as oil gains, positive earnings outlooks and economic optimism offset profit-taking, technical selling and geopolitical concerns. My intermediate-term trading indicators are giving neutral signals and the Portfolio is 100% net long heading into the week.

Today's Headlines

Bloomberg:

• It Was the Best Week for Stocks in a Year. It always looks inevitable in retrospect. Why wouldn’t U.S. stocks rally, surging to the biggest weekly gain in a year, amid earnings euphoria like this? With no hint of fatigue, the S&P 500 Index spent the holiday-shortened week rolling past 2,700, while the Dow Jones Industrial Average jumped over 25,000. Ninety-eight companies in the Nasdaq 100 rose. It happened as Wall Street stock analysts were jacking up profit forecasts. So fast that a measure tracking the frequency of upward earnings revisions to downward hit the highest level since 2011. The result was the best start to a year for the S&P 500 since 1999.

• Trump Warns Democrats Again: No Mexican Border Wall, No DACA. President Donald Trump said Congress should enact a measure to provide legal status to young, undocumented immigrants, provided other proposals, including funding for a wall on the U.S. border with Mexico, are also adopted -- a compromise Democratic lawmakers have already rejected.

• Cohen to Manage Outside Money Under Point72 Asset Management. When Steve Cohen takes in outside capital later this quarter, he’ll be doing so under the name Point72 Asset Management.  Point72 was the entity created four years ago that housed Cohen’s family office when he returned client capital, after his former hedge fund firm SAC Capital Advisors pleaded guilty to securities fraud and paid a record $1.8 billion fine to settle a seven-year federal insider-trading probe.

Wall Street Journal: 

• Trial Over Theft of Wind Technology Spotlights U.S.-China Tensions. American Superconductor says Sinovel stole source code for turbine software.

• Pfizer Ends Hunt for Drugs to Treat Alzheimer’s and Parkinson’s. About 300 layoffs to take place after once-promising compounds failed during testing.

• In Praise of Hierarchy. Established, traditional order is under assault from freewheeling, networked disrupters as never before. But society craves centralized leadership, too. 

• SEC Looks Into Kushner Cos. Over Use of EB-5 Program for Immigrant Investors. Probe is being conducted in collaboration with Brooklyn U.S. attorney’s office, which issued similar subpoena.

Barron's:

• Had bullish commentary on (PYPL), (GLD), (KSS) and (FDX).

• Had bearish commentary on (CAT).

MarketWatch.com:

• Intel(INTC) and Nvidia(NVDA) have a budding rivalry that will reach a peak at CES.

• 10 favorite stocks for 2018 from top-ranked stock newsletter writers.

Fox News:

• Trump hits back at mental fitness accusations, says 'greatest assets' are stability, smarts. (video)

CNBC: 

• Saudi king orders payouts, bonuses to soften price hikes.

• Big tech will get bigger in 2018, while smaller players look for exits.

• Savioke's AURA in Singapore will deliver your drinks and toiletries, and even rides the elevator. (video)

Zero Hedge:

• SEC Probing Kushner Companies Over Use Of Immigrant Visa Program.

• Visualizing The Global Millionaire Population. (map)

• Americans Are Ditching These Five States In Record Numbers. 

• Here's Why There's No More Free Passes For The Clinton Foundation. 

• "Record Lows From Bangor to Charleston": Bomb Cyclone Ushers In Brutal Cold, Ice Storm.

• White House Asks For $18 Billion To Build 700 Miles Of Border Wall.

• Iran's Former President Mahmoud Ahmadinejad Arrested For Inciting Unrest: Report.

• Criminals Abandon Bitcoin As Privacy Weakens.

• States Threaten "Economic Civil War" On Washington.

• Fed Chair Powell's Stunning Admission: "The Fed Has A Short Volatility Position".

• Survey Shows Majority Of Pensioners Have No Idea Their Pensions Are Underfunded.

• Bannon's Target Isn't Trump, It's Still Kushner.

• GOP Senators Ask For Criminal Probe Of British Spy Who Wrote "Trump Dossier".

• Venezuela Is Recruiting 'Miners' For Its Cryptocurrency.

• Rich People Are Fleeing Connecticut.

• One Bank Asks If The PBOC Is Secretly Goosing Markets. (graph)

• Weekend Reading: The "Brawny" Market.

• Risk Hits Record Low, Ripple Ravaged As Gold Has Longest Ever Win Streak. (graph)

Business Insider:

• Populism isn't going away anytime soon.

• The world is swimming in a record $233 trillion of debt.

• Photos show how a winter ‘bomb cyclone’ pummeled New York City with snow and ice.