Weekly Outlook

• Wall St. Week Ahead by Reuters. 

• Weekly Market Outlook by Yahoo. (video)

• 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 technical selling, global growth fears and European/Emerging Market/US High-Yield debt angst offset bargain-hunting, lower long-term rates and seasonal strength. My intermediate-term trading indicators are giving neutral signals and the Portfolio is 50% net long heading into the week.

Morning Market Internals

NYSE Composite Index:

• Volume Running +2.9% Above 100-Day Average
• 10 Sectors Rising, 1 Sector Declining
• 80.7% of Issues Advancing, 17.0% Declining
• 9 New 52-Week Highs, 65 New Lows
• 22.6% of Issues Above 200-day Moving Average
• Average 14-Day RSI 40.1%
• Vix 22.1 -1.8%
• Total Put/Call 1.31 +40.9%
• TRIN/Arms .69 -52.7%

Wednesday Watch

Evening Headlines

Bloomberg:              

• U.S. Accuses China of Continuing IP Theft Amid Trade War.    

• One of China's Biggest Defaulters Has a $10 Billion Plan and It's Scaring Investors.

• Trump Says U.S. to Stand by Saudis Despite Khashoggi Killing.

• Asia Stocks Roiled as Wall St. Woes Spread to Debt. Asian stocks are back in bear-market territory after another dive on Wall Street, where concerns have spread to the corporate-bond market. Investors are also contending with no obvious havens, with Treasuries little changed so far this week and gold weaker. Equity benchmarks retreated across the region though U.S. futures edged higher. Oil tumbling toward $53 a barrel weighed on energy companies, while a plunge in Apple Inc.’s stock hit suppliers in Asia. All major U.S. benchmarks fell more than 1.5 percent Tuesday. The S&P 500 Index briefly slid 10 percent below its September record close before clawing back just above the threshold. Two-year Treasury yields are up slightly this week, suggesting no sea-change in views on the Federal Reserve’s path of tightening. Japan’s Topix index fell 1 percent as of 10:45 a.m. in Tokyo. Australia’s S&P/ASX 200 Index fell 0.8 percent. South Korea’s Kospi index lost 1 percent. Hong Kong’s Hang Seng Index lost 0.5 percent. S&P 500 futures rose 0.3 percent. The S&P 500 declined 1.8 percent. The MSCI Asia Pacific Index fell 0.9 percent.      

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

• China Under Xi, Trump's Fed Problem, RBA's Lowe on Jobs: Eco Day.

• Investors Flee Oil as Stock Rout, OPEC Doubts Turn Up Pressure.

• Bitcoin Sinks Below $4,500 With No End in Sight.   

• Investors Pulled $29 Billion in October, Most in Three Years From Funds.

Wall St. Journal:

• Trump Plays Down Saudi Prince’s Role In Journalist’s Death. 

• Apple in Talks to Give Veterans Access to Electronic Medical Records.

• Kelly Nears Deal to Leave With All of Her $69 Million Contract.

• ‘I Can Be the Bank’: Individual Investors Buy Bad Mortgages.

• Walgreens, Humana Weigh Taking Stakes in Each Other.

• Federal Reserve Not Likely Swayed by Market Declines.

• If GE Debt Gets Junked, Markets Have Reason to Shudder.

MarketWatch.com:

• Victims of bitcoin insanity are quickly piling up: Ivan Martchev.

Fox News:   

• Trump slams liberal-leaning 9th Circuit hours after an Obama-appointed judge's asylum ruling.

CNBC:          

• JP Morgan(JPM) sees a slowdown coming, with economy growing at less than 2 percent in 2019. 

• Cramer: Powell now has 8 reasons to pause the Fed's rate hikes after December.

• Retail stocks slide as CEOs fail to persuade skeptical investors that outlook is rosy. 

• Mohamed El-Erian: US is 'much more vulnerable' to a policy mistake by the Fed. 

• As bitcoin nosedives, regulators said to be investigating whether it was propped up illegally.

• Stocks making the biggest moves after hours: Foot Locker, Autodesk and more.

Zero Hedge:     

• "Ungrateful F*cking Bitch": Avenatti Accuser's Pics Show Bruises; Says He "Dragged Her Across Apartment".

• Trump Says Oil Prices Would "Go Through The Roof" If We Broke With Saudi Arabia; Wants Lower Rates.

• The Only Options For Illinois Millennials: Fight Or Flight.

• Obama Blames Slow Climate Change Progress On "Confused, Blind, Racist, Shrouded With Hate" Americans.

• WTI Barely Bounces After Surprise Crude Draw.

• Lighthizer: China's Trade Abuses Continue Despite US Warnings. 

• Job Market Euphoria: Companies Are Now Hiring "Sight Unseen".

• Stocks Slammed Into Red For 2018 Amid Carnage In Crude, Crypto, & Credit.

Telegraph:

• Greek crisis returns as Italian banks enter the danger zone.

Night Trading 

• Asian equity indices are -1.0% to -.5% on average.

• Asia Ex-Japan Investment Grade CDS Index 98.75 +4.0 basis points. 

• Asia Pacific Sovereign CDS Index 10.75 +.5 basis point.

• Bloomberg Emerging Markets Currency Index 67.04 -.06%.

• FTSE 100 futures -.01%.

• S&P 500 futures +.35%.

• NASDAQ 100 futures +.46%.

Morning Preview Links

Earnings of Note
Company/Estimate
Before the Open:

• (DE)/2.44

• (MOV)/1.12

• (DAKT)/.18

Economic Releases

8:30 am EST

• Preliminary Durable Goods Orders for October are estimated to fall -2.6% versus a +.7% gain in September.

• Preliminary Durables Ex Transports for October are estimated to rise +.4% versus unch. in September.

• Preliminary Cap Goods Orders Non-Defense Ex-Air for October are estimated to rise +.2% versus a -.1% decline in September.

• Initial Jobless Claims for last week are estimated to fall to 215K versus 216K the prior week.

• Continuing Claims are estimated to fall to 1650K versus 1676K the prior week.

10:00 am EST

• The Leading Index for October is estimated to rise +.1% versus a +.5% gain in September.

• Existing Home Sales for October are estimated to rise to 5.2M versus 5.15M in September.
  

10:30 am EST

• Bloomberg consensus estimates call for a weekly crude oil inventory build of +2,860,750 barrels versus a +10,270,000 barrel gain the prior week. Gasoline supplies are estimated to fall by -444,000 barrels versus a -1,411,000 barrel decline the prior week. Distillate supplies are estimated to fall by -2,665,180K versus a -3,589,000 barrel decline the prior week. Finally, Refinery Utilization is estimated to rise by +1.08% versus a +.1% gain prior.

Upcoming Splits

• None of note

Other Potential Market Movers

• The Japan CPI report, weekly Bloomberg Consumer Comfort report, Bloomberg Economic Expectations Index for Nov. and the weekly MBA Mortgage Applications report could also impact trading today.

BOTTOM LINE:  Asian indices are lower, weighed down 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 50% net long heading into the day.

Stocks Falling Substantially into Final Hour on Global Growth Fears, Trade War Worries, European/Emerging Market/US High-Yield Debt Angst, Energy/Transport Sector Weakness

 Broad Equity Market Tone:

• Advance/Decline Line: Substantially Lower
  

• Sector Performance: Almost Every Sector Declining
  

• Volume: Heavy

• Market Leading Stocks: Performing In Line

Equity Investor Angst:

• Volatility(VIX) 23.0 +14.5%

• Euro/Yen Carry Return Index 133.28 -.52%

• Emerging Markets Currency Volatility(VXY) 10.16 +.4%

• S&P 500 Implied Correlation 47.10 +4.3%

• ISE Sentiment Index 69.0 -20.7%
  

• Total Put/Call .93 -3.1%

• NYSE Arms 1.54 +92.5%

Credit Investor Angst:

• North American Investment Grade CDS Index 78.62 +2.8%
  

• America Energy Sector High-Yield CDS Index 680.0 +1.86%

• European Financial Sector CDS Index 105.96 +3.55%

• Italian/German 10Y Yld Spread 326.75 +4.25 basis points
  

• Asia Pacific Sovereign Debt CDS Index 10.70 +4.14%

• Emerging Market CDS Index 217.66 +4.73%
  

• iBoxx Offshore RMB China Corporate High Yield Index 146.97 +.21%

• 2-Year Swap Spread 19.0 -.25 basis point

• TED Spread 28.0 -2.75 basis points

• 3-Month EUR/USD Cross-Currency Basis Swap -32.75 -1.75 basis points

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 67.05 -.47%
• 3-Month T-Bill Yield 2.38% +3.0 basis points

• Yield Curve 25.25 -2.0 basis points

• China Iron Ore Spot 69.4 USD/Metric Tonne -1.84%

• Citi US Economic Surprise Index 8.90 +.1 point

• Citi Eurozone Economic Surprise Index -55.30 -.2 point

• Citi Emerging Markets Economic Surprise Index -9.70 +.5 point

• 10-Year TIPS Spread 1.98 -2.0 basis points
• 72.0% chance of Fed rate hike at Jan. 30th meeting, 86.9% chance at March 20th meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating -293 open in Japan 
• China A50 Futures: Indicating -135 open in China

• DAX Futures: Indicating -12 open in Germany

Portfolio: 

• Slightly Higher: On gains in my index hedges and emerging market shorts

• Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges

• Market Exposure: Moved to 50% Net Long