Stocks Rising into Final Hour on Brexit Deal Hopes, China Trade Deal Optimism, Diminishing Global Growth Worries, Energy/Transport Sector Strength

 Broad Equity Market Tone:

• Advance/Decline Line: Substantially Higher
  

• Sector Performance: Most Sectors Rising
  

• Volume: Around Average

• Market Leading Stocks: Outperforming

Equity Investor Angst:

• Volatility(VIX) 14.2 -.4%

• Euro/Yen Carry Return Index 125.63 -.06%

• Emerging Markets Currency Volatility(VXY) 7.75 -.26%

• S&P 500 Implied Correlation 31.85 -4.47%

• ISE Sentiment Index 112.0 +32.8%
  

• Total Put/Call .93 -5.1%

• NYSE Arms .97 unch.

Credit Investor Angst:

• North American Investment Grade CDS Index 54.02 -1.93%
  

• America Energy Sector High-Yield CDS Index 487.0 +.35%

• European Financial Sector CDS Index 57.32 -4,43%

• Italian/German 10Y Yld Spread 132.75 +2.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 70.07 -.91%
  

• Emerging Market CDS Index 201.25 -.17%
  

• iBoxx Offshore RMB China Corporate High Yield Index 166.83 +.08%

• 2-Year Swap Spread 2.5 -2.25 basis points

• TED Spread 29.75 -2.75 basis points

• 3-Month EUR/USD Cross-Currency Basis Swap -22.75 -2.5 basis points

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 65.90 -.21%
• 3-Month T-Bill Yield 1.65% -1.0 basis point

• Yield Curve .18 +1.0 basis point

• China Iron Ore Spot 82.67 USD/Metric Tonne +.5%

• Citi US Economic Surprise Index 7.2 -.8 point

• Citi Eurozone Economic Surprise Index -57.2 +9.8 points

• Citi Emerging Markets Economic Surprise Index -20.10 -.5 basis point

• 10-Year TIPS Spread 1.61 +1.0 basis point
• 91.7% chance of Fed rate cut at Dec. 11th meeting, 94.1% chance of cut at Jan. 29th meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating +152 open in Japan 
• China A50 Futures: Indicating +23 open in China

• DAX Futures: Indicating -3 open in Germany

Portfolio:

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

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

• Market Exposure: Moved to 100% Net Long

Bear Radar

Style Underperformer:

• Small-Cap Growth -1.1%

Sector Underperformers:

• 1) Gold & Silver -1.7% 2) Homebuilding -.7% 3) Medical Equipment -.2%

Stocks Falling on Unusual Volume: 

• BA, LTM, CRL, KMT and SPR

Stocks With Unusual Put Option Activity:

• 1) SKT 2) COTY 3) HPE 4) HOG 5) PLUG

Stocks With Most Negative News Mentions:

• 1) DEST 2) SPR 3) BA 4) SNDL 5) SSYS

Charts:

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

Bull Radar

Style Outperformer:

• Small-Cap Growth +1.2%

Sector Outperformers:

• 1) Oil Service +3.6% 2) Computer Hardware +2.3% 3) Road & Rail +2.2%

Stocks Rising on Unusual Volume:

• PETS, APRE, SGEN, COTY, FSCT, COMM, RYTM, HAL, ACAD, SPWR, SNAP, MTOR, NMRK, DNLI, HPE, NMIH, ACA, IGT, PINS, SPB, ONB, RVNC, SLB, JBLU, AEO, AMD, IAA, KEYS, MGNX, EHTH, GEO, SKT, ALK, PTC, MAN, NTRA, SUM and FAST

Stocks With Unusual Call Option Activity:

• 1) IGT 2) JCI 3) RTN 4) PHM 5) ZEN

Stocks With Most Positive News Mentions:

• 1) SBHO 2) PETS 3) COUP 4) DAL 5) AMD

Charts:

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

Mid-Day Market Internals

NYSE Composite Index:

• Volume Running -2.8% Below 100-Day Average
• 8 Sectors Rising, 3 Sectors Declining
• 68.5% of Issues Advancing, 29.2% Declining
• 159 New 52-Week Highs, 24 New Lows
• 53.9% of Issues Above 200-day Moving Average
• Average 14-Day RSI 48.1%
• Vix 14.3 +.5%
• Total Put/Call .87 -11.2%
• TRIN/Arms 1.12 +15.5%

Monday Watch

Today's Headlines

Bloomberg:

• Back Johnson or Risk No-Deal Brexit, Minister Warns Parliament.  

• Johnson to Renew Push to Get Brexit Deal Through Parliament.

• Erdogan Vows to Crush Kurd Group if It Doesn’t Leave Syria.

• Pervasive Violence in 20th Week of Protests: Hong Kong Update     

• Japan’s Exports Continue to Drop as Global Slowdown Weighs.

• China’s Pig Crisis Is Pushing Up Bacon Prices Worldwide.    

• Private-Jet Deliveries Surge Just as Global Economy Cools Off.

• Stocks in Asia Trade Mixed. Stocks in Asia got off to a mixed start to the week as traders digested the latest trade developments and waited for a slew of earnings reports. The pound dropped as Boris Johnson’s Brexit deal hangs in the balance. Japanese shares rose modestly, while those in South Korea were flat and equities in Sydney retreated. The S&P 500 Index dipped Friday despite a batch of mainly positive earnings results as American stocks remained near to a fresh all-time high. The dollar traded near the lowest level since July and Treasury yields edged lower. Japan’s Topix index added 0.3% as of 9:08 a.m. in Tokyo. Futures on the S&P 500 Index rose 0.1%. The underlying index lost 0.4% on Friday. Australia’s S&P/ASX 200 Index fell 0.2%. South Korea’s Kospi index was flat.

• Saudi Stocks Lead Gulf Gains After Aramco IPO Delayed: Inside EM.  

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

• Trump’s Allies Craft List of Potential Mulvaney Replacements.

• Buttigieg Eyes 35% Corporate Tax Rate to Fund Health Plan.

Wall Street Journal:

• Johnson Prepares to Put Brexit Deal to Vote After Foiled First Try.

• Hillary Clinton Finds More to Deplore.

• Grubhub’s Struggles Could Chill Food Delivery Hype.

• Ratings Firms Give Companies More Breathing Room.

• Oil Prices Set to Climb? Investors Aren’t Betting On It.

• Hong Kong Protests Rage Despite New Effort to Calm Unrest.

• Congress Ramps Up Scrutiny of Boeing Executives, Board.

• Online Influencers Tell You What to Buy, Advertisers Wonder Who’s Listening.

MarketWatch.com:

• Opinion: How big a year-end stock-market rally to expect this time.

• Opinion: Today’s stock market pessimism is a reliable sign of a pending rebound.

• World finance officials pledge to combat global economic slowdown due to trade war. 

• Opinion: Johnson lost again. But his Brexit deal is likely to succeed.

Fox News:

• JIM BRESLO: To help the homeless, California turns to bad plan loved by left.

• Gabbard reveals why she thinks Clinton, DNC are pummeling her with 'smears'.

CNBC:

• Amazon(AMZN) is shipping expired baby formula and granola, putting customers and food brands at risk.

• Brexit vote postponed: Here’s what could happen now.

• Millions of people are running out of water – how desalination plants are trying to fix that.

• Stocks will likely hit new records in the week ahead if earnings keep topping expectations.

• Robert Shiller: Recession likely years away due to bullish Trump effect.

Zero Hedge:       

• "Toe The Line Or Be Destroyed": Tulsi Gabbard Dismantles Establishment 'Hit-Job' In Viral Video.

• Pound Opens 0.4% Lower With EU Set To Grant 3-Month Brexit Extension; Goldman Says BTFD.

• Civil Unrest Is Erupting All Over The World, But Just Wait Until America Joins The Party...

• Democrats Have No Answer For Trump's Anti-War Posture.

• Dramatic Footage Shows National Spanish Police In Brutal Catalonia Protest Crackdown.

• Navy Patents UFO-Like Compact Nuclear Fusion Reactor And Hybrid Space/Sea Crafts.

• Trump Scraps Plan To Hold 2020 G-7 Summit At His Doral Golf Resort After "Irrational Hostility".

• Major Blaze At Iran Oil Refinery Raises Suspicions Of Saudi Revenge Attack.

Night Trading

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

• Asia Ex-Japan Investment Grade CDS Index 70.5 -1.0 basis point.

• China Sovereign CDS 41.0 unch.

• Bloomberg Emerging Markets Currency Index 66.03 -.04%.

• FTSE 100 futures -.08%.

• S&P 500 futures +.14%.

• NASDAQ 100 futures +.19%.

Morning Preview Links

Earnings of Note

Company/Estimate

Before the Open:

• (HAL)/.34

• (PETS)/.26

• (SAP)/1.30

After the Close:

• (BXS)/.61

• (CDNS)/.51

• (CE)/2.51

• (LOGI)/.39

• (AMTD)/.96

• (ZION)/1.08

Economic Releases

• None of note

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The (SLB) investor roundtable could also impact trading today.

BOTTOM LINE: Asian indices are mostly higher, boosted 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 75% net long heading into the week.

Weekly Outlook

• Wall St. Week Ahead by Reuters.
• Global Economy Week by Bloomberg. 
• The Week Ahead 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 China trade deal hopes, fewer global growth concerns and earnings optimism offsets technical selling, Brexit concerns and profit-taking. My intermediate-term trading indicators are giving neutral signals and the Portfolio is 75% net long heading into the week.