Stocks Slightly Higher into Final Hour on Earnings Optimism, China Trade Deal Hopes, Technical Buying, Medical/Homebuilding Sector Strength

 Broad Equity Market Tone:

• Advance/Decline Line: About Even
  

• Sector Performance: Mixed
  

• Volume: Around Average

• Market Leading Stocks: Performing In Line

Equity Investor Angst:

• Volatility(VIX) 12.8 +1.2%

• Euro/Yen Carry Return Index 124.53 -.29%

• Emerging Markets Currency Volatility(VXY) 7.25 -.55%

• S&P 500 Implied Correlation 30.15 +.9%

• ISE Sentiment Index 102.0 +4
  

• Total Put/Call .89 -3.3%

• NYSE Arms 1.51 +36.0%

Credit Investor Angst:

• North American Investment Grade CDS Index 51.69 +.44%
  

• America Energy Sector High-Yield CDS Index 543.0 +2.34%

• European Financial Sector CDS Index 57.09 -1.97%

• Italian/German 10Y Yld Spread 147.0 -3.5 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 63.55 -.8%
  

• Emerging Market CDS Index 197.76 +2.31%
  

• iBoxx Offshore RMB China Corporate High Yield Index 167.65 -.01%

• 2-Year Swap Spread 4.0 -.25 basis point

• TED Spread 34.75 -1.0 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -17.0 -.75 basis point

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 65.48 -.51%
• 3-Month T-Bill Yield 1.56% +2.0 basis points

• Yield Curve .25 +1.0 basis point

• China Iron Ore Spot 79.03 USD/Metric Tonne +2.1%

• Citi US Economic Surprise Index 5.0 unch.

• Citi Eurozone Economic Surprise Index -16.40 +6.4 points

• Citi Emerging Markets Economic Surprise Index -21.50 +.6 basis point

• 10-Year TIPS Spread 1.71 -2.0 basis points
• 21.4% chance of Fed rate cut at Jan. 29th meeting, 34.0% chance of cut at March 18th meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating -60 open in Japan 
• China A50 Futures: Indicating -47 open in China

• DAX Futures: Indicating -23 open in Germany

Portfolio:

• Slightly Higher: On gains in my tech sector longs

• Disclosed Trades: None

• Market Exposure: 100% Net Long

Bear Radar

Style Underperformer:

• Mid-Cap Value +.2%

Sector Underperformers:

• 1) Airlines -1.2% 2) Oil Service -.9% 3) Telecom -.9%

Stocks Falling on Unusual Volume: 

• JCOM, RETA, TERP, AAP, EBIX, EB, IIVI, IMXI and UGI

Stocks With Unusual Put Option Activity:

• 1) CLDR 2) MNST 3) RUN 4) BGS 5) BKLN

Stocks With Most Negative News Mentions:

• 1) DPLO 2) CHK 3) ALB 4) OSTK 5) WU

Charts:

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

Bull Radar

Style Outperformer:

• Large-Cap Growth +.5%

Sector Outperformers:

• 1) Video Gaming +1.4% 2) Medical Equipment +1.3% 3) Shipping +1.2%

Stocks Rising on Unusual Volume:

• CVET, SE, VRS, DXC, URGN, CNNE, KEM, ROK, FOE, IAA, AEIS, MAXR, EDIT, GO, TSN, AXNX, GNK, ELF, PI, ARWR, GLIBA, RCII, ESPR, MNTA, ICUI, DRNA, NOVA, PAR, ANAB, SRPT, AGIO, CLNC, AVTR, EAF, MTSI, TTD, FSLY, BAND, GBT, FTNT, TWLO, GDOT, ROKU, PLNT, BRY, BLUE, SAFM and SIX

Stocks With Unusual Call Option Activity:

• 1) KEM 2) EMB 3) EWJ 4) BSX 5) ITB

Stocks With Most Positive News Mentions:

• 1) SE 2) SNCR 3) ROK 4) FOLD 5) AEIS

Charts:

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

Mid-Day Market Internals

NYSE Composite Index:

• Volume Running +3.0% Above 100-Day Average
• 11 Sectors Rising, 0 Sectors Declining
• 53.8% of Issues Advancing, 42.7% Declining
• 106 New 52-Week Highs, 49 New Lows
• 59.0% of Issues Above 200-day Moving Average
• Average 14-Day RSI 49.1%
• Vix 12.6 -1.0%
• Total Put/Call .74 -19.6%
• TRIN/Arms 1.53 +70.0%

Morning Market Internals

NYSE Composite Index:

• Volume Running +3.0% Above 100-Day Average
• 11 Sectors Rising, 0 Sectors Declining
• 53.8% of Issues Advancing, 42.7% Declining
• 106 New 52-Week Highs, 49 New Lows
• 59.0% of Issues Above 200-day Moving Average
• Average 14-Day RSI 49.1%
• Vix 12.6 -1.0%
• Total Put/Call .74 -19.6%
• TRIN/Arms 1.53 +70.0%

Tuesday Watch

Evening Headlines

Bloomberg:

• Asian Nations Struggle to Capitalize on China-U.S. Trade War. 

• Wall Street Awaits Trump Economic Club Speech for Hints on Trade.

• Hong Kong Stocks on Shaky Ground After $118 Billion Wipeout.

• South Korea's Robots Are Both Friends and Job Killers.

• Singapore Beats Out Hong Kong for Property Investment Prospects.

• Asian Stocks Trade Mixed; Treasury Yields Decline. Asian stocks were mixed Tuesday as investors awaited further developments on the U.S.-China trade front and kept an eye on the situation in Hong Kong. Treasuries recouped some of their recent losses. Hong Kong shares opened higher, taking back some of their sharp losses from Monday, when escalating violence in the strife-torn city unnerved investors. Stocks dipped in Tokyo and Sydney, and ticked up in Seoul. U.S. futures slipped after the S&P 500 Index fell for the first time in four sessions in holiday-thinned trading on Monday. Oil was above $56 a barrel in New York. Japan’s Topix index were down 0.2% as of 10:24 a.m. in Tokyo. Australia’s S&P/ASX 200 Index fell 0.5%. South Korea’s Kospi index rose 0.1%. Hong Kong’s Hang Seng Index climbed 0.5%. S&P 500 futures were down 0.1%. The S&P 500 Index fell 0.2%.  

• Oil Drops From a Six-Week High on Slippery Trade-War Signals.

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

• If Not China, Where? Trump Deal Risk, Germany Reprieve: Eco Day.

• PG&E Is Offering $13.5 Billion in Compensation to Wildfire Victims.

• Wall Street’s Very Own Unicorn Emerges in Private Credit Frenzy.  

• Apple(AAPL) Plans Standalone AR and VR Gaming Headset by 2022 and Glasses Later.

Wall Street Journal:

• Migrants Find Different Fates at Texas, Arizona Borders.

• Amazon’s(AMZN) Heavy Recruitment of Chinese Sellers Puts Consumers at Risk.

• Google(GOOG) Is Collecting Personal Health Data of Millions of People.

• Warren’s ‘2 Cents’ Come at Your Expense.

• Hong Kong Protesters Direct Anger at Police as Violence Flares.

• Adidas to Close Sneaker Factory in the U.S., Move Production to Asia.

Fox News:

• Senate may not even take up the push to oust Trump, former DOJ boss says.

• MSNBC anchor calls Thanksgiving 'problematic,' mocks Trump supporters.

MarketWatch.com:    

• Opinion: Winter is coming: These stocks can fire up your portfolio as energy demand spikes.

• China’s pork crisis is bigger than you think.

• Here’s what may drive stocks yet higher (hint: it isn’t a tariff resolution or the Fed).

CNBC:

• Mark Cuban is latest billionaire to bash Sen. Elizabeth Warren’s wealth tax plan.

• Weak 2019 earnings growth paves the way for a strong 2020 earnings picture, boosting stocks.

• Trump is expected to delay European auto tariffs for 6 months, report says.

• Boeing(BA) expects to resume 737 Max deliveries in December and commercial service green light in January.

• Stocks making the biggest moves after hours: DXC Technology, Reata Pharmaceuticals and Grocery Outlet.

Zero Hedge:

• Google(GOOG) Secretly Harvested 'Detailed' Healthcare Data From Millions Of Americans.

• Iran Is Blowing Past Enriched Uranium Limits, New IAEA Report Confirms.

• Trump To Release "Tantalizing" Transcript Of First Ukraine Call This Week.

• Baltimore Murder Crisis Could Hit Record, About To Record 300 Homicides For Fifth Straight Year.

• "Everyone Was Bleeding": Teen Survivor Of Mexican Cartel Massacre Recounts Horrifying Details.

• Gold Gagged With Bonds Away But Boeing, Boots, & Apple Save Stocks.

Night Trading 

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

• Asia Ex-Japan Investment Grade CDS Index 64.0 +.75 basis point.

• China Sovereign CDS 37.25 +1.0 basis point.

• Bloomberg Emerging Markets Currency Index  65.82 -.01%.

• FTSE 100 futures +.07%.

• S&P 500 futures -.15%.

• NASDAQ 100 futures -.18%.

Morning Preview Links

Earnings of Note 
Company/Estimate

Before the Open:

• (AAP)/2.05

• (CBS)/.93

• (DHI)/1.25

• (DF)/-.20

• (EBIX)/1.08

• (OSTK)/-.58

• (ROK)/1.93

• (SAGE)/-3.38

• (TSN)/1.27

After the Close:

• (ADT)/.21

• (DOX)/1.08

• (SWKS)/1.50

• (TLRY)/-.30

Economic Releases
6:00 am EST

• The NFIB Small Business Optimism report for Oct. is estimated to rise to 102.0 versus 101.8 in Sept.

Upcoming Splits

• None of note

Other Potential Market Movers

• The President speaking at Economic Club of New York, Fed's Barkin speaking, Fed's Kashkari speaking, Fed's Harker speaking, Fed's Clarida speaking, German ZEW Index, weekly US retail sales reports, Morgan Stanley Chemicals/Ag/Packaging Conference, RBC Precious Metals Conference, Citi Financial Tech Conference, Needham Networking/Communications/Security Conference and the (UIS) analyst 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 modestly lower and rally into the afternoon, finishing modestly higher. The Portfolio is 100% net long heading into the day.