Monday Watch

Today's Headlines

Bloomberg:

• Hong Kong Braces for More Disruption as Violence Escalates.  

• Police Move to Clear Protesters at University: Hong Kong Update.

• Trump Tells North Korea’s Kim That Biden Isn’t a ‘Rabid Dog’.

• World Economy Recovery on the Cards in First Quarter of 2020.

• Big Bets in Asia on Fed Cuts Have Traders Guessing Who’s Paying.

• Prince Andrew Bombs in BBC Interview Over Sex Claims.

• Saudi Arabia Cuts Aramco Valuation, Boosts Loans to Get IPO Done. 

• Asia Stocks See Muted Start; Treasuries Hold Gains. Stocks saw a muted open to the week in Asia as investors await fresh developments on the U.S.-China trade front. Treasuries stabilized after advancing last week. Japanese and South Korean equities were little changed in early trading, while those in Australia dropped. U.S. futures were flat after the S&P 500 Index on Friday reached another record in a sixth week of gains, the longest streak in two years. White House economic adviser Larry Kudlow’s comment that U.S.-China talks were nearing final stages had given markets impetus Friday, though a mixed bag of retail sales and factory numbers in the U.S. weighed on the dollar. The Topix index was flat as of 9:11 a.m. in Tokyo. Australia’s S&P/ASX 200 Index dropped 0.5%. Hong Kong’s Hang Seng Index futures added 0.4% earlier. Futures on the S&P 500 Index were little changed.  

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

• Oil Holds Gains Near 2-Month Highs on U.S.-China Trade Hopes.

• PG&E Says It May Cut Power to 180,000 in Northern California.

Wall Street Journal:

• China and the Swamp Are 5G Allies.

• Europe’s New Jobs Lack Old Guarantees—Stoking Workers’ Discontent.

• Aramco IPO Aims to Value Energy Giant At Up to $1.7 Trillion.

• Elizabeth Warren Loves ‘Billionaire Tears’.

• Cyclical Shares Propel Stock Market to Latest Milestone.

• Airlines Turn Away From Big Jets.

• Hong Kong Police Threaten to Open Fire on Protesters at University.

• U.S. Struggles to Stem Chinese Efforts to Recruit Scientists.

• Iran’s Supreme Leader Seeks to Calm Deadly Anger Over Fuel Price Rises.

• Why China’s Smaller Banks Are Wobbling.

• Impeachment and Public Opinion.

• Speech and Sanctimony at Twitter.

• Sanders’s Tax Would Hit Small Investors.

MarketWatch.com:

• Opinion: Walmart’s(WMT) stock is now outperforming Amazon’s(AMZN) — here’s how it happened.

• Dow, S&P and Nasdaq finish at records after retail sales, trade optimism rebound.

Fox News:

• Texas congressman says upcoming IG report on FISA warrant likely to prompt criminal probes.

• Dem smear campaign against Trump led to deeper WH involvement in Ukraine, Nunes says.

CNBC:

• China and US had ‘constructive discussions’ about phase-one trade deal, state media says.

• HP board unanimously rejects Xerox’s bid to acquire the company.

• Trade update, Aramco IPO pricing and retail earnings: 3 things to watch for in the markets on Monday.

• White House confirms Trump will visit Apple’s manufacturing plant in Austin.

Zero Hedge:        

• Hong Kong Police Storm Into University After Violent Standoff With Student "Rioters".

• Hedge Fund: It Is Astonishing That MSCI And Bloomberg/Barclays Index Force Global Pensioners To Fund China's Communist Party.

• Here's The Real Reason Why Hong Kong Authorities Are Desperate To Regain Control Of University.

• Social Media Censorship Reaches New Heights As Twitter Permanently Bans Dissent.

• This Is How The Chinese Are Evading Capital Controls And Secretly Getting Money Out Of The Country.

• Pope Proposes New Sin: Thou Shalt Not Destroy The Harmony Of The Environment.

• Morgan Stanley Capitulates: Upgrades Global Stocks To Neutral, No Longer Sees A Recession In 2020.

• Prince Andrew's Epstein-Related BBC Interview Was "Catastrophic Mistake".

• Top NSC Official Told Secret Impeachment Panel Nothing Improper Transpired During Trump-Zelensky Call.

• Saudis Admit Aramco Not Worth $2 Trillion: "It's A Much Tougher Sell Now".

•   Hong Kong Police Officier Shot With Arrow As Fiery University Standoff Rages

• "Voters Don't Want To See Crazy Stuff" - Obama Asks WTF Are 2020 Democrats Doing.

Business Insider:

• 40 Big Tech Predictions for 2019.

Night Trading

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

• Asia Ex-Japan Investment Grade CDS Index 63.75 -.5 basis point.

• China Sovereign CDS 38.0 -.5 basis point.

• Bloomberg Emerging Markets Currency Index 65.68 unch.

• FTSE 100 futures +.09%.

• S&P 500 futures -.04%.

• NASDAQ 100 futures -.02%.

Morning Preview Links

Earnings of Note

Company/Estimate

Before the Open:

• None of Note

After the Close:

• (CRMT)/1.77

Economic Releases
10:00 am EST

• The NAHB Housing Market Index for November is estimated at 71.0 versus 71.0 in October.

4:00 pm EST

• Net Long-Term TIC Flows for September.
  

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The RBA Minutes, JPMorgan TMT Conference and the (LRG) investor day could also impact trading today.

BOTTOM LINE: Asian indices are slightly lower, weighed down by commodity and consumer 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.
• 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 modestly higher on China trade deal hopes, fewer global growth concerns, earnings optimism, technical buying, oil strength and short-covering. My intermediate-term trading indicators are giving neutral signals and the Portfolio is 100% net long heading into the week.

Today's Headlines

Bloomberg:  

• China Soldiers Help Clean Up Damage in Hong Kong.

• China Urges Australian Lawmakers to ‘Repent’ Over Past Criticism.

• ECB’s Muller Says More Assets Could Join Stimulus List in Slump 

• U.S. Consulate in Nuevo Laredo, Mexico Issues Safety Warning.

• The Pot Stock Bubble Has Burst. Here’s Why.

• What Hedge Funds Are Buying and Selling.

• Newark, LaGuardia Ranked Among Most Expensive Airports in U.S.   

• Political Unpredictability Is Now the New Normal: Weekend Reads.  

• Your Weekend Reading: Cracking Up. 

• Car Crashes in Pot-Legal States Have Soared.

Wall Street Journal:

• Innovation Should Be Made in the U.S.A.

• Beware Warren’s ‘Madisonian’ Plan for Public Education.

• Adam Schiff, Founding Father.

• How Google(GOOG) Interferes With Search Results.

• Chinese State-Backed Investors Extend Support to Yet Another Bank.

• Protests Flare Across Iran After 50% Fuel-Price Increase.

• New Stanford Hospital Takes Holistic Approach to Technology.

• Charges for Jeffrey Epstein’s Jail Guards Coming as Soon as Next Week.

CNBC:

• Dow jumps more than 200 points to 28,000, posts 4-week winning streak.

• These 4 mega-cap consumer stocks have crushed fears of disruption and the market in the process.

• Under-the-radar trend suggests Wall Street isn’t bullish enough, CFRA’s Sam Stovall says.

• Here are the best analyst calls of the week on Wall Street, including Apple, Live Nation.

• Obama warns Democrats against going too far left: ‘We have to be rooted in reality’.

Barron's:

• Had bullish commentary on (RCL), (CSCO), (AMGN), (KEY), (T), (SYF), (PRU), (KO), (MDT), (MCD).

MarketWatch.com:

• Warren Buffett increases Apple(AAPL) stake despite selling some stock.

Fox News:

• AG Barr accuses the left of 'using every tool' to derail Trump; warns of ‘dangerous’ precedent.

• California city’s homeless stats soar, fed-up locals demand fix.

Zero Hedge:

• Chinese Soldiers Deployed Onto Street Of Hong Kong To "Help Clean Up".

• Medicare-For-All "Socialism" Is Just Another Racket.

• Zelensky "Loves Your Ass": Hearsay-Gate Intensifies Over Trump-Sondland Call.

• German Farmers Block Hamburg In Revolt Against Globalist Environmental Regulations.

• Democrats Flipped From "Quid Pro Quo" To "Bribery" Because A 'Focus Group' Told Them To.

• Baltimore City Hits 300 Homicides For 5th Consecutive Year Amid Murder Crisis.

• Global Debt To Hit All Time High $255 Trillion, 330% Of World GDP.

• Resolving Creeping Communism: "We're More Socialist Than We Think".

• Globalists Openly Admit To Population Control Agenda - And That's A Bad Sign...

• "More And More Robots Are Coming" - South Korea Embraces Job-Killing 'Friends'.

• Denver Business Owner Fined For Not Cleaning Up Vagrant Poo And Used Needles.

• "The Democrats Have The Country On A Slippery Slope", Paul Craig Roberts.

• Report Finds China Still Harvesting Organs From Political Dissidents, Minorities. 

• If You've Given Your Genetic Code To A DNA Database, US Police May Now Have Access To It.

• 'I Have Freedom Of Speech': Trump Hits Back After Critics Claim Witness Intimidation, 'Thugocracy'.

• Series Of Blasts Target Mass Protest Gathering In Baghdad, Multiple Dead & Wounded.

• Assad Goes Red Pill In Interview: Epstein, Bin Laden & Baghdadi 'Liquidated' As "They Knew Vital Secrets".

• Hong Kong Liquidity Crisis Near Decade Highs As Capital Flight Accelerates.

• YouTube To Delete All Accounts That Aren't "Commercially Viable" Starting Dec. 10th.

• Exposing The Deep State's Deep State Department.

• Stocks Jump To Record Highs As Bond Yields, Economic Data Dump.

Business Insider: 

• Twitter will ban all politicians from advertising on its platform, but it will make a few exceptions for news publishers and causes.

• Inside the chaotic aftermath of the McDonald's CEO's shocking termination and his replacement's quest to win over workers.

• Bernie Sanders and Elizabeth Warren are the 2020 progressive standard-bearers. Here's where they disagree on policy.

Mid-Day Market Internals

NYSE Composite Index:

• Volume Running -4.6% Below 100-Day Average
• 11 Sectors Rising, 0 Sectors Declining
• 63.0% of Issues Advancing, 34.5% Declining
• 93 New 52-Week Highs, 44 New Lows
• 57.7% of Issues Above 200-day Moving Average
• Average 14-Day RSI 47.8%
• Vix 12.3 -5.7%
• Total Put/Call .77 -6.1%
• TRIN/Arms .66 -57.7%

Friday Watch

Evening Headlines

Bloomberg:             

• Kudlow Says Phase One China Deal Down to the ‘Short Strokes’.

• U.S. Senate Readies Quick Vote on Trade Status: Hong Kong Update.  

• Justice Minister Hurt; Elderly Worker Dies: Hong Kong Update.

• Jack Ma Says U.S.-China Trade Tension Could Last 20 Years.

• Stocks, Yields Gain on Renewed Trade-Deal Hopes: Markets Wrap. Asian stocks and U.S. futures rose along with Treasury yields after a senior American official suggested progress on a trade deal with China. The yen dipped. Equities rose in Tokyo, Sydney and Seoul after White House economic adviser Larry Kudlow said an agreement is “coming down to the short strokes.” Hong Kong shard propelled Treasuries earlier this week, and arrested a U.S. stock rally that took benchmarks to record highs. Japan’s Topix Index rose 0.9% as of 10:41 a.m. Shanghai Composite dipped 0.1%. Hang Seng index gained 0.8%. Korea’s Kospi gained 0.9%. The S&P/ASX 200 rose 0.8%. S&P 500 futures were up 0.4%. The S&P 500 Index rose 0.1% Thursday. 

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

• China Prize Irresistible, Global Debt Soars, Fed’s Star: Eco Day.

• Macro Risk Checks Which Hedges Actually Work and Which Are Duds .

• Aurora Becomes Latest Pot Firm to Miss Estimates.

• Goldman Names 465 New Managing Directors, Fewer Than Last Cycle.

Wall Street Journal:  

• Student Kills 2, Wounds 3 at California High School.

• Impeachment as Usual.

• Inside Under Armour’s Sales Scramble: ‘Pulling Forward Every Quarter’. 

• Walmart Shows Shoppers Are Still Spending.

• No More Easy Profits as China’s Venture-Capital Boom Fizzles.

Fox News:

• WATCH LIVE: Trump mocks witnesses in first public impeachment hearing, during packed Louisiana rally.

• House Republicans to sharpen focus on Ukraine meddling claims after hearing.

MarketWatch.com:       

• Applied Materials(AMAT) says earnings and sales are about to return to growth, sending stock higher

• Opinion: AMD(AMD), Amarin and Crispr are three stocks to watch for potentially higher prices  

• Nvidia(NVDA) earnings point to end of a year of revenue declines.

CNBC:

• Warren Buffett’s Berkshire Hathaway reveals new stake in furniture retailer RH, shares surge.

• Nancy Pelosi says a USMCA trade deal breakthrough could be ‘imminent’.

• Attorney General Barr says Chinese companies ‘Huawei and ZTE cannot be trusted’.

• Stocks making the biggest moves after hours: Farfetch, NVIDIA, Applied Materials & more.

Zero Hedge:

• Billionaires Savage Elizabeth Warren Over Virtue Smoke-Signaling Campaign Ad.

• Leaked Bank Records Confirm Burisma-Biden Payments To Morgan Stanley Account.

• South Korea Slaughters 380,000 Pigs After China's Pig Ebola Crosses Border.

• Amazon(AMZN) Lodges Formal Protest After Controversial 'JEDI' Contract Awarded To. Microsoft(MSFT).

• Millennial Suing His Pension Fund For Not Being "Green" Enough.

• Have You Noticed That The Crazy People Are Starting To Take Over Our Society?

• Fed Braces For Year End Repo Turmoil: Announces $55 Billion In 28, 42-Day Repos To Flood System With Cash.

• Google(GOOG) Slides After Antitrust Probe Expands Into Search And Android Businesses

• Bond Yields Tumble As Stocks Reach Longest (Best) Bull Market Ever.

Night Trading 

• Asian equity indices are -.25% to +.75% on average.

• Asia Ex-Japan Investment Grade CDS Index 64.25 -1.0 basis point.

• China Sovereign CDS 38.5 -1.0 basis point.

• Bloomberg Emerging Markets Currency Index  65.43 +.06%.

• FTSE 100 futures +.34%.

• S&P 500 futures +.34%.

• NASDAQ 100 futures +.37%.

Morning Preview Links

Earnings of Note 
Company/Estimate

Before the Open:

• (JCP)/-.54

• (JD)/1.20

After the Close:

• None of note

Economic Releases
8:30 am EST

• Empire Manufacturing for Nov. is estimated to rise to 6.0 versus 4.0 in Oct.

• The Import Price Index MoM for Oct. is estimated to fall -.2% versus a +.2% gain in Sept.

• The Export Price Index MoM for Oct. is estimated to fall -.1% versus a -.2% decline in Sept.

• Retail Sales Advance MoM for Oct. is estimated to rise +.2% versus a -.3% decline in Sept.

• Retail Sales Ex Auto MoM for Oct. is estimated to rise +.4% versus a -.1% decline in Sept. 

• Retail Sales Ex Autos and Gas for Oct. is estimated to rise +.3% versus unch. in Sept.

9:15 am EST

• Industrial Production MoM for Oct. is estimated to fall -.4% versus a -.4% decline in Sept.

• Manufacturing Production for Oct. is estimated to fall -.7% versus a -.5% decline in Sept.

• Capacity Utilization is estimated to fall to 77.0% versus 77.5% in Sept.
  

10:00 am EST

• Business Inventories for Sept. is estimated to rise +.1% versus unch. in Aug.

Upcoming Splits

• None of note

Other Potential Market Movers

• The Eurozone CPI report and the (VAR) investor 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 mixed and rally into the afternoon, finishing modestly higher. The Portfolio is 100% net long heading into the day.