Thursday Watch

Night Trading 

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

• Asia Ex-Japan Investment Grade CDS Index 65.0 -.75 basis point.

• China Sovereign CDS 39.5 +.75 basis point.

• Bloomberg Emerging Markets Currency Index  65.49 +.03%.
• FTSE 100 futures +.11%.

• S&P 500 futures -.08%.

• NASDAQ 100 futures -.11%.

Morning Preview Links

Earnings of Note 
Company/Estimate

Before the Open:

• (AZZ)/.56
• (BF/B)/.52
• (DG)/1.38
• (JILL)/.10
• (KR)/.49
• (SIG)/-1.09
• (TIF)/.85
• (TD)/1.74

After the Close:

• (COO)/3.27
• (CRWD)/-.12
• (KFY)/.81
• (OKTA)/-.12
• (ULTA)/2.14
• (ZUMZ)/.60

Economic Releases
7:30 am EST

• Challenger Job Cuts YoY for Nov.
  

8:30 am EST

• Initial Jobless Claims for last week are estimated to rise to 215K versus 213K the prior week.
• Continuing Claims are estimated to rise to 1660K versus 1640K prior.
• The Trade Deficit for Oct. is estimated at -$48.6B versus -$52.5B in Sept.
  

10:00 am EST

• Factory Orders for Oct. are estimated to rise +.3% versus a -.6% decline in Sept.
  

Upcoming Splits

• None of note

Other Potential Market Movers

• The Fed's Quarles speaking, Eurozone retail sales report, weekly Bloomberg Consumer Comfort Index, weekly EIA natural gas inventory report, Goldman Sachs Auto Conference, BofA Merrill Solar/Alt Energy Symposium, (WFC) analyst meeting, (WMB) analyst day, (EW) investor day and the (BIIB) Aducanumab Phase 3 Topline results could also impact trading today.

BOTTOM LINE: Asian indices are higher, boosted by commodity and technology 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 day.

Stocks Rising into Final Hour on China Trade Deal Optimism, Oil Gain, Less European/Emerging Markets/US High-Yield Debt Angst, Energy/Financial Sector Strength

 Broad Equity Market Tone:

• Advance/Decline Line: Substantially Higher
  

• Sector Performance: Almost Every Sector Rising
  

• Volume: Around Average

• Market Leading Stocks: Performing In Line

Equity Investor Angst:

• Volatility(VIX) 14.4 -9.5%

• Euro/Yen Carry Return Index 125.18 +.19%

• Emerging Markets Currency Volatility(VXY) 6.95 unch.

• S&P 500 Implied Correlation 43.7 -2.9%

• ISE Sentiment Index 77.0 +13
  

• Total Put/Call .98 -14.0%

• NYSE Arms .75 -39.5%

Credit Investor Angst:

• North American Investment Grade CDS Index 50.54 -2.54%
  

• America Energy Sector High-Yield CDS Index 623.0 -1.84%

• European Financial Sector CDS Index 56.01 -3.61%

• Italian/German 10Y Yld Spread 160.5 -3.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 65.1 +.25%
  

• Emerging Market CDS Index 204.93 -1.97%
  

• iBoxx Offshore RMB China Corporate High Yield Index 168.42 +.11%

• 2-Year Swap Spread 1.5 +.25 basis point

• TED Spread 34.5 unch.

• 3-Month EUR/USD Cross-Currency Basis Swap -12.25 +3.25 basis points

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 65.46 +.20%
• 3-Month T-Bill Yield 1.53% -3.0 basis points

• Yield Curve .20 +2.0 basis points

• China Iron Ore Spot 86.70 USD/Metric Tonne -.23%

• Citi US Economic Surprise Index -4.2 -10.0 basis points

• Citi Eurozone Economic Surprise Index .9 +3.2 points

• Citi Emerging Markets Economic Surprise Index -23.0 +4.0 basis points

• 10-Year TIPS Spread 1.69 +4.0 basis points
• 12.7% chance of Fed rate cut at Jan. 29th meeting, 25.6% chance of cut at March 18th meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating +250 open in Japan 
• China A50 Futures: Indicating +64 open in China

• DAX Futures: Indicating +31 open in Germany

Portfolio:

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

• Disclosed Trades: None

• Market Exposure: 100% Net Long

Bear Radar

Style Underperformer:

• Large-Cap Growth +.7%

Sector Underperformers:

• 1) Gold & Silver -.3% 2) Tobacco -.2% 3) Software -.1%

Stocks Falling on Unusual Volume: 

• VST, AVAV, WDAY, CNNE, INMD, ARWR, ZS, HIIQ, EOLS, TNDM, INST, IMMU, DT and RVNC

Stocks With Unusual Put Option Activity:

• 1) DVN 2) WLL 3) FIVE 4) ACHN 5) ASHR

Stocks With Most Negative News Mentions:

• 1) DT 2) PTON 3) PLT 4) AMPE 5) REX

Charts:

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

Bull Radar

Style Outperformer:

• Small-Cap Value +1.1%

Sector Outperformers:

• 1) Oil Service +4.6% 2) Road & Rail +1.6% 3) Video Gaming +1.6%

Stocks Rising on Unusual Volume:

• KOD, SOI, RVLV, HQY, CWH, MTEM, MED, REAL, EXPE, OMER, PRVB, VCYT, EXEL, OLLI, LB, FANG, CLVS, EOG, MCHP, TROX, CLVS, NXTC, YETI, APA, MAT, STAA, VNOM, VIAB, CBS, NSTG, CCMP, ALLO, FTI, CFX, WWD, SBH, AVTR, PING, REGI, USAC, COP and AKCA

Stocks With Unusual Call Option Activity:

• 1) BTU 2) FIVE 3) ON 4) ZS 5) CRM

Stocks With Most Positive News Mentions:

• 1) HQY 2) MYGN 3) MCHP 4) CLF 5) UNH

Charts:

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

Mid-Day Market Internals

NYSE Composite Index:

• Volume Running -.6% Below 100-Day Average
• 11 Sectors Rising, 0 Sectors Declining
• 72.8% of Issues Advancing, 24.1% Declining
• 53 New 52-Week Highs, 10 New Lows
• 54.7% of Issues Above 200-day Moving Average
• Average 14-Day RSI 45.0%
• Vix 14.1 -11.4%
• Total Put/Call .92 -19.3%
• TRIN/Arms .72 -41.9%

Wednesday Watch

Night Trading 

• Asian equity indices are -1.25% to -.5% on average.

• Asia Ex-Japan Investment Grade CDS Index 65.75 +1.25 basis points.

• China Sovereign CDS 40.25 +1.25 basis points.

• Bloomberg Emerging Markets Currency Index  65.30 -.05%.

• FTSE 100 futures +.06%.

• S&P 500 futures +.02%.

• NASDAQ 100 futures +.03%.

Morning Preview Links

Earnings of Note 

Company/Estimate

Before the Open:

• (CPB)/.71

• (GIII)/1.94

• (JW/A)/.65

After the Close:

• (HOME)/-.02

• (FIVE)/.17

• (HRB)/-.92

• (RH)/2.25

• (SMTC)/.40

• (SNPS)/1.13

Economic Releases

8:15 am EST

• The ADP Employment Change for Nov. is estimated to rise to 135K versus 125K in Oct.
  

10:00 am EST

• The ISM Non-Manufacturing Index for Nov. is estimated to fall to 54.5 versus 54.7 in Oct.
  

10:30 am EST

• Bloomberg consensus estimates call for a weekly crude oil inventory decline of -1,486,310 barrels versus a +1,572,000 barrel gain the prior week. Gasoline supplies are estimated to rise by +1,469,750 barrels versus a +5,132,000 barrel gain the prior week. Distillate inventories are estimated to rise by +327,420 barrels versus a +725,000 barrel gain the prior week. Finally, Refinery Utilization is estimated to rise by +.84% versus a -.2% decline prior.
  

Upcoming Splits

• None of note

Other Potential Market Movers

• The Fed's Quarles speaking, Berenberg European Conference, Eurozone PMI report, weekly MBA Mortgage Applications report and the impeachment hearing could also impact trading today.

BOTTOM LINE: Asian indices are lower, weighed down by commodity and industrial shares in the region. I expect US stocks to open modestly lower and to rally into the afternoon, finishing modestly higher. The Portfolio is 100% net long heading into the day.