Bull Radar

Style Outperformer:

• Small-Cap Value +1.3%

Sector Outperformers:

• 1) I-Banks +1.9% 2) Airlines +1.6% 3) Disk Drives +1.5%

Stocks Rising on Unusual Volume:

• XPO, NLTX, NVCR, TPTX, CCXI, MS, RUN, YMAB, NTRA, SAVE, PSNL, EGHT, IRDM, BL, MNTA, MRNA, PINS, HOMB, VECO, COHU, CUE, DNLI, XLRN, PI, MC, HSC, AMBC, APPN, AVYA, BLUE, NSTG and EVR

Stocks With Unusual Call Option Activity:

• 1) VER 2) MS 3) EMB 4) TFC 5) CSX

Stocks With Most Positive News Mentions:

• 1) SIG 2) MS 3) SCHW 4) SPLK 5) APTV

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running +11.2% Above 100-Day Average
• 11 Sectors Rising, 0 Sectors Declining
• 69.8% of Issues Advancing, 27.2% Declining
• 231 New 52-Week Highs, 4 New Lows
• 66.7% of Issues Above 200-day Moving Average
• Average 14-Day RSI 51.0%
• Vix 12.2 -1.9%
• Total Put/Call .68 -9.3%
• TRIN/Arms .91 -28.4%

Thursday Watch

Evening Headlines

Bloomberg:        

• China to Hit 2019 Economic Targets as Trade Deal Lifts Outlook.

• U.S. and China Sign Phase One of Trade Deal.

• China’s State TV Gives Trump Live Airtime for Trade Deal Signing. 

• Stocks Mixed in Asia After U.S.-China Trade-Deal. Stocks in Asia were mixed Thursday in wake of the signing of the U.S.-China trade deal, expectations for which had driven global equities to record highs and propelled a recovery in the yuan. Shares in Japan and South Korea were largely flat, while Australian equities were modestly higher. Hong Kong and Shanghai saw a muted open. U.S. futures were little changed after the S&P 500 Index Wednesday notched a fresh record high. Treasuries held gains, with 10-year yields below 1.8%, and West Texas Intermediate hovered around $58 a barrel. Futures on the S&P 500 Index were little changed as of 10:34 a.m. in Tokyo. The underlying gauge rose 0.2% on Wednesday. Japan’s Topix index dipped 0.2%. South Korea’s Kospi index was little changed. Australia’s S&P/ASX 200 Index advanced 0.6%. Shanghai Composite index was flat. Hang Seng index dipped 0.2%.

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

• Smith & Wesson Maker Replaces CEO After Non-Financial Misconduct.  

• TeslaTSLA) Is Once Again the Most Shorted American Stock.

Wall Street Journal:

• U.S., China Sign Agreement Easing Trade Tensions.

• The Best and Worst U.S. Airlines of 2019.

• Can Trump Earn Black Support?

• Pelosi’s Impeachment Offenses.

Fox News:

• Pelosi 'played into' McConnell's hands, 'destroyed' her impeachment case, Turley says.

MarketWatch.com: 

• The Dow just closed above 29,000 for first time in a brisk 40 trading days.

• The ‘best job in America’ for 2020 pays $105,000 a year — and you’ve probably never even heard of it.  

• Millennials prefer White Claw over wine — and it’s shaking up the alcohol industry.

CNBC:

• Here’s what China agreed to buy from the US in the phase one trade deal.

• Facebook(FB) stock is about to ride a big upside move, trader predicts.

• The real warning in Target’s holiday sales: Toys are in trouble.

• Shares of XPO Logistics(XPO) soar 15% after announcing possible spin-offs.

• Twitter(TWTR) CEO Jack Dorsey: ‘I eat seven meals every week, just dinner’.

Zero Hedge:

• Epstein Trafficked Girls As Recently As 2018 - Some As Young As 11, According To Lawsuit By Virgin Islands AG. 

• Northam Declares State Of Emergency In Virginia Because "Armed Militia Groups Plan To Storm The Capitol".

• The Cannabis Industry's Dirty Energy Secret.

• House Delivers Articles Of Impeachment To Senate, 'Trial' To Start Tuesday.

• #CNNIsTrash Trends As Pushback Grows Against Oligarchic Election Meddling.

• 18 Signs That Social Decay In America Is Worse Than It's Ever Been Before.

• "Sell The News"? Stocks, Dollar, & Bond Yields Slide After Signing Trade Deal.

Night Trading 

• Asian equity indices are -.25% to +.5% on average.

• Asia Ex-Japan Investment Grade CDS Index 52.50 -.5 basis point.

• China Sovereign CDS 30.25  -1.0 basis point.

• Bloomberg Emerging Markets Currency Index  66.50 +.03%.

• FTSE 100 futures -.01%.

• S&P 500 futures +.11%.

• NASDAQ 100 futures +.16%.

Morning Preview Links

Earnings of Note 
Company/Estimate

Before the Open:

• (BK)/1.00

• (SCHW)/.62

• (MS)/1.02

• (PPG)/1.34

• (TSM)/4.12

After the Close:

• (CSX)/.98

• (PRGS)/.75

Economic Releases 
8:30 am EST

• The Philly Fed Business Outlook Index for Jan. is estimated to rise to 3.6 versus .3 in Dec.

• The Import Price Index MoM for Dec. is estimated to rise +.3% versus a +.2% gain in Nov.

• The Export Price Index MoM for Dec. is estimated to rise +.2% versus a +.2% gain in Nov.

• Retail Sales Advance MoM for Dec. is estimated to rise +.3% versus a +.2% gain in Nov.

• Retail Sales Ex Autos MoM for Dec. is estimated to rise +.5% versus a +.1% gain in Nov.

• Retail Sales Ex Autos and Gas for Dec. is estimated to rise +4% versus unch. in Nov.

• Initial Jobless Claims for last week are estimated to rise to 218K versus 214K the prior week.

• Continuing Claims are estimated to fall to 1750K versus 1803K prior.
  

10:00 am EST

• Business Inventories for Nov. is estimated to fall -.2% versus a +.2% gain in Oct.

• The NAHB Housing Market Index for Jan. is estimated to fall to 74 versus 76 in Dec.
  

4:00 pm EST

• Net Long-Term TIC Flows for Nov.
  

Upcoming Splits

• None of note

Other Potential Market Movers

• The Fed's Bowman speaking, BoE Survey, weekly EIA natural gas inventory report, (WING) investor day and the (CMCSA) streaming service investor meeting could also impact trading today.

Market Hours
Normal:

• 9:30 am - 4:00 pm EST
  

BOTTOM LINE: Asian indices are slightly higher, boosted by technology and commodity shares in the region. I expect US stocks to open mixed and to weaken into the afternoon, finishing modestly lower. The Portfolio is 75% net long heading into the day.

Stocks Reversing Slightly Lower into Final Hour on Profit-Taking, Oil Weakness, Technical Selling, Bank/Energy Sector Weakness

 Broad Equity Market Tone:

• Advance/Decline Line: Higher
  

• Sector Performance: Mixed
  

• Volume: Above Average

• Market Leading Stocks: Performing In Line

Equity Investor Angst:

• Volatility(VIX) 12.4 +.3%

• Euro/Yen Carry Return Index 127.19 +.15%

• Emerging Markets Currency Volatility(VXY) 6.31 -.63%

• S&P 500 Implied Correlation 37.26 -4.2%

• ISE Sentiment Index 96.0 +8
  

• Total Put/Call .72 -5.26%

• NYSE Arms 1.25 +19.1%

Credit Investor Angst:

• North American Investment Grade CDS Index 44.48 -.32%
  

• America Energy Sector High-Yield CDS Index 539.0 -1.19%

• European Financial Sector CDS Index 51.52 +.8%

• Italian/German 10Y Yld Spread 160.0 +3.25 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 52.62 -.65%
  

• Emerging Market CDS Index 179.58 -1.32%
  

• iBoxx Offshore RMB China Corporate High Yield Index 168.88 +.03%

• 2-Year Swap Spread 7.25 +1.5 basis points

• TED Spread 27.25 -2.0 basis points

• 3-Month EUR/USD Cross-Currency Basis Swap -1.25 +.25 basis point

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 66.53 -.1%
• 3-Month T-Bill Yield 1.56% +1.0 basis point

• Yield Curve .24 -3.0 basis points

• China Iron Ore Spot 94.82 USD/Metric Tonne +.7%

• Citi US Economic Surprise Index -5.4 +.4 point

• Citi Eurozone Economic Surprise Index 40.50 -1.0 point

• Citi Emerging Markets Economic Surprise Index -3.30 -.7 basis point

• 10-Year TIPS Spread 1.75 -1.0 basis point
• .7% chance of Fed rate cut at March 18th meeting, 10.2% chance of cut at April 29th meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating +24 open in Japan 
• China A50 Futures: Indicating +12 open in China

• DAX Futures: Indicating -27 open in Germany

Portfolio:

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

• Disclosed Trades: Added to my (IWM)/(QQQ) hedges

• Market Exposure: Moved to 50% Net Long

Morning Market Internals

NYSE Composite Index:

• Volume Running +13.5% Above 100-Day Average
• 9 Sectors Rising, 2 Sectors Declining
• 57.2% of Issues Advancing, 39.5% Declining
• 186 New 52-Week Highs, 3 New Lows
• 66.1% of Issues Above 200-day Moving Average
• Average 14-Day RSI 50.4%
• Vix 12.5 +.6%
• Total Put/Call .64 -15.8%
• TRIN/Arms 1.25 +19.1%

Wednesday Watch

Night Trading 

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

• Asia Ex-Japan Investment Grade CDS Index 53.0 -1.5 basis points.

• China Sovereign CDS 31.25  +1.25 basis points.

• Bloomberg Emerging Markets Currency Index  66.51 -.05%.
• FTSE 100 futures -.03%.

• S&P 500 futures -.15%.

• NASDAQ 100 futures -.19%.

Morning Preview Links

Earnings of Note 

Company/Estimate

Before the Open:

• (BAC)/.69
• (BLK)/7.42
• (GS)/5.48
• (PNC)/2.91
• (USB)/1.09
• (UNH)/3.75

After the Close:

• (AA)/-.23
• (KMI)/.26

Economic Releases 

8:30 am EST

• PPI Final Demand MoM for Dec. is estimated to rise +.2% versus unch. in Nov.
• PPI Ex Food and Energy MoM for Dec. is estimated to rise +.2% versus a -.2% decline in Nov.
• Empire Manufacturing for Jan. is estimated to rise to 3.6 versus .3 in Dec.
  

10:30 am EST

• Bloomberg consensus estimates call for a weekly crude oil inventory gain of +384,730 barrels versus a +1,164,000 barrel gain the prior week. Gasoline supplies are estimated to rise by +3,389,100 barrels versus a +9,137,000 barrel gain the prior week. Distillate supplies are estimated to rise by +2,023,900 barrels versus a +5,330,000 barrel gain the prior week.Finally, Refinery Utilization is estimated to fall by -.26% versus a -1.5% decline prior.
  

2:00 pm EST

• US Fed Beige Book report.
  

Upcoming Splits

• None of note

Other Potential Market Movers

• The Fed's Harker speaking, Fed's Kaplan speaking, China Phase 1 Trade Deal Signing, UK CPI report, Japan Machine Orders report, (TGT) holiday sales update, weekly MBA Mortgage Applications report and the (CRM) Jefferies investor meeting could also impact trading today.

Market Hours

Normal:

• 9:30 am - 4:00 pm EST
  

BOTTOM LINE: Asian indices are slightly lower, weighed down by technology and consumer shares in the region. I expect US stocks to open modestly lower and to maintain losses into the afternoon. The Portfolio is 75% net long heading into the day.