Bear Radar

Style Underperformer:

• Large-Cap Growth +.5%

Sector Underperformers:

• 1) Gold & Silver -.4% 2) Drugs unch. 3) Steel unch.

Stocks Falling on Unusual Volume: 

• SDC, WING, BCOR, TWST, DTIL, BK, AAOI and AA

Stocks With Unusual Put Option Activity:

• 1) BK 2) UNIT 3) AA 4) IRBT 5) SPCE

Stocks With Most Negative News Mentions:

• 1) TSLA 2) DDD 3) BYND 4) UBER 5) PPC

Charts:

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

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%