Morning Market Internals

NYSE Composite Index:

• Volume Running +19.4% Above 100-Day Average
• 0 Sectors Rising, 11 Sectors Declining
• 16.0% of Issues Advancing, 82.3% Declining
• 67 New 52-Week Highs, 98 New Lows
• 66.5% of Issues Above 200-day Moving Average
• Average 14-Day RSI 49.6%
• Vix 17.7 +21.8%
• Total Put/Call 1.0 -8.3%
• TRIN/Arms 1.84 -21.4%

Monday Watch

Today's Headlines

Bloomberg:    

• U.S. Embassy in Baghdad Hit in Katyusha Rocket Attack.

• California Reports Infection as China Warns of Virus Spreading Fast.

• Behind the Global Race to Contain China’s Killer Bug.

• Hong Kong Protest Against Quarantine Facilities Turns Violent.

• Mapping the Coronavirus Outbreak Across the World.

• China Names HIV Drugs in Treatment Plan for New Virus.

• Latest News Updates on the Spreading Virus.  

• In Bid for Trump Trade Deal, EU Turns to Shellfish from Soybeans.

• Stock Futures, Oil Tumble; Yen Jumps on Virus Fear. Stock futures tumbled with crude oil and the yen jumped in early trading Monday as the impact of the deadly coronavirus escalated, with a rising death toll and the announcement of an unspecified extension to China’s lunar new year holiday. With no sign of the disease’s containment, traders rushed for havens and out of risk assets. Contracts on the S&P 500 Index fell more than 1% and Nikkei 225 futures dropped more than 1.5%. China’s yuan tumbled, and oil sank more than 2%. The moves come on a day with limited trading options in Asia, as markets are shut in locations including China, Hong Kong, South Korea and Australia, due to holidays. Treasury futures climbed. S&P 500 futures fell 1.1% as of 8:33 a.m. in Tokyo. The S&P 500 Index fell 0.9% Friday. Nikkei 225 futures fell 1.5% in Chicago. FTSE China A50 futures slid 1.9% earlier.

• Middle East Stock Markets Fall as Coronavirus Spreads.    

• Oil Slumps as Fears Grow Over Impact of Deadly Virus.

• Hemp Prices Plunge as CBD Demand Falls Short: Cannabis Weekly.  

• Drug Stocks Slide as Never-Ending Political Worry Gathers Steam.

Wall Street Journal:

• Elizabeth Warren Meets an Irate Dad.

• U.S. Hospitals Aren’t Ready for the Coronavirus.

• Apple(AAPL) Was Headed for a Slump. Then It Had One of the Biggest Surges Ever.

• The Pharmacist Is Out: Supermarkets Close Pharmacy Counters.

• Europe’s Banking Regulator Paves the Way for Bank Mergers.

• China Urges Calm Over Virus During ‘Critical Period’.

• State Attorneys General to Meet With Justice Officials to Coordinate on Google(GOOG) Probe.

• The Hidden Factor Making Junk Bonds Less Risky.

• The Tax Increases to Come.

• China’s Censorship Helps Spread the Virus.

• Phones That Can Read Your Mind.

MarketWatch.com:

• Apple earnings: A year after holiday misfire, Apple is worth twice as much.

Fox News:

• TRENT ENGLAND: Here’s how Elizabeth Warren wants to silence Middle America.

CNBC:

• How coronavirus is beginning to hit China’s economy.

• Boeing’s 777X completes maiden flight, a milestone for company struggling from Max crashes.

• Sanders leads New Hampshire Democratic primary less than three weeks out.

• Fifth US case of coronavirus confirmed in Arizona, health officials say.

• After virus scare, markets look to Fed rate policy to keep stock rally going.

Zero Hedge: 

• Crude Crashes As Asia Trading Opens; Stocks Slump, Gold Jumps, Yuan Dumps.

• 5 Million Potential Carriers Have Left Wuhan As Coronavirus Appears To Mutate Into "More Transmissable" Form.

• Fresh Rocket Attack Scores Direct Hit On US Embassy In Baghdad.

• Did China Steal Coronavirus From Canada And Weaponize It?

• Sweden And Its Welfare State In Crisis.

• Third Coronavirus Infection Confirmed In California As Wuhan Mayor Expects “1000 Or So” New Cases.

• Kobe Bryant Dies In Helicopter Crash.

• CDC Calls CoV "Serious Emerging Public Health Threat", Confirms 5th US Case.

• Obama Called Trump "Fascist Who Can't Be Allowed Into White House"

• N95 Virus Masks Sell Out Across The U.S.

• Italians Head To Polls In Regional Vote That Could Topple The Government.

• The 'Golden Age Of Plastic'? Banks Are Quietly Raising Credit Limits For Freespending Borrowers.

• Yale Cancels Prestigious Art History Course For Being "Too White".

• "Racist" Trump Supporters Should Lose Their Vote, Says NBC. Guess Who Decides They're "Racist"?

• A New 'Greenwashed' Road To Serfdom.

Business Insider:

• The Wuhan coronavirus could blow up the game China's been playing with its economy for years.

• Iran's military knew it accidentally shot down a passenger plane moments after it happened, and a stunning new report details how it was covered up — even from Iran's president.

Night Trading

• Asian indices are -2.0% to -1.5% on average.

• Asia Ex-Japan Investment Grade CDS Index 53.75 +.25 basis point.

• China Sovereign CDS 37.5 +1.0 basis point.

• Bloomberg Emerging Markets Currency Index 65.99 -.02%.

• FTSE 100 futures n/a.

• S&P 500 futures -.9%.

• NASDAQ 100 futures -1.3%.

Morning Preview Links

Earnings of Note

Company/Estimate

Before the Open:

• (DHI)/.91

• (S)/-.04

After the Close:

• (BRO)/.27

• (FFIV)/2.42

• (GGG)/.39

• (JNPR)/.57

• (PKI)/1.33

• (RMBS)/.25

• (SANM)/.70

• (WHR)/4.27

Economic Releases
10:00 am EST

• New Home Sales MoM for Dec. is estimated to rise to 731K versus 719K in Nov.

10:30 am EST

• Dallas Fed Manufacturing Activity for Jan. is estimated to rise to -1.6 versus -3.2 in Dec.

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The German IFO Business Climate Index, $40B 2Y T-Note auction and the $41B 5Y T-Note auction could also impact trading today.

Market Hours
Normal:

• 9:30 am - 4:00 pm EST

BOTTOM LINE: Asian indices are lower, weighed down by transportation and commodity shares in the region. I expect US stocks to open lower and to maintain losses into the afternoon.  The Portfolio is 25% 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 lower on China coronavirus fears, global growth concerns, oil weakness, European/Emerging Markets/US High-Yield debt angst, less dovish FOMC commentary and rising Mideast tensions. My intermediate-term trading indicators are giving neutral signals and the Portfolio is 25% net long heading into the week.

Today's Headlines

Bloomberg: 

• China’s Xi Steps in as Deadly Virus Spreads to Four Continents.

• Wuhan Gets Aid as Singapore, Malaysia Report Cases: Virus Update.

• Tracking the Virus Outbreak’s Impact on Business and Travel.

• Copper Sees Worst Losing Streak Since 2018 on Virus Fears.

• Sanders Takes Iowa Lead Over Buttigieg, Biden in NYT Poll.

Wall Street Journal:

• Pentagon Blocks Limits on Huawei in Bid to Protect U.S. Tech Firms.

• U.S. Working to Evacuate American Citizens From Epidemic-Stricken Chinese City

• Will 5G Reinvent Working From Home?

• Taxpayers Decide Some States Aren’t Worth It.

CNBC:

• Apple(AAPL) and Microsoft(MSFT) reps are joining meeting on Monday promoting patient access to health data.

• Bonds look like they are flashing a warning for global markets.

• Trump administration cracks down on counterfeits sold on Amazon(AMZN) and other online retailers.

• Hong Kong declares virus emergency for coronavirus, first cases appear in Australia.

• The market’s valuation, momentum and speculative activity is nowhere near as extreme as in 1999.

• Wall Street analysts say these stocks have strong growth stories, including Peloton & Pinterest.

Barron's:

• Had bullish commentary on (DEAC), (MGM), (ERI), (WYNN), (CZR), (LVS), (BYD), (PENN), (IBM), (AVGO), (HPE) and (CSCO).

MarketWatch.com: 

• Esports Is Finding a Huge Audience. These Stocks Are the Best Plays.

Fox News:

• Trump team goes on offense in impeachment trial, accuses Dems of 'massive' election interference.

• MSNBC anchor: Dems didn't offer 'enough evidence' of Trump obstruction.

Zero Hedge:

• 56 Million Chinese On Lockdown As Virus Spreads To Australia, Malaysia.

• Asia Panics: Virus Masks Sell Out As Prices Skyrocket Amid Coronavirus Fears.

• Turkey Moves Toward Passage Of Controversial "Marry Your Rapist" Law.

• "Bullcrap": Schiff Outrages GOP Senators With "Head On A Pike" Remark.

• U.S. Presidential Partisan Divide Hits Record High.

• A New 'Greenwashed' Road To Serfdom.

• Watch Live: GOP Senators Say Sekulow 'Shredded' Impeachment Case; Schiff Calls A 'Distortion'.

• U.S. Prepares Emergency Evacuation Of Americans From Epidemic Stricken Chinese City.

• Bernie Sanders Surges To 7-Point Lead In Iowa: Times Poll.

• Guggenheim: 10 Macro Themes To Watch In 2020.

• Students Suffer "Separation Anxiety" After Schools Take Smartphones During Class.

• Professors Donate To Democrats Over Republicans By A 95:1 Ratio, New Study Finds.

• Lindsey Graham Attacks, Then Protects Bidens - Will Oppose Any Attempts To Call As Impeachment Witnesses.

• UK Researcher Predicts Over 250,000 Chinese Will Have Coronavirus In Ten Days.

• China Suddenly Increases Death Toll By Over 60% As Virus Jumps To Europe.

• The Richmond Rally Is A Perfect Example Why You Can't Trust The Media To Provide Reliable Intel.

• Absurdistan: MO Librarians Face Year In Jail For Not Banning "Prurient" Books.

• Joe Rogan Smeared As "White Nationalist Transphobe" After Bernie Sanders Accepts His Endorsement.

• Baltimore - A Once Great City That Is Now The Murder Capital Of America.

• Corona-Contagion Crashes Commodity/Stock Markets Worldwide, Bonds & Bullion Bid.

Business Insider:   

• Doctors say they face 'flooding' of patients.

• S&P: Coronavirus could slash Chinese economic growth.

• Coronavirus hits city where 1M Uighur Muslims are imprisoned.

• Hospital staff in Wuhan are wearing adult diapers.

• Xi Jinping warned of the 'grave situation' created by the 'accelerating' spread of coronavirus.