Morning Market Internals

NYSE Composite Index:

• Volume Running -19.1% Below 100-Day Average
• 6 Sectors Rising, 5 Sectors Declining
• 52.9% of Issues Advancing, 44.3% Declining
• 10 New 52-Week Highs, 19 New Lows
• 35.2% of Issues Above 200-day Moving Average
• Average 14-Day RSI 37.7% 
• Bloomberg Global Risk-On/Risk-Off Index -59.0 -50.0 points
• Vix 28.4 -.5%
• Total Put/Call .82 -18.0%
• TRIN/Arms 1.69 +164.0%

 

Friday Watch

Evening Headlines

Bloomberg:  

• Australia to Loosen Lending Laws to Boost Flow of Credit.
• London Loses Allure for Jobseekers as Covid Hits City Businesses.  
• Korea Consumer Confidence Retreats on New Virus Wave, Curbs.
• India’s Animal Spirits Stabilize as Virus Rages Across Economy.
• Covid Death Toll Nears 1 Million, But Real Number May Be Double.   
• Worsening Virus Trends Are Raising Alarms for Stock Investors. 
• Asia Looks Set for Modest Stock Gains; Dollar Dips: Markets Wrap. Asian stocks looked set for tentative gains after a volatile U.S. session as investors weighed the chances of a new stimulus package against an uptick in global coronavirus cases. The dollar slipped. Futures in Japan, Hong Kong and Australia pointed to a modest rise. S&P 500 contracts climbed. Earlier, the benchmark pared most of an earlier rally as optimism faded that Congress would reach a spending deal with the White House. Sentiment had pushed shares higher on news that Treasury Secretary Steven Mnuchin and the Democratic House leader were open to fresh talks. But a report that Speaker Nancy Pelosi’s fresh overture deviated only slightly from previous offers sparked concern that the two sides would remain far apart. Treasuries were little changed. Elsewhere, Chinese assets will be in focus Friday after FTSE Russell said the country’s debt would be added to its flagship World Government Bond Index. The offshore yuan ticked higher. Oil dipped. S&P 500 futures rose 0.3% as of 7:20 a.m. Tokyo time. The S&P 500 advanced 0.3% on Thursday. Futures on Japan’s Nikkei 225 rose 0.4%. Hang Seng futures earlier gained 0.5%. Futures on Australia’s S&P/ASX 200 Index added 0.1%.
• Oil Rally Stutters as Demand Concerns Offset Stimulus Optimism.
• Pay Cuts Become Permanent for Many Americans During Pandemic.
• Pac-12 Resumes Football, Capping Big Conferences’ Return.

Wall Street Journal:

• India Seeks Naval Edge as China Penetrates Indian Ocean.
• Palantir Expected to Be Valued at Nearly $22 Billion in Trading Debut.
• Woke Science Is an Experiment Certain to Fail.
• High Jobless Claims Suggest Slowing in Labor’s Recovery.
• California’s Ban on New Gas Cars Further Upends Auto Industry.

Fox News:

• This city in 'nanny state' CA is 1st to ban 'unhealthy' food at checkout.
• Louisville small business owner pushes back reopening after rioters smash store window.
  

CNBC.com:

• Trump to sign executive orders to protect preexisting conditions, seek end to surprise medical bills.
• Sanofi not cutting corners for its coronavirus vaccine despite acceleration: CEO.
• Cramer says Nvidia is a buy, cites ‘unstoppable’ potential of Arm acquisition.
• Biden’s child tax-credit plan is a big clue that his agenda could be more progressive than thought.
• Amazon’s newest Ring gadget is a flying security camera drone.
  

MarketWatch.com:      

• Mark Cuban wants the government to give every American a check for $1,000 every two weeks.
  
• Target to focus on fulfilling digital orders from stores, contactless options this holiday season.

Zero Hedge:    

• "Confirmed" Has Become A Meaningless Word In Mainstream News Reporting.
• Wisconsin Authorities Investigate Absentee Ballots Found In Ditch, As FBI Probes Discarded Pro-Trump Ballots In PA.
• Seoul Outraged After North Korean Soldiers Shoot & Burn Body Of "Defector" At Sea.
• Third Arab Nation Will Reach Peace Deal With Israel In Next 2 Days: US Envoy.
• Lawsuit Accuses Ray Dalio Of "Devaluing Women", "Abuses Of Wealth And Power".
• With Ginsburg's Death, Cue The Last Stand Of American Marxists.
• Kyle Rittenhouse's Legal Team Bolsters 'Self-Defense' Case In New Viral Footage.
• Top Twenty Lessons Learned In 2020.
• Novavax Launches 'Phase 3' COVID-19 Vaccine Trials As UK, France Post Record Numbers: Live Updates.
• Ohio Mom Tased & Arrested At Middle School Football Game For Not Wearing Mask.
• Brainard Wants To Be Next Fed Chair, But Biden Has Pegged Her To Head The Treasury: Report.
• Stocks Pump'n'Dump As Stimulus Hopes (& The Dollar) Slump.

Business Insider:     

• The 7 biggest announcements from Amazon's blockbuster event, from a mini drone that can fly around your home to a cloud gaming service.

The Epoch Times:

• China’s Post-Pandemic Recovery Has Severe Regional Imbalances—Survey.
• Netizens Suspect China Reports All New Coronavirus Cases as ‘Imported’.
  

Digital Blackboard:

• Daily New Cases by Region.

Worldometer:

• New Cases/Deaths by state.

Rt Covid-19:

• How fast virus is growing by state.

KFF:

• State Data(Tests/Hospitalizations).

Night Trading 

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

• Asia Ex-Japan Investment Grade CDS Index 77.25 +1.75 basis points.

• China Sovereign CDS 49.25 +3.0 basis points.

• Bloomberg Emerging Markets Currency Index 59.41 unch.
• Bloomberg Global Risk-On/Risk Off Index -31.0 -22.0 points.
• Volatility Index(VIX) futures 31.95 -.85%
• FTSE 100 futures +.58%.

• S&P 500 futures +.39%.

• NASDAQ 100 futures +.43%.

Morning Preview Links

Earnings of Note 
Company/Estimate

Before the Open:

• None of note
  

After the Close:

• None of note
  

Economic Releases

8:30 am EST

• Durable Goods Orders for Aug. is estimated to rise +1.3% versus a +11.4% gain in July.
• Durables Ex Transports for Aug. is estimated to rise +1.1% versus a +26% gain in July.
• Cap Goods Orders Non-Defense Ex-Air for Aug. is estimated to rise +1.0% versus a +1.9% gain in July.
  

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Fed's Evans speaking, Fed's Williams speaking, Canadian budget and the Wells Fargo Advertising Summit could also impact trading today.

Market Hours
Normal:

• 9:30 am - 4:00 pm EST
  

BOTTOM LINE: Asian indices are modestly higher, boosted by commodity and technology shares in the region. I expect US stocks to open modestly higher and to weaken into the afternoon, finishing mixed. The Portfolio is 50% net long heading into the day.

Stocks Reversing Higher into Final Hour on US Economic Data, Oil Gain, Short-Covering, Metals & Mining/Homebuilding Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Slightly Higher
  

• Sector Performance: Mixed
  

• Volume: Around Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 28.3 -.8%
• Bloomberg Global Risk On/Risk Off Index 9.0 -17.0 points

• Euro/Yen Carry Return Index 127.54 +.14%

• Emerging Markets Currency Volatility(VXY) 12.3 +2.3%

• S&P 500 Implied Correlation 58.6 -3.8%

• ISE Sentiment Index 94.0 -31.0 points
  

• Total Put/Call 1.02 +14.6%

• NYSE Arms .49 -57.0%

Credit Investor Angst:

• North American Investment Grade CDS Index 58.10 +2.27%
  

• US Energy High-Yield OAS 879.41 +1.89%

• European Financial Sector CDS Index 79.60 +3.5%

• Italian/German 10Y Yld Spread 140.0 +4.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 77.31 +5.79%
  

• Emerging Market CDS Index 241.45 -2.92%
  

• iBoxx Offshore RMB China Corporate High Yield Index 178.29 unch.

• 2-Year Swap Spread 9.25 +.5 basis point

• TED Spread 13.5 +.25 basis point
  

• 3-Month EUR/USD Cross-Currency Basis Swap -3.0 -.5 basis point
  
• MBS  5/10 Treasury Spread  95.0 unch.
  
• IHS Markit CMBX BBB- 6 66.5 unch.

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 59.43 +.34%
• 3-Month T-Bill Yield .09% unch.

• Yield Curve 53.5 unch.
  

• China Iron Ore Spot 112.90 USD/Metric Tonne +.51%

• Citi US Economic Surprise Index 171.6 +7.4 points

• Citi Eurozone Economic Surprise Index 45.70 -1.6 points

• Citi Emerging Markets Economic Surprise Index 49.4 -.3 point

• 10-Year TIPS Spread 1.59 -3.0 basis points
• 100.0% chance of no change at Dec. 16th meeting, 100.0% chance of no change at Jan. 27th meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating -17 open in Japan 
• China A50 Futures: Indicating -134 open in China

• DAX Futures: Indicating -42 open in Germany

Portfolio:

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

• Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges
  

• Market Exposure: Moved to 50% Net Long

Bear Radar

Style Underperformer:

• Large-Cap Growth -.9%

Sector Underperformers:

• 1) Shipping -1.0% 2) Biotech -.9% 3) Medical Equipment -.7%

Stocks Falling on Unusual Volume: 

• CNK, PTON, XBIT, RC, VRM, SWTX, SSYS, NKLA, ROKU, SPAQ, RCII, ZGNX, MITK, OLN, PLUG, TWTR, NKLA, EDIT, ACAD, ODT, APPS, SHLL, ALBO, DMYT, RPRX, ZM, LCA, ATNX, PENN, GRAF, MRNS, KMX, FMCI and RAD
  

Stocks With Unusual Put Option Activity:

• 1) ITB 2) ASHR 3) ET 4) EMB 5) YUM
  

Stocks With Most Negative News Mentions:

• 1) PENN 2) SSYS 3) NKLA 4) VXRT  5) COTY
  

Charts:

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

 

Bull Radar

Style Outperformer:

• SMall-Cap Value +1.8%

Sector Outperformers:

• 1) Gold & Silver +4.2% 2) Tobacco +3.1% 3) Homebuilding +2.5%

Stocks Rising on Unusual Volume:

• OMI, EXAS, MEI, SSP, JEF, DRI, JBL, SBE, ACEL, IVZ and AJRD
  

Stocks With Unusual Call Option Activity:

• 1) SKX 2) EXAS 3) TCO 4) KMX 5) SEAS

Stocks With Most Positive News Mentions:

• 1) OMI 2) AR 3) DRI 4) MEI 5) BBBY

Charts:

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

 

Mid-Day Market Internals

NYSE Composite Index:

• Volume Running +7.7% Above 100-Day Average
• 6 Sectors Rising, 5 Sectors Declining
• 36.5% of Issues Advancing, 60.6% Declining
• 2 New 52-Week Highs, 67 New Lows
• 35.9% of Issues Above 200-day Moving Average
• Average 14-Day RSI 37.6% 
• Bloomberg Global Risk-On/Risk-Off Index -11.0 -38.0 points
• Vix 28.5 -.31%
• Total Put/Call 1.07 +20.2%
• TRIN/Arms .49 -55.3%