Thursday Watch

 Night Trading 

• Asian equity indices are -.75% to unch. on average.

• Asia Ex-Japan Investment Grade CDS Index 66.0 +1.75 basis points.

• China Sovereign CDS 39.75 +1.0 basis point.

• Bloomberg Emerging Markets Currency Index 59.39 -.01%.
• Bloomberg Global Risk-On/Risk Off Index 338.0 +6.0 points.
• Volatility Index(VIX) futures 28.53 +1.17%
• FTSE 100 futures -.42%.

• S&P 500 futures -.30%.

• NASDAQ 100 futures -.64%.

Morning Preview Links

Earnings of Note 
Company/Estimate

Before the Open:

• (SCHW)/.47
• (CMC)/.56
• (MS)/1.28
• (TSM)/4.27
• (WBA)/.96
  

After the Close:

• (ISRG)//2.05
• (MRTN)/.20
  

Economic Releases

8:30 am EST

• Empire Manufacturing for Oct. is estimated to fall to 14.0 versus 17.0 in Sept.
• Initial Jobless Claims for last week are estimated to fall to 825K versus 840K the prior week.
• Continuing Claims are estimated to fall to 10550K versus 10976K prior.
• The Import Price Index MoM for Sept. is estimated to rise +.3% versus a +.9% gain in Aug.
• The Import Price Index Ex Petrol for Sept. is estimated to rise +.5% versus a +.7% gain in Aug. 
• The Export Price Index MoM for Sept. is estimated to rise +.3% versus a +.5% gain in Aug.
• The Philly Fed Business Outlook Index for Oct. is estimated to fall to 14.8 versus 15.0 in Sept.
  

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Town Halls with President Trump/Joe Biden, Fed's Quarles speaking, weekly Bloomberg Consumer Comfort Index, China Yuan Loans, weekly EIA natural gas inventory report and the (HPE) analyst meeting could also impact trading today.

Market Hours
Normal:

• 9:30 am - 4:00 pm EST
  

BOTTOM LINE: Asian indices are mostly lower, weighed down by financial and technology shares in the region. I expect US stocks to open modestly lower and to maintain losses into the afternoon. The Portfolio is 25% net long heading into the day.

Stocks Reversing Lower into Afternoon on Diminishing Stimulus Hopes, Virus Concerns, Biden Presidency/Tax Hike Fears, Tech/Biotech Sector Weakness

 Broad Equity Market Tone:

• Advance/Decline Line: Lower
  

• Sector Performance: Most Sectors Declining
  

• Volume: Around Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 26.7 +2.4%
• Bloomberg Global Risk On/Risk Off Index 306.0 -133.0 points

• Euro/Yen Carry Return Index 128.02 -.26%

• Emerging Markets Currency Volatility(VXY) 11.21 -1.15%

• S&P 500 Implied Correlation 44.7 +11.4%

• ISE Sentiment Index 121.0 -4.0 points
  

• Total Put/Call .69 -8.0%

• NYSE Arms .59 -63.4%

Credit Investor Angst:

• North American Investment Grade CDS Index 55.74 +1.75%
  

• US Energy High-Yield OAS 805.87 -.65%

• European Financial Sector CDS Index 70.68 +2.93%

• Italian/German 10Y Yld Spread 124.0 +3.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 64.95 +2.2%
  

• Emerging Market CDS Index 207.60 +2.57%
  

• iBoxx Offshore RMB China Corporate High Yield Index 178.96 +.07%

• 2-Year Swap Spread 9.25 +.25 basis point

• TED Spread 13.0 +.25 basis point
  

• 3-Month EUR/USD Cross-Currency Basis Swap -11.0 unch.
  
• MBS  5/10 Treasury Spread  86.0 +.25 basis point
  
• IHS Markit CMBX BBB- 6 68.0 unch.

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 59.41 -.03%
• 3-Month T-Bill Yield .10% +1.0 basis point

• Yield Curve 59.25 -2.0 basis points
  

• China Iron Ore Spot 114.83 USD/Metric Tonne -2.25%

• Citi US Economic Surprise Index 137.6 +.2 point

• Citi Eurozone Economic Surprise Index 35.80 -2.1 points
  

• Citi Emerging Markets Economic Surprise Index 44.2 +1.1 points

• 10-Year TIPS Spread 1.69 -1.0 basis point
• 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 -31 open in Japan 
• China A50 Futures: Indicating -79 open in China

• DAX Futures: Indicating -66 open in Germany

Portfolio:

• Slightly Higher: On gains in my industrial sector longs, index hedges and emerging market shorts
  

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

• Market Exposure: Moved to 25% Net Long

Wednesday Watch

Evening Headlines

Bloomberg:  

• Australian Household Sentiment Soars as Optimists Now Majority.  
• Deflationary Trends Are Growing More Powerful.
• Asia Stocks Slip Amid Earnings, Stimulus Deadlock: Markets Wrap. Asian stocks followed their U.S. counterparts lower Wednesday as earnings season began and there was no sign of a quick end to the fiscal stimulus stalemate. Treasuries and the dollar were steady. Stocks slipped in Japan and South Korea and were little changed in Australia. Hong Kong’s markets are expected to resume trading after a tropical storm forced closures on Tuesday. S&P 500 contracts ticked higher after banks earlier dragged down the U.S. benchmark, with JPMorgan Chase & Co. and Citigroup Inc. sinking as investors worried that third-quarter earnings signaled just a pause in pain from soured loans. Eli Lilly & Co. dropped after saying that enrollment in a government-sponsored clinical trial of its antibody therapy had been paused out of safety concerns. Elsewhere, traders will be watching a speech from China President Xi Jinping in Shenzhen on Wednesday, where he is expected to lay out a vision for the region’s growth. The Bank of Korea is likely to keep its key interest rate on hold Wednesday, amid signs of economic improvement. Crude oil held an overnight advance. S&P 500 futures were little changed as of 9:03 a.m. in Tokyo. The index dipped 0.6% on Tuesday. Topix index fell 0.4%. Australia’s S&P/ASX 200 Index declined 0.1%. South Korea’s Kospi index was little changed.  
• Oil Rally Loses Steam as Hopes Fade for Timely U.S. Stimulus.
  
• Trump, Republicans Divided on Stimulus as Pelosi Demands Revamp.
  
• States See $31 Billion of Taxes Disappear Due to Covid Recession.
  
• Lilly, J&J Pause Trials; Texas Cases Top 800,000: Virus Update.

Wall Street Journal:

• Mass Testing: China Doubles Down on Virus Control Plan.
• Who’s Afraid of Amy Coney Barrett?
• Regeneron’s Coronavirus October Surprise.
• On Wall Street Regulation, Joe Biden Keeps Everyone Guessing.
• How Do Real-Estate Agents Show Homes During Covid?
• J&J Hopes Covid-19 Vaccine Trial Will Restart Shortly.
• Fewer Fistfights, Less Sex—TV Production Gets a Covid Makeover.
• JPMorgan, Citigroup Signal Economy Not Out of the Woods.
• iPhone 12 vs. iPhone 11 vs. iPhone XR vs. iPhone SE: Comparing Apple’s Full Lineup.
• Trump’s Drug-Discount Cards Expected to Reach Medicare Recipients After Election.
• Turkish-Backed Syrian Fighters Join Armenian-Azeri Conflict.

Fox News:

• WATCH NOW: Barrett has tense exchange with Harris over ObamaCare, recusal, and abortion.
• Speaker rips CNN's Blitzer over COVID stimulus questions.
  

CNBC.com:

• Apple’s full-size iPhone 12 costs at least $100 more than last year’s iPhone 11.
• Cramer: It’s still too early to be speculating in the cruise line stocks.
• U.S. pauses Eli Lilly’s trial of a coronavirus antibody treatment over safety concerns. 
  

MarketWatch.com:       

• McConnell says will try to move $500 billion stimulus package before Barrett vote.

Zero Hedge:

• JPMorgan's Kolanovic Has A Warning For Those Expecting A Crushing Biden Victory.
• Trump Scores With Independents As Suburban Women Lean Left.
• Texas COVID-19 Cases Top 800k; France Sees Biggest Jump In ICU Admissions Since April: Live Updates.
• US "Geoblocks" BLS And Census Websites For Hong Kong Internet Users.
• Federal Judge Allows Clinton Foundation Whistleblower Complaint To Proceed, Rules IRS 'Abused Its Discretion'.
• Declassified FBI Spreadsheet Exposes Steele Dossier Farce: Media Reports On FBI Reports Of Media Reports.
• NYPD Braces For Protests 'Growing In Size, Frequency And Intensity' Surrounding 'Most Highly Contested Election In Modern Era'.
• Mapping The Uneven Recovery Of US Small Businesses.
• Banks Bust, Bullion Battered, But Big-Tech Bid (Again).

The Epoch Times: 

• Exclusive: China Had COVID-Like Patients Months Before Official Timeline. 
  

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 -.25% to +.25% on average.

• Asia Ex-Japan Investment Grade CDS Index 64.25 +.25 basis point.

• China Sovereign CDS 38.75 +.5 basis point.

• Bloomberg Emerging Markets Currency Index 59.43 -.01%.
• Bloomberg Global Risk-On/Risk Off Index 432.0 -8.0 points.
• Volatility Index(VIX) futures 28.57 -.02%
• FTSE 100 futures +.24%.

• S&P 500 futures +.15%.

• NASDAQ 100 futures +.27%.

Morning Preview Links

Earnings of Note 
Company/Estimate

Before the Open:

• (BAC)/.50
• (GS)/5.50
• (PNC)/2.05
• (PGR)/1.31
• (USB)/.90
• (UNH)/3.08
• (WFC)/.47
  

After the Close:

• (AA)/-1.07
• (UAL)/-7.46
  

Economic Releases

8:30 am EST

• PPI Final Demand MoM for Sept. is estimated to rise +.2% versus a +.3% gain in Aug.
• PPI Ex Food & Energy MoM for Sept. is estimated to rise +.2% versus a +.4% gain in Aug.
  

11:00 am EST

• Bloomberg consensus estimates call for a weekly crude oil inventory decline of -1,832,630 barrels versus a +501,000 barrel gain the prior week. Gasoline supplies are estimated to fall by -1,306,500 barrels versus a -1,435,000 barrel decline the prior week. Distillate inventories are estimated to fall by -1,584,130 barrels versus a -962,000 barrel decline the prior week. Finally, Refinery Utilization is estimated to fall -.57% versus a +1.3% gain prior.

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Fed's Quarles speaking, Fed's Clarida speaking, Australia Unemployment Rate, weekly MBA Mortgage Applications report and the (ZM) analyst day could also impact trading today.

Market Hours
Normal:

• 9:30 am - 4:00 pm EST
  

BOTTOM LINE: Asian indices are mostly lower, weighed down by financial and industrial shares in the region. I expect US stocks to open mixed and to weaken into the afternoon, finished modestly lower. The Portfolio is 50% net long heading into the day.

Stocks Lower into Final Hour on Virus Concerns, Diminishing Stimulus Hopes, Earnings Jitters, Energy/Financial Sector Weakness

 Broad Equity Market Tone:

• Advance/Decline Line: Lower
  

• Sector Performance: Most Sectors Declining
  

• Volume: Below Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 26.1 +3.9%
• Bloomberg Global Risk On/Risk Off Index 433.0 -24.0 points

• Euro/Yen Carry Return Index 128.31 -.45%

• Emerging Markets Currency Volatility(VXY) 11.4 -1.2%

• S&P 500 Implied Correlation 40.16 -.05%

• ISE Sentiment Index 125.0 -30.0 points
  

• Total Put/Call .66 +1.54%

• NYSE Arms 1.27 +21.3%

Credit Investor Angst:

• North American Investment Grade CDS Index 534.13 +1.48%
  

• US Energy High-Yield OAS 810.47 +1.28%

• European Financial Sector CDS Index 68.67 +3.14%

• Italian/German 10Y Yld Spread 121.0 -1.0 basis point
  

• Asia Ex-Japan Investment Grade CDS Index 63.63 -1.09%
  

• Emerging Market CDS Index 203.35 +2.13%
  

• iBoxx Offshore RMB China Corporate High Yield Index 178.83 +.02%

• 2-Year Swap Spread 9.0 +.25 basis points

• TED Spread 12.75 -.25 basis point
  

• 3-Month EUR/USD Cross-Currency Basis Swap -11.0 -1.5 basis points
  
• MBS  5/10 Treasury Spread  85.75 +.75 basis point
  
• IHS Markit CMBX BBB- 6 68.0 unch.

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 59.43 -.41%
• 3-Month T-Bill Yield .09% unch.

• Yield Curve 61.25 -1.25 basis points
  

• China Iron Ore Spot 116.61 USD/Metric Tonne -1.27%

• Citi US Economic Surprise Index 137.4 -.5 point

• Citi Eurozone Economic Surprise Index 37.90 -8.3 points
  

• Citi Emerging Markets Economic Surprise Index 43.1 +1.4 points

• 10-Year TIPS Spread 1.70 -4.0 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 -61 open in Japan 
• China A50 Futures: Indicating +3 open in China

• DAX Futures: Indicating -39 open in Germany

Portfolio:

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

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

• Market Exposure: Moved to 50% Net Long

Bear Radar

Style Underperformer:

• Small-Cap Value -1.2%

Sector Underperformers:

• 1) Banks -2.4% 2) Insurance -1.9% 3) Airlines -1.7%

Stocks Falling on Unusual Volume: 

• C, FOX, SPR, BYND, FOXA, APO, SBE, HCC, DPHC, REGI, FUN, SDGR, HYLN, CCL, CUK, EPR, DDS, EBS, RCL and WKHS
  

Stocks With Unusual Put Option Activity:

• 1) VNQ 2) GPOR 3) AMCX 4) SLB 5) EMB
  

Stocks With Most Negative News Mentions:

• 1) WKHS 2) AMC 3) LBRT 4) MLM 5) DAL
  

Charts:

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

Bull Radar

Style Outperformer:

• Mid-Cap Growth +.9%

Sector Outperformers:

• 1) Retail +1.1% 2) Digital Health +1.0% 3) Internet +.9%

Stocks Rising on Unusual Volume:

• FLXN, ALT, ETH, WAT, EGAN, TNDM, ICPT, BLK, FSLR, RUN, ATHA, SNDX, CELH, DIS, ATEC, PACB, NARI, GTES, FEYE, PSTG, IOVA, SAFM, DPZ and IONS
  

Stocks With Unusual Call Option Activity:

• 1) PAGP 2) FEYE 3) FAST 4) CIEN 5) AMCS

Stocks With Most Positive News Mentions:

• 1) VXRT 2) BAND 3) GTES 4) U 5) TWLO
  

Charts:

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