Friday Watch

Night Trading 

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

• Asia Ex-Japan Investment Grade CDS Index 66.5 +.5 basis point.

• China Sovereign CDS 39.75 unch.

• Bloomberg Emerging Markets Currency Index 59.21 -.02%.
• Bloomberg Global Risk-On/Risk Off Index 190.0 -3.0 points.
• Volatility Index(VIX) futures 28.55 -1.13%
• FTSE 100 futures +.91%.

• S&P 500 futures +.32%.

• NASDAQ 100 futures +.38%.

Morning Preview Links

Earnings of Note 
Company/Estimate

Before the Open:

• (ALLY)/.70
• (BMI)/.38
  
• (BK)/.94
• (JBHT)/1.28
• (KSU)/1.90
• (SLB)/.13
• (STT)/1.41
• (VFC)/.47
  

After the Close:

• None of note
  

Economic Releases

8:30 am EST

• Retail Sales Advance MoM for Sept. is estimated to rise +.8% versus a +.6% gain in Aug.
• Retail Sales Ex Autos MoM for Sept. is estimated to rise +.4% versus a +.7% gain in Aug.
• Retail Sales Ex Auto and Gas for Sept. is estimated to rise +.5% versus a +.7% gain in Aug.
  

9:15 am EST

• Industrial Production MoM for Sept. is estimated to rise +.6% versus a +.4% gain in Aug.
• Capacity Utilization for Sept. is estimated to rise to 71.8% versus 71.4% in Aug.
• Manufacturing Production for Sept. is estimated to rise +.6% versus a +1.0% gain in Aug.
  

10:00 am EST

• Business Inventories for Aug. is estimated to rise +.4% versus a +.1% gain in July.
• Preliminary Univ. of Mich. Consumer Sentiment for Oct. is estimated to rise to 80.5 versus 80.4 in Sept.
  

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Eurozone PMI report and the (SAFM) investor day could also impact trading today.

Market Hours
Normal:

• 9:30 am - 4:00 pm EST
  

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

 

Stocks Lower into Final Hour on Virus Worries, Biden Presidency/Tax Hike Fears, Earnings Jitters, Tech/Biotech Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Modestly Lower
  

• Sector Performance: Mixed
  

• Volume: Below Average

• Market Leading Stocks: Performing in Line
  

Equity Investor Angst:

• Volatility(VIX) 26.3 +3.3%
• Bloomberg Global Risk On/Risk Off Index 171.0 -160.0 points

• Euro/Yen Carry Return Index 127.80 -.13%

• Emerging Markets Currency Volatility(VXY) 11.18 +.36%

• S&P 500 Implied Correlation 45.5 +4.0%

• ISE Sentiment Index 112.0 -9.0 points
  

• Total Put/Call .75 +7.14%

• NYSE Arms .84 unch.

Credit Investor Angst:

• North American Investment Grade CDS Index 56.69 +1.55%
  

• US Energy High-Yield OAS 812.91 +.55%

• European Financial Sector CDS Index 74.38 +5.0%

• Italian/German 10Y Yld Spread 131.0 +7.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 67.09 +3.13%
  

• Emerging Market CDS Index 208.78 -.19%
  

• iBoxx Offshore RMB China Corporate High Yield Index 179.20 +.13%

• 2-Year Swap Spread 9.25 unch.

• TED Spread 14.0 +1.0 basis point
  

• 3-Month EUR/USD Cross-Currency Basis Swap -12.25 -1.25 basis points
  
• MBS  5/10 Treasury Spread  85.0 -1.0 basis point
  
• IHS Markit CMBX BBB- 6 68.0 unch.

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 59.21 -.30%
• 3-Month T-Bill Yield .10% unch.

• Yield Curve 57.25 -2.0 basis points
  

• China Iron Ore Spot 114.50 USD/Metric Tonne -.23%

• Citi US Economic Surprise Index 138.8 +1.2 points

• Citi Eurozone Economic Surprise Index 33.80 -2.0 points
  

• Citi Emerging Markets Economic Surprise Index 44.7 +.5 point

• 10-Year TIPS Spread 1.70 +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 +3 open in Japan 
• China A50 Futures: Indicating -89 open in China

• DAX Futures: Indicating +7 open in Germany

Portfolio:

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

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

• Market Exposure: Moved to 50% Net Long

Bear Radar

Style Underperformer:

• Large-Cap Growth -1.2%

Sector Underperformers:

• 1) Biotech -2.7% 2) Alt Energy -2.2% 3) Video Gaming -1.9%

Stocks Falling on Unusual Volume: 

• VLO, FSLR, APPN, CLDR, NFE, VLDR, LYFT, DISH, DKNG, HGEN, EXPE, GH, AKAM, DYN, RDFN, ACCD, OCUL, AA, TTD, EVER, EGAN, CRNC, LMND, NET, IPOB, AMCX, PAND, ALLO, APPS, ARVN, BE, BCLI, FMCI, VRTX and FSLY
  

Stocks With Unusual Put Option Activity:

• 1) TFC 2) IBB 3) VGK 4) AMCX 5) EQR
  

Stocks With Most Negative News Mentions:

• 1) FSLY 2) TTD 3) ACB 4) UAL 5) ROKU
  

Charts:

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

Bull Radar

Style Outperformer:

• Small-Cap Value +.4%

Sector Outperformers:

• 1) I-Banks +.9% 2) REITs +.6% 3) Retail +.5%

Stocks Rising on Unusual Volume:

• SNBR, REPL, USX, ARWR, ANAB, GME, ATEC, ZM, SHOO, MDRX, GRA, CARG, RAVN, AAXN, ANDE, BG, IOVA, PTON, SAGE and PE
  

Stocks With Unusual Call Option Activity:

• 1) AMCX 2) TRIP 3) TIF 4) UAA 5) Z

Stocks With Most Positive News Mentions:

• 1) CARS 2) AVXL 3) ZM 4) SONO 5) SCHW
  

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running -11.1% Below 100-Day Average
• 2 Sectors Rising, 9 Sectors Declining
• 35.3% of Issues Advancing, 62.0% Declining
• 25 New 52-Week Highs, 16 New Lows
• 54.7% of Issues Above 200-day Moving Average
• Average 14-Day RSI 49.2% 
• Bloomberg Global Risk-On/Risk-Off Index 105.0 -225.0 points
• Vix 28.2 +6.8%
• Total Put/Call .74 +5.7%
• TRIN/Arms .82 -2.4%

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.