Tuesday Watch

Evening Headlines

Bloomberg:  

• Australia’s Ex-Treasurer Accuses China of ‘Immature’ Reprisals.
• U.S. Futures, Asia Stocks Rise Ahead of Election: Markets Wrap. U.S. futures and Asian stocks gained ahead of Tuesday’s presidential election. Crude oil rebounded. Shares in Australia and South Korea climbed. Futures edged up in Hong Kong. Japan is closed for a holiday and Treasuries won’t trade until London opens. S&P 500 Index futures headed higher. Earlier, the benchmark climbed after plunging 5.6% last week. The tech-heavy Nasdaq 100 lagged behind, weighted down by Apple Inc. and Amazon.com Inc. as investors rotated from so-called work-from-home stocks and into sectors that would benefit from more stimulus. Treasury yields dropped and the dollar traded near a one-month high. Elsewhere, oil clawed back earlier losses amid signals that Russia, a key OPEC ally, is in talks to possibly postpone the group’s planned output hike in January. S&P 500 Index futures rose 0.2% as of 8:12 a.m. in Hong Kong. The S&P 500 Index climbed 1.2%. Australia’s S&P/ASX 200 Index rose 1.3%. South Korea’s Kospi index rose 0.7%. Hong Kong’s Hang Seng Index futures gained 0.3% earlier.
• Oil Extends Gains on Signs OPEC+ Will Delay Easing Output Cuts.  
• Dalio China Push, Powell and Politics, Senate Stimulus: Eco Day.  
• Trump, Biden Make Final Push in States Seen as Key to Victory.  
• Corporate Insiders Want No Part of the Pre-Election Stock Market.  
• Ken Griffin’s Macro ‘Dream’ Propels Net Worth to $20 Billion.  
• Apple to Start Intel Breakup Next Week With New Mac Laptops.  
• Vornado Loses $409 Million on Fifth Avenue, Times Square Venture.

Wall Street Journal:

• France Endures Agonizing Autumn From Virus, Terrorism.
• Trump Is Terribly Flawed, but the Alternative Is Simply Terrible.
• Georgia May Decide the Senate Majority.
• What Pollsters Miss About Trump.

Fox News:

• Trump, Biden clash over declaring winner Election Night.
  

CNBC.com:

• Election 2020 updates: Biden lead over Trump narrows in swing states as campaign enters final hours.
• Americans show they’re eager to shop even as pandemic stretches on, retail economist says.
• Jim Cramer names 9 stocks to watch amid election results, rising cases.
• Stocks making the biggest moves after hours: PayPal, Mondelez, Skyworks Solutions and more.
• Joe Biden’s fundraiser list includes more than 30 executives with Wall Street ties.

Zero Hedge:

• Watch: National Guard Troops Arrive In Multiple US Cities Ahead Of Election Night Chaos 
• Roots Of Antifa: This 'Idea' Has Violent Consequences.
• Greenwald's Intercept Resignation Exposes The Rot In All Mass Media.
• At Least 1 Civilian Killed, Several Injured In Vienna Terror Attack.
• Biden Boosted By 'Tens Of Thousands' Of Fake Twitter Followers -- From India.
• Michigan Governor Whitmer Goes Full Orwell, Demands Full Names, Phone Numbers For All Restaurant Customers.
• The Best And Worst Performing Assets In October.
• Despite Tech Tumble; Stocks, Bonds, Gold, & The Dollar Rally On Election Eve.

The Epoch Times:

• Rep. Banks Urges Chamber of Commerce to Rethink Opposition to Ban on Chinese-Made Drones.
  

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 +.5% to +1.25% on average.

• Asia Ex-Japan Investment Grade CDS Index 69.0 unch.

• China Sovereign CDS 39.25 unch.

• Bloomberg Emerging Markets Currency Index 58.57 +.04%.
• Bloomberg Global Risk-On/Risk Off Index -396.0 -3.0 points.
• Volatility Index(VIX) futures 32.70 -1.43%
• FTSE 100 futures +.64%.

• S&P 500 futures +.43%.

• NASDAQ 100 futures +.37%.

Morning Preview Links

Earnings of Note 
Company/Estimate 

 

Before the Open: 

• (AGCO)/1.00
• (ETN)/1.04
• (EMR)/.94
• (EXPD)/.99
• (FOXA)/.74
• (HUM)/2.78
• (JCI)/.73
• (LPX)/1.45
• (MCK)/3.88
• (SYY)/.27
• (VSH)/.23
• (W)/.83
  

After the Close:

• (MYGN)/-.30
• (PRU)/2.67

Economic Releases

10:00 am EST

• Factory Orders for Sept. is estimated to rise +1.0% versus a +.7% gain in Aug.
• Factory Orders Ex Transports for Sept. is estimated to rise +.6% versus a +.7% gain in Aug.
• Wards Total Vehicle Sales for Oct. is estimated to rise to 16.5M versus 16.34M in Sept.
  

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The releasing of election exit polls, China PMI report and the weekly US retail sales reports could also impact trading today.

Market Hours
Normal:

• 9:30 am - 4:00 pm EST
  

BOTTOM LINE: Asian indices are modestly higher, boosted by technology and commodity 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 Higher into Final Hour on Technical Buying, Oil Gain, Short-Covering, Commodity/Financial Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Higher
  

• Sector Performance: Mixed
  

• Volume: Around Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 38.2 +.5%
• Bloomberg Global Risk On/Risk Off Index -490.0 +29.0 points

• Euro/Yen Carry Return Index 126.24 +.02%

• Emerging Markets Currency Volatility(VXY) 11.8 +1.6%

• S&P 500 Implied Correlation 73.9 -1.0%

• ISE Sentiment Index 84.0 -14.0 points
  

• Total Put/Call .95 -10.4%

• NYSE Arms .72 +2.9%

Credit Investor Angst:

• North American Investment Grade CDS Index 63.91 -2.47%
  

• US Energy High-Yield OAS 847.30 +.13%

• European Financial Sector CDS Index 81.11 -4.06%

• Italian/German 10Y Yld Spread 139.0 unch.
  

• Asia Ex-Japan Investment Grade CDS Index 70.22 -.87%
  

• Emerging Market CDS Index 219.64 +.7%
  

• iBoxx Offshore RMB China Corporate High Yield Index 180.02 +.05%

• 2-Year Swap Spread 8.0 -.5 basis point

• TED Spread 13.0 -.25 basis point
  

• 3-Month EUR/USD Cross-Currency Basis Swap -15.25 -1.25 basis points
  
• MBS  5/10 Treasury Spread  79.25 -1.75 basis points
  
• IHS Markit CMBX BBB- 6 66.75 -1.25 basis points

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 58.51 -.28%
• 3-Month T-Bill Yield .09% unch.

• Yield Curve 70.75 -1.0 basis point
  

• China Iron Ore Spot 113.22 USD/Metric Tonne -.53%

• Citi US Economic Surprise Index 131.10 +2.2 points

• Citi Eurozone Economic Surprise Index 101.6 -1.6 points
  

• Citi Emerging Markets Economic Surprise Index 61.20 -1.9 points

• 10-Year TIPS Spread 1.71 +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 +125 open in Japan 
• China A50 Futures: Indicating +27 open in China

• DAX Futures: Indicating -35 open in Germany

Portfolio:

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

• Disclosed Trades: None
  

• Market Exposure: 50% Net Long

Bear Radar

Style Underperformer:

• Large-Cap Growth unch.

Sector Underperformers:

• 1) Biotech -1.3% 2) Internet -1.1% 3) Airlines -1.0%

Stocks Falling on Unusual Volume: 

• POWI, SFM, NCLH, LITE, NOW, ACHC, HSIC, ALEX, TDOC, BLKB, RARE, ARNA, FIVN, TWTR, BPMC, OLLI, COUP, KPTI, CAR, PEN, MDLA, INSM, NVCR, IMUX, IMUX, PEN, ALLK and DYN
  

Stocks With Unusual Put Option Activity:

• 1) BKLN 2) XLI 3) COUP 4) DNKN 5) USB
  

Stocks With Most Negative News Mentions:

• 1) EVBG 2) EQR 3) MA 4) UPS 5) CME
  

Charts:

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

Bull Radar

Style Outperformer:

• Small-Cap Value +2.2%

Sector Outperformers:

• 1) Oil Service +3.9% 2) Energy +3.7% 3) Defense +2.6%

Stocks Rising on Unusual Volume:

• LL, CVA, SRRK, MHK, NSP, ABR, GDEN, DNKN, CWH, NLSN, PWR, TCRR, CLX, USFD, MSM, FUBO and AIZ
  

Stocks With Unusual Call Option Activity:

• 1) EIGI 2) DNKN 3) ANF 4) DGLY 5) WRTC

Stocks With Most Positive News Mentions:

• 1) CWH 2) LHX 3) MHK 4) UAA 5) CLX
  

Charts:

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

Mid-Day Market Internals

NYSE Composite Index:

• Volume Running +1.6% Above 100-Day Average
• 0 Sectors Rising, 11 Sectors Declining
• 7.9% of Issues Advancing, 90.5% Declining
• 29 New 52-Week Highs, 13 New Lows
• 43.5% of Issues Above 200-day Moving Average
• Average 14-Day RSI 39.1% 
• Bloomberg Global Risk-On/Risk-Off Index -436.0 +83.0 points
• Vix 37.5 -1.3%
• Total Put/Call .92 -13.2%
• TRIN/Arms .83 +18.6%

Monday Watch

Night Trading

• Asian indices are -.25% to +.75% on average.
• Asia Ex-Japan Investment Grade CDS Index 70.25 -.5 basis point.
• China Sovereign CDS 40.25 +.5 basis point.
• Bloomberg Emerging Markets Currency Index 58.64 -.05%.
• Bloomberg Global Risk-On/Risk Off Index -500.0 +19.0 points.
• Volatility Index(VIX) futures 33.70 -1.1%. 
• Euro Stoxx 50 futures unch.
• S&P 500 futures +.10%.
• NASDAQ 100 futures +.02%.

Morning Preview Links

Earnings of Note

Company/Estimate

Before the Open:

• (CWH)/1.17
• (CLX)/2.22
• (EL)/.90
• (J)/1.32
• (JLL)/1.25
• (LL)/.22
• (LITE)/1.47
• (WING)/.34
  

After the Close:

• (ADTN)/.07
• (CRUS)/.89
• (FN)/.98
• (IR)/.31
• (JAZZ)/4.08
• (MDLZ)/.62
• (MOS)/.17
• (PYPL)/.94
• (SWKS)/1.52
• (STE)/1.27
• (TREX)/.38
• (VNO)/.94
• (WMB)/.26
  

Economic Releases

10:00 am EST

• The ISM Manufacturing Index for Oct. is estimated to rise to 55.8 versus 55.4 in Sept.
• ISM New Orders for Oct. is estimated to rise to 62.0 versus 60.2 in Sept. 
• ISM Prices Paid for Oct. is estimated to fall to 60.5 versus 62.8 in Sept.
• Construction Spending MoM for Sept. is estimated to rise +1.0% versus +1.4% in Aug.
  

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Eurozone PMI report and the RBA Minutes could also impact trading today.

Market Hours
Normal:

• 9:30 am - 4:00 pm EST

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