Stocks Sharply Higher into Final Hour on Vaccine Hopes, Short-Covering, Oil Gain, Energy/Transport Sector Strength

 Broad Equity Market Tone:

• Advance/Decline Line: Substantially Higher
  

• Sector Performance: Most Sectors Rising
  

• Volume: Heavy

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 23.6 -5.2%
• Bloomberg Global Risk On/Risk Off Index 1,138.0 +539.0 points

• Euro/Yen Carry Return Index 129.10 +1.47%

• Emerging Markets Currency Volatility(VXY) 10.6 -.47%

• S&P 500 Implied Correlation 43.6 -6.7%

• ISE Sentiment Index 153.0 +5.0 points
  

• Total Put/Call .71 -15.5%

• NYSE Arms .74 -12.9%

Credit Investor Angst:

• North American Investment Grade CDS Index 51.21 -4.23%
  

• US Energy High-Yield OAS 729.86 -4.67%

• European Financial Sector CDS Index 64.30 -6.82%

• Italian/German 10Y Yld Spread 127.0 +1.0 basis point
  

• Asia Ex-Japan Investment Grade CDS Index 60.92 -4.33%
  

• Emerging Market CDS Index 171.21 -9.84%
  

• iBoxx Offshore RMB China Corporate High Yield Index 180.68 +.04%

• 2-Year Swap Spread 7.5 -1.25 basis points

• TED Spread 12.0 -.75 basis point
  

• 3-Month EUR/USD Cross-Currency Basis Swap -14.75 -.75 basis point
  
• MBS  5/10 Treasury Spread  72.0 -2.0 basis points
  
• IHS Markit CMBX BBB- 6 68.25 unch.

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 60.67 +.91%
• 3-Month T-Bill Yield .09% +1.0 basis point

• Yield Curve 67.25 +5.5 basis points
  

• China Iron Ore Spot 119.17 USD/Metric Tonne +1.0%

• Citi US Economic Surprise Index 105.0 -13.0 points

• Citi Eurozone Economic Surprise Index 96.5 +1.8 points
  

• Citi Emerging Markets Economic Surprise Index 50.5 -3.5 points

• 10-Year TIPS Spread 1.73 +8.0 basis points
• 100.0% chance of no change at Jan. 27th meeting, 100.0% chance of no change at March 17th meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating +736 open in Japan 
• China A50 Futures: Indicating +48 open in China

• DAX Futures: Indicating -27 open in Germany

Portfolio:

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

• Disclosed Trades: None
  

• Market Exposure: 50% Net Long

Bear Radar

Style Underperformer:

• Mid-Cap Growth -.1%

Sector Underperformers:

• 1) Gold & Silver -6.1% 2) Homebuilding -4.0% 3) Internet -2.6%

Stocks Falling on Unusual Volume: 

• BLD, FDX, AMH, TMO, BC, EBAY, PGR, KR, PII, PYPL, TTWO, BILL, PFSI, BKI, KBH, CLX, HOLX, PKI, WSM, RGR, BYND, BAND, MPWR, CHGG, FIVN, CHWY, EDOC, PRPL, RLGY, WGO, ZG, STMP, IRBT, AAWW, LGIH, ETSY, LPSN, YETI, TREX, POOL, PLT, BJ, VSTO, CWH, HEAR, HZO, AM, VIVO, HOME, TWOU, PTON, NTGR, W, VIR, PRTS, NLS, VAPO, FLGT, BIIB, QDEL and ARCT
  

Stocks With Unusual Put Option Activity:

• 1) PBF 2) SABR 3) CNK 4) ACI 5) EQR
  

Stocks With Most Negative News Mentions:

• 1) NKLA 2) FLDM 3) BIIB 4) FAF 5) BGNE
  

Charts:

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

Bull Radar

Style Outperformer:

• Small-Cap Value +8.5%

Sector Outperformers:

• 1) Oil Service +19.3% 2) Airlines +18.3% 3) Energy +18.0%

Stocks Rising on Unusual Volume:

• NCLH, EBIX, LNC, SBNY, RCL, ZION, PFGC, GRA, RUTH, PACW, FHB, CAR, MTB, PSX, EXPE, EEFT, AHH, CAKE, LYV, CATM, SAVE, WEX, PBCT, SPR, WAL, EWBC, UBA, BXP, AXP, LYFT, JBLU, YELP, FUN, BOH, OXY, HWM, VTR, CMA, OUT, HQY, JWN, ICPT and AAT
  

Stocks With Unusual Call Option Activity:

• 1) HA 2) EQR 3) PLNT 4) USFD 5) JBLU

Stocks With Most Positive News Mentions:

• 1) RCL 2) AAL 3) SPG 4) GRA 5) FLS
  

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running +167.5% Above 100-Day Average
• 11 Sectors Rising, 0 Sectors Declining
• 83.1% of Issues Advancing, 15.1% Declining
• 318 New 52-Week Highs, 9 New Lows
• 59.1% of Issues Above 200-day Moving Average
• Average 14-Day RSI 49.0% 
• Bloomberg Global Risk-On/Risk-Off Index 1,150.0 +552.0 points
• Vix 23.8 -4.2%
• Total Put/Call .59 -29.8%
• TRIN/Arms .73 -14.1%

Monday Watch

Today's Headlines

Bloomberg:   

• France Faces Pivotal Moment as Covid-19 Surges.  
• Johnson Enters Brexit Endgame That Could Define His Premiership.  
• Vital World Trade Route Roiled by ‘Black Swan’ Container Crunch.
• Biden’s Long History With China Unlikely to Mend Trump-Era Rift.
• Coronavirus Cases Approach 50 Million Worldwide: Virus Update.    
• Stocks Rise on Biden Claim of Victory; Dollar Edges Lower: Markets Wrap. U.S. stock futures climbed with Asian equities Monday in a continuation of last week’s risk-on pattern after Joe Biden was declared the winner of the presidential race on Saturday. The dollar extended declines. S&P 500 futures were up about 1% in early trading, building on the strongest week since April for the benchmark, as the president-elect prepared to launch his transition effort. Stocks rose in Japan, Australia and South Korea. The yuan and euro ticked higher alongside the Australian and New Zealand dollars. Treasuries slipped. Biden, in his victory speech over the weekend, promised swift action against the pandemic and an orderly transfer of power. Elsewhere, Turkey’s lira rose after the installment of a new central bank chief. Oil pared some of Friday’s slide. S&P futures rose 1.1% as of 8:40 a.m. Tokyo time. The S&P 500 Index closed little changed on Friday. Japan’s Topix index rose 0.8%. South Korea’s Kospi advanced 0.9%. Australia’s S&P/ASX 200 Index rose 1.4%.
• China Shows the Payoff From Curbing the Virus: Eco Week Ahead.   
• Oil Climbs Toward $38 After Biden Victory; Gold Gains Third Day.
• Biden’s First-Day Plans Range From Covid to Climate, Guns, Labor.  
• Wall Street Wants to Be Sure Biden Can Keep Warren’s Army at Bay.
• Trumpism Is Here to Stay, No Matter Who’s in the White House.  
• Biogen Analysts Brace for Collapse After Alzheimer’s-Panel Blow.

Wall Street Journal:

• Restaurants Defend Dining Rooms as Covid-19 Spreads.
• Evidence of PPP Fraud Mounts, Officials Say.
• Live Updates | Biden Transition Team to Begin Review of Federal Agencies.
• Smaller Is Big in New E-Commerce Warehouses.
• Live Updates | GOP Leader McCarthy Backs Trump’s Legal Challenges.
• Georgia’s Two Runoff Races Become Focus for Senate Control.
• How Democrats Lost So Many South Texas Latinos—the Economy.

Barron's:

• Had bullish commentary on (AAPL), (AMZN), (FB), (GOOG), (MAR), (WYNN), (APO), (VAC), (MA) and (TSLA).

Fox News:

• Biden's first priority? Require face coverings when Americans step outside their front door.
• Trump vows more legal moves, as top Republicans mum on projected Biden win.
• Iran calls US election a 'spectacle,' says it is a clear sign of 'decline'.

CNBC:

• Families jump to private schools as coronavirus drags on.
• 4 potential talking points at McDonald’s investor meeting.
  

Zero Hedge: 

• AOC vs. DNC: Ocasio-Cortez Threatens To Quit Politics, Slams "Hostile" Dems For Not Being Progressive Enough.
• Yang Slams Democrats As Party Of 'Coastal Urban Elites'.
• Watch Live: Trump Campaign Press Conference After Giuliani Warns Of Election-Changing Evidence In PA.
• As Biden Pledges 'Unity', Michelle Obama Reminds Dems Millions Voted For "Lies, Hate, Chaos".
• President Bush Says Trump Has Right To Request Election Recount.
• Wisconsin Poll Workers Allegedly Altered Thousands Of Invalid Ballots: Report.
• Is The Pandemic Over? Liberals Rally To Celebrate Media Projecting Biden's Victory.
• Livid Luongo Lashes Out At Democrat "Depravity" Playing Out In Real-Time.
• Trump Campaign To Challenge Mail-In Ballots Counted In Absence Of GOP Observers In Battlefield States.
  
• Trump Says "Election Far From Over"; Biden "Honored & Humbled" After MSM Declares Him President-Elect.
• In 30 States, A Computer System Known To Be Defective Is Tallying Votes.
• The Kafka Election: Finding A Way Out Of The Maze.
• Information War? Internet Archive To Rewrite History With Alerts For 'Fact-Checked' Sites.
• "Meet The New Resistance" - Mark Levin Rages At Democrats' "Cloward-Piven" Chaos Plan.
• Forget GOAT, Look At GBOAT: The Greatest Bubble Of All Time.
• Largest State-Run Chinese Newspaper Laughs At Trump In First Reaction To Biden 'Win'.
• Mapping The States Where It's Legal To Smoke Marijuana.
• The Resistance Eats Its Own: Liberals Furious At 'Nevertrump' Lincoln Project.
• A 7-Point-Plan To Fix Our Elections.
• Tropical Storm Eta "Regains Strength" With South Florida In Path.
• The Rescues Are Ruining Capitalism.
• Watch Live: Trump Campaign To Hold "Big Press Conference" In Philadelphia.
• NHS Nurse Publicly Resigns, Blasts COVID Lockdown Policy.
• Europe Back In Lockdown Mode.
• UK Supreme Court Justice Warns England Underestimates The Costs Of Lockdown At Its Peril.
• Israeli Minister Warns Of War In Middle East If Biden Wins.
• BET's Billionaire Founder Says Black People Get "Minimal Return" By Voting For Democrats.
• The COVID-19 RT-PCR Test: How To Mislead All Humanity Into Accepting Societal Lock-Downs.
• Game-On For The Coup?

  MarketWatch.com:   

• Goldman Sachs cuts growth forecasts for the U.S. and Europe, citing worries over COVID-19’s winter spread.
  

OANN:

• Giuliani: Team Trump to file 4 to 5 lawsuits targeting voter fraud.

The Epoch Times:

• Trump Condemns Communism, Remembers 100 Million Lives Claimed by the ‘Oppressive Ideology’.
• China Is Also Watching US Election Result.

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 indices are +.75% to +1.75% on average.
• Asia Ex-Japan Investment Grade CDS Index 62.25 -1.5 basis points.
• China Sovereign CDS 32.75 -2.5 basis points.
• Bloomberg Emerging Markets Currency Index 60.19 +.10%.
• Bloomberg Global Risk-On/Risk Off Index 650.0 +50.0 points.
• Volatility Index(VIX) futures 26.35 -3.0%. 
• Euro Stoxx 50 futures +1.47%.
• S&P 500 futures +1.56%.
• NASDAQ 100 futures +1.98%.

Morning Preview Links

Earnings of Note

Company/Estimate

Before the Open:

• (CGC)/-.37
• (CARS)/.39
• (EBIX)/.99
• (MCD)/1.90
• (BTU)/-.81
• (PLUG)/-.07
  

After the Close:

• (BYND)/.05
• (HAIN)/.19
• (MYGN)/-.30
• (NKLA)/-.33
• (NCLH)/-2.22
• (OXY)/-.72
• (RNG)/.24
• (SPG)/2.29
  

Economic Releases

• None of note

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The 3Y T-Note auction, Credit Suisse Healthcare Conference, German Trade Data report and the (MCD) investor update could also impact trading today.

Market Hours
Normal:

• 9:30 am - 4:00 pm EST

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

Evening Headlines

Bloomberg:    

• Alito Temporarily Orders Late-Arriving Pennsylvania Ballots Segregated.
• Covid Back in Focus for FX After Election Takes an Ax to Dollar.
• N.Y. Cases Surge Above 3,000 as Upstate Drives Second Wave.
  
• Tech, Exchanges, Health and Pot Stocks Rally With Biden Boost.

 Wall Street Journal:

• Intel’s Success Came With Making Its Own Chips. Until Now..
• Biden Pulls Ahead in Pennsylvania and Georgia as Vote Counts Continue.
• As Biden Moves Closer to Presidency, Trump Pursues Legal Challenges.
• Fall in Jobless Rate Shows Healing U.S. Labor Market.
• Return to Normalcy? Not on the Streets of Philadelphia.
• Muni Bonds Falter on Prospect of Divided U.S. Government.

CNBC: 

• Toyota president: Tesla has ‘not created a real business in the real world yet’.
• These states could go to a recount, here’s how it will work.
• McConnell and Pelosi are once again at odds over the size of a coronavirus stimulus package.

IG:

• Weekend Markets Trading Live.

MarketWatch.com: 

• FDA panel urges rejection of experimental Biogen Alzheimer’s drug.

Fox News:

• Dems blame far-left turn for disappointing election, point to two major issues.
• Trump warns Dems aiming to take the Senate, doubles down on final victory.

Zero Hedge:

• GOP Loses Bid To Toss 'Flawed' Ballots In PA; Biden's Lead Widens In Nevada.
• Software 'Glitch' In Michigan Erroneously Gave 1000s Of Votes To Biden; Up To 47 Counties Compromised.
• Spirit Airlines Flight Attendant Threatens To Have People Who Don't Wear Mask Arrested, Put On No Fly List.
• Tehran Doubles Down On Biden As Preferred Candidate After Trump "Brought Iran To Its Knees".
• PA USPS Official Willing To Testify Under Oath Over Ballot-Backdating.
• Newt Gingrich: The 'Corrupt' Believe The American People Are "Spineless... Cowards".
• How The Left Uses "Science" To Extend Its Bias In Media And Academia.
• "Gridlock = Goldilocks" Means The Second Wave Of 2020 QE Has Begun.
• What Happens In Vegas May Not Stay In Vegas: Why The Nevada Challenge Could Be Important To The Presidential Election.
• Trump Data Director Joins 'Deep Dive' Voter Fraud Effort.
• An America With Two Presidents.
• US COVID-19 Hospitalizations May Be Headed For All-Time Highs: Live Updates.
• Stocks Soar To Best Election Week Since FDR, Gold Jumps, Dollar Dumps.

 @kylenabecker: 

• The election software system in Michigan that switched 6,000 votes from Trump to Biden is called "Dominion." It is used in 30 states including: Nevada, Arizona, Minnesota, Michigan, Wisconsin, Georgia and Pennsylvania. Every single major swing state. EVERY. SINGLE. ONE.
• About Dominion Voting Systems. John Poulos, President and Chief Executive Officer.

C-Span:

• 2020 Election Security(1/09/2020). Dominion CEO John Poulos testimony at 18:29. (video)
  

GCN.com:

• Voting Marching Security: Too Little Too Late(1/10/2020)? The three companies -- Election Systems and Software, Dominion Voting Systems and Hart InterCivic -- have a history of resisting outside scrutiny of their products, but company representatives expressed openness to new federal regulations to bolster confidence about the security of their products. Concerns also exist about the companies' software and hardware supply chains. A report released last month by Interos found that at least one major voting system vendor sourced parts and components out of China, where U.S. officials have raised general concerns about supply chain compromise. The report did not identify the vendor, but witnesses from all three of the major manufacturers acknowledged they relied on Chinese-made gear. Lawmakers expressed concerns that such hardware and software could open the door to compromise or sabotage by bad actors. Dominion Voting Systems CEO John Poulos and Hart InterCivic President Julie Mathis said their companies use Chinese-made LCD screen components, chip capacitors and resistors, arguing that in some cases there's no option for manufacturing those parts in the United States.

NPR.com:

• Cyber Experts Warn Of Vulnerabilities Facing 2020 Election Machines. (9/4/2019) Governments contract with private companies to provide voting equipment and other services and there are no laws requiring any sort of breach disclosure or third party security auditing. Even the governments themselves are usually barred from hiring a security firm to investigate the machines they serve to voters. Cybersecurity expert Bruce Schneier, a fellow with Harvard's Berkman Center for Internet and Society and the author of more than a dozen books, was asked how much security has improved since 2016. He cut off the question."Oh, we have done nothing," Schneier told NPR. "We've done absolutely nothing." The largest state that was exclusively using paperless electronic machines in 2016, Georgia, is slated to replace its machines with touchscreen equipment that provides a paper record before 2020.

The Epoch Times:

• Worried Students Are Not Adhering to CCP Ideology, Chinese Colleges Monitor Their Activities. 
• US Government Looking Into Pfizer’s Operations in China.
  

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).