Tuesday Watch

Night Trading 

• Asian equity indices are +.25% to +.75% on average.

• Asia Ex-Japan Investment Grade CDS Index 60.0 +.25 basis point.

• China Sovereign CDS 32.5 +1.75 basis points.

• Bloomberg Emerging Markets Currency Index 61.0 -.02%.
• Bloomberg Global Risk-On/Risk Off Index 1,218.0 +36.0 points.
• Volatility Index(VIX) futures 24.70 +.71%
• FTSE 100 futures -.31%.

• S&P 500 futures -.16%.

• NASDAQ 100 futures +.28%.

Morning Preview Links

Earnings of Note 
Company/Estimate 

 

Before the Open: 

• (ARMK)/-.34
• (HD)/3.02
• (JKS)/.85
• (KSS)/-.44
• (LM)/.85
• (SE)/-.55
• (WMT)/1.19
  

After the Close:

• (LZB)/.47
  

Economic Releases

8:30 am EST

• Retail Sales Advance MoM for Oct. is estimated to rise +.5% versus a +1.9% gain in Sept.
• Retail Sales Ex Autos MoM for Oct. is estimated to rise +.6% versus a +1.5% gain in Sept.
• Retail Sales Ex Autos and Gas MoM for Oct. is estimated to rise +.6% versus a +1.5% gain in Sept.
• The Import Price Index MoM for Oct. is estimated unch. versus a .3% gain in Sept.
• The Export Price Index MoM for Oct. is estimated to rise +.2% versus a +.6% gain in Sept.
  

9:15 am EST

• Industrial Production MoM for Oct. is estimated to rise +1.0% versus a -.6% decline in Sept.
• Capacity Utilization for Oct. is estimated to rise to 72.3% versus 71.5% in Sept.
• Manufacturing Production for Oct. is estimated to rise +1.0% versus a -.3% decline in Sept.
  

10:00 am EST

• Business Inventories for Sept. is estimated to rise +.6% versus a +.3% gain in Aug.
• The NAHB Housing Market Index for Nov. is estimated at 85.0 versus 85.0 in Oct.

4:00 pm EST

• Net Long-Term TIC Flows for Sept.
  

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Japan Trade Data report, Wolfe Healthcare Conference, Jefferies Healthcare Conference, Scotiabank Transport/Industrials Conference, RBC Tech/Internet/Media/Telecom Conference and the (ROK) investor meeting could also impact trading today.

Market Hours
Normal:

• 9:30 am - 4:00 pm EST
  

BOTTOM LINE: Asian indices are mostly higher, boosted by commodity 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 day.

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

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Higher
  

• Sector Performance: Mixed
  

• Volume: Heavy

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 23.5 +1.7%
• Bloomberg Global Risk On/Risk Off Index 1,100.0 +29.0 points

• Euro/Yen Carry Return Index 128.20 unch.

• Emerging Markets Currency Volatility(VXY) 10.63 +.66%

• S&P 500 Implied Correlation 41.4 +7.0%

• ISE Sentiment Index 121.0 +7.0 points
  

• Total Put/Call .64 -18.0%

• NYSE Arms .77 -7.2%

Credit Investor Angst:

• North American Investment Grade CDS Index 52.66 -3.2%
  

• US Energy High-Yield OAS 727.97 -.84%

• European Financial Sector CDS Index 62.92 -5.6%

• Italian/German 10Y Yld Spread 120.0 -1.0 basis point
  

• Asia Ex-Japan Investment Grade CDS Index 60.28 +1.08%
  

• Emerging Market CDS Index 169.99 -2.79%
  

• iBoxx Offshore RMB China Corporate High Yield Index 181.50 +.38%

• 2-Year Swap Spread 8.75 +.25 basis point

• TED Spread 13.75 +.25 basis point
  

• 3-Month EUR/USD Cross-Currency Basis Swap -15.25 +1.25 basis points
  
• MBS  5/10 Treasury Spread  73.5 +.75 basis point
  
• IHS Markit CMBX BBB- 6 70.25 unxh.

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 61.0 +.28%
• 3-Month T-Bill Yield .08% -1.0 basis point

• Yield Curve 71.0 +1.5 basis points
  

• China Iron Ore Spot 120.08 USD/Metric Tonne +.75%

• Citi US Economic Surprise Index 66.0 -11.6 points

• Citi Eurozone Economic Surprise Index 98.7 +5.8 points
  

• Citi Emerging Markets Economic Surprise Index 59.9 +.6 point

• 10-Year TIPS Spread 1.73 unch.
• 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 +158 open in Japan 
• China A50 Futures: Indicating +16 open in China

• DAX Futures: Indicating -43 open in Germany

Portfolio:

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

• Disclosed Trades: None
  

• Market Exposure: 50% Net Long

Bear Radar

Style Underperformer:

• Large-Cap Growth +.2%

Sector Underperformers:

• 1) Social Media -.9% 2) Pharma -.8% 3) Video Gaming -.7%

Stocks Falling on Unusual Volume: 

• FE, KCAC, TDOC, TNDM, RGEN, ZM, QDEL, SILK, VIR, VITL, PFE, VSTO, PGNY, EQT, DLTH, MODN, ANAB, GH, CYTK, TPTX, AMWL, U, FPRX, VRM, TFFP, FPRX, VRM, SPCE, CODX, SPT, NVAX, NLS, CYRX, REZI and RAPT
  

Stocks With Unusual Put Option Activity:

• 1) VNQ 2) VIAC 3) AEO 4) WMB 5) FCEL
  

Stocks With Most Negative News Mentions:

• 1) GOCO 2) TLRY 3) AEP 4) KOD 5) UROV
  

Charts:

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

Bull Radar

Style Outperformer:

• Small-Cap Value +3.0%

Sector Outperformers:

• 1) Oil Service +7.6% 2) Airlines +6.1% 3) Energy +5.1%

Stocks Rising on Unusual Volume:

• HDS, ROAD, GMS, FUBO, CUK, JWN, CRNC, SRG, INO, NCLH, RCL, FLGT, TCO, MRNA, BRX, SPG, BA, UFS, UPWK, EB, SUN, LOB, PK, MSM, MMP, BPYU, AAL, PANW, CNK and HEP
  

Stocks With Unusual Call Option Activity:

• 1) RSX 2) BKD 3) AMLP 4) KDP 5) PANW

Stocks With Most Positive News Mentions:

• 1) ABUS 2) HPE 3) PANW 4) TSN 5) FFIV
  

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running +38.4% Above 100-Day Average
• 11 Sectors Rising, 0 Sectors Declining
• 80.2% of Issues Advancing, 17.4% Declining
• 126 New 52-Week Highs, 1 New Low
• 75.2% of Issues Above 200-day Moving Average
• Average 14-Day RSI 54.8% 
• Bloomberg Global Risk-On/Risk-Off Index 1,157.0 +86.0 points
• Vix 22.9 -1.0%
• Total Put/Call .51 -34.6%
• TRIN/Arms 1.16 +38.6%

Monday Watch

Today's Headlines

Bloomberg:   

• Iran Business Event Seeks to Tap Post-Trump Investor Interest.   
• Japan Economy Rebounds From Covid at Fastest Pace Since 1968.
• OPEC+ Gets Scant Relief From Vaccine as Ministers Meet.  
• U.S. Stock Futures Gain; Asian Shares Set to Rise: Markets Wrap. U.S. equity futures opened higher Monday and Asian stocks looked poised to gain amid positive sentiment on trade in the region and after a national U.S. lockdown was ruled out. Shares kicked off the week firmer in Australia. Asia Pacific nations including China, Japan and South Korea on Sunday signed the world’s largest regional free-trade agreement. Meanwhile, advisers to President-elect Joe Biden said they opposed a nationwide U.S. lockdown despite the pandemic accelerating, favoring targeted local measures instead. Oil advanced. S&P 500 Index futures rose 0.5% as of 8:08 a.m. in Tokyo. The S&P 500 gained 1.4% Friday. Nikkei 225 futures rose 1.1% earlier. The S&P/ASX 200 Index rose 1.2%. Hang Seng Index future gained 0.4% earlier.
• Five Things You Need to Know to Start Your Day.  
• Run-It-Hot Returns, Battered Bali, World’s Biggest Deal: Eco Day.
• Biden Virus Advisers Say a National Lockdown Isn’t on the Agenda.    
• U.S. Tops 11 Million as Cases Surge Coast to Coast: Virus Update.
• Biden Fills Economic Posts With Experts on Systemic Racism.
• NYC Mayor Says Schools ‘Thankfully’ Will Remain Open on Monday.  
• Bloomberg New Economy: How Will Covid-19 Remake Our Cities? 
• Simon Property, Taubman Resolve Takeover Spat With Lower Price.
• A 1% Treasury Yield Proves Elusive With Pandemic Intensifying.

Wall Street Journal:

• DACA Restored After Court Rules DHS Head Served Illegally.
• Seattle’s New Theory of Crime.
• Millions of Unemployed Americans Face Loss of Benefits at Year’s End.
• Retail Chains Shed Stores, but It Isn’t Good for Business.
• Pandemic Speeds Americans’ Embrace of Digital Commerce.
• Why Democrats Nearly Lost the House.
• California, Love It and Leave It.
• Coronavirus Surge Tests the Smallest Companies.
• Virus Hits Rural Nursing Homes.
• The Big Unknown Is Where People Are Getting Infected.

Fox News:

• Trump blasts ‘ANTIFA SCUM,’ ‘Silent Media’ as MAGA march in DC descends into night of violence, arrests.
• Thousands of Pro-Trump supporters descend on DC for 'Million MAGA March' near White House.
• News outlets take heat for ignoring violent attacks on Trump supporters at MAGA rally.

CNBC:

• Top Wall Street analysts back stocks like Lyft and Square amid vaccine hopes.
  

Zero Hedge: 

• Trump Lawyer Sidney Powell: "We're Getting Ready To Overturn Election Results In Multiple States".
• BLM/Antifa Thugs Attack Trump Supporters, Including Children, After D.C. "Million MAGA March".
• Sudden Default By AAA-Rated Chinese State-Owned Coal Miner Sends Shockwaves Across Markets.
• Parler Says Previously Secret Backer Is Conservative Billionaire Rebekah Mercer.
• Newsmax Buyout Eyed By Trump Allies Seeking 'Fox News Killer'; CEO Denies Deal.
• Martin Armstrong: This Is The Most Corrupt Election In American History.
• Another Brexit Deal Deadline Blown As Boris Johnson Stands His Ground; Extension Expected.
• Washington, Michigan Impose Tough New COVID-19 Restrictions; US Tops 11 Million Cases: Live Updates.
• Dr. Fauci Warns US Likely To Cancel Christmas, Hints That Masks & Social Distancing Are Here To Stay.
• Biden Advisors To Start Meeting With Vaccine-Makers In Latest Hint Of Collusion.
• "I Concede Nothing": Trump Blasts "Fake News Media" For Saying He Conceded To Biden.
• 70% Of Americans Unlikely To Travel For Holidays As US Faces Second Virus Wave.
• In 2020, Central Bankers Everywhere Are Being Exposed.
• The Orwellian Pandemic.
• Lockdowns Haven't Brought Down COVID Mortality, But They Have Killed Millions Of Jobs.  
• Trump Won "Tens Of Thousands" More New York City Votes In 2020 Than In 2016.
• Why GOP Loyalists And Candidates Keep Moving Left.

  MarketWatch.com:

• BioNTech and Pfizer’s COVID-19 vaccine is surprisingly effective, though experts question what effectiveness will look like in the real world.
  

NewsMax:

• Trump to NY Post: Election 'Greatest Theft in History of America'.  
• Rudy Giuliani: 'Dominion Shouldn't Be Counting Votes Anywhere'.
• Jenna Ellis: States Must Audit Dominion Machines.
• Rep. Louie Gohmert to Newsmax TV: Marchers Protested Against Stolen Election.

 Townhall.com:

• BLM, Antifa Explode in Violence After Tens of Thousands of Trump Supporters March in D.C.

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 +1.25% on average.
• Asia Ex-Japan Investment Grade CDS Index 59.25 -.5 basis point.
• China Sovereign CDS 30.25 -1.5 basis points.
• Bloomberg Emerging Markets Currency Index 60.92 +.13%.
• Bloomberg Global Risk-On/Risk Off Index 1,103.0 +33.0 points.
• Volatility Index(VIX) futures 24.60 -1.89%. 
• Euro Stoxx 50 futures +.79%.
• S&P 500 futures +.67%.
• NASDAQ 100 futures +.85%.

Morning Preview Links

Earnings of Note

Company/Estimate

Before the Open:

• (JD)/2.71
• (PANW)/1.33
• (TSN)/1.19
  

After the Close:

• (BIDU)/13.08
• (SDC)/-.14
  

Economic Releases

8:30 am EST

• Empire Manufacturing for Nov. is estimated to rise to 14.0 versus 10.5 in Oct.

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The RBA Minutes, Jefferies Consumer Conference, Stifel Healthcare Conference, Citi Fintech Conference, RBC Mining/Materials Conference, Stephens Investment Conference, Needham Networking/Communications/Security Conference and the (MSTR) analyst day 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.