Stocks Higher into Afternoon on Lower Long-Term Rates, Stimulus Hopes, Short-Covering, Utility/Medical Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Modestly Lower
  

• Sector Performance: Mixed
  

• Volume: Around Average

• Market Leading Stocks: Outperforming
  

Equity Investor Angst:

• Volatility(VIX) 22.2 -4.8%
• Bloomberg Global Risk On/Risk Off Index 2,042.0 +2.0 points

• Euro/Yen Carry Return Index 130.69 -.27%

• Emerging Markets Currency Volatility(VXY) 10.5 -.7%

• S&P 500 Implied Correlation 49.0 +1.6%

• ISE Sentiment Index 122.0 +25.0 points
  

• Total Put/Call .90 +32.4%

• NYSE Arms 1.46 +117.9%

Credit Investor Angst:

• North American Investment Grade CDS Index 50.22 -2.29%
  

• US Energy High-Yield OAS 506.90 -.18%

• European Financial Sector CDS Index 59.58 -3.2%

• Italian/German 10Y Yld Spread 112.0 unch.
  

• Asia Ex-Japan Investment Grade CDS Index 62.26 +1.17%
  

• Emerging Market CDS Index 162.31 -1.71%
  

• iBoxx Offshore RMB China Corporate High Yield Index 185.47 +.19%

• 2-Year Swap Spread 7.5 -.25 basis point

• TED Spread 14.25 -.25 basis point
  

• 3-Month EUR/USD Cross-Currency Basis Swap -1.5 +.75 basis point
  
• MBS  5/10 Treasury Spread  73.50 +2.5 basis points
  
• IHS Markit CMBX BBB- 6 72.75 unch.

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 62.58 +.01%
• 3-Month T-Bill Yield .08% unch.
  

• Yield Curve 98.0 -2.0 basis points
  

• China Iron Ore Spot 164.75 USD/Metric Tonne -.34%

• Citi US Economic Surprise Index 56.10 -.2 point

• Citi Eurozone Economic Surprise Index 165.30 +.2 point
  

• Citi Emerging Markets Economic Surprise Index 63.5 +.5 point

• 10-Year TIPS Spread 2.06 -2.0 basis points
• 100.0% chance of no change at March 17th meeting, 100.0% chance of no change at April 28th meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating +43 open in Japan 
• China A50 Futures: Indicating -14 open in China

• DAX Futures: Indicating +4 open in Germany

Portfolio:

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

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

• Market Exposure: Moved to 75% Net Long
  

Bear Radar

Style Underperformer:

• Small-Cap Value -.7%

Sector Underperformers:

• 1) Oil Service -2.5% 2) Steel -2.5% 3) Paper -2.2%

Stocks Falling on Unusual Volume: 

• NTUS, SCHW, AMD, SRPT, PRIM, ZEN, HEC, NFE, LVS, BLI, STPK, DD, SEAS, IFF, CURI, NVIX, ERII, LOCO, DBX, LPG, KAR, USCR, VMW, DELL, SILK, RPAY, ESPR, PRVB and MARA
  

Stocks With Unusual Put Option Activity:

• 1) MGY 2) VECO 3) EEM 4) KBH 5) GME
  

Stocks With Most Negative News Mentions:

• 1) DBX 2) GRWG 3) KNDI 4) PRTY 5) DD
  

Charts:

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

Bull Radar

 Style Outperformer:

• Large-Cap Growth +.6%

Sector Outperformers:

• 1) Utilities +2.1% 2) REITs +1.3% 3) Video Gaming +1.2%

Stocks Rising on Unusual Volume:

• GME, ROOT, MTRX, FSRV, RMO, GOEV, TRHC, NARI, ACLS, PAR, QELL, NVTA, NGA, SKLZ, BBBY, QTRX, VIR, DMTK, SHAK, NKLA, CURO, INTC, PCPL, CLNE, XL, PLUG, PDAC, TFFP, PEB, SWCH, CCIV, ZM, PRCH, ASAN, COGT and AMCI
  

Stocks With Unusual Call Option Activity:

• 1) POWW 2) BHF 3) KBH 4) SFM 5) ACRX

Stocks With Most Positive News Mentions:

• 1) KBH 2) PLUG 3) SHAK 4) GKOS 5) VAPO
  

Charts:

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

Mid-Day Market Internals

NYSE Composite Index:

• Volume Running +5.1% Above 100-Day Average 
• 7 Sectors Rising, 4 Sectors Declining
• 48.8% of Issues Advancing, 48.5% Declining
• 220 New 52-Week Highs, 2 New Lows
• 84.9% of Issues Above 200-day Moving Average
• Average 14-Day RSI 54.8% 
• Bloomberg Global Risk-On/Risk-Off Index 2,027.0 -12.0 points
• Vix 22.3 -4.5%
• Total Put/Call .62 -8.8%
• TRIN/Arms .58 -6.5%

Wednesday Watch

Evening Headlines

Bloomberg:        

• South Korea’s Jobless Rate Hits 10-Year High as Virus Surges.  
• Dollar Extends Decline; Treasury Yields Drop: Markets Wrap.
• Oil Extends Gains on Expectations for Shrinking U.S. Supplies.  
• Taper Pushback, EU Double-Dip, Dodging Jobless Recovery: Eco Day.
• Arizona Sets Death Record; N.Y. Lowers Vaccine Age: Virus Update.
• A Handful of Penny Stocks Just Made Up a Fifth of U.S. Volume.  
• Wall Street Visionaries Provide Chilling Views on Next Big Risk.
• Bolsonaro Eyes Alternative to Twitter, Facebook After Trump Ban.  
• KB Home Beats Estimates for Orders on Housing Rally’s Strength.

Wall Street Journal:

• U.S. Preparing to Charge Protesters With Plotting Government Overthrow.
• Pence Won’t Invoke 25th Amendment to Remove Trump.
• What Trump Said to Supporters Before the Protest.
• A Hong Kong Dissident’s Daring Escape.
• Vaccine Doses That Were Held Back Now Being Released.
• SolarWinds Discloses Earlier Evidence of Hack.
• U.S. to Require Covid-19 Tests for All International Visitors.

Fox News:  

• McConnell furious with president, supports move to initiate impeachment proceedings: sources.
  

CNBC.com:

• Pence tells Pelosi he will not invoke 25th Amendment to remove Trump.
• With rates on the rise, investors fearing any signs of inflation.
• Visa abandons takeover of Plaid after DOJ raises antitrust concerns.
• Stripe and PayPal halt payments for Trump’s campaign and supporters: CNBC After Hours.
• Zoom plans $1.5 billion share sale at 10 times its IPO price.

MarketWatch.com:      

• ‘Prepare to lose all your money’ — regulator’s blunt warning on bitcoin and other cryptocurrencies.  
• Bitcoin sees bear-market skid — living up to its reputation for seismic price swings.  
• Mark Cuban says recent crypto trading is ‘exactly like the internet stock bubble’.  
• Adam Kinzinger and John Katko join fellow Republican Liz Cheney in committing to ‘yes’ votes on Trump impeachment.  
• These 3 risks mean 2021 is ‘not a time for excessive optimism’ for markets, says Pimco.

Zero Hedge:

• McConnell Reportedly "Pleased" About Trump Impeachment; Senior Republican Liz Cheney Will Vote To Impeach.
• Senate Could Have Votes To Impeach, Pence Says He's Against Using 25th Amendment.
• Gamma Energy: As XLE Call Buying Explodes, Energy Sector Braces For Huge Melt Up.
• The Great Social Silencing.
• Why Did These 40 Companies Continue To Fund Democrats Who 'Undermined Democracy' In 2005?
• PBS Lawyer Fired After Project Veritas Expose.
• House Judiciary Release 76-Page Impeachment Report.
• CIA Releases "Black Vault" UFO Files.
• NeoCon John Bolton Urges GOP To Purge Trumpism.
• Toyota Halts Production In China Due To Global Semiconductor Shortage.
• L.A. County Tells Residents To Wear Masks Inside Own Homes.
• WTI Extends Gains After Surprisingly Large Crude Draw.
• Morgan Stanley Spots An Extremely Rare Market Signal Which Precedes Selloffs.
• Greenwald: How Silicon Valley, In A Show of Monopolistic Force, Destroyed Parler.
• Tech Wrecks And Russell Roars As Dollar Dead-Cat-Bounce Dies.

Newsmax:

• Civil Rights Groups Take Aim at YouTube, Trump's Last Big Social Media Outlet.
• Top Military Leaders Remind Troops of Limits of Free Speech.
• Walmart Halts GOP Contributions for Electoral Objectors.
• US Pursuing Seditious Conspiracy Cases in 'Unprecedented' Probe of Capitol Riot.

@MikeCarterTV:

• BREAKING VIDEO: Protester interrupts Chuck Schumer presser in NYC.

NBC 10 Philadelphia:

• These Are the Companies Taking a Stand on the U.S. Capitol Protest by Pulling Their Political Donations. Many of the country's biggest companies across industry sectors, from Ford Motor Co. to Airbnb to Boston Scientific, announced suspensions of all PAC donations. The list of companies pledging change, which continues to grow, included the financial services companies JPMorgan Chase, Goldman Sachs and Citigroup and the tech behemoths Microsoft, Facebook and Google. A host of other large companies, including Delta Air Lines, Wells Fargo, Walmart and Bank of America, said they would take the unprecedented events of last week into account when considering future political donations.

@kylenabecker:

• HOUSE. "Proposing an amendment to the Constitution of the United States to *abolish* the ELECTORAL COLLEGE and to provide for the DIRECT ELECTION of the... President of the United States." The Democratic Party moves to nationalize elections & solidify a permanent majority.

TheGatewayPundit.com:

• After Several Delays Gateway Pundit CLOSE to VIDEO EVIDENCE from Detroit’s 3am Biden Ballot Dump.
• Florida State Representative Asks Governor DeSantis to Divest State Funds From Apple, Facebook, Google and Twitter.
• PBS Lawyer Caught in Project Veritas Under Cover Video Sting Inciting Political Violence Against Trump Supporters Resigns.
• You Just Can’t Make It Up: After Stealing the 2020 Election in the Greatest Heist Ever, Joe Biden Announces the Theme for His Inauguration “America United”.
• THE END OF THE REPUBLICAN PARTY: Mitch McConnell Tells Reporter He Believes Trump Committed Impeachable Offenses.
• Hillary Clinton Labels Trump Supporters “Domestic Terrorists” Who Need to be Tracked and Surveilled Following Chaos at US Capitol.
• HUGE! Analysis of Video of Trump Supporter Ashli Babbitt Death in the Capitol Shows Antifa’s Actions Led to Shots Being Fired (VIDEO).

The Epoch Times: 

• CCP Virus Outbreaks Spread Across North China, as Cities Prepare Emergency Isolation Units.

ProtectTheVote.com: 

• Serious allegations of misconduct in the 2020 elections have resulted in unprecedented legal action to ensure our elections are -- and remain -- free and fair. Find out where we’re exposing fraud and how you can help.

HereIsTheEvidence.com:

• This is for aggregating publicly available items of voter fraud evidence in the US election that would be admissible in court.
  

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 +.5% on average.

• Asia Ex-Japan Investment Grade CDS Index 62.5 +1.75 basis points.

• China Sovereign CDS 30.5 +.5 basis point.

• Bloomberg Emerging Markets Currency Index 62.58 +.01%.
• Bloomberg Global Risk-On/Risk Off Index 2,041.0 +3.0 points.
• Volatility Index(VIX) futures 25.4 -.1%.
• FTSE 100 futures +.01%.

• S&P 500 futures +.02%.

• NASDAQ 100 futures +.01%.

Morning Preview Links

Earnings of Note 
Company/Estimate 

 

Before the Open: 

• (INFO)/.67
• (SJR)/.32
  

After the Close:

•  None of note
  

Economic Releases

8:30 am EST

• The CPI MoM for Dec. is estimated to rise +.4% versus a +.2% gain in Nov.
• The CPI Ex Food and Energy MoM for Dec. is estimated to rise +.1% versus a +.2% gain in Nov.
• Real Avg Weekly Earnings YoY for Dec.
  

2:00 pm EST

• The Monthly Budget Statement for Dec. is estimated at -$143.5B versus -$145.3B in Nov. 
• US Fed Beige Book report.
  

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Fed's Clarida speaking, Fed's Brainard speaking, Eurozone Industrial Production report, $24B 30Y T-Note auction, weekly MBA Mortgage Applications report, Sidoti Investor Conference could also impact trading today.

Market Hours
Normal:

• 9:30 am - 4:00 pm EST
  

BOTTOM LINE: Asian indices are mostly higher, boosted by energy and technology 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 Slightly Higher into Final Hour on Dollar Weakness, Stable Long-Term Rates, Short-Covering, Energy/Retail Sector Strength

 Broad Equity Market Tone:

• Advance/Decline Line: Higher
  

• Sector Performance: Mixed
  

• Volume: Around Average

• Market Leading Stocks: Outperforming
  

Equity Investor Angst:

• Volatility(VIX) 23.6 -1.9%
• Bloomberg Global Risk On/Risk Off Index 2,022.0 +118.0 points

• Euro/Yen Carry Return Index 131.06 -.01%

• Emerging Markets Currency Volatility(VXY) 10.6 -1.1%

• S&P 500 Implied Correlation 49.6 +2.5%

• ISE Sentiment Index 97.0 -3.0 points
  

• Total Put/Call .70 -11.4%

• NYSE Arms .60 -3.2%

Credit Investor Angst:

• North American Investment Grade CDS Index 51.78 +1.23%
  

• US Energy High-Yield OAS 509.53 -.01%

• European Financial Sector CDS Index 61.55 +2.8%

• Italian/German 10Y Yld Spread 112.0 +6.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 61.52 +3.3%
  

• Emerging Market CDS Index 165.87 +1.7%
  

• iBoxx Offshore RMB China Corporate High Yield Index 185.12 +.13%

• 2-Year Swap Spread 7.75 +.5 basis point

• TED Spread 14.5 -1.0 basis point
  

• 3-Month EUR/USD Cross-Currency Basis Swap -2.25 +2.5 basis points
  
• MBS  5/10 Treasury Spread  71.0 +1.25 basis points
  
• IHS Markit CMBX BBB- 6 72.75 -.5 basis point

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 62.55 +.80%
• 3-Month T-Bill Yield .08% unch.
  

• Yield Curve 100.0 unch.
  

• China Iron Ore Spot 166.14 USD/Metric Tonne -.69%

• Citi US Economic Surprise Index 56.30 -2.4 points

• Citi Eurozone Economic Surprise Index 165.10 -2.1 points
  

• Citi Emerging Markets Economic Surprise Index 63.0 -2.7 points

• 10-Year TIPS Spread 2.08 +2.0 basis points
• 100.0% chance of no change at March 17th meeting, 100.0% chance of no change at April 28th meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating -4 open in Japan 
• China A50 Futures: Indicating +12 open in China

• DAX Futures: Indicating -39 open in Germany

Portfolio:

• Slightly Lower: On losses in my tech/medical sector longs and emerging market shorts
  

• Disclosed Trades: None
  

• Market Exposure: 50% Net Long