Stocks Rising into Final Hour on US Economic "Soft-Landing" Hopes, AI Implementation Optimism, Dollar Weakness, Tech/Financial Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Higher
  

• Sector Performance: Most Sectors Rising
  

• Volume: Around Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 13.1 +1.0%
• DJIA Intraday % Swing .36% -25.4%
  
• Bloomberg Global Risk On/Risk Off Index 58.5 +1.7%

• Euro/Yen Carry Return Index 166.1 -2.3%

• Emerging Markets Currency Volatility(VXY) 8.0 +.6%

• CBOE S&P 500 Implied Correlation Index 21.0 -2.0% 

• ISE Sentiment Index 156.0 +10.0
  

• Total Put/Call .97 +11.5%

• NYSE Arms 1.24 +5.1% 
• NYSE Non-Block Money Flow +$141.4M 
  

Credit Investor Angst:

• North American Investment Grade CDS Index 62.4 -.9%
  

• US Energy High-Yield OAS 360.1 +1.4%
• Bloomberg TRACE # Distressed Bonds Traded 382 +18.0
  

• European Financial Sector CDS Index 76.2 +.08% 
• Deutsche Bank Subordinated 5Y Credit Default Swap 231.42 +.03%
  

• Italian/German 10Y Yld Spread 175.0 basis points +1.0 basis point
  

• Asia Ex-Japan Investment Grade CDS Index 100.3 +.2%
  

• Emerging Market CDS Index 185.4 -.74%
• Israel Sovereign CDS 113.0 -1.3%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 25.6 +.43%

• 2-Year SOFR Swap Spread -19.75 basis points -1.0 basis point
  

• TED Spread 25.25 basis points +1.25 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -9.5 +.25 basis point
  
• MBS  5/10 Treasury Spread 150.0 unch.
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 952.0 +3.0 basis points
  
• Avg. Auto ABS OAS 85.0 unch.
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 41.6 +.03%
• 3-Month T-Bill Yield 5.39% -1.0 basis point
  

• China Iron Ore Spot 134.8 USD/Metric Tonne +.7%
• Dutch TTF Nat Gas(European benchmark) 40.0 euros/megawatt-hour +1.7%

• Citi US Economic Surprise Index 11.7 -.5 point

• Citi Eurozone Economic Surprise Index -21.2 -.6 point

• Citi Emerging Markets Economic Surprise Index 26.9 +1.8 points
• S&P 500 Current Quarter EPS Growth Rate YoY(495 of 500 reporting) +4.4% -.1 percentage point
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 242.43 +.04:  Growth Rate +9.5% unch., P/E 18.9 unch.
  
• S&P 500 Current Year Estimated Profit Margin 12.12% -1.0 basis point
  
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(9 of 10 reporting) +50.6% unch.
  
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 285.51 +.14: Growth Rate +34.3% +.4 percentage point, P/E 28.8 +.2
  
• Bloomberg US Financial Conditions Index .53 +2.0 basis points
  
• Bloomberg Euro-Zone Financial Conditions Index .27 +2.0 basis points
  
• US Yield Curve -45.5 basis points (2s/10s) +3.25 basis points
  
• US Atlanta Fed 4Q GDPNow Forecast +1.25% -2.0 basis points
  
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 57.8% +.1 percentage point
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +3.46% unch.: CPI YoY +3.04% unch.
  
• 10-Year TIPS Spread 2.17 +2.0 basis points
  
• Highest target rate probability for Jan. 31st FOMC meeting: 81.7%(-5.1 percentage points) chance of 5.25%-5.5%. Highest target rate probability for March 20th meeting: 52.8%(-1.2 percentage points) chance of 5.0%-5.25%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -468 open in Japan 
• China A50 Futures: Indicating +6 open in China

• DAX Futures: Indicating +52 open in Germany

Portfolio:

• Higher:  On gains in my transport/industrial/tech sector longs
  

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

• Market Exposure: Moved to 100% Net Long
  

Bear Radar

Style Underperformer:

• Mid-Cap Growth +.4%
  

Sector Underperformers:

• 1) Shipping -1.1% 2) Gold & Silver -.3% 3) Defense -.3%

Stocks Falling on Unusual Volume: 

• TDC, BRZE, BMEA, CRS, MEI, XPOF, AI, LPG and CXM
  

Stocks With Unusual Put Option Activity:

• 1) NKLA 2) CERE 3) LUMN 4) CHWY 5) DBI
  

Stocks With Most Negative News Mentions:

• 1) CXM 2) NAPA 3) DMTK 4) MVST 5) AI
  

Charts:

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

Bull Radar

Style Outperformer:

• Large-Cap Growth +1.2%
  

Sector Outperformers:

• 1) Airlines +2.8% 2) Semis +2.6% 3) Regional Banks +1.7%

Stocks Rising on Unusual Volume:

• SFWL, ENVA, BCYC, CABA, AMAM, RVLV, KSS, JWN, LITE, SQM, HLF, ALB, URGN, AMCX, AMRC, MLTX, NGVT, SLAB, LOVE, TNDM, CYTK, SLAB, KYMR, UNFI, VSAT, ALGT, HGV, TGS, MLTX, SRRK, OGN, SEE, GIII, UNFI, ABNB, SLNO, ALGT, PRTA, XNCR, CBAY, DAR, VSCO, BGS, FRPT, CLS, MNRO, SIBN, DAL, SGH, PLAY, SNCY, WOLF, AKRO, VAC, VRNA, PLL, GBCI, CMA, XRX, CNK, Z, ARWR, HOG, WNC, ZG, ON, AKRO, KFY, SNBR, AFRM, TSN, CYRX, COHR, HPQ, HOPE and BBIO
  

Stocks With Unusual Call Option Activity:

• 1) RNG 2) BVN 3) MET 4) ITUB 5) FXY

Stocks With Most Positive News Mentions:

• 1) SMTC 2) JBLU 3) HOFT 4) VRNT 5) SATS
  

Charts:

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

Tomorrow's Earnings/Economic Releases of Note; Market Movers

Earnings of Note 
Company/Estimate 

Before the Open:

• None of note
  

After the Close: 

• None of note
  

Economic Releases

 

8:30 am EST

• The Change in Non-Farm Payrolls for Nov. is estimated to rise to 185K versus 150K in Oct.
• The Unemployment Rate for Nov. is estimated at 3.9% versus 3.9% in Oct.
• Average Hourly Earnings MoM for Nov. is estimated to rise +.3% versus +.2% in Oct.
• Labor Force Participation Rate for Nov. is estimated at 62.7% versus 62.7% in Oct.
  

10:00 am EST

• The Univ. of Mich. Consumer Sentiment Index for Dec. is estimated to rise to 62.0 versus 61.3 in Nov.
• Univ. of Mich. 1Y Inflation Expectations Index for Dec. is estimated to fall to +4.3% versus +4.5% in Nov.
  

Upcoming Splits 

• None of note
  

Other Potential Market Movers

• The American Society of Hematology Meeting and the San Antonio Breast Cancer Symposium could also impact global trading tomorrow.

US Equity Market Hours

• 9:30 am - 4:00 pm EST

Mid-Day Market Internals

NYSE Composite Index:

• Volume Running +.4% Above 100-Day Average 
• Nasdaq/NYSE Volume Ratio 11.7 +2.5
  
• 2 Sectors Declining, 9 Sectors Rising
• 65.6% of Issues Advancing, 31.4% Declining 
• TRIN/Arms 1.25 +5.9% 
• Non-Block Money Flow +$107.3M
  
• 46 New 52-Week Highs, 28 New Lows
• 52.1%(+1.8%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 65.0 -2.0

Other:

• Bloomberg Global Risk-On/Risk-Off Index 58.4 +1.7%
  
• Russell 1000: Growth/Value 18,508.6 +.92%
  
• 1-Day Vix 11.1 +14.2%
  
• Vix 13.0 +.46%
  
• Total Put/Call 1.0 +15.0%

Thursday Watch

Evening Headlines

Bloomberg:

• Moody’s Cuts Outlook for Chinese Banks, Hong Kong, LGFVs.
• EM Asia Bonds’ High Valuations May Start to Worry Investors.
• Asia Hedge Funds Avert China Turmoil With Bets on Japan, AI.
• Australia’s Trade Surplus Widens on Improved Iron-Ore Exports.
• Australia Signs Pacific Pact in Battle for Influence With China.
• EU Nears Deal to Regulate ChatGPT, Other AI Tech in Landmark Act.
• Shares in Asia Fall as Oil Touches Six-Month Low: Markets Wrap.
• Elon Musk's SpaceX Valued at $175 Billion or More in Tender Offer.
• SpaceX Weighs Spinning Off Starlink Via IPO as Soon as 2024.
• Biden Moves to Forgive Nearly $5 Billion in Student Loans.
• Carson Block Shorts Blackstone Publicly Traded Mortgage REIT.
• Pfizer CEO Calls Harvard, MIT, Penn Antisemitism Comments ‘Despicable’.
• C3.ai Says Revenue Dented by New ‘AI Governance’ Department Reviews. 
• Live: Dimon, Warren Find Rare Common Ground in Crypto-Bashing.
• US Firms Slow Hiring With Manufacturers Cutting Jobs, ADP Says.
• Ramaco CEO Says Wyoming Coal Mine Discoveries Include Gallium, Germanium.

Zero Hedge:

• Senate Republicans Block Biden Ukraine Aid Despite Warning Over 'Direct Conflict With Russia'.
• Janet Yellen Joins Zelensky In Saying US Would Be "Responsible For Ukraine's Defeat".
• Citi Sees Senate Flipping, Ponders 'Red Wave' In 2024.
• Americans 'Should Be Worried' About Potential Chinese Invasion Of Taiwan: Joint Chiefs Of Staff Chairman.
• Biden Tells Israel To Wrap Up War By January As An Estimated 80% Of Gazans Displaced.
• Gun Business Challenges Arizona City's Refusal To Renew Advertising Contract.
• Tiger Woods Past The Peak? Reports Say Longtime Nike Partnership May End.
• Moms For America Endorses 'Proven Leader' Trump For 2024 Presidency.
• "Let Me Be Clear": Harvard Backpedals After Donors Slam 'Insane' Protections For Pro-Genocide Students.
• House Passes Resolution Stating 'Anti-Zionism Is Antisemitism'.
• Putin Trots Around Middle East, All Smiles With MbS, While US Can't Secure Ukraine Funding.
• Texas, The Daily Wire, & The Federalist Sue US State Dept For Conspiring With Newsguard To Censor American Media Companies.
• COP28: The Globalist Agenda Has Never Been More Obvious.
• Lebanese Soldier Dies, Army Post Comes Under Israeli Shelling, For 1st Time In The Conflict.
• US stocks trickled lower after further soft data releases - Newsquawk Asia-Pac Market Open.
• Climate Scientist Says It's 'Unreasonable' To Call Climate Change An Existential Threat.
• "They're Saying The Quiet Part Out Loud": Tucker And Massie Slam Additional Ukraine Funds For 'War They Cannot Win'.
• Stocks fall and Dollar gains as eyes turn to NFP after soft ADP - Newsquawk US Market Wrap.
• Exuberant breadth and magnificent selling.
• Riley Gaines Wrecks "Misogynist" 'Squad' Member After Being Called 'Hateful, Transphobic'.
• 'Growth Scare' Spooks Big-Tech & Black Gold As Bond Yields Plunge.
• "Here Comes The Cliff!": Carson Block Shorts Blackstone Mortgage REIT As 'Liquidity Crisis' Risks Mount.
• VP Biden Linking Ukraine Loan To Prosecutor's Firing Surprised State Department Officials, Emails Show.

Wall Street Journal:

• 23andMe Hack Is a Wake-Up Call for Your Password Habits.
• DEI Drives Campus Antisemitism. Gerrymandering Jews into an ‘oppressed’ class won’t save universities from a malevolent ideology.
• Israel Says It Killed Half of Hamas’s Midlevel Commanders.
• Is That Food Ultra-Processed? How to Tell.
• McKinsey Shrinks New Partner Class by Roughly 35%.
• Facebook and Instagram Steer Predators to Children, New Mexico Lawsuit Alleges.
• Meta to Start Fully Encrypting Messages on Facebook and Instagram.
• U.S. Gas Startup at Center of Epic Feud With Global Energy Giants.

CNBC.com:

• Governments are spying on Apple, Google users through phone notifications, U.S. senator says.
• China’s big property market problem will take at least 4 to 6 years to resolve.
• Haley’s Wall Street donor surge draws fire ahead of GOP debate.
• Wall Street tries to convince senators that new capital rules will hurt Americans as well as banks.
• U.S. crude oil falls below $70 a barrel, closing at the lowest level since June.

MarketWatch.com:

• GameStop stock slips after revenue miss, and Ryan Cohen eyes equity investments.
• As bitcoin’s price surges, crypto’s power in Washington withers.
• AbbVie to buy Cerevel Therapeutics in $8.7 billion all-cash deal.

Fox News:

• Anti-woke beer company takes aim at women's sports in special project.
• Some Democrats join Republicans to deliver big blow to Biden's EV mandate.
• House Judiciary investigating whether DA 'coordinated' with Jan. 6 committee.
• At least 3 people killed in shooting on UNLV campus, suspect dead.
• Another boat filled with migrants invades beach near ritzy homes of Hollywood stars.

TheGatewayPundit.com:

• World Health Organization Calls for Huge Global Tax Increases on Alcohol, Soda.
• Dems’ Censorship Demand Now ‘Insatiable,’ Constitutional Expert Warns.
• CNN’s Jake Tapper Surprised by Biden’s ‘Stunning Admission’ About His 2024 Campaign.
• Leo Hohmann: IMF Boss Says Governments Need to Impose Global Carbon Tax on Citizens to Punish Them for Using Energy.
• GOP Lawmakers Threaten Hunter Biden: Appear at Closed Deposition on December 13th or Face Legal Action.
• Biden Border Crisis: More Than 12,000 Illegal Aliens Flood Open Southern Border in Last 24 Hours – Highest Single Day Total Ever Recorded.
• Shocking Video: Here Are the 16 Innocent Israelis Hamas Massacred on the Beach in Southern Israel on Oct. 7.
• The Border Crisis: Coming to a Neighborhood Near You.
• Civil Rights Lawyers Warn Woke Illinois Schools’ Racially Segregated AP Classes are ‘Unconstitutional’.
• Muckraker Report: Secret Chinese Staging Hotel Exposed in Colombia with Military-Aged Men Heading to Open US Border (VIDEO).
• Arizona Sheriff Mark Lamb: Every Illegal Alien Crossing Border Received $5,000 Gift Card (VIDEO).
• Zelensky Blows Off Congress as Republicans Walk Out of Ukraine Funding Meet: “There Has to be Border Security First”.
• Sen. DICK Durbin Suffers Memory Loss After Claiming Epstein Flight Logs Inquiry Has “Never Been Raised by Anyone” Despite Requests from Senator Blackburn (VIDEO).

The Epoch Times:

• China Approves 5 New COVID-19 Vaccines for ‘Emergency Use’ Amid Worsening Pneumonia Outbreak.

OpenVAERS:

• VAERS US COVID Vaccine Adverse Event Reports. 988,705 Reports(+5,406 from prior week) Through October 27th, 2023.

SKirsch.com:

• Using the MGH numbers with our own VAERS queries, we have 247 cases per million doses from the MGH study divided by 5.97 cases per million doses from VAERS. 247/5.97 = 41. This suggests that the VAERS under-reporting factor (URF) is 41X.

Night Trading 

• Asian equity indices are -1.25% to -.25% on average.

• Asia Ex-Japan Investment Grade CDS Index 100.25 unch.

• China Sovereign CDS 62.75 unch.
  
• China Iron Ore Spot 131.8 USD/Metric Tonne +.11%.

• Bloomberg Emerging Markets Currency Index 41.6 -.06%.
• Bloomberg Global Risk-On/Risk Off Index 57.6 +.3%.
  
• Bloomberg US Financial Conditions Index .51 +1.0 basis point.
  
• Volatility Index(VIX) futures 15.6 +.02%.
• Euro Stoxx 50 futures -.49%.

• S&P 500 futures -.06%.

• NASDAQ 100 futures -.02%.  

Morning Preview Links

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