Tuesday Watch

Night Trading 

• Asian equity indices are -.25% to +.5% on average.

• Asia Ex-Japan Investment Grade CDS Index 99.0 -.5 basis point.

• China Sovereign CDS 62.0 +.5 basis point.
  
• China Iron Ore Spot 134.5 USD/Metric Tonne -.41%.

• Bloomberg Emerging Markets Currency Index 41.5 unch.
• Bloomberg Global Risk-On/Risk Off Index 62.8 +1.5%.
  
• Bloomberg US Financial Conditions Index .58 -2.0 basis points.
  
• Volatility Index(VIX) futures 14.8 -.2%.
• Euro Stoxx 50 futures +.09%.

• S&P 500 futures +.02%.

• NASDAQ 100 futures +.10%.  

Morning Preview Links

BOTTOM LINE: Asian indices are mostly higher, boosted by consumer and technology shares in the region. I expect US stocks to open modestly higher and to weaken into the afternoon, finishing mixed.  The Portfolio is 75% net long heading into the day.

Stocks Reversing Higher into Final Hour on Stable Long-Term Rates, Buyout Speculation, AI Implementation Optimism, Tech/Consumer Discretionary Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Modestly Lower
  

• Sector Performance: Most Sectors Rising
  

• Volume: Around Average

• Market Leading Stocks: Outperforming
  

Equity Investor Angst:

• Volatility(VIX) 12.6 +2.4%
• DJIA Intraday % Swing .39% -31.2%
  
• Bloomberg Global Risk On/Risk Off Index 61.7 +1.4%

• Euro/Yen Carry Return Index 168.66 +.77%

• Emerging Markets Currency Volatility(VXY) 7.90 -.13%

• CBOE S&P 500 Implied Correlation Index 19.6 -3.4% 

• ISE Sentiment Index 150.0 +28.0
  

• Total Put/Call .94 +4.44%

• NYSE Arms .99 +51.5% 
• NYSE Non-Block Money Flow +$108.2M 
  

Credit Investor Angst:

• North American Investment Grade CDS Index 61.4 -.45%
  

• US Energy High-Yield OAS 359.59 +1.7%
• Bloomberg TRACE # Distressed Bonds Traded 361 -16.0
  

• European Financial Sector CDS Index 75.70 -.12% 
• Deutsche Bank Subordinated 5Y Credit Default Swap 213.10 -3.9%
  

• Italian/German 10Y Yld Spread 180.0 basis points +5.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 99.57 -.09%
  

• Emerging Market CDS Index 184.42 -.56%
• Israel Sovereign CDS 114.53 +4.9%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 25.57 +.18%

• 2-Year SOFR Swap Spread -19.5 basis points unch.
  

• TED Spread 25.5 basis points +.25 basis point
  

• 3-Month EUR/USD Cross-Currency Basis Swap -10.5 -1.5 basis points
  
• MBS  5/10 Treasury Spread 148.0 -1.0 basis point
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 960.0 +8.0 basis points
  
• Avg. Auto ABS OAS 83.0 unch.
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 41.5 -.22%
• 3-Month T-Bill Yield 5.38% -1.0 basis point
  

• China Iron Ore Spot 134.3 USD/Metric Tonne -.52%
• Dutch TTF Nat Gas(European benchmark) 36.1 euros/megawatt-hour -6.4%

• Citi US Economic Surprise Index 17.2 -3.1 points

• Citi Eurozone Economic Surprise Index -19.4 +1.6 points

• Citi Emerging Markets Economic Surprise Index 24.8 -1.4 points
• S&P 500 Current Quarter EPS Growth Rate YoY(1 of 500 reporting) +10.1% n/a
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 242.88 +.53:  Growth Rate +11.5% +2.1 percentage points, P/E 19.0 +.1
  
• S&P 500 Current Year Estimated Profit Margin 12.11% unch.
  
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(0 of 10 reporting) +0.0% -0.0 percentage points
  
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 285.80 +6.88: Growth Rate +37.2% +3.2 percentage points, P/E 28.4 -.5
  
• Bloomberg US Financial Conditions Index .60 -1.0 basis point
  
• Bloomberg Euro-Zone Financial Conditions Index .34 +2.0 basis points
  
• US Yield Curve -49.25 basis points (2s/10s) -.5 basis point
  
• US Atlanta Fed 4Q GDPNow Forecast +1.25% unch.
  
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 52.2% -5.3 percentage points
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +3.46% unch.: CPI YoY +3.04% unch.
  
• 10-Year TIPS Spread 2.20 -1.0 basis point
  
• Highest target rate probability for Jan. 31st FOMC meeting: 94.4%(+1.2 percentage points) chance of 5.25%-5.5%. Highest target rate probability for March 20th meeting: 55.4%(+2.0 percentage points) chance of 5.25%-5.5%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +302 open in Japan 
• China A50 Futures: Indicating +28 open in China

• DAX Futures: Indicating +41 open in Germany

Portfolio:

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

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

• Market Exposure: Moved to 100% Net Long
  

Bear Radar

Style Underperformer:

• Large-Cap Growth +.1%
  

Sector Underperformers:

• 1) Telecom -.9% 2) Gold & Silver -.8% 3) Airlines -.5%

Stocks Falling on Unusual Volume: 

• UPST, SE, EDR, CRSP, GIL, KROS and BMEA
  

Stocks With Unusual Put Option Activity:

• 1) CARR 2) SABR 3) MBI 4) CAR 5) JCI
  

Stocks With Most Negative News Mentions:

• 1) SLRN 2) JD 3) LXEO 4) FSR 5) EXFY
  

Charts:

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

Bull Radar

Style Outperformer:

• Mid-Cap Growth +1.1%
  

Sector Outperformers:

• 1) Semis +3.8% 2) Networking +2.4% 3) Gambling +2.1%

Stocks Rising on Unusual Volume:

• M, CI, SAVA, GCT, MSS, HOLI, BPMC, AVGO, SNDX, SHAK, JWN, CHWY, BASE, UDMY, DOCU, AGRO, UNM, MDB, AMD and CAR
  

Stocks With Unusual Call Option Activity:

• 1) INVZ 2) NXPI 3) EDR 4) XLI 5) UAA

Stocks With Most Positive News Mentions:

• 1) CI 2) M 3) JTAI 4) AVGO 5) JWN
  

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:

• (FCEL)/-.08
• (JCI)/.70
  

After the Close: 

• None of note
  

Economic Releases

6:00 am EST

• The NFIB Small Business Optimism Index for Nov. is estimated at 90.7 versus 90.7 in Oct.
  

8:30 am EST

• The CPI MoM for Nov. is estimated unch. versus unch. in Oct.
• The CPI Ex Food and Engery MoM for Nov. is estimated to rise +.3% versus a +.2% gain in Oct.
• Real Avg. Weekly Earnings YoY for Nov.

2:00 pm EST

• The Monthly Budget Deficit for Nov. is estimated to widen to -302.1B versus -$248.5 in Oct.
  

Upcoming Splits 

• None of note
  

Other Potential Market Movers

• The 30Y bond auction, weekly US retail sales reports, EIA short-term energy outlook, API weekly crude oil stock report, (CNC) investor day, (LHX) investor day, (PANW) annual meeting and the (FRO) annual meeting could also impact global trading tomorrow.

US Equity Market Hours

• 9:30 am - 4:00 pm EST

Afternoon Market Internals

NYSE Composite Index:

• Volume Running +3.5% Above 100-Day Average 
• Nasdaq/NYSE Volume Ratio 11.3 -.4
  
• 1 Sector Declining, 10 Sectors Rising
• 50.2% of Issues Advancing, 47.1% Declining 
• TRIN/Arms .96 +45.45% 
• Non-Block Money Flow +$106.4M
  
• 101 New 52-Week Highs, 25 New Lows
• 53.9%(+.8%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 69.0 +3.0

Other:

• Bloomberg Global Risk-On/Risk-Off Index 61.5 +1.1%
  
• Russell 1000: Growth/Value 18,379.8 -.8%
  
• 1-Day Vix 11.1 +11.0%
  
• Vix 12.7 +2.5%
  
• Total Put/Call .95 +5.6%