Stocks Surging into Final Hour on US Economic "Soft-Landing" Hopes, Earnings Outlook Optimism, Technical Buying, Consumer Discretionary/Tech Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Modestly Lower
  

• Sector Performance: Most Sectors Gaining
  

• Volume: Above Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 14.4 -2.8%
• DJIA Intraday % Swing .82% +68.4%
  
• Bloomberg Global Risk On/Risk Off Index 59.6 +1.7%

• Euro/Yen Carry Return Index 173.5 -.13%

• Emerging Markets Currency Volatility(VXY) 7.5 -1.2%

• CBOE S&P 500 Implied Correlation Index 20.0 -4.1% 

• ISE Sentiment Index 137.0 +26.0
  

• Total Put/Call .94 -6.0%

• NYSE Arms 1.54 -.7% 
• NYSE Non-Block Money Flow +$56.5M 
  

Credit Investor Angst:

• North American Investment Grade CDS Index 56.0 -.97%
  

• US Energy High-Yield OAS 337.60 +.14%
• Bloomberg TRACE # Distressed Bonds Traded 326 +13
  

• European Financial Sector CDS Index 70.83 -2.9% 
• Deutsche Bank Subordinated 5Y Credit Default Swap 211.79 -3.4%
  

• Italian/German 10Y Yld Spread 158.0 basis points -2.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 102.5 -1.0%
  

• Emerging Market CDS Index 179.18 -1.1%
• Israel Sovereign CDS 120.14 +.02%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 24.4 unch.

• 2-Year SOFR Swap Spread -16.75 basis points -.75 basis point
  

• Treasury Repo 3M T-Bill Spread 5.0 basis points -2.0 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -4.0 +1.0 basis point
  
• MBS  5/10 Treasury Spread 144.0 -3.0 basis points
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 946.0 -4.0 basis points
  
• Avg. Auto ABS OAS 74.0 -2.0 basis points
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 40.9 +.02%
• 3-Month T-Bill Yield 5.35% -2.0 basis points
  

• China Iron Ore Spot 127.8 USD/Metric Tonne -1.3%
• Dutch TTF Nat Gas(European benchmark) 27.9 euros/megawatt-hour +.7%

• Citi US Economic Surprise Index 4.9 +3.5 points

• Citi Eurozone Economic Surprise Index -13.2 +.7 point

• Citi Emerging Markets Economic Surprise Index 6.4 unch.
• S&P 500 Current Quarter EPS Growth Rate YoY(36 of 500 reporting) -3.9% -2.8 percentage points
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 243.70 -.14:  Growth Rate +10.0% -1.9 percentage points, P/E 19.5 +.1
  
• S&P 500 Current Year Estimated Profit Margin 11.73% -3.0 basis points
  
• 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 292.15 +.12: Growth Rate +37.0% +.1 percentage point, P/E 30.0 +.4
  
• Bloomberg US Financial Conditions Index .88 -3.0 basis points
  
• Bloomberg Euro-Zone Financial Conditions Index .81 +1.0 basis point
  
• US Yield Curve -21.75 basis points (2s/10s) +3.25 basis points
  
• US Atlanta Fed 4Q GDPNow Forecast +2.39% +18.0 basis points
  
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 65.6% -1.5 percentage points
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +3.02% unch.: CPI YoY +2.96% unch.
  
• 10-Year TIPS Spread 2.35 +5.0 basis points
  
• Highest target rate probability for March 20th FOMC meeting: 55.7%(+1.9 percentage points) chance of 5.0%-5.25%. Highest target rate probability for May 1st meeting: 45.4%(-1.5 percentage points) chance of 5.0%-5.25%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +594 open in Japan 
• China A50 Futures: Indicating -80 open in China

• DAX Futures: Indicating +141 open in Germany

Portfolio:

• Higher:  On gains in my tech/biotech/consumer discretionary/industrial sector longs
  

• Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges and some of my emerging market shorts
  

• Market Exposure: Moved to 100% Net Long
  

Bear Radar

Style Underperformer:

• Small-Cap Growth +.1%
  

Sector Underperformers:

• 1) Healthcare Providers -1.7% 2) Alt Energy -1.6% 3) Utilities -1.4%

Stocks Falling on Unusual Volume: 

• ABVX, KVYO, KEY, CNMD, BIRK, IRBT, HUM, DFS and VRDN
  

Stocks With Unusual Put Option Activity:

• 1) PTEN 2) BVN 3) BALL 4) BMBL 5) DFS
  

Stocks With Most Negative News Mentions:

• 1) SAVE 2) PLUG 3) DFS 4) CHPT 5) BIRK
  

Charts:

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

Bull Radar

Style Outperformer:

• Large-Cap Growth +.6%
  

Sector Outperformers:

• 1) Gambling +2.8% 2) Semis +2.5% 3) Road & Rail +1.4%

Stocks Rising on Unusual Volume:

• NVCR, MDC, RAMP, BTU, TSM, DWAC, FAST, VECO, DKNG, SNV, CAMT, UCTT, FHN, PI, IGMS, HCC, CZR, ARM, COHR, BA, ISRG, ASML and LRCX
  

Stocks With Unusual Call Option Activity:

• 1) PCG 2) GT 3) TSM 4) MCHI 5) MRVL

Stocks With Most Positive News Mentions:

• 1) MRAI 2) RAMP 3) FAST 4) MRVL 5) MDC
  

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:

• (ALLY)/.44
• (CMA)/.90
• (FITB)/.77
• (HBAN)/.12
• (RF)/.46
• (SLB)/.84
• (STT)/1.83
• (TRV)/5.08
  

After the Close: 

• None of note
  

Economic Releases

8:30 am EST 

• Univ. of Mich. Consumer Sentiment for Jan. is estimated to rise to 70.1 versus 69.7 in Dec.
• Univ. of Mich. 1Y Inflation Expectations Index for Jan. is estimated at +3.1% versus a +3.1% gain in Dec.
• Existing Home Sales for Dec. is estimated to rise to 3.83M versus 3.82M in Nov.
  

4:00 pm EST

• Net Long-Term TIC Flows for Nov.
  

Upcoming Splits 

• None of note
  

Other Potential Market Movers

• The Fed's Barr speaking, Fed's Daly speaking, Atlanta Fed GDPNow Q4 Update, US Government funding deadline, CFTC speculative net positioning reports and the US Baker Hughes Rig Count 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 +9.3% Above 100-Day Average 
• Nasdaq/NYSE Volume Ratio 11.2 +1.1
  
• 8 Sectors Declining, 3 Sectors Rising
• 36.4% of Issues Advancing, 60.9% Declining 
• TRIN/Arms 1.64 +5.8% 
• Non-Block Money Flow -$47.1M
  
• 48 New 52-Week Highs, 40 New Lows
• 57.1%(-.3%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 46.0 -2.0
  

Other:

• Bloomberg Global Risk-On/Risk-Off Index 59.3 +1.2%
• Bloomberg Cyclicals/Defensives Pair Index 136.6 +.4%
  
• Russell 1000: Growth/Value 18,987.3 +1.2%
• CNN Fear & Greed Index 63.0 (Greed) +2.0
• 1-Day Vix 10.4 -8.5%
  
• Vix 14.7 -.7%
  
• Total Put/Call .97 -3.0%

Thursday Watch

Evening Headlines

Bloomberg:

• Third Commercial Ship in a Week Struck by a Drone Near Yemen.
• China Downplays Big Stimulus in 2024, Testing Investor Patience.
• Australian Jobs Unexpectedly Slump, Boosting Rate-Cut Bets.
• Japan Stocks Are Gaining on China as World-Beating Rally Extends.
• TSMC’s $59 Billion Rally May Extend on AI Demand: Tech Watch.
• Liquidity Risks Are Worrying IMF Amid High Debt, Gopinath Says.
• Asia Mixed as Rate Cut Doubts Hit US Stocks, Bonds: Markets Wrap.
• Oil Gains Ground as Traders Gauge Impact of Middle East Crisis.
• Apple Must Stop Selling Watches With Blood Oxygen Feature.
• Coinbase Compares Buying Crypto to Collecting Beanie Babies.
• Goodyear to Name Stellantis Exec as CEO After Elliott Push.
• You Switched the Lights On. Traders Made Billions of Dollars.
• Real Estate Stocks Tumble as Traders Reassess March Rate Cut Bets. 
• Harvard, Elite College Backlash Seen Pressuring Billions of Debt.

Zero Hedge:

• Watch: The Most Ridiculous 75 Seconds Of Bullshit From Davos Yet On "Ecocide"
• Increasing Psychopathic Behavior Is A Sign That Society Is On The Verge Of Breaking Down
• Iran, Pakistan On Brink Of Military Conflict Following Missile Strike - China Urges Calm
• Parents Are Winning The Battle For School Choice.
• Cold Blast Takes Half Of North Dakota's Oil Production Offline.
• DNA Contaminants In COVID Vaccines Are 'Beyond The Pale': Florida Surgeon General.
• Jim Jordan Demands Answers After Biden Admin Caught Flagging "MAGA" And "Trump" To Track Political Opponents' Financial Transactions.
• Yet Another Recession Red Flag: Net Saving Is Negative.
• "The Western World Is In Danger": Milei Warns Of DEI Doom, As Dimon Touts Trump On 'Critical Issues'.
• OpenAI Attempts To Dispel Fears Of AI-Meddling In Elections.
• US stocks declined as some of dovish rate cut bets unwound - Newsquawk Asia-Pac Market Open.
• US stocks declined as some of dovish rate cut bets unwound - Newsquawk Asia-Pac Market Open.
• Surging rates and stuck equities.
• I Can't Believe This Is A Real Science Class At A Real University.
• WTI Maintains Gains After API Reports Unexpected Crude Build.
• Rate cut expectations unwind after hot UK CPI and US Retail Sales - Newsquawk US Market Wrap.
• The 'Arms Race' For Fake AI Election Content Is On.
• 'Good News Is Bad News' As Goldilocks Reality-Check Wrecks Dovish Dreams.
• Container Lines Scramble To Rent More Ships Amid Red Sea Crisis.

Wall Street Journal:

• For a Cheap Home in Hawaii, Try a Lava Zone.
• Americans Are Ditching Weeknight Fun. Can They Be Tempted Back?
• Israel’s War in Gaza Enters Its Most Perilous Phase Yet.
• Your Healthspan Is as Important as Your Lifespan—and It’s Declining.
• China’s Population Decline Accelerates.

CNBC.com:

• Failed JetBlue buyout leaves Spirit Airlines with a tough path forward
• Sheryl Sandberg says she’s leaving Meta’s board
• Cramer lists his major themes for the market in 2024
• Jamie Dimon warns ‘all these very powerful forces’ will impact U.S. economy in 2024 and 2025
• The weight loss drug market may get more crowded. Here are the companies trying to enter the space

Fox News:

• Biden's DOJ finally confirms Hunter's laptop is real, contents match Apple iCloud backups.
• All eyes on NH's independent voters after reports of Dems meddling for Haley in Iowa.
• 'Squad' lawmaker explains 'creative' way to pay $14 trillion in reparations.

TheGatewayPundit.com:

• “Long Live Freedom” — Argentinian President Javier Milei Trashes Socialism and Calls Out Elites at WEF (VIDEO).
• RIDICULOUS: After Indicting The Leading Presidential Candidate and Destroying America, Kamala Harris Calls Trump an “Existential Threat to Our Democracy,” Who “Took Rights and Liberties From The American people” (VIDEO)
• E. Jean Carroll Admits to Deleting Evidence Under Subpoena – Clinton Judge Kaplan Rushes to Her Defense!
• HOLY HELL! Another Elitist Freak Show… Demonic Witch Mumbles Incantations, Hexes Stage, Blows Air at Attendees… Welcome to Davos!
• IT ALL MAKES SENSE NOW: Biden’s DC District Attorney Matthew Graves Represented Terrorist-Supporting State Qatar and Foreign Banks Financing Terror.
• Golden State Warriors Assistant Coach Dead at 46 After Heart Attack.
• JUST IN: Maine Court Orders Trump Back on Ballot Pending SCOTUS Ruling.
• Trump Tops New Hampshire Poll With 50 Percent Support, Haley Trails With 34, DeSantis Below ‘Undecided’ at 5 Percent.
• JPMorgan CEO and Dem Donor Jamie Dimon Defends Trump and MAGA — Calls Out Democrats for Demonizing Millions of Americans: ‘Democrats Need to Grow Up’.
• Exposed: Moderna’s Vaccine Against Vaccine Dissent.
• WOW! Did Kamala Harris Just Admit the Biden-Harris 2024 Plan is to Run ‘Without an Opponent’? (VIDEO).
• The Who’s Roger Daltrey Blasts Scientists and Big Pharma: ‘They Don’t Want to Find a Cure for Cancer’.
• Bill Gates Says Next-Generation Vaccines to Offer ‘Longer Duration, More Coverage’ and Will Be Administered Needle-Free (VIDEO). 
• NOW YOU KNOW: The One County Out of 99 that Trump Lost in Iowa Ran Out of Party-Switch Forms on Caucus Night (VIDEO).

The Epoch Times:

• When and Who Should Stand Up for Taiwan.
• Chinese Lab Sequenced COVID-19 Weeks Before Beijing Disclosed Data.

OpenVAERS:

• VAERS US COVID Vaccine Adverse Event Reports. 997,917 Reports(+9,212 from prior week) Through November 3rd, 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 -.5% to +.25% on average.

• Asia Ex-Japan Investment Grade CDS Index 103.75 +3.5 basis points.

• China Sovereign CDS 69.25 +5.25 basis points.
  
• China Iron Ore Spot 126.5 USD/Metric Tonne +.53%.

• Bloomberg Emerging Markets Currency Index 40.93 +.04%.
• Bloomberg Global Risk-On/Risk Off Index 58.9 +.6%.
• Volatility Index(VIX) futures 15.4 -.8%.
• Euro Stoxx 50 futures +.02%.

• S&P 500 futures -.02%.

• NASDAQ 100 futures -.04%.  

Morning Preview Links

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