Friday Watch

Night Trading 

• Asian equity indices are -.25% to +.25% on average. 
• Asia Ex-Japan Investment Grade CDS Index 63.75 +.25 basis point.
• China Sovereign CDS 42.75 -1.25 basis points.
• China Iron Ore Spot 103.2 USD/Metric Tonne -1.1%. 
• Swiss Franc/Offshore Chinese Renminbi Cross 8.80 -.01%.
• Bloomberg Emerging Markets Currency Index 36.27 -.01%.
• Bloomberg Global Risk-On/Risk Off Index 93.0 -.7%.
• US 10-Year Yield 4.09% -1.0 basis point.
• Japan 30-Year Yield 3.38% -2.0 basis points. 
• Volatility Index(VIX) futures 19.4 -.3%.
• Euro Stoxx 50 futures n/a. 
• S&P 500 futures +.13%.
• NASDAQ 100 futures +.23%.

Morning Preview Links

BOTTOM LINE: Asian indices are mostly higher, boosted by technology and financial shares in the region. I expect US stocks to open mixed and to rally into the afternoon, finishing modestly higher.  The Portfolio is 100% net long heading into the day.

Stocks Slightly Lower into Final Hour on Higher Long-Term Rates, Earnings Outlook Jitters, Profit-Taking, Consumer Discretionary/Pharma Sector Weakness

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 36.3 -.02%
• US 10-Year T-Note Yield 4.11% +4.0 basis points
• 3-Month T-Bill Yield 3.70% -2.0 basis points

• China Iron Ore Spot 104.4 USD/Metric Tonne +.1%
• Dutch TTF Nat Gas(European benchmark) 27.1 euros/megawatt-hour -4.0%

• Citi US Economic Surprise Index 10.5 +7.7 points

• Citi Eurozone Economic Surprise Index 24.7 -.1 point

• Citi Emerging Markets Economic Surprise Index 30.8 +3.4 points
• S&P 500 Current Quarter EPS Growth Rate YoY(492 of 500 reporting) +13.0% unch.
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 305.59 +.14:  Growth Rate +13.6% unch., P/E 22.4 unch.
• S&P 500 Current Year Estimated Profit Margin 13.48% -1.0 basis point
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(9 of 10 reporting) +17.5% unch.
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 509.40 +.37: Growth Rate +24.1% +.1 percentage point, P/E 32.4 -.1
• Bloomberg US Financial Conditions Index .66 +2.0 basis points
• Bloomberg Euro-Zone Financial Conditions Index 1.52 +5.0 basis points
• Bloomberg Global Trade Policy Uncertainty Index 1.9 +.5
• US Yield Curve 57.75 basis points (2s/10s) +1.75 basis points
• US Atlanta Fed GDPNow Q2 Forecast +3.8% -.1 percentage point
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 30.7% -1.8 percentage points

• Cleveland Fed Inflation Nowcast Core PCE YoY +2.85% unch.: CPI YoY +2.96% unch.
• 1-Year TIPS Spread 2.58 +1.0 basis point
• 10-Year TIPS Spread 2.27 +2.0 basis points
• Highest target rate probability for Jan. 28th FOMC meeting: 64.1% (-1.1 percentage points) chance of 3.5%-3.75%. Highest target rate probability for March 18th meeting: 44.6%(+2.2 percentage points) chance of 3.5%-3.75%. (current target rate is 3.75-4.0%)
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -438 open in Japan 
• China A50 Futures: Indicating -35 open in China

• DAX Futures: Indicating +30 open in Germany

Portfolio:

• Slightly Higher: On gains in my industrial/tech/utility sector longs 
• Disclosed Trades: None
• Market Exposure: 100% Net Long

Bear Radar

Style Underperformer:

• Large-Cap Growth -.1%

Sector Underperformers:

• 1) Homebuilding -1.3% 2) Gambling -1.12% 3) Pharma -1.0%

Stocks Falling on Unusual Volume: 

• SCHL, KR, MDU, ARE, MBX, MEDP, PHVS, ACLX, PHG, CHA, PVH, SNOW, PTRN, BBW, QURE, CAPR, SYM and SUPX

Stocks With Unusual Put Option Activity:

• 1) CIEN 2) DG 3) HTZ 4) SO 5) PATH

Stocks With Most Negative News Mentions:

• 1) SYM 2) HOV 3) PVH 4) GCO 5) SNOW

Sector ETFs With Most Negative Money Flow:

• 1) XLF 2) XLE 3) XLK 4) IDU 5) IBB

Charts:

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

Bull Radar

Style Outperformer:

• Small-Cap Growth +1.7%

Sector Outperformers:

• 1) Nuclear +4.6% 2) Computer Hardware +2.7% 3) Defense +2.6%

Stocks Rising on Unusual Volume:

• PATH, USAR, AXGN, BIOA, ASTS, FLNG, EOSE, AEVA, SAIC, EYPT, OKLO, SMR, DSGX, BE, DG, LUNR, IONQ, VKTX, MPLT, SNDK, KROS, SERV, AVTX, WYFI, NVA, RKLB, KALV, FLY, DCI, ATRC, OCUL, NGNE, BAH, DXYZ, NTSK, FTK, DXYZ, CHOW, PRCT, GEV, JMIA, SITM, COHR, FLOC, BAP, OII, AVBP, CBLL, OMDA, SKWD, UTI, MIDD, IDYA, UPB, LC, CNK, ALK, MXL, MCHB, META, CRM, KLIC, CALM, CM, EGBN, IMAX, ZIM, CHAC, HRL, IVZ, TPR and TTAN

Stocks With Unusual Call Option Activity:

• 1) CCCC 2) RBRK 3) DG 4) IVZ 5) VALE 

Stocks With Most Positive News Mentions:

• 1) PATH 2) DG 3) AXGN 4) BIOA 5) DCI

Sector ETFs With Most Positive Money Flow:

• 1) XLY 2) KRE 3) VGT 4) XBI 5) ARKK

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:

• (VSCO)/-.59

After the Close: 

• None of note

Economic Release 

10:00 am EST

• Personal Income for Sept. is estimated to rise +.3% versus a +.4% gain in Aug.
• Personal Spending for Sept. is estimated to rise +.3% versus a +.6% gain in Aug.
• The Core PCE Price Index MoM for Sept. is estimated to rise +.2% versus a +.2% gain in Aug.
• The University of Michigan Consumer Confidence Index for Dec. is estimated to rise to 52.0 versus 51.0 in Nov.
• The Univ. of Michigan 1Y Inflation Expectations Index for Dec. is estimated to rise +4.4% versus a prior expected gain of +4.5% in Nov. 

3:00 pm EST

• Consumer Credit for Oct. is estimated at $10.48B versus $13.093B in Sept. 

Upcoming Splits

• (NOW) 5-for-1

Other Potential Market Movers

• The (MSFT) annual meting, (SLG) investor meeting, (CPRT) annual meeting and the American Society of Hematology 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 -9.8% Below 100-Day Average 
• Nasdaq/NYSE Volume Ratio 11.7 -2.1
• 4 Sectors Declining, 7 Sectors Rising
• 52.0% of Issues Advancing, 45.4% Declining 
• TRIN/Arms .60 -51.2%
• Non-Block Money Flow +$7.4M
  
• 116 New 52-Week Highs, 17 New Lows
• 62.0% (-.8%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 60.0 +2.1

Polymarket:

• Supreme Court Rules in Favor of Trump's Tariffs? 28.0% +2.0 percentage point
• Will there be another US government shutdown by January 31st? 32.0% +4.0 percentage points
• Will China invade Taiwan by end of 2026? 14.0% -1.0 percentage point
• US-Venezuela military engagement by Dec. 31st 38.0% -7.0 percentage points

Other:

• Bloomberg Global Risk-On/Risk-Off Index 93.4 +1.6%
• US High-Yield Tech Sector OAS Index 413.0 -4.5 basis points
• Bloomberg Cyclicals/Defensives Index 258.7 +.3%
  
• Morgan Stanley Growth vs Value Index 162.2 +1.0%
• CNN Fear & Greed Index 39.0 (FEAR) +12.0 points
• 1-Day Vix 9.2 -6.1%
  
• Vix 16.0 -.3%
  
• Total Put/Call .79 -7.1%