Stocks Slightly Lower into Final Hour on US Economic Data, Quad Witching Positioning, Technical Selling, Energy/Healthcare Sector Weakness

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 36.1 -.04%
• US 10-Year T-Note Yield 4.15% -3.0 basis points
• 3-Month T-Bill Yield 3.61% -1.0 basis point

• China Iron Ore Spot 103.1 USD/Metric Tonne +.5%
• Dutch TTF Nat Gas(European benchmark) 26.7 euros/megawatt-hour -2.4%

• Citi US Economic Surprise Index 8.0 -3.0 points

• Citi Eurozone Economic Surprise Index 32.4 +1.6 points

• Citi Emerging Markets Economic Surprise Index 30.9 -.3 point
• S&P 500 Current Quarter EPS Growth Rate YoY(2 of 500 reporting) +41.3% unch.
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 307.32 +.21:  Growth Rate +14.2% +.1 percentage point, P/E 22.1 -.1
• S&P 500 Current Year Estimated Profit Margin 13.49% unch.
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(0 of 10 reporting) +n/a +n/a
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 516.63 +.68: Growth Rate +25.7% +.1 percentage point, P/E 30.6 -.1
• Bloomberg US Financial Conditions Index .68 -4.0 basis points
• Bloomberg Euro-Zone Financial Conditions Index 1.41 +6.0 basis points
• Bloomberg Global Trade Policy Uncertainty Index 1.5 unch.
• US Yield Curve 66.75 basis points (2s/10s) -.5 basis point
• US Atlanta Fed GDPNow Q2 Forecast +3.5% -10.0 basis points
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 28.1% +.8 percentage point

• Cleveland Fed Inflation Nowcast Core PCE YoY +2.76% unch.: CPI YoY +2.96% unch.
• 1-Year TIPS Spread 2.26 -12.0 basis points
• 10-Year TIPS Spread 2.23 -3.0 basis points
• Highest target rate probability for March 18th FOMC meeting: 46.0% (-3.0 percentage points) chance of 3.5%-3.75%. Highest target rate probability for April 29th meeting: 44.8%(+.8 percentage point) chance of 3.25%-3.5%. (current target rate is 3.5-3.75%)
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +475 open in Japan 
• China A50 Futures: Indicating -9 open in China

• DAX Futures: Indicating +175 open in Germany

Portfolio:

• Higher: On gains in my tech sector longs, index hedges and emerging market shorts
• Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges
• Market Exposure: Moved to 75% Net Long

Bear Radar

Style Underperformer:

• Mid-Cap Value -1.0%

Sector Underperformers:

• 1) Oil Service -4.2% 2) Energy -3.2% 3) Healthcare Providers -1.9%

Stocks Falling on Unusual Volume: 

• XEL, ELP, MUFG, INSP, BP, HLIO, NKTR, MOS, ABVX, PFE, CPNG, KYTX, RDNT, CORT, BAH, AXTI, VITL, DXYZ and NAVN

Stocks With Unusual Put Option Activity:

• 1) EQNR 2) XOP 3) CARR 4) WGMI 5) RILY

Stocks With Most Negative News Mentions:

• 1) IRBT 2) NAVN 3) VITL 4) CRWV 5) STUB

Sector ETFs With Most Negative Money Flow:

• 1) XLE 2) XLV 3) FXR 4) XLF 5) ARKK

Charts:

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

Bull Radar

Style Outperformer:

• Large-Cap Growth -.2%

Sector Outperformers:

• 1) Education +2.0% 2) Software +.4% 3) Computer Hardware +.32%

Stocks Rising on Unusual Volume:

• VOR, GLUE, AFRM, SEZL, CRCL, PVLA, CLPT, UPB, NTSK, MIRM, UBS, CGNX, RH, CMCSA, IMNM, STAA, JMIA, ZG, SLDE, EL, GLIBK and KMTS

Stocks With Unusual Call Option Activity:

• 1) ECH 2) MGNI 3) GGAL 4) ALDX 5) PZZA 

Stocks With Most Positive News Mentions:

• 1) RILY 2) TLRY 3) RZLV 4) AFRM 5) GLUE

Sector ETFs With Most Positive Money Flow:

• 1) MISL 2) XBI 3) SOXX 4) XLP 5) VGT

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:

• (ABM)/1.09
• (GIS)/1.03
• (JBL)/2.70
• (TTC)/.87 
• (WS)/.39 

After the Close: 

• (MU)/3.96
• (MLKN)/.41 

Economic Release 

10:00 am EST

• Business Inventories MoM for Sept.
• Retail Inventories Ex Autos MoM for Sept. 

10:30 am EST

• Bloomberg Consensus estimates call for a weekly crude oil inventory decline of -2,426,170 barrels versus a -1,812,000 barrel decline the prior week. Gasoline supplies are estimated to rise by +1,427,170 barrels versus a +6,397,000 barrel gain the prior week. Distillate inventories are estimated to fall by -439,000 barrels versus a +2,502,000 barrel gain the prior week.

Upcoming Splits

• None of note

Other Potential Market Movers

• The Fed's Bostic speaking, Fed's Williams, Fed's Waller speaking, 20Y T-Note auction, weekly MBA Mortgage Applications report and the (AZO) annual meeting 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 -13.8% Below 100-Day Average 
• Nasdaq/NYSE Volume Ratio 12.2 -1.1
• 9 Sectors Declining, 2 Sectors Rising
• 37.7% of Issues Advancing, 59.7% Declining 
• TRIN/Arms 1.07 -7.8%
• Non-Block Money Flow -$26.9M
  
• 50 New 52-Week Highs, 33 New Lows
• 63.1% (-2.2%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 56.4 -3.9

Polymarket:

• Supreme Court Rules in Favor of Trump's Tariffs? 28.0% +1.0 percentage point
• Will there be another US government shutdown by January 31st? 34.0% +1.0 percentage point
• Will China invade Taiwan by end of 2026? 13.0% -1.0 percentage point
• US-Venezuela military engagement by Jan. 31st 33.0% +2.0 percentage points

Other:

• Bloomberg Global Risk-On/Risk-Off Index 93.1 -1.4%
• US High-Yield Tech Sector OAS Index 439.75 +8.5 basis points
• Bloomberg Cyclicals/Defensives Index 262.9 unch.
• Morgan Stanley Growth vs Value Index 157.9 +.6%
• CNN Fear & Greed Index 46.0 (Moved to NEUTRAL from FEAR) +3.0
• 1-Day Vix 10.8 -16.3%
  
• Vix 16.9 +2.3%
  
• Total Put/Call .87 -1.1%

Tuesday Watch

Around X:

• @Business  

• Vigils in Australia and across the world have marked the Bondi Beach massacre of Jews celebrating Hanukkah, an attack that’s fueled pressure for tougher gun laws and mounting anger within the Jewish community. 
• A gofundme page for the bystander who tackled and disarmed one of the Bondi Beach shooters is nearing $2 million after his bravery won praise from US President Trump and hedge fund billionaire Bill Ackman.
• Shock over a shooting rampage at Brown University over the weekend is giving way to frustration over the lack of video footage and suspects.
• Nasdaq, the second-largest exchange in the US, is looking for regulatory approval to extend trading hours on its stock venues to 23 hours during the work week.
• Madison Air filed confidentially for a US IPO, a signal that more industrial companies are joining the pipeline to go public in the new year. 
• The queue for power-intensive customers looking to tap into New York’s energy grid has surged as the boom for AI and growth in large-scale manufacturing drive electricity demand, according to one of the state’s utility providers.
• UPS will invest $120 million in 400 robots used to unload trucks, according to sources, revealing new details on the logistics giant’s $9 billion automation plan. 
• Get up to speed on what's moving global markets.
• Here's what you need to know to start your day.   

• @ZeroHedge

• Clinton Judge Orders Destruction Of Key Evidence In Case Against James Comey.
• November Jobs Preview: "The Asymmetry Is Towards A Negative Surprise".
• Access To Electricity Is Holding Back Growth Across The Global Economy.
• Supertankers Bound For Venezuela Make U-Turns, Fearing US Interdiction, As PDVSA Hit By Cyberattack
  . 
• Update: “Several media outlets quoted students and other witnesses saying that the shooter yelled ‘Allahu Akbar’ before opening fire in the building.” Waiting for official confirmation…
• Image from Mars vs Image from Providence Rhode Island surveillance footage of Brown University shooter. (pic)
• JUST IN: Police release new surveillance footage of a person of interest in the Brown University shooting. The man is seen in dark clothing with a mask over his face. Special agent in charge of the FBI Boston office Ted Docks says they are now offering a $50,000 reward for information leading to the arrest of the gunman. Docks says the gunman should be considered armed and dangerous. 
• 10 Major Laws Taking Effect In California In 2026.
• National (Energy) Security Strategy.
• The Evidence Is Clear: Masks Don't Do Anything...
• Free And Fair?
• Crypto Carnage Continues, Bonds & Stocks Mixed Ahead Of Catalyst-Heavy Week. 

• @CNBC

• CNBC Daily Open: Debt worries continue to weigh on AI-related stocks.
• Analysts say a luxury eyewear giant could be the next AI winner.
• Asia-Pacific markets set for mixed open as AI sell-off on Wall Street continues
  . 
• Tuesday's big stock stories: What’s likely to move the market in the next trading session
  . 
• Stock futures are little changed as traders await payrolls report: Live updates
  .
• Tesla stock closes at 2025 high after Musk confirms driverless Robotaxi tests underway in Austin
  .  
• New Trump tariffs collection hits $200 billion, Customs says
  .
• Ford to record $19.5 billion in special charges related to EV pullback
  .  

• @WSJ  

• Union membership in the U.S. is in steep decline. Two experts debate whether a revival is possible.
• American fans of former New Zealand prime minister Jacinda Ardern imagined her a moderate. A new documentary leaves no doubt that she’s a creature of the progressive left. 
• The manhunt for the gunman in Saturday’s deadly shooting at Brown University has stretched into a third day, with police sharing new footage of a potential suspect.
• A “terrifying” new era of warfare is forcing America to rethink its tools and tactics as it prepares for great-power conflict with China.
• The wealthy have a whole other stock market—and you’re not invited.

Night Trading 

• Asian equity indices are -1.5% to -.75% on average. 
• Asia Ex-Japan Investment Grade CDS Index 65.25 +.75 basis point.
• China Sovereign CDS 42.75 -.24 basis point.
• China Iron Ore Spot 102.6 USD/Metric Tonne +1.1%. 
• Swiss Franc/Offshore Chinese Renminbi Cross 8.85 -.02%.
• Bloomberg Emerging Markets Currency Index 36.15 -.01%.
• Bloomberg Global Risk-On/Risk Off Index 93.6 -.8%.
• US 10-Year Yield 4.16% -1.0 basis point.
• Japan 30-Year Yield 3.37% unch. 
• Volatility Index(VIX) futures 18.9 +1.7%.
• Euro Stoxx 50 futures -.54%. 
• S&P 500 futures -.52%.
• NASDAQ 100 futures -.79%.

Morning Preview Links

BOTTOM LINE: Asian indices are lower, weighed down by technology and commodity shares in the region. I expect US stocks to open modestly lower and to maintain losses into the afternoon.  The Portfolio is 25% net long heading into the day.