Stocks Falling into Final Hour on AI Infrastructure Build Out Worries, Rising US/Venezuela Tensions, Technical Selling, Tech/Alt Energy Sector Weakness

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 36.01 -.20%
• US 10-Year T-Note Yield 4.15% unch.
• 3-Month T-Bill Yield 3.62% +2.0 basis points

• China Iron Ore Spot 104.2 USD/Metric Tonne +.5%
• Dutch TTF Nat Gas(European benchmark) 27.4 euros/megawatt-hour +2.2%

• Citi US Economic Surprise Index 2.9 -5.1 points

• Citi Eurozone Economic Surprise Index 30.5 -1.9 points

• Citi Emerging Markets Economic Surprise Index 31.4 +.5 point
• S&P 500 Current Quarter EPS Growth Rate YoY(5 of 500 reporting) +22.1% -19.2 percentage points
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 307.42 +.10:  Growth Rate +14.2% unch., P/E 21.9 -.2
• S&P 500 Current Year Estimated Profit Margin 13.50% +1.0 basis point
• 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 516.92 +.29: Growth Rate +25.8% +.1 percentage point, P/E 30.2 -.4
• Bloomberg US Financial Conditions Index .65 -3.0 basis points
• Bloomberg Euro-Zone Financial Conditions Index 1.43 +2.0 basis points
• Bloomberg Global Trade Policy Uncertainty Index 1.5 unch.
• US Yield Curve 66.5 basis points (2s/10s) -.25 basis point
• US Atlanta Fed GDPNow Q2 Forecast +3.5% unch.
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 28.3% +.2 percentage point

• Cleveland Fed Inflation Nowcast Core PCE YoY +2.76% unch.: CPI YoY +2.96% unch.
• 1-Year TIPS Spread 2.30 +4.0 basis points
• 10-Year TIPS Spread 2.24 +1.0 basis point
• Highest target rate probability for March 18th FOMC meeting: 46.0% (unch.) chance of 3.5%-3.75%. Highest target rate probability for April 29th meeting: 44.8%(unch.) chance of 3.25%-3.5%. (current target rate is 3.5-3.75%)
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -390 open in Japan 
• China A50 Futures: Indicating -86 open in China

• DAX Futures: Indicating -38 open in Germany

Portfolio:

• Slightly Lower: On losses in my tech/utility/industrial sector longs
• Disclosed Trades: Added to my (IWM)/(QQQ) hedges
• Market Exposure: Moved to 25% Net Long

Bear Radar

Style Underperformer:

• Large-Cap Growth -1.5%

Sector Underperformers:

• 1) Semis -3.8% 2) Nuclear -3.3% 3) AI/Innovation -3.3%

Stocks Falling on Unusual Volume: 

• PDD, CLS, ETN, PVLA, LOGI, AVGO, ORCL, HPP, TLRY, ARM, NRG, VOR, MOD, NVT, NKTR, GEV, EVCM, IMNM and HNRG

Stocks With Unusual Put Option Activity:

• 1) AVTR 2) ABR 3) EQNR 4) VTGN 5) GTM

Stocks With Most Negative News Mentions:

• 1) LEN 2) AVGO 3) CAT 4) BYND 5) CVAC

Sector ETFs With Most Negative Money Flow:

• 1) XLF 2) XLE 3) XBI 4) XLP 5) ARKK

Charts:

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

Bull Radar

Style Outperformer:

• Mid-Cap Value -.2%

Sector Outperformers:

• 1) Energy +1.1% 2) Restaurants +1.0% 3) Oil Service +1.0%

Stocks Rising on Unusual Volume:

• DBVT, TWO, KOD, HYMC, HUT, TTC, AERO, AXGN, NRDS, VIA, QURE, SGML, CBRL, CLW, SQM, PI, BRZE, LENZ, ABM, NTNX, DXYZ, MSI, STAA, DRI, STAA, BWLP, BROS and OMCL

Stocks With Unusual Call Option Activity:

• 1) VLY 2) URNM 3) XHB 4) BIRK 5) ES 

Stocks With Most Positive News Mentions:

• 1) MDLN 2) NTNX 3) UDMY 4) ICCM 5) RDDT

Sector ETFs With Most Positive Money Flow:

• 1) SOXX 2) GDX 3) XLI 4) IGF 5) IBB

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:

• (BIRK)/.36
• (KMX)/.33
• (CTAS)/1.20
• (DRI)/2.10
• (FDS)/4.36 
• (ACN)/3.74 

After the Close: 

• (BB)/.04
• (FDX)/4.12
• (HEI)/1.22
• (KBH)/1.79
• (AVO)/.23
• (NKE)/.37 

Economic Release 

8:30 am EST

• Initial Jobless Claims for last week is estimated to fall to 225K versus 236K the prior week.
• Continuing Claims is estimated to rise to 1922K versus 1838K prior.
• Real Avg. Weekly Earnings YoY for Nov.
• The Philly Fed Business Outlook for Dec. is estimated to rise to 2.3 versus -1.7 in Nov.
• The Kansas City Fed Manufacturing Activity Index for Dec. is estimated to fall to 6.0 versus 8.0 in Nov.

4:00 pm EST

• Net Long-Term TIC Flows for Oct.

Upcoming Splits

• None of note

Other Potential Market Movers

• The ECB Meeting, Fed's weekly balance sheet report and the (FDS) 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 -6.0% Below 100-Day Average 
• Nasdaq/NYSE Volume Ratio 12.4 +.2
• 5 Sectors Declining, 6 Sectors Rising
• 46.9% of Issues Advancing, 50.1% Declining 
• TRIN/Arms .82 -35.9%
• Non-Block Money Flow -$94.9M
  
• 51 New 52-Week Highs, 16 New Lows
• 62.7% (+.2%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 53.7 -2.7

Polymarket:

• Supreme Court Rules in Favor of Trump's Tariffs? 28.0% unch.
• Will there be another US government shutdown by January 31st? 35.0% +1.0 percentage point
• Will China invade Taiwan by end of 2026? 13.0% unch.
• US-Venezuela military engagement by Jan. 31st 33.0% unch.

Other:

• Bloomberg Global Risk-On/Risk-Off Index 93.5 +.1%
• US High-Yield Tech Sector OAS Index 442.0 +1.75 basis points
• Bloomberg Cyclicals/Defensives Index 263.2 -.1%
• Morgan Stanley Growth vs Value Index 156.6 -1.24%
• CNN Fear & Greed Index 46.0 (Moved to FEAR from NEUTRAL) -3.0
• 1-Day Vix 13.8 +15.2%
  
• Vix 17.1 +3.8%
  
• Total Put/Call .96 +3.2%

Wednesday Watch

Around X:

• @Business  

• US and Japan prepare to review energy projects as potential debut investments in a landmark $550 billion joint fund that was a centerpiece of their trade deal. 
• OpenAI is in discussions to raise at least $10 billion of investment from Amazon and use the online retailer’s AI chips, the Information reported.
• Companies embracing AI to recruit and hire people won’t threaten Indeed’s business model, as some investors fear, but rather help drive profit and sales growth at the No. 1 job-search portal, its CEO said.
• In a banner year for share sales in Asia, one bank has pulled far ahead of the rest: Morgan Stanley.
• Builder Lennar’s forecast for quarterly home orders missed analysts’ estimates as affordability pressures and the weakening job market pushes buyers to the sidelines.
• Get up to speed on what's moving global markets.
• Here's what you need to know to start your day.

• @ZeroHedge

• Side Effects Of 30 Antidepressants Ranked And Compared: Lancet Study. 
• Trump Orders Full Blockade Of Sanctioned Oil Tankers Off 'Terrorist' Venezuela.
• Will The US Hit A Deflationary Wall Or Will The Fed Inflate Again In 2026?  
• Short interest for the average stock is very high.
• I watched the entire press conference with an open mind. Providence and Brown are hiding something. Please go watch it for yourself. (video)
• The Trauma Of Inflation Hits Hard In 2025.  
• Does The Bondi Beach Massacre Prove Liberal Governments Love Mass Shootings?
• NEWS from @PunchbowlNews Defense. The White House is preparing an executive order that could limit stock buybacks, dividends and executive compensation for military contractors, according to multiple sources familiar with the discussions. The in-the-works directive, which targets some of the biggest companies that supply the Pentagon with warfighting equipment, has sent shockwaves through the defense industry. 
• *WAYMO RAISING MORE THAN $15 BILLION IN ALPHABET-LED ROUND. So Waymo, which is owned by Alphabet, is raising more money in a round led by its parent? 
• FBI Agents Thought Clinton's Uranium One Deal Might Be Criminal - But McCabe, Yates Stonewalled Investigation: Report.
• FDA Not Adding 'Black Box' Warning To COVID-19 Vaccines: Commissioner.
• Goldman Hedge Fund Honcho Offers "A Few Lessons From Market History".
• Pew Research's 'Most Striking' Findings From 2025.
• *US TOLD CHINA IT'S READY TO DEFEND INTERESTS IN INDO-PACIFIC.
• Bitcoin & Bonds Bid, Black Gold Skids Amid Payrolls, Peace-Talks, & Pummeling Brussels.  

• @CNBC

• CNBC Daily Open: Beware confirmation bias in U.S. jobs report for November.
• Wednesday's big stock stories: What’s likely to move the market in the next trading session.
• Asia-Pacific markets set to open mixed ahead of Japan trade data.
• Stock futures are little changed as traders absorb shaky U.S. economic data: Live updates.
• Why China’s young are flocking to government jobs in record numbers.

• @RenzTom

• All of MAGA most certainly does not love Susie. Susie was a managing partner at Mercury - a lobbying firm that represented Pfizer, GAVI, Gilead, Alibaba, and many other bad actors. She’s a Bush loyalist and controls the administration with an iron fist (Trump called her the most powerful woman in the world). Did you notice every single person in the administration had to pay something demonstrating their loyalty to her today after the interview where they literally quoted her (and this wasn’t the first interview where she ripped Trump). It wasn’t hit piece - it was her words. I’m MAGA. I’m MAHA. And I’m praying I’m wrong but everything I hear about her out of Washington is bad. Ask yourself why Bondi (a Susie pushed to be AG) and so many others won’t do anything to support Trump?

• @EmeraldRobinson

• Trump's chief of staff trashes the entire administration to a shitlib media outlet (after 11 interviews) and then gets the entire administration to pretend that there's nothing wrong on social media! The biggest PR disaster of the 21st century. (pic)
• Corrupt judges are clearly rigging the process so that it's impossible to prosecute disgraced FBI Director Comey. Why? Because the FBI is the entity which blackmails our elected officials and our judges. You're in the middle of a judicial coup against the rule of law. 
• Good morning. The corrupt uniparty is trying to save America's rigged voting machines by switching owners. Don't fall for it.

• @lsferguson

• Why is Pam Bondi letting the statute of limitations run out on January 6? Doesn't she realize unraveling January 6 will unravel the stolen 2020 Presidential election? Who's side is Bondi on? Can't she see the President want's action? (pic)

• @RWMaloneMD

• This is so, so dark. Fauci was not an outlier. He represents modern US mainstream medicine. (video)

• @BGatesIsaPsycho

• Holy Crap - Excess Mortality amongst the working age in America (18-49years) hit 40%!! Perhaps they were intended as a depopulation tool after all. Shocking data. (graph)

• @JamesOKeefeIII

• The reason ‘nobody is held accountable’ is because the bad guys bribe those who could theoretically hold them accountable. If that doesn’t work, threats of lawsuits and prison time. And if that doesn’t work… If you demand accountability, ask yourself if you would be willing to do the right thing even if they offer you millions to do the wrong thing, or threaten your family. Do not demand of others a moral standard you are not willing to hold yourself to. “But I’m different I did not go into public service.” That right there is why our world Is so broken. Be the change you wish to see. it starts with you. Set the example for others and your kids. Or shut up. That’s the only way we get out of this mess. Don’t agree you me? You tell me what the solution is if not that one above. Name a few DC people who are not self-interested. (News flash: they’re there to get money, get power and get laid) “But they’ll kill me if I tell the truth” Maybe. Maybe not. But since you all keep obsessing about death: Death comes to us all sooner or later. The outcome is the same. It’s just in one case you die in shame, which is the worst way to die. So get busy doing the right thing or get ready to die in shame.

• @EricLDaugh

• BOOM! JD VANCE: I have seen so many people who will say one thing to the president and then will do the exact opposite! AUDIENCE MEMBER: They are TRAITORS! VANCE: They ARE. (video)
• BREAKING: President Trump confirms the Senate GOP is STILL letting Democrats block his U.S. attorneys and judges through the "blue slip" tradition. "I am UNABLE to put anybody in office having to do with U.S. attorneys, or judges. If you have ONE Democrat senator in a state, it's not possible to appoint because of blue slips." "Blue slips are a DISGRACE. They should not be relevant anymore! This is a different world from 15-20 years ago!" He's right. FIX IT, SEN. GRASSLEY AND THUNE! (video)

• @RealHickory

• Only 20 days until the statute of limitations expires on one of the greatest crimes ever committed against the American people, Nancy Pelosi's J6 Insurrection hoax! After that, everyone involved will have gotten away with it. If that happens, that will be a worse crime! (pic)

• @SidneyPowell1

• This is a FREAKING OUTRAGE that should be terminated immediately NO more! Not another dime of taxpayer money. Do you hear us?? @LeaderJohnThune @SpeakerJohnson @realDonaldTrump STOP funding your friends or anyone else in NGOs through our hard-earned tax dollars.

• @LaraLogan

• This is outrageous - they are still tying to kill this woman because she captured real evidence of the theft of the 2020 election. (video)

• @rawsalerts

• Mustapha Kharbouch's now-deleted 2024 manifesto — published in the Institute for Palestine Studies — has been recovered by internet sleuths. (pic)

• @seanmdav

• Thune deliberately slow-walked Trump’s appointments and then refused to go into recess so he could block Trump from doing recess appointments. Thune is not on Trump’s side. He is doing everything he can to give the false appearance of being helpful while doing everything possible to procedurally gum up the works behind the scenes.

• @Barnes_law

• In her own words @SusieWiles confirmed long-held suspicions of her hostility to #MAGA principles, including her opposition to pardoning all J6ers, her opposition to taking apart USAID, her belief EpsteinFiles are no big deal & her dislike of deportation raids. Susie is the swamp.

• @JoshHall2024

• If it wasn’t clear before, it couldn’t get any clearer now: Susie Wiles is leading a RINO coup to try and take out MAGA and is undermining President Trump every step of the way. She is there to sabotage him and this administration… Plain and simple. This interview was absolutely disgusting and disgraceful… and if she’s not gone after this then there is something really wrong. President Trump: It’s time to say “Susie, YOU’RE FIRED!” (video)

• @mattvanswol

• Everyone on the Left discussing gun control refuses to ever consider that if we just locked up ALL violent criminals, the majority of violent crime would disappear, overnight. It's not the guns. It's the violent criminals... ...and the Left keeps letting them out of prison. (graph)

Night Trading 

• Asian equity indices are -.25% to +.5% on average. 
• Asia Ex-Japan Investment Grade CDS Index 65.5 +.25 basis point.
• China Sovereign CDS 43.0 +.25 basis point.
• China Iron Ore Spot 103.4 USD/Metric Tonne +.8%. 
• Swiss Franc/Offshore Chinese Renminbi Cross 8.85 +.04%.
• Bloomberg Emerging Markets Currency Index 36.11 -.06%.
• Bloomberg Global Risk-On/Risk Off Index 93.6 +.2%.
• US 10-Year Yield 4.16% +2.0 basis points.
• Japan 30-Year Yield 3.35% unch. 
• Volatility Index(VIX) futures 18.5 -.1%.
• Euro Stoxx 50 futures +.05%. 
• S&P 500 futures -.01%.
• NASDAQ 100 futures -.05%.

Morning Preview Links

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