Stocks Finish Slightly Higher on Lower Long-Term Rates, Rising Fed Rate-Cut Hopes, Loose US Financial Conditions, Tech/Alt Energy Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Slightly Lower
  

• Sector Performance: Mixed
  

• Volume: Below Average

• Market Leading Stocks: Underperforming
  

Equity Investor Angst:

• Volatility(VIX) 12.7 -.3%
• DJIA Intraday % Swing .60% +62.8%
  
• Bloomberg Global Risk On/Risk Off Index 63.9 -1.5%

• Euro/Yen Carry Return Index 173.4 -.54%

• Emerging Markets Currency Volatility(VXY) 7.7 -.13%

• CBOE S&P 500 Implied Correlation Index 19.9 +.7% 

• ISE Sentiment Index 137.0 +12.0
  

• Total Put/Call 1.0 -10.7%

• NYSE Arms .81 -44.1% 
• NYSE Non-Block Money Flow -$107.2M 
  

Credit Investor Angst:

• North American Investment Grade CDS Index 63.4 -.48%
  

• US Energy High-Yield OAS 343.3 +.79%
• Bloomberg TRACE # Distressed Bonds Traded 328 unch.
  

• European Financial Sector CDS Index 79.5 -1.2% 
• Deutsche Bank Subordinated 5Y Credit Default Swap 249.1 +1.3%
  

• Italian/German 10Y Yld Spread 176.0 basis points +2.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 99.7 +2.72%
  

• Emerging Market CDS Index 189.02 +.58%
• Israel Sovereign CDS 118.2 -.93%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 25.4 -.1%

• 2-Year SOFR Swap Spread -14.75 basis points +4.0 basis points
  

• TED Spread 24.5 basis points +1.0 basis point
  

• 3-Month EUR/USD Cross-Currency Basis Swap -15.5 -.5 basis point
  
• MBS  5/10 Treasury Spread 153.0 -4.0 basis points
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 946.0 +8.0 basis points
  
• Avg. Auto ABS OAS 94.0 +2.0 basis points
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 41.93 +.25%
• 3-Month T-Bill Yield 5.41% +1.0 basis point
  

• China Iron Ore Spot 128.5 USD/Metric Tonne -.27%
• Dutch TTF Nat Gas(European benchmark) 42.77 euros/megawatt-hour -2.75%

• Citi US Economic Surprise Index 27.5 -2.7 points

• Citi Eurozone Economic Surprise Index -17.10 +1.6 points

• Citi Emerging Markets Economic Surprise Index 21.9 -.8 point
• S&P 500 Current Quarter EPS Growth Rate YoY(482 of 500 reporting) +4.3% unch.
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 242.14 +.08:  Growth Rate +9.4% unch., P/E 18.9 +.1
  
• S&P 500 Current Year Estimated Profit Margin 12.14% -1.0 basis point
  
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(8 of 10 reporting) +50.6% unch.
  
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 283.18 +.40: Growth Rate +33.1% +.2 percentage point, P/E 29.2 -.2
  
• Bloomberg US Financial Conditions Index .46 -1.0 basis point
  
• Bloomberg Euro-Zone Financial Conditions Index .28 -10.0 basis points
  
• US Yield Curve -40.75 basis points (2s/10s) +9.5 basis points
  
• US Atlanta Fed 4Q GDPNow Forecast +2.10% unch.
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 49.6% +2.7 percentage points
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +3.55% unch.: CPI YoY +3.04% -3.0 basis points
  
• 10-Year TIPS Spread 2.24 +1.0 basis point
  
• Highest target rate probability for Jan. 31st FOMC meeting: 95.6%(+6.2 percentage points) chance of 5.25%-5.5%. Highest target rate probability for March 20th meeting: 64.6%(-5.8 percentage points) chance of 5.25%-5.5%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -113 open in Japan 
• China A50 Futures: Indicating +19 open in China

• DAX Futures: Indicating +32 open in Germany

Portfolio:

• Slightly Higher:  On gains in my tech/utility sector longs
  

• Disclosed Trades: None
  

• Market Exposure: 75% Net Long
  

Bear Radar

Style Underperformer:

• Small-Cap Growth -.4%
  

Sector Underperformers:

• 1) Gambling -1.1% 2) Insurance -1.1% 3) I-Banking -1.0%

Stocks Falling on Unusual Volume: 

• RILY, TRMD, ATRC, ARGX and CABA
  

Stocks With Unusual Put Option Activity:

• 1) FTCH 2) SGML 3) NTAP 4) WDAY 5) WBD
  

Stocks With Most Negative News Mentions:

• 1) THAR 2) CTRN 3) SNES 4) CABA 5) PCT
  

Charts:

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

Bull Radar

Style Outperformer:

• Large-Cap Growth +.1%
  

Sector Outperformers:

• 1) Gold & Silver +3.6% 2) Electric Vehicles +1.1% 3) Retail +1.0%

Stocks Rising on Unusual Volume:

• PDD, SWTX, CWEN/A, AFRM, CFLT, GME, GFI, AU, MARA, RIOT, COIN,  SDRL, SE, TAL, SAVE, CG, EGO, GOLD, CROX, WPC, AEM, WOR, TWLO and ROKU
  

Stocks With Unusual Call Option Activity:

• 1) FTCH 2) ZS 3) STNG 4) PDD 5) X

Stocks With Most Positive News Mentions:

• 1) PDD 2) AFRM 3) SWTX 4) COIN 5) CROX
  

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:

• (ROAD)/.52
• (DLTR)/1.01
• (DCI)/.72
• (FTCH)/-.17
• (FL)/.21
• (HRL)/.44
• (PDCO)/.59
• (WOOF)/.02
  

After the Close: 

• (FIVE)/.23
• (LZB)/.62
• (OKTA)/.30
• (PVH)/2.74
• (CRM)/2.05
• (SNOW)/.16
• (SNPS)/3.04
• (VSCO)/-.78
• (ZUO)/.03
  

Economic Releases

8:30 am EST

• The Advance Goods Trade Balance report for Oct. is estimated at -$86.5B versus -$86.8B in Sept.
• Wholesale Inventories MoM for Oct. is estimated to rise +.2% versus a +.2% gain in Sept.
• Retail Inventories MoM for Oct. is estimated to rise +.6% versus a +.9% gain in Sept.
• 3Q GDP revisions.
  

10:30 am EST

• Bloomberg consensus estimates call for a weekly crude oil inventory gain of +19,830 barrels versus a +8,700,000 barrel gain the prior week. Gasoline supplies are estimated to fall by -371,170 barrels versus a +750,000 barrel gain the prior week. Distillate inventories are estimated to fall by -1,047,330 barrels versus a -1,018,000 barrel decline the prior week. Finally, Refinery Utilization is estimated to rise by +.98% versus a +.9% gain prior.
  

2:00 pm EST

• Federal Reserve Beige Book release.
  

Upcoming Splits 

• None of note
  

Other Potential Market Movers

• The Fed's Mester speaking, weekly MBA Mortgage Applications report, Q3 Corporate Profits report, Wells Fargo TMT Summit, Evercore ISI Health Conference, UBS Tech/Media/Telecom Conference, Citi Basic Materials Conference, UBS Industrials Summit, Bernstein Industrials Forum, Barclays Eat/Sleep/Play Conference, (SEE) general meeting, (GM) business update, (UNH) investor meeting and the Barclays Automotive/Mobility Tech Conference 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 -10.0% Below 100-Day Average 
• Nasdaq/NYSE Volume Ratio 9.4 unch.
  
• 7 Sectors Declining, 4 Sectors Rising
• 50.3% of Issues Advancing, 46.8% Declining 
• TRIN/Arms .87 -40.0% 
• Non-Block Money Flow -$84.8M
  
• 57 New 52-Week Highs, 23 New Lows
• 44.8%(-.2%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 67.0 +2.0

Other:

• Bloomberg Global Risk-On/Risk-Off Index 641. -1.1%
  
• Russell 1000: Growth/Value 18,666.2 +.1%
  
• 1-Day Vix 7.8 -4.6%
  
• Vix 12.8 +1.0%
  
• Total Put/Call .92 -17.9%

Tuesday Watch

Night Trading 

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

• Asia Ex-Japan Investment Grade CDS Index 98.5 +1.75 basis points.

• China Sovereign CDS 59.75 -.75 basis point.
  
• China Iron Ore Spot 130.2 USD/Metric Tonne -1.9%.

• Bloomberg Emerging Markets Currency Index 41.8 +.04%.
• Bloomberg Global Risk-On/Risk Off Index 66.4 +2.4%
  
• Bloomberg US Financial Conditions Index .51 +3.0 basis points
  
• Volatility Index(VIX) futures 13.9 -.24%.
• Euro Stoxx 50 futures -.11%.

• S&P 500 futures unch.

• NASDAQ 100 futures -.05%.  

Morning Preview Links

BOTTOM LINE: Asian indices are mostly higher, boosted by technology and commodity 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.