Stocks Modestly Lower into Final Hour on Rising Long-Term Rates, Year-End Positioning, Technical Selling, Tech/Alt Energy Sector Weakness

Economic/Market Gauges:

• North American Investment Grade CDS Index 50.0 unch.
• Bloomberg US Securitized MBS/ABS/CMBS Avg. OAS .26 unch.
• BofA Global Financial Stress Indicator -.28 +1.0 basis point
• European Financial Sector CDS Index 54.2 -.02%
• Emerging Market CDS Index 124.3 -.4%
• Bloomberg Global Trade Policy Uncertainty Index 2.2 -.1

• Citi US Economic Surprise Index 14.4 +6.1 points

• Citi Eurozone Economic Surprise Index 32.6 +.1

• Citi Emerging Markets Economic Surprise Index 30.6 +1.5 points 
• S&P 500 Current Quarter EPS Growth Rate YoY(16 of 500 reporting) +32.8% unch.
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 310.36 +.10:  Growth Rate +15.3% +.1 percentage point, P/E 22.2 unch.
• S&P 500 Current Year Estimated Profit Margin 13.50% 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 484.65 +.19: Growth Rate +18.0% +.1 percentage point, P/E 32.8 -.1
• Bloomberg US Financial Conditions Index .77 unch.
• US Yield Curve 69.0 basis points (2s/10s) +1.75 basis points 
• Bloomberg Industrial Metal Index 163.4 -.7% 
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 28.8% unch.
• US Atlanta Fed GDPNow Q4 Forecast +3.0% unch. 
• US 10-Year T-Note Yield 4.17% +5.0 basis points
• 1-Year TIPS Spread 2.29 -4.0 basis points

• Highest target rate probability for March 18th FOMC meeting: 49.9% (+.8 percentage point) chance of 3.5%-3.75%. Highest target rate probability for April 29th meeting: 45.2%(-.1 percentage point) chance of 3.25%-3.5%. (current target rate is 3.5-3.75%)
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +450 open in Japan 
• China A50 Futures: Indicating -19 open in China

• DAX Futures: Indicating +200 open in Germany

Portfolio:

• Slightly Lower: On losses in my consumer discretionary/tech/industrial sector longs
• Disclosed Trades: None
• Market Exposure: 75% Net Long

Bear Radar

Style Underperformer:

• Mid-Cap Growth -.4%

Sector Underperformers:

• 1) Computer Services -1.3% 2) Gold & Silver -.9% 3) Digital Health -.9%

Stocks Falling on Unusual Volume: 

• LB, NCDL, CCAP, IDR, AFJK, QXO, PSLV and CORT

Stocks With Unusual Put Option Activity:

• 1) XME 2) CORT 3) BTBT 4) CCIR 5) SIRI

Stocks With Most Negative News Mentions:

• 1) CORT 2) WDC 3) NIO 4) NEM 5) CPNG

Sector ETFs With Most Negative Money Flow:

• 1) XBI 2) PPA 3) ARKK 4) VHT 5) VGT

Charts:

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

Bull Radar

Style Outperformer:

• Large-Cap Growth -.2%

Sector Outperformers:

• 1) Nuclear +.4% 2) Biotech +.4% 3) unch.

Stocks Rising on Unusual Volume:

•  AXSM, ONDS, UMAC, DJT, PSNY, APLD, AFJK, PHVS, NKE, LPTH, HYMC and PVLA

Stocks With Unusual Call Option Activity:

• 1) AMLP 2) VNDA 3) EU 4) EVLV 5) PRMW 

Stocks With Most Positive News Mentions:

• 1) VNDA 2) NKE 3) AMRN 4) ONDS 5) ANGH

Sector ETFs With Most Positive Money Flow:

• 1) XLF 2) XLP 3) SOXX 4) SIL 5) XLC

Charts:

• ETFs Rising on Unusual Volume
• Stocks Rising on Unusual Volume

Friday's Earnings/Economic Releases of Note; Market Movers

Earnings of Note 
Company/Estimate 

Before the Open:

• None of note

After the Close: 

• None of note

Economic Release 

9:45 am EST

• Final S&P Global US Manufacturing PMI reading for Dec. 

10:00 am EST

• Construction Spending MoM for Oct. 

Upcoming Splits

• None of note

Other Potential Market Movers

• The weekly MBA Mortgage Applications report and Fed's weekly balance sheet report could also impact global trading on Friday.

US Equity Market Hours

• 9:30 am - 4:00 pm EST

Mid-Day Market Internals

NYSE Composite Index:

• Volume Running -50.8% Below 100-Day Average 
• Nasdaq/NYSE Volume Ratio 14.4 -3.2
• 10 Sectors Declining, 0 Sectors Rising
• 27.1% of Issues Advancing, 70.3% Declining 
• TRIN/Arms .83 -12.6%
• Non-Block Money Flow -$102.3M
  
• 32 New 52-Week Highs, 34 New Lows
• 59.8% (-3.5%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 57.2 -4.4

Polymarket:

• Supreme Court Rules in Favor of Trump's Tariffs? 30.0% -1.0 percentage point
• Will there be another US government shutdown by January 31st? 28.0% +2.0 percentage points
• Will China invade Taiwan by end of 2026? 12.0% -1.0 percentage point
• US-Venezuela military engagement by Jan. 31st 24.0% unch.

Other:

• Bloomberg Global Risk-On/Risk-Off Index 97.8 -.3%
• US High-Yield Tech Sector OAS Index 423.75 -5.5 basis points
• Bloomberg Cyclicals/Defensives Index 265.25 +.1%
• Morgan Stanley Growth vs Value Index 159.7 +.1%
• CNN Fear & Greed Index 47.0 (NEUTRAL) -3.0
• 1-Day Vix 8.5 -16.1%
  
• Vix 14.7 +2.4%
  
• Total Put/Call .90 +8.4%

Wednesday Watch

Around X:

• @Business  

• China’s factory activity surprised with an expansion in December, snapping an eight-month contraction streak that was the longest slump on record.
• China has bought at least 8 million tons of US soybeans this year, according to people familiar with the matter, putting the world’s top importer on track to meet a pledge it made two months ago as part of an apparent trade truce with Washington. 
• CME Group will raise margins on precious-metal futures for the second time in the space of a week following a volatile period of trading that saw prices spike then retreat.
• Elon Musk’s xAI is planning an expansion of its data center complex in Memphis, and has purchased a large warehouse in Southaven, Mississippi, where it intends to build an adjoining facility, the Information reported. 
• Get up to speed on what's moving global markets.
• Here's what you need to know to start your day.  

• @ZeroHedge

• My courageous compatriots, Your presence in the streets across Iran has kindled the flame of a national revolution. The continuation and expansion of your presence, and taking control of the streets, is today our foremost, vital priority...
• Hollywood Blamed The Fans For Their Failures And Now They Face Collapse.
• There it is: Audrey Hale, the trans kiIIer who kiIIed 6 in a Christian school, was targeting Christians and White kids. Biden's FBI buried this: That is what happens when anti-White hatred is pushed in America.
• Journalists complaining about how someone else is doing their job for them because they refuse to do it is a fun part of all of this.
• America Is Arguing About Free Speech... The World Is Putting People In Prison For It.
• "Significant Safety Concerns" After Salem, Oregon Appoints Convicted Killer To Public Safety Boards.  
• You can't afford another kid because childcare is so expensive—but Somali fraudsters got millions of your taxpayer dollars for child care centers that don’t exist. You can’t afford a home—but 100 Somalis spent millions of your taxpayer dollars on luxury properties. You’re paying $30K a year for terrible health care—while they got millions of your taxpayer dollars for health care centers they never opened. That's the Democratic elites in a nutshell: You come last. And if you object, they call you racist. 
• The avg fundamental long/short Hedge Fund underperformed the S&P 500 by 200bps: Goldman.
• Only 28% of large cap mutual funds are outperforming their benchmarks, the lowest since 2019.  
• Yale No Longer Has A Single Republican Professor Across 27 Departments.
• From Tax-Cuts To Tariff-Stability: US Economy Poised For Solid Growth In 2026.
• Bitcoin & Bullion Bounce Back From Bloodbathery, Stocks Snooze As Santa Surge Stalls. 

• @CNBC

• Asia-Pacific markets set to trade flat in year-end trade.
• Stock futures are little changed, as Wall Street readies to close out the third year of a bull market: Live updates.
• Wednesday's big stock stories: What’s likely to move the market in the next trading session. 
• 'Consumer stimulus will stabilize the labor market,' says Bank of America's Aditya Bhave with his 2026 economic outlook.

• @MarioNawful

• JOURNALIST EXPOSES MINNESOTA “HEALTHCARE” SCAMMER BILLING MEDICAID FOR FAKE PATIENTS AND FAKE CLINIC. The researcher Dustin Grage recorded a video that shows the scam: Mohamed Mohamed ran a “healthcare” company that billed Medicaid for people he never met, never treated, and who never even signed up for services. When Grage checked the address listed for the business, the place was completely deserted. No staff, no patients, just dead silence and a sketchy mailbox. The scam? Bill the government for therapy sessions and medical services that never happened, using names of people who say they had no idea they were clients.

• @TheSCIF

• MILITARY whistleblower and election investigator expose an ENORMOUS amount of ELECTION FRAUD in the 2020 ELECTION in Fulton County, Georgia, which also involves the Georgia Secretary of State and the Georgia Attorney General. First, we'll start with the confirmed findings from the election investigator in Fulton County, Georgia: (video)

• @ElonMusk

• TRUMP ADMIN SUES VIRGINIA FOR GIVING IN-STATE TUITION TO ILLEGAL IMMIGRANTS WHILE AMERICANS PAY FULL PRICE. It’s official: the Trump administration is taking the state of Virginia to court, filing a lawsuit to block the University of Virginia from offering in-state tuition to illegal aliens, a move that directly challenges how states distribute taxpayer-funded benefits. The reason is that the Democratic Party is buying their vote.

• @Wiseman_Cap

• Goldman’s Top Themes for 2026.
• Morgan Stanley Picks for 2026. 

• @johnrockshomes

• I am a J6er. Entrapment happened when the doors were opened, and we were let in and given tours while feds in the crowd led the way. Murder was committed when Michael Byrd shot an unarmed protester and Lila Morris beat another one to death. Incitement occurred when the peaceful crowd was fired upon with flashbangs and rubber bullets to the face. A miscarriage of justice took place when Americans were charged with assault against law enforcement for stopping cops' punches with their face. Selective prosecution happened when prison sentences were handed down for the same charges $50 tickets were given in the past and afterwards...

• @EricLDaugh

• JUST IN: Elon Musk says Barack Hussein Obama IMPORTED Somalis and other 3rd world migrants in specific locations "in order to ensure that a Democrat would win the election in that district". Tens of THOUSANDS of Somalis came in under Obama...barely ANY came in under Trump Term 1. "The Somalis and many other groups were imported, given government handouts and allowed to do fraud without prosecution." - Import voters. - Give them endless free stuff. - Never hold them accountable. - Achieve power. IT'S CRIMINAL!

• @WallStreetApes

• Apple recently filed a patent number US20230225659A1. The new earbuds described in the patent will allow Apple to read your brain waves. “Earbuds that are designed and patented by Apple to literally read your brain waves, record your brain waves — You're not going to believe what these guys have the control to do with these. Check this out. The patent is for a bio signal sensing device using dynamic selection of electrodes. This is absolutely Apple, it is 2023 and it gets not good. (video)

• @Oilfield_Rando

• Hey guys, all those insane “refugee assistance” grants I’m always tweeting? The @GOP is about to supercharge the funds. (pic)

• @RWMaloneMD

• EAT ZE BUGS? NOPE! Another blow against the plans of the globalist elites. This time, despite the millions invested, the largest insect farm in Europe, Ÿnsect, has declared itself insolvent and has gone into judicial liquidation! Will they now release billions of insects? So sad. Condolences to the WEF.

• @TheTechInvest

• $GOOGL MUST DOUBLE AI COMPUTE EVERY 6 MONTHS TO MEET DEMAND, AI INFRASTRUCTURE BOSS TELLS EMPLOYEES. The current bearish sentiment is not what’s happening fundamentally.

• @cfromhertz

• $FTAI FTAI Aviation Gains on Engine Conversion Plan for Data Centers (Bloomberg) -- FTAI Aviation shares rose more than 10% on Tuesday after the company started a program to convert CFM56 engines to power new turbines built to provide energy for data centers. Production is expected to begin in 2026. (graph)

• @KariLake

• Tim Walz was almost Vice President, one of the most vetted roles in the nation. Yet during the 2024 election, the press didn’t find the massive fraud exploding on his watch as Minnesota governor. Even after citizen journalist @nickshirleyy dropped his bombshell video, the mainstream media stayed radio silent. They’re as complicit as the fraudsters themselves. In one afternoon, Nick didn’t just highlight hundreds of millions in fraud. He destroyed the mainstream media’s credibility. (video)
• What happened in Minnesota is not merely criminal, it’s treasonous. And I have so much anger seeing this, seeing the corruption where I’m working in Washington, DC, and knowing no one's been held accountable yet. They steal our elections, pilfer our money, they dragged @RogerJStoneJr out of bed & into jail, raided Mar-A-Lago, they tried to put @POTUS behind bars. When are we gonna see some effing handcuffs on some effing criminals in this country? (video)

• @kevinvdahlgren

• Every evening in Seattle, hundreds of people gather in front of a Walgreens to sell items they’ve just shoplifted. By 8:00 p.m. the store closes. By 8:05, an open-air black market forms—rows of stolen goods laid out for buyers looking for cheap prices. Shoplifting has become big business in Seattle. Theft under $750 is treated as a misdemeanor, and in practice, most officers do not pursue or arrest offenders. The result is predictable: organized retail theft operating openly, night after night. (video)

• @Savsays

• I’m at “burn it all down” levels of angry at the government for the fraud they’ve perpetuated against the American people. Because no, this wasn’t just the work of Somalis, it was the work of our own government who has actively worked to destroy our own country for DECADES.

• @WallStreetMav

• The mayor of an American city waving the flag of a foreign country on American soil in order to remain politically viable. (video) 

• @RealAlexJones

• EXCLUSIVE: Alex Jones Reveals Trump's Fatal Blind Spots. •AG Pam Bondi Is Not A Warrior. •Kash Patel Is A Wannabe Hollywood Star. •Dan Bongino Is A Day Late & A Dollar Short. •Todd Blanche Is On Record Sabotaging EVERYTHING. •There Are Yes Men Surrounding Him In DC. •The Democrats Are Going To Indict Him & His Entire Family If He Doesn't. Prosecute Deep State Criminals! The President's Legacy Will Be One Of Ashes If He Doesn't Take Action To Address These Major Problems In His Administration! (video)

• @lDeAngelisCorey

• The Governor of Washington really just posted this. (pic)

• @C_3C_3 

• About a month ago… Politicians in DC were telling Americans we would have to move the retirement age to 70 because Social Security was going bankrupt. Think about that. That is why EVERYONE involved in taxpayer fraud needs to be punished. No exceptions. No mercy.
• The biggest news story in the world… These “news” outlets still have not covered Nick Shirley and his Somalia fraud bombshell on the biggest Media platform on the planet.. WaPo. NBC News. MSNBC. CBS News. NYT. CNN. PBS. NPR. ABC News. The Legacy Media is the enemy of the people.

Night Trading 

• Asian equity indices are -.5% to +.25% on average. 
• Asia Ex-Japan Investment Grade CDS Index 64.5 -.25 basis point.
• China Sovereign CDS 43.5 +.25 basis point.
• China Iron Ore Spot 105.9 USD/Metric Tonne +.2%. 
• Swiss Franc/Offshore Chinese Renminbi Cross 8.81 -.2%.
• Bloomberg Emerging Markets Currency Index 36.12 -.05%.
• Bloomberg Global Risk-On/Risk Off Index 97.9 -.2%.
• US 10-Year Yield 4.12% +1.0 basis point.
• Japan 30-Year Yield 3.40% -3.0 basis points. 
• Volatility Index(VIX) futures 16.5 +.5%.
• Euro Stoxx 50 futures n/a. 
• S&P 500 futures -.09%.
• NASDAQ 100 futures -.18%.

Morning Preview Links

BOTTOM LINE: Asian indices are mostly lower, weighed down by financial and industrial shares in the region. I expect US stocks to open modestly lower and to rally into the afternoon, finishing mixed.  The Portfolio is 75% net long heading into the day.