Bull Radar

Style Outperformer:

• Large-Cap Growth +.5%

Sector Outperformers:

• 1) Homebuilders +2.1% 2) HMOs +1.9% 3) Airlines +1.0%

Stocks Rising on Unusual Volume:

• WGL, THO, TIF, BERY, ACRS, JD, SCMP, EVHC, AMSG, WLB, WGL, PKY, DW and TUP

Stocks With Unusual Call Option Activity:

• 1) CMCSA 2) TIF 3) HBI 4) JCI 5) EXPR

Stocks With Most Positive News Mentions:

• 1) ALXN 2) CVS 3) ACRS 4) VCYT 5) ZBH

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running +4.5% Above 100-Day Average
• 6 Sectors Rising, 4 Sectors Declining
• 51.9% of Issues Advancing, 45.6% Declining
• 102 New 52-Week Highs, 19 New Lows
• 56.2% of Issues Above 200-day Moving Average
• Average 14-Day RSI 44.9%
• Vix 12.8 -2.9%
• Total Put/Call .98 +8.9%
• TRIN/Arms 1.22 +20.3%

Tuesday Watch

Evening Headlines

Bloomberg:

• Japan’s Household Spending, Retail Sales Decline in October. Japan’s household spending dropped for an eighth straight month and retail sales fell slightly in October, underscoring weak domestic consumption. The unemployment rate remained at the lowest in two decades. 
• Dollar Retreat Deepens as Bonds Recover While Japan Stocks Drop. The dollar continued to retreat amid further gains in government debt, with investors’ focus shifting from Donald Trump’s election win to other potential threats to market stability. Japanese stocks snapped their longest rally in 18 months as oil fell. The Bloomberg Dollar Spot Index edged lower for a third straight session, extending its decline from a decade high reached last week as 10-year Treasury yields dropped. The yen’s recovery weighed on Japan’s Topix index, which fell for the first time in 13 days, while other Asian benchmarks fluctuated. The euro held gains after concern over Italy’s forthcoming referendum on constitutional reform sank European bank stocks. U.S. oil fell for the third time in four sessions amid anxiety ahead of the OPEC meeting.
• OPEC Said to Remain Split as Saudis Call Cut Not Essential. OPEC officials failed on Monday to bridge their differences on an agreement to cut production and revive oil prices, following comments from Saudi Arabia that output curbs aren’t essential. With just two days left before ministers from the Organization of Petroleum Exporting Countries meet to finalize the first decline in production in eight years, the foundations for a deal are looking increasingly shaky.
• Oil Investors Have $490 Billion Riding on Big OPEC Decision. After two tough years of falling oil prices and company valuations, investors in the world’s biggest energy producers have some cause for hope as crude prices continue their recovery from a 12-year low. They will be looking to OPEC not to dash it. Oil and gas producers including Exxon Mobil Corp. and Royal Dutch Shell Plc have together added $490 billion to their market value this year, the biggest gain in six years following a 27 percent rise in benchmark Brent crude, according to data compiled by Bloomberg. This follows a $850 billion loss in value last year and $720 billion in 2014 as crude prices plunged.  

Wall Street Journal: 

• Ohio State University Says Student Carried Out Attack. Suspect is identified as a student, Abdul Razak Ali Artan. At least 11 people were injured Monday at Ohio State University after a student allegedly jumped a curb in a motor vehicle, then slashed pedestrians with a butcher knife before he was shot and killed.
• ECB’s Mario Draghi Warns of Risks of Prolonged Low Interest Rates. A lengthy period of low rates has created ‘fertile terrain’ for financial-market risks, the central bank chief says.

Fox News: 

• Jill Stein -- Fighting election fraud or lining her own pockets? (video) President-elect Donald Trump isn’t mincing words. He believes the recount effort – and multimillion-dollar fundraising goal – led by Green Party candidate Jill Stein is nothing more than a scam. Stein and her party are raising money for presidential recounts in Wisconsin, Michigan and Pennsylvania. Hillary Clinton’s campaign has offered help, but Clinton’s own lead counsel admitted that the recount won’t likely lead to any changes in the outcome of the presidential election.

Zero Hedge

• OSU Attacker Complained That As A Muslim "I'm Not What The Media Portrays Me To Be", Slammed US "Interference".
• How Far Can Bond Yields Rise Before Hurting Equities? Goldman Answers.
• Wisconsin Denies Request For Recount By Hand As Stein Threatens To Sue.
• Aussie Media Push Globalists' "Cash Is For Criminals" Narrative.
• Where Are We In The Business Cycle: A Troubling Chart From Morgan Stanley.
• Ohio State Attack Suspect Is Abdul Ali Artan, 18-Year-Old Somali Refugee; Terrorism Investigated.
• "Buy High, Sell Low"? Bullish Sentiment Soars Most In 6 Years As Stocks Spike. (graph)
• Trumpsgiving Hangover? Gold Gains Most In A Month As Banks, Small Caps, Dollar Stumble. (graph)

Business Insider:

• Robert Wolf, Democratic fundraiser and Obama's top Wall Street adviser, joins Fox News as contributor.
• The world could be about to run low on dollars.
• Bond yields have to rise a lot more to price in 'Trumpflation'.
• Trump responds to Ohio State attack, thanks first responders.

Night Trading 

• Asian equity indices are -.25% to unch. on average.
• Asia Ex-Japan Investment Grade CDS Index 127.5 +.5 basis point 
• Asia Pacific Sovereign CDS Index 44.25 unch.
• Bloomberg Emerging Markets Currency Index 69.02 +.%. 
• S&P 500 futures +.02%. 
• NASDAQ 100 futures -.02%.

Morning Preview Links

Earnings of Note
Company/Estimate 

• (MNK)/1.99
• (TIF)/.67
• (ADSK)/-.24
• (SPLK)/.08

Economic Releases 
8:30 am EST

• 3Q GDP is estimated to rise +3.0% versus a prior estimate of a +2.9% gain.
• 3Q Personal Consumption is estimated to rise +2.3% versus a prior estimate of a +2.1% gain.
• The 3Q GDP Price Index is estimated to rise +1.5% versus a prior estimate of a +1.5% gain.
• The 3Q Core PCE is estimated to rise +1.7% versus a prior estimate of a +1.7% gain. 

9:00 am EST

• The S&P CoreLogic CS 20-City MoM for September is estimated to rise +.4% versus a +.24% gain in August. 

10:00 am EST

• Consumer Confidence for November is estimated to rise to 101.5 versus 98.6 in October.
  

Upcoming Splits 

• None of note

Other Potential Market Movers

• The Fed's Fischer speaking, Fed's Dudley speaking, Eurozone Industrial Production/Consumer Confidence reports, French GDP report, Japan Housing Starts, CSFB Industrials Conference, Jefferies Energy Conference, Citi Basic Materials Conference, Piper Jaffray Healthcare Conference and the (UNH) Investor Conference could also impact trading today.

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

Stocks Lower into Final Hour on US Election Recount Concerns, Less Economic Optimism, Yen Strength, Energy/Healthcare Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Lower
  

• Sector Performance: Most Sectors Declining
  

• Volume: Below Average

• Market Leading Stocks: Underperforming
  

Equity Investor Angst:

• Volatility(VIX) 12.85 +4.1%

• Euro/Yen Carry Return Index 124.18 -.78%

• Emerging Markets Currency Volatility(VXY) 11.0 -1.96%

• S&P 500 Implied Correlation 53.48 -.07%

• ISE Sentiment Index 75.0 -34.78%
  

• Total Put/Call .88 +11.4%

• NYSE Arms 1.03 unch.

Credit Investor Angst:

• North American Investment Grade CDS Index 73.36 +.15%
  

• America Energy Sector High-Yield CDS Index 621.0 +1.24%

• European Financial Sector CDS Index 111.0 +2.05%

• Western Europe Sovereign Debt CDS Index 23.39 -.36%

• Asia Pacific Sovereign Debt CDS Index 44.24 -.15%

• Emerging Market CDS Index 268.64 -.86%
  

• iBoxx Offshore RMB China Corporate High Yield Index 132.94 +.04%

• 2-Year Swap Spread 20.75 +1.0 basis point

• TED Spread 45.0 +.5 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -61.25 -6.0 basis points
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 69.36 +.35%
• 3-Month T-Bill Yield .46% -3.0 basis points

• Yield Curve 122.0 -2.0 basis points
  

• China Import Iron Ore Spot $80.83/Metric Tonne +1.53%

• Citi US Economic Surprise Index 11.60 +2.3 points

• Citi Eurozone Economic Surprise Index 66.0 +2.5 points

• Citi Emerging Markets Economic Surprise Index -4.4 +1.2 points

• 10-Year TIPS Spread 1.88% -5.0 basis points
• 100.0% chance of Fed rate hike at Feb. 1 meeting, 100.0% chance at March 15 meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating -46 open in Japan 
• China A50 Futures: Indicating -13 open in China

• DAX Futures: Indicating -1 open in Germany

Portfolio: 

• Lower: On losses in my medical/biotech/retail sector longs and emerging markets shorts

• Disclosed Trades: Added to my (IWM)/(QQQ) hedges

• Market Exposure: Moved to 25% Net Long

Today's Headlines

Bloomberg:

• China to Curb Megadeals as Regulators Tame Record Overseas Spree. (video) China is planning sweeping curbs on its companies’ overseas acquisitions, including barring most foreign investments of $10 billion or more, people with knowledge of the matter said, as it seeks to tame a record dealmaking spree that’s alarmed officials from Washington to Berlin. The government will generally suspend several categories of deals while still leaving room for some strategic transactions to be executed, the people said, asking not to be identified because the information is private. It will restrict overseas investments of at least $1 billion in industries outside a buyer’s core business, as well as foreign property deals of $1 billion or more by state-owned enterprises, according to the people.
• China Cites ‘The Art of War’ as Trump Signals Trade Battle. (video) There’s a Chinese saying that stems from the philosophy in Sun Tzu’s ancient text “The Art of War”: You can kill 1,000 enemies, but you would also lose 800 soldiers. Centuries later, the proverb is suddenly apt again, being mentioned frequently in discussions around Beijing. Now, it highlights the potential damage U.S. President-elect Donald Trump could inflict if he makes good on his threat to start a trade war with China, the world’s second-biggest economy.
• Investor Who Backed Brexit Sees Euro Breaking Up Within 5 Years. Jim Mellon stood out among investors in 2016 as a rare, public backer of Britain’s exit from the European Union. Now, the chairman of the Burnbrae Group is forecasting another breakup. Mellon, who was cited as a supporter of the “Leave” campaign by pro-Brexit lawmaker Michael Gove, predicts the euro will become a future casualty of a rising anti-establishment tide, causing the currency union to splinter within the next five years.
• OECD Lifts Global Growth Forecasts on Expected Trump Stimulus. (video) The OECD lifted its global growth forecasts for 2017 and predicted expansion in 2018 will reach its fastest pace in half a decade as Donald Trump’s planned fiscal stimulus provides a boost to major economies. World gross domestic product will now expand 3.3 percent next year, up by 0.1 percentage point from September’s forecast, the Organization for Economic Cooperation and Development said in a semi-annual report. The Paris-based organization sees the global economy expanding 3.6 percent in 2018, the fastest pace since 2011.
• Draghi Warns U.K. Likely to Suffer Most If Hard Brexit Hits.
• Italian Lenders Slide on Vote Worries to Drag Down Europe Stocks. (video) Italian lenders declined on rising concerns about risks to their financial stability from the upcoming referendum, bringing an end to a three-week rally in European shares. Banca Monte dei Paschi di Siena SpA, the lender burdened by bad loans and under pressure to raise fresh money, tumbled 14 percent. UniCredit SpA and Intesa Sanpaolo SpA fell at least 3.2 percent, dragging the FTSE MIB Index to one of the worst performances in western-European markets. The Financial Times reported yesterday that as many as eight Italian banks risk failing if Renzi loses the vote. The Stoxx Europe 600 Index declined 0.8 percent at the close in London, with the volume of shares changing hands about 17 percent lower than the 30-day average.
• OPEC’s Last Cut Shows Oil Market Could Get a Whole Lot Messier. (video) Anyone planning to trade the outcome of this week’s OPEC meeting might consider the lessons of the group’s last production cut. Then take a deep breath. In December 2008, as oil demand and prices slumped during the global financial crisis, the Organization of Petroleum Exporting Countries, announced a record output reduction. What was supposed to stabilize the market initially sowed more confusion as the group’s statement bundled together previously announced supply curbs and omitted a breakdown of how much each member would cut -- details of which leaked out days later. While the deal did eventually halt the slide in prices, the Chicago Board Options Exchange Crude Oil Volatility Index, a common measure of market turbulence, stayed near a record over the following two months amid doubts that OPEC members would comply with their new targets.
• Trump Says He May ‘Terminate’ Relaxing of Cuba Restrictions. (video) 
• Google(GOOG), Facebook(FB) Leave Rivals Struggling for Digital ‘Nirvana’.

Wall Street Journal:

• How to Kill the Volcker Rule? Don’t Enforce It. Big banks hoping a Trump administration will defang one of Dodd-Frank’s most-controversial pieces.
• China’s New Tool for Social Control: A Credit Rating for Everything. Beijing wants to give every citizen a score based on behavior such as spending habits, turnstile violations and filial piety, which can blacklist citizens from loans, jobs, air travel.
• How Iran, Russia Could Derail Oil-Production Deal. OPEC members engage in a last-minute blitz of diplomacy ahead of a meeting on Wednesday.

Fox News: 

• One suspect dead, 9 injured after attack at Ohio State University involving car, butcher knife. (video)

CNBC:

• Eight EU countries warned over vulnerable property market - ESRB. The residential property market is at risk of overheating in eight European Union countries, including Britain, partly due to the unintended effects of ultra low interest rates, the EU's financial risk watchdog said on Monday.
• OPEC could see 'punishing outcome' if talks fail in Vienna.
• A simple market measure monitored by Warren Buffett says stocks may be overvalued.

Zero Hedge:

• Trump Reportedly "Furious" Over Kellyanne Conway's "Rogue" Comments About Mitt Romney.
• Ohio State Attack Suspect Is 20-Year-Old Somali Refugee; Terror Motive Investigated. (video)
• Jill Stein Officially Files Recount Petition In Pennsylvania.
• OPEC Releases Schedule For Nov. 30 Meeting; Fails To Agree On Anything Else.
• Portugal Bond Yields Hover Near Brexit Highs As Bank Bosses Quit Ahead Of Bailout.
• The Market's Next Headache: China's (Not So) Stealth Tightening.
• Stein Vows To Launch Recounts In More States To Ensure "Election Integrity".
• Trump Victory Leads To Biggest Surge In Dallas Fed "Hope" In Past Decade. (graph)
• David Petraeus To Meet With Trump As Possible Secretary Of State Pick.
• Italian Bond Risk Spikes To 30-Month Highs As Referendum Fear Batters Banks. (graph)
• Is This The Democrats' Real Strategy In Launching Recounts?

Business Insider:

• Wisconsin elections commission: Recount expected to uphold Trump's win.
• Top Iranian general: Iran may seek naval bases in Yemen or Syria.
• Canada's banks could see 'significant losses' if the housing market turns.
• 4 charts that show China's accelerating debt problem.