Bull Radar

Style Outperformer:

• Small-Cap Value +.7%

Sector Outperformers:

• 1) Airlines +1.5% 2) Retail +1.3% 3) Steel +1.3%

Stocks Rising on Unusual Volume:

• FRED, AKBA, ACAD, SGY, TRIP, PI, CRR, BKD, KMX, EDIT and CVGW

Stocks With Unusual Call Option Activity:

• 1) THC 2) PAA 3) HRTX 4) TRIP 5) ACAD

Stocks With Most Positive News Mentions:

• 1) AA 2) ACI 3) CAR 4) KMX 5) AMD

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running -9.1% Below 100-Day Average
• 7 Sectors Rising, 3 Sectors Declining
• 63.7% of Issues Advancing, 32.7% Declining
• 154 New 52-Week Highs, 9 New Lows
• 58.7% of Issues Above 200-day Moving Average
• Average 14-Day RSI 43.8%
• Vix 11.7 -.4%
• Total Put/Call .71 -39.3%
• TRIN/Arms .86 -39.3%

Tuesday Watch

Evening Headlines

Bloomberg:

• Germany Reels as Truck Kills 12 at Berlin Christmas Market. (video) Germany’s federal prosecutor is investigating after a truck rammed into crowds at a Berlin Christmas market, killing and injuring visitors as they celebrated the festive season in what the government said was probably a deliberate attack. Police in the German capital said that 12 people died and 48 were injured, among them tourists, after a truck with Polish plates crashed into the market shortly before 8 p.m. on Monday near the Kurfuerstendamm in the heart of west Berlin.
• China Property Market Puts Macau's VIP Gaming Recovery at Risk. The luck is running out. For those wondering whether to raise or lower bets on Macau's VIP gaming business, look no further than China's real estate market. According to Nomura Holdings Inc.'s analyst Richard Huang, the two markets are "strongly correlated" and a series of property tightening measures in the mainland will dampen the industry that has just recently begun to recover from three "brutal" years.
• China Talks the Talk on Property Curbs, but Can it Walk the Walk? China is talking the talk about reining in the speculation that fueled spiraling property prices. The test will be whether it can walk the walk should growth start to falter. The government must do more to deflate the real-estate bubble by strictly controlling speculation, Yang Weimin, deputy director of an elite economic group led by President Xi Jinping, said Saturday in Beijing after the annual gathering to plan economic goals ended. Authorities have made similar vows in recent years that pushed prices down temporarily before they surged anew to fresh highs as policy eased again to boost slowing economic growth. 
• EU Renews Sanctions on Russia But This Time Could Be the Last. The European Union decision to roll over economic sanctions against Russia for an additional six months may be the last time the bloc is able to impose such penalties as the West’s united front against President Vladimir Putin wavers. While the EU announced Monday it was prolonging the measures until July 31 as a result of continued violence in eastern Ukraine, the need for unanimity among the 28 governments makes holding the line beyond that date far from certain. Footholds made by pro-Moscow politicians throughout Europe as well as questions about the efficacy of sanctions will test that unity like never before. 
• Italy Paves Way for a $21 Billion Rescue Plan for Ailing Banks.
• Japan Shares Fall After Yen Gains; Aussie Bonds Rally on Turmoil. Asian share markets had their second nervous start to a trading day this week as geopolitical concerns ramped up after the assassination of Russia’s ambassador to Turkey and violent incidents in Germany and Switzerland. Japanese equities declined, while futures indicated Chinese and Singaporean stocks may also open down. That came even as Australian shares climbed to follow gains for their U.S. counterparts. Bonds rose in Australia and New Zealand after Treasuries gained the most in two weeks. Russia’s envoy was gunned down in Ankara, Berlin police said at least nine people were killed after a truck rammed into a Christmas market, and a manhunt was under way in Zurich, Switzerland’s biggest city, after a suspect shot people praying in an Islamic center close to the main train station. The yen was stronger for a third day. The MSCI Asia Pacific Index was little changed after falling as much as .1%.
• Iran’s OPEC Win Lacks Substance Without Real Deals With Big Oil. Few countries have benefited from the oil market’s 2016 recovery like Iran. Since sanctions on its economy were eased in January, the Persian Gulf producer has doubled exports as prices rallied and won approval from OPEC last month to pump even more while other members cut. The key to continued growth will be attracting foreign investment to the energy industry. “Iran is definitely better off than they started the year,” said Carsten Fritsch, an analyst at Commerzbank AG in Frankfurt. “Further expansion plans for production have reached a plateau. They need foreign investment.”
• Obama Said to Use 1953 Law to Block Drilling in Arctic, Atlantic. President Barack Obama is preparing to block the sale of new offshore drilling rights in much of the U.S. Arctic and parts of the Atlantic, a move that could indefinitely restrict oil production there, according to two people familiar with the decision. Obama will invoke a provision in a 1953 law that gives him wide latitude to withdraw U.S. waters from future oil and gas leasing, said the people who spoke on condition of anonymity because the decision had not been announced. Until now the law has been used sparingly to permanently preserve coral reefs, walrus feeding grounds and marine sanctuaries. 
• Uber's Loss Exceeds $800 Million in Third Quarter on $1.7 Billion in Net Revenue. Ride-hailing company's annual loss may hit $3 billion by year's end.

Wall Street Journal:

• Why a Russian Hacking Inquiry Is in Donald Trump’s Best Interests. Uncertainty over the issue would cloud the president-elect’s agenda.
• Companies Face Delays Getting Cash Out of China. New regulations aimed at slowing the yuan’s decline create confusion for multinationals.

Fox News:

• Trump secures victory in Electoral College, as bid to flip electors flops. (video)

MarketWatch:

• Here’s why China’s currency outflows are much larger than they appear.

CNBC:

• 'Dogs of the Dow' strategy beats market again this year. Here are the dogs for 2017.
• About half of Americans support giving residents up to $2000 a month when robots take their jobs.

Zero Hedge:

• Donald Trump Seals Electoral College Victory, Officially Becomes 45th US President.
• Trump Urges "Civilized World Must Change" After Today's Terror Attacks.
• 12 Dead, 48 Injured After Pakistan-Born Refugee Rammed Truck Into Berlin Christmas Market. (video)
• CalPERS Announces Plans To Sell $15BN In Equities Over Next Two Years.
• IMF Board Expresses "Full Support" In Christine Lagarde Despite Negligence Conviction.
• Financialism, Not Capitalism.
• Developed Market Estimate-Revisions Breadth Has Hit An All-Time Low.
• Monday Humor? Obama Warns Trump On Use Of "Executive Orders".
• Car-tastrophe - GM, Fiat Chrysler Idle 7 Plants; Over 10,000 Workers Affected. (graph)
• Bonds Have Best Day In Over 3 Months Amid China Carnage, Turkey Terror, & Berlin Bloodbath. (graph)

Business Insider:

• Obama offers blunt assessment of why Democrats lost 2016 presidential election.
• JAMES BULLARD: It may be time for the Fed to shrink its $4.5 trillion balance sheet.

Night Trading 

• Asian equity indices are -.25% to +.25% on average.
• Asia Ex-Japan Investment Grade CDS Index 123.25 -.5 basis point.
• Asia Pacific Sovereign CDS Index 37.5 +.25 basis point.
• Bloomberg Emerging Markets Currency Index 69.27 -.01%. 
• S&P 500 futures +.06%. 
• NASDAQ 100 futures +.07%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (BBRY)/-.01
• (KMX)/.71
• (CCL)/.58
• (DRI)/.64
• (FDS)/1.70
• (GIS)/.87
• (NAV)/.28
• (FDX)/2.90
• (NKE)/.43
• (SCS)/.31

Economic Releases 

•  None of note

Upcoming Splits 

• None of note

Other Potential Market Movers

• The BoJ rate decision, RBA Minutes and weekly US retail sales reports could also impact trading today.

BOTTOM LINE:  Asian indices are mostly lower, boosted by technology 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 50% net long heading into the day.

Stocks Higher into Afternoon on Lower Long-Term Rates, Less European/Emerging Markets/US High-Yield Debt Angst, Short-Covering, Tech/Telecom Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Higher
  

• Sector Performance: Mixed
  

• Volume: Below Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 11.68 -4.3%

• Euro/Yen Carry Return Index 127.55 -.97%

• Emerging Markets Currency Volatility(VXY) 11.45 +.17%

• S&P 500 Implied Correlation 50.78 +.67%

• ISE Sentiment Index 108.0 +66.15%
  

• Total Put/Call 1.22 +34.07%

• NYSE Arms 1.80 +54.38%

Credit Investor Angst:

• North American Investment Grade CDS Index 67.59 -1.74%
  

• America Energy Sector High-Yield CDS Index 449.0 -.35%

• European Financial Sector CDS Index 95.06 +1.44%

• Western Europe Sovereign Debt CDS Index 20.0 -2.25%

• Asia Pacific Sovereign Debt CDS Index 37.55 +.82%

• Emerging Market CDS Index 245.47 -1.32%
  

• iBoxx Offshore RMB China Corporate High Yield Index 133.04 +.04%

• 2-Year Swap Spread 27.0 +1.25 basis points

• TED Spread 51.0 +1.5 basis points

• 3-Month EUR/USD Cross-Currency Basis Swap -58.75 -4.0 basis points
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 69.30 -.08%
• 3-Month T-Bill Yield .49% -1.0 basis point

• Yield Curve 132.0 -2.0 basis points
  

• China Import Iron Ore Spot $81.22/Metric Tonne -.33%

• Citi US Economic Surprise Index 23.2 +.3 point

• Citi Eurozone Economic Surprise Index 60.60 -2.7 basis points

• Citi Emerging Markets Economic Surprise Index 6.60 +1.0 points

• 10-Year TIPS Spread 1.89% unch.
• 29.8% chance of Fed rate hike at March 15 meeting, 42.2% chance at May 3 meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating +32 open in Japan 
• China A50 Futures: Indicating -18 open in China

• DAX Futures: Indicating -1 open in Germany

Portfolio: 

• Higher: On gains in my tech/retail sector longs and emerging markets shorts

• Disclosed Trades: None

• Market Exposure: 50% Net Long

Bear Radar

Style Underperformer:

• Large-Cap Value -.1%

Sector Underperformers:

• 1) Gaming -2.6% 2) Steel -2.2% 3) Coal -1.9%

Stocks Falling on Unusual Volume: 

• AMBC, WR, GGAL, GIL, FLT, ABCB, AZN, BMA, SCHL, KANG, DIN, DKL, GBCI, MATW, GSUM, DB, WTS, VAL, SXI, ARCB, AMP, PVH, HAS, LVS and SSB

Stocks With Unusual Put Option Activity:

• 1) DXJ 2) XLK 3) GE 4) FDX 5) UNH

Stocks With Most Negative News Mentions:

• 1) JAKK 2) AMBC 3) SUN 4) MRK 5) ILMN

Charts:

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

Bull Radar

Style Outperformer:

• Small-Cap Growth +.6%

Sector Outperformers:

• 1) Alt Energy +1.5% 2) REITs +1.1% 3) Telecom +1.0%

Stocks Rising on Unusual Volume:

• AWH, LOXO, BEAT, GPOR, SUPN and HSC

Stocks With Unusual Call Option Activity:

• 1) GSAT 2) CY 3) HTZ 4) CHTR 5) DUK

Stocks With Most Positive News Mentions:

• 1) LRCX 2) WEX 3) RLGY 4) COST 5) HUBS

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running -17.4% Below 100-Day Average
• 5 Sectors Rising, 5 Sectors Declining
• 66.2% of Issues Advancing, 30.0% Declining
• 67 New 52-Week Highs, 14 New Lows
• 58.4% of Issues Above 200-day Moving Average
• Average 14-Day RSI 43.1%
• Vix 11.9 -2.6%
• Total Put/Call 1.19 +30.8%
• TRIN/Arms 1.60 +37.3%