Monday, November 25, 2019

Stocks Rising into Final Hour on China Trade Deal Optimism, Buyout Speculation, Less European/US High-Yield Debt Angst, Tech/Biotech Sector Strength

 Broad Equity Market Tone:
  • Advance/Decline Line: Higher
  • Sector Performance: Mixed
  • Volume: Around Average
  • Market Leading Stocks: Outperforming
Equity Investor Angst:
  • Volatility(VIX) 11.9 -3.5%
  • Euro/Yen Carry Return Index 124.52 +.19%
  • Emerging Markets Currency Volatility(VXY) 7.04 -.14%
  • S&P 500 Implied Correlation 42.4 -5.0%
  • ISE Sentiment Index 160.0 +45
  • Total Put/Call .93 -2.11%
  • NYSE Arms .99 +28.6%
Credit Investor Angst:
  • North American Investment Grade CDS Index 50.53 -2.45%
  • America Energy Sector High-Yield CDS Index 615.0 +2.14%
  • European Financial Sector CDS Index 57.94 -3.63%
  • Italian/German 10Y Yld Spread 151.25 -2.75 basis points
  • Asia Ex-Japan Investment Grade CDS Index 65.29 -1.19%
  • Emerging Market CDS Index 203.92 +.59%
  • iBoxx Offshore RMB China Corporate High Yield Index 168.40 +.08%
  • 2-Year Swap Spread -1.25 +1.25 basis points
  • TED Spread 33.25 -.75 basis point
  • 3-Month EUR/USD Cross-Currency Basis Swap -13.75 -1.5 basis points
Economic Gauges:
  • Bloomberg Emerging Markets Currency Index 65.37 -.15%
  • 3-Month T-Bill Yield 1.58% unch.
  • Yield Curve .15 unch.
  • China Iron Ore Spot 86.71 USD/Metric Tonne -.57%
  • Citi US Economic Surprise Index .2 -3.1 basis points
  • Citi Eurozone Economic Surprise Index -15.40 +.7 point
  • Citi Emerging Markets Economic Surprise Index -27.80 +.4 basis point
  • 10-Year TIPS Spread 1.64 unch.
  • 13.0% chance of Fed rate cut at Jan. 29th meeting, 23.5% chance of cut at March 18th meeting
Overseas Futures:
  • Nikkei 225 Futures: Indicating +138 open in Japan 
  • China A50 Futures: Indicating -1 open in China
  • DAX Futures: Indicating +5 open in Germany
Portfolio:
  • Higher: On gains in my biotech/industrial/retail/tech/medical sector longs
  • Disclosed Trades: None
  • Market Exposure: 100% Net Long

Bull Radar

Style Outperformer:
  • Small-Cap Growth +2.5%
Sector Outperformers:
  • 1) Biotech +2.5% 2) Semis +2.4% 3) Gaming +2.3%
Stocks Rising on Unusual Volume:
  • MDCO, ARWR, FOE, INMD, EDIT, ZS, NXTC, DTIL, MNTA, ICPT, BIG, JELD, DRNA, AMTD, TIF, LB, ALNY, INCY, SFNC, SPLK, POST, TPTX, PTCT, GBT, ZGNX, NXST, ESPR, AQUA, AXNX, CFX, EVRI, GSX, ETFC, DLTR and SERV
Stocks With Unusual Call Option Activity:
  • 1) BURL 2) MDCO 3) DLTR 4) PANW 5) ICPT
Stocks With Most Positive News Mentions:
  • 1) SRNE 2) MDCO 3) TIF 4) NVDA 5) ALNY
Charts:

Morning Market Internals

NYSE Composite Index:

Sunday, November 24, 2019

Monday Watch

Today's Headlines
Bloomberg:   
  • Stocks Rise as China Offers Compromise on Trade. Stocks in Asia rose along with American equity futures as investors monitored the latest move by China to ease trade tensions. Currencies saw muted reactions. Equities in Japan, South Korea and Australia advanced and S&P 500 futures edged up. In the latest on trade: China said over the weekend it will raise penalties on intellectual property violations as it tries to smooth over one of the sticking points in discussions with the U.S. The S&P 500 Index nudged up Friday after President Donald Trump said he was “very close” to a trade pact with China. Japan’s Topix index advanced 0.7% as of 9:05 a.m. in Tokyo. South Korea’s Kospi index added 1%. Futures on the S&P 500 Index rose 0.2%. Australia’s S&P/ASX 200 Index rose 0.7%.    
Wall Street Journal:
MarketWatch.com:
Zero Hedge:           
Night Trading
  • Asian indices are unch. to +1.0% on average.
  • Asia Ex-Japan Investment Grade CDS Index 65.0 -.25 basis point.
  • China Sovereign CDS 39.50 unch.
  • Bloomberg Emerging Markets Currency Index 65.49 +.03%.
  • FTSE 100 futures +.36%.
  • S&P 500 futures +.30%.
  • NASDAQ 100 futures +.40%.

Earnings of Note
Company/Estimate

Before the Open:
  • (JEC)/1.31
After the Close:
  • (A)/.86
  • (AMBA)/.21
  • (HPE)/.46
  • (NTNX)/-.75
  • (PANW)/1.04
  • (PVH)/2.99
Economic Releases
8:30 am EST
  • The Chicago Fed National Activity Index for Oct. is estimated to rise to -.2 versus -.45 in Sept.
10:30 am EST
  • The Dallas Fed National Activity Index for Nov. is estimated to rise to -3.5 versus -5.1 in Oct.
Upcoming Splits
  • None of note
Other Potential Market Movers
  • The $40B 2Y T-Note auction, German IFO report and the (PTC) investor meeting could also impact trading today.
BOTTOM LINE: Asian indices are mostly higher, boosted by technology and industrial shares in the region. I expect US stocks to open modestly higher and to maintain gains into the afternoon.  The Portfolio is 100% net long heading into the week.