Stocks Slightly Higher into Final Hour on Virus Vaccine/Treatment Optimism, Stimlus Hopes, Short-Covering, Homebuilding/Transport Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Modestly Higher
  

• Sector Performance: Mixed
  

• Volume: Around Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 28.1 -.11%
• Bloomberg Global Risk On/Risk Off Index 266.0 unch.

• Euro/Yen Carry Return Index 128.67 +.19%

• Emerging Markets Currency Volatility(VXY) 10.93 -.18%

• S&P 500 Implied Correlation 51.04 +1.71%

• ISE Sentiment Index 134.0 +35.0 points
  

• Total Put/Call .81 +2.53%

• NYSE Arms 1.19 +142.8%

Credit Investor Angst:

• North American Investment Grade CDS Index 56.75 -1.02%
  

• US Energy High-Yield OAS 803.40 -.17%

• European Financial Sector CDS Index 72.50 -2.23%

• Italian/German 10Y Yld Spread 133.0 -4.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 65.44 -.61%
  

• Emerging Market CDS Index 203.16 +.25%
  

• iBoxx Offshore RMB China Corporate High Yield Index 179.56 +.02%

• 2-Year Swap Spread 8.25 -.25 basis point

• TED Spread 13.0 +.25 basis point
  

• 3-Month EUR/USD Cross-Currency Basis Swap -13.5 -.5 basis point
  
• MBS  5/10 Treasury Spread  80.0 +.75 basis point
  
• IHS Markit CMBX BBB- 6 68.25 unch.

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 59.74 +.04%
• 3-Month T-Bill Yield .09% unch.

• Yield Curve 70.0 +3.5 basis points
  

• China Iron Ore Spot 113.75 USD/Metric Tonne -3.1%

• Citi US Economic Surprise Index 127.9 -.2 point

• Citi Eurozone Economic Surprise Index 15.70 +10.2 points
  

• Citi Emerging Markets Economic Surprise Index 40.50 -.1 point

• 10-Year TIPS Spread 1.75 -1.0 basis point
• 100.0% chance of no change at Dec. 16th meeting, 100.0% chance of no change at Jan. 27th meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating +19 open in Japan 
• China A50 Futures: Indicating +167 open in China

• DAX Futures: Indicating -31 open in Germany

Portfolio:

• Slightly Higher: On gains in my biotech/industrial/consumer staple sector longs
  

• Disclosed Trades: None
  

• Market Exposure: 50% Net Long

Bear Radar

 Style Underperformer:

• Small-Cap Growth -.4%

Sector Underperformers:

• 1) Computer Hardware -1.4% 2) Disk Drives -1.4% 3) Gold & Silver -1.1%

Stocks Falling on Unusual Volume: 

• HCSG, NTGR, AXP, AGIO, EFX, IPOB, LMND, SBE, THO, TXRH, AAL, VRSN, CTXS, FHN, HA, HTH, MANH, FGEN, FSLY, EAT, REGI, U, SSYS, SDC, U, UNFI, USAC, SLQT, SPAQ, EHTH, CELH, SNOW, SPCE, WGO, RHI, VIR, GBX, BJRI, INTC and BLMN
  

Stocks With Unusual Put Option Activity:

• 1) NSC 2) APO 3) INTC 4) AXP 5) SNAP
  

Stocks With Most Negative News Mentions:

• 1) LLNW 2) FSLY 3) CTXS 4) AXP 5) BLNK
  

Charts:

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

Bull Radar

Style Outperformer:

• Small-Cap Value -.1%

Sector Outperformers:

• 1) Steel +1.3% 2) Homebuilding +.5% 3) Healthcare Providers +.5%

Stocks Rising on Unusual Volume:

• MAT, KOD, SNAP, X, FUBO, BEAM, NXGN, AIMC, FTAI, BATRK, FAF, BCOV, OZK and SIVB
  

Stocks With Unusual Call Option Activity:

• 1) MAT 2) ATUS 3) ALGN 4) APO 5) NBEV

Stocks With Most Positive News Mentions:

• 1) MAT 2) SAM 3) AIMC 4) GRC 5) GNTX
  

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running -11.9% Below 100-Day Average
• 8 Sectors Rising, 3 Sectors Declining
• 62.2% of Issues Advancing, 34.1% Declining
• 51 New 52-Week Highs, 8 New Lows
• 56.3% of Issues Above 200-day Moving Average
• Average 14-Day RSI 48.9% 
• Bloomberg Global Risk-On/Risk-Off Index 287.0 +20.0 points
• Vix 28.1 -.2%
• Total Put/Call .66 -16.5%
• TRIN/Arms .98 +100.0%

Friday Watch

Evening Headlines

Bloomberg:

• China Gets Richer as Virus Drags on U.S., Credit Suisse Says.  
• Huawei Outhustles Trump by Hoarding Chips Vital for China 5G.  
• What to Watch for in China's 5-Year Plan as Economy Shifts to Self-Sufficiency.
• U.S. Deaths Hit High; France New Cases Top 40,000: Virus Update.
• Stock Futures Steady Before Final Election Debate: Markets Wrap.  U.S. equity futures were steady and benchmark Treasury yields remained near their highest since June as traders readied for the final presidential debate and lawmakers in Washington continued to haggle over a spending bill. Asian stocks were mixed. S&P 500 contracts were little changed after the benchmark closed higher with financial stocks rallying almost 2%. The 10-year Treasury yield steadied around 0.85% amid data showing the labor market is still gradually recovering. The dollar was little changed. Japanese and South Korean shares edged higher, while those in Australia dipped. Intel Corp. tumbled in after-hours trading after a tepid forecast. S&P 500 Index futures were flat as of 9:01 a.m. in Tokyo. The gauge rose 0.5% on Thursday. Japan’s Topix index gained 0.2%. Australia’s S&P/ASX 200 Index slid 0.2%.
• Oil Set for Weekly Drop With Second Wave Clouding Demand Outlook.  
• China’s Self-Reliance, 1986 Goal, Jobless Claims Drop: Eco Day.
• Senate Skepticism on Pre-Election Stimulus Vote Spreads to House.
• Chicago Issues Business Curfew as Cases, Hospitalizations Surge.  
• WeWork Default Is a Real Possibility, Fitch Ratings Warns.
• Goldman’s Image Stained Again With Damning 1MDB Settlements.
• Uber, Lyft Ordered by Appeals Court to Comply With Labor Law.
• FDA Vaccine Rules Challenged as Weak at Advisory Panel Meeting.  
• What We Learned From Ghislaine Maxwell’s Unsealed Deposition.

Wall Street Journal:

• In Xi Jinping’s China, Nationalism Takes a Dark Turn.
• Inside the Left’s Web of ‘Dark Money’.
• The Biden ‘Family Legacy’.
• Red and Blue States of Recovery.
• Jobless Claims for Month So Far Fell to Lowest Levels Since March.
• Palantir to Help U.S. Track Covid-19 Vaccines.
• Barbie Sales Take Off as Parents Try to Cut Down on Screen Time.
• Intel Hit as Consumers Flock to Lower-Cost Laptops, Datacenter Chips.

Fox News:

• New Hunter Biden allegations hover over final Trump-Joe Biden debate. 
• EXCLUSIVE: Hunter Biden biz associate's texts suggest meeting with Joe.
• Progressive journalist slams corporate media for 'dangerous' blackout of Hunter Biden scandal
• Hunter's ex-partner recounts meeting Joe Biden, says sons were 'paranoid' about hiding father's involvement.
• Pressure builds for debate moderator to address growing Hunter Biden scandal.
  

CNBC.com:

• Digital payment stocks Square and PayPal surge this year, but a market analyst has a warning.
• Intel drops on weak results for its data center group.
• Coronavirus second wave is hitting Europe in very different ways. JPMorgan has a theory on it.
• Steel producer Nucor sees opportunity in autos beyond recent rebound.
• Redfin CEO expects ‘absolutely insane’ demand in housing market to last into 2021. 
  

MarketWatch.com:         

• Gilead's stock rises as FDA formally approves remdesivir.  
• Walmart sues government in pre-emptive move ahead of expected opioid lawsuit.

Zero Hedge:

• Hunter Biden's Ex-Partner To Be Trump's Debate Guest As Senate Demands Hunter Turn Over Records.
• Iran To Import North Korean Missiles In 25-Year Military Deal With China.
• Hunter's Ex-Biz Partner Speaks In Pre-Debate Presser.
• Walmart's Redesigned Airport-Style Stores Will Track Everyone.
• "Bias, Hatred, & Rudeness" - Trump Posts Full Raw '60 Minutes' Interview, Then Posts Pence's.
• 2020's Best Performing Hedge Fund Warns Of "Incredible Move" Around The Election.
• Epstein And Bill Clinton Flew Together, Maxwell Confirms In Newly Released Deposition.
• Intel Plummets After Data Center Sales, Gross Margin Miss; Cloud Server Orders Slowing.
• Pelosi Optimism Triggers Massive Value Rotating Short Squeeze.

The Epoch Times:

• A Look Back at the Biden Family’s China Business Ties.
  

Digital Blackboard:

• Daily New Cases by Region.

Worldometer:

• New Cases/Deaths by state.

Rt Covid-19:

• How fast virus is growing by state.

KFF:

• State Data(Tests/Hospitalizations).

Night Trading 

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

• Asia Ex-Japan Investment Grade CDS Index 65.75 unch.

• China Sovereign CDS 37.75 -.25 basis point.

• Bloomberg Emerging Markets Currency Index 59.67 -.09%.
• Bloomberg Global Risk-On/Risk Off Index 252.0 -14.0 points.
• Volatility Index(VIX) futures 28.85 +.09%
• FTSE 100 futures +.05%.

• S&P 500 futures -.07%.

• NASDAQ 100 futures +.02%.

Morning Preview Links

Earnings of Note 
Company/Estimate

Before the Open:

• (ABB)/.17
• (AXP)/1.35
• (ALV)/1.15
• (B)/.27
• (BLMN)/-.32
• (CRI)/1.57
• (CLF)/-.12
• (GNTX)/.41
• (ITW)/1.45
  

After the Close:

• None of note
  

Economic Releases

9:45 am EST

• The Markit US Manufacturing PMI for Oct. is estimated to rise to 53.5 versus 53.2 in Sept.
• The Markit US Services PMI for Oct. is estimated at 54.6 versus 54.6 in Sept.
  

Upcoming Splits

• (NEE) 4-for-1
  

Other Potential Market Movers

• The Full Senate vote on nomination of Amy Coney Barrett and the Eurozone PMI report,  could also impact trading today.

Market Hours
Normal:

• 9:30 am - 4:00 pm EST
  

BOTTOM LINE: Asian indices are modestly lower, weighed down by technology and consumer shares in the region. I expect US stocks to open mixed and to weaken into the afternoon, finished modestly lower. The Portfolio is 50% net long heading into the day.

Stocks Rising into Final Hour on Stimulus Hopes, Earnings Optimism, Short-Covering, Energy/Financial Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Higher
  

• Sector Performance: Most Sectors Rising
  

• Volume: Around Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 27.9 -2.7%
• Bloomberg Global Risk On/Risk Off Index 288.0 +103.0 points

• Euro/Yen Carry Return Index 128.39 -.10%

• Emerging Markets Currency Volatility(VXY) 11.1 +1.3%

• S&P 500 Implied Correlation 49.8 -2.3%

• ISE Sentiment Index 99.0 -5.0 points
  

• Total Put/Call .79 -10.2%

• NYSE Arms .59 -29.8%

Credit Investor Angst:

• North American Investment Grade CDS Index 57.15 -.15%
  

• US Energy High-Yield OAS 806.55 +.26%

• European Financial Sector CDS Index 74.16 +2.67%

• Italian/German 10Y Yld Spread 137.0 unch.
  

• Asia Ex-Japan Investment Grade CDS Index 65.89 +.23%
  

• Emerging Market CDS Index 202.44 +.01%
  

• iBoxx Offshore RMB China Corporate High Yield Index 179.852 -.18%

• 2-Year Swap Spread 8.5 -.25 basis point

• TED Spread 12.75 +1.25 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -13.0 +.5 basis point
  
• MBS  5/10 Treasury Spread  79.25 -2.5 basis points
  
• IHS Markit CMBX BBB- 6 68.25 unch.

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 59.72 -.23%
• 3-Month T-Bill Yield .09% unch.

• Yield Curve 66.5 -.75 basis point
  

• China Iron Ore Spot 116.1 USD/Metric Tonne -1.82%

• Citi US Economic Surprise Index 128.1 +2.2 points

• Citi Eurozone Economic Surprise Index 5.50 -2.4 points
  

• Citi Emerging Markets Economic Surprise Index 40.60 -.3 point

• 10-Year TIPS Spread 1.76 +3.0 basis points
• 100.0% chance of no change at Dec. 16th meeting, 100.0% chance of no change at Jan. 27th meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating +126 open in Japan 
• China A50 Futures: Indicating +56 open in China

• DAX Futures: Indicating +29 open in Germany

Portfolio:

• Higher: On gains in my tech/medical/industrial/biotech sector longs
  

• Disclosed Trades: None
  

• Market Exposure: 50% Net Long