Stocks Surging into Final Hour on Mideast War Resolution Hopes, AI Infrastructure Build-Out Optimism, Positive Earnings Outlooks, Tech/Energy Sector Strength

Economic/Market Gauges:

• North American Investment Grade CDS Index 59.2 -.3%
• BofA Private Credit Proxy Index 69.4 -.01% 
• Bloomberg US Securitized MBS/ABS/CMBS Avg. OAS .35 +2.0 basis points
• BofA Global Financial Stress Indicator .03 -5.0 basis points
• European Financial Sector CDS Index 66.30 -2.3% 
• Emerging Market CDS Index 160.4 -.1% 
• Israel Sovereign CDS 57.2 +1.2% 
• Bloomberg Global Trade Policy Uncertainty Index .7 unch.
• US Morning Consult Daily Consume Sentiment Index 86.9 -1.2

• Citi US Economic Surprise Index 74.0 +.4

• Citi Eurozone Economic Surprise Index -2.6 -.1

• Citi Emerging Markets Economic Surprise Index 36.2 -1.3
• S&P 500 Current Quarter EPS Growth Rate YoY(451 of 500 reporting) +27.1% unch.
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 416.47 +.06:  Growth Rate +27.0% unch., P/E 18.3 +.3
• S&P 500 Current Year Estimated Profit Margin 16.32% -2.0 basis points
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(8 of 10 reporting) +34.9% unch.
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 1,107.26 +.59: Growth Rate +64.9% +.1 percentage point, P/E 16.0 +.5
• Bloomberg US Financial Conditions Index .90 +9.0 basis points
• US Yield Curve 25.0 basis points (2s/10s) -.5 basis point
• Bloomberg Industrial Metal Index 171.5 +1.2%
• Dutch TTF Nat Gas(European benchmark) 87.0 euros/megawatt-hour +2.7%
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 14.1% unch.
• US Atlanta Fed GDPNow Q4 Forecast +3.5% unch.
• US 10-Year T-Note Yield 4.99% n/a
• 1-Year TIPS Spread 1.99 n/a

• Highest target rate probability for Jan. 27th FOMC meeting: 60.7% (+.6 percentage point) chance of 4.25%-4.5%. Highest target rate probability for March 17th meeting: 43.9%(+3.5 percentage points) chance of 4.5%-4.75%. (current target rate is 3.75-4.0%)
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +930 open in Japan 
• China A50 Futures: Indicating -37 open in China
• KOSPI 200 Futures: Indicating +20 open in South Korea 

• DAX Futures: Indicating +182 open in Germany

Portfolio:

• Higher: On gains in my tech/industrial/biotech/energy sector longs
• Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges
• Market Exposure: Moved to 100% Net Long

Bear Radar

Style Underperformer:

• Large-Cap Value +.2%

Sector Underperformers:

• 1) Gold & Silver -1.0% 2) Foods -.7% 3) Restaurants -.7%

Stocks Falling on Unusual Volume: 

• SE, YETI, APAM, NTES, VIA, RGTI, GO, LEGN, COGT, TTEK, MIR and SEPN

Stocks With Unusual Put Option Activity:

• 1) AAP 2) ARDX 3) LFMD 4) MPT 5) MET

Stocks With Most Negative News Mentions:

• 1) INVZ 2) DAVA 3) MNTK 4) VLN 5) CSTE

Sector ETFs With Most Negative Money Flow:

• 1) SMH 2) XLU 3) IXC 4) DRAM 5) XLF

Charts:

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

Bull Radar

Style Outperformer:

• Large-Cap Growth +3.1%

Sector Outperformers:

• 1) Computer Hardware +7.4% 2) Semis +7.4% 3) AI/Innovation +7.0%

Stocks Rising on Unusual Volume:

• FOSL, CRWV, AXTI, AZTA, CAPR, AAOI, NBIS, SNDK, BE, REZI, SHAZ, FRVO, DELL, LMRI, LITE, MXL, MU, ARM, LGN, EQPT, GLXY, AMKR, ELMT, CECO, FTH, STX, CRDO, AEHR, SONO, MRVL, COHR, ERAS, CIEN, DOCN, ONTO, FUN, FLY, ORCL, MPWR, APLD, SITM, HMH, AMD, TSEM, CLS, ZETA, PSIX, GDS, CORZ, VRT, APEI, LB, INTC, HNRG, ASTS, DCTH, GMRS, IREN, WULF, LSCC, NAMS, HIMS, FROG, MKSI, IBKR, PRAA, TDW, ZM, RKLB, AVGO, AII, FIS, AXGN, BCAX, WTTR, ETOR, AXSM, PUBM, AKAM, ATEX, SANM, SENS, QLYS, TSM, ROCK, WRBY, NVDA, GCT, DGII, PLXS, LUNR, MRCY, DRTS, NET, DOX, CAT, VCYT, IFS, TTD, ZBRA, AXON, ALNY, TPC, CWST, PRAX, JCI, PKX, EXPE, FRNM, ODD and SKM

Stocks With Unusual Call Option Activity:

• 1) URNM 2) VTRS 3) UMC 4) RUM 5) KGC 

Stocks With Most Positive News Mentions:

• 1) CRWV 2) MU 3) FOSL 4) MRVL 5) STX

Sector ETFs With Most Positive Money Flow:

• 1) VGT 2) ARKK 3) XLV 4) SIX 5) AMLP

Charts: 

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

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

Earnings of Note 
Company/Estimate 

Before the Open: 

• (CDNL)/.52
• (FPS)/.20
• (LUNR)/-.10
• (NBIS)/-.72
• (SPB)/.90
• (SSYS)/.02
• (TWST)/-.39
• (WWW)/.46
• (YETI)/.84 
• (WSM)/2.18
• (M)/-.18
• (CSIQ)/-.69 

After the Close: 

• (ANDG)/1.09
• (AMAT)/4.06
• (CBRS)/-.15
• (CSCO)/1.33
• (FLO)/.15
• (LFMD)/-.14 

Economic Releases 

8:30 am EST

• Initial Jobless Claims for last week is estimated to rise to 195K versus 189K the prior week. 
• Continuing Claims is estimated to fall to 1710K versus 1718K prior.

10:00 am EST

• Existing Home Sales for Oct. is estimated at 3.85M versus 3.99M in Sept.

10:30 am EST

• Bloomberg consensus estimates call for a weekly crude oil inventory decline of -852,600 barrels versus a -865,000 barrel decline the prior week. Gasoline supplies is estimated to fall by -219,400 barrels versus a -222,000 barrel decline the prior week. Distillate inventories are estimated to fall by -1,412,800 barrels versus a -3,565,000 barrel decline prior. Finally, Refinery Utilization is estimated to rise +.48% versus a +1.7% gain prior.

2:00 pm EST

• The Federal Budget Deficit for Oct. is estimated at -$300.0B versus -$284.3B in Sept. 

Upcoming Splits

• (SNDK) 8-for-1

Other Potential Market Movers

• The Fed's Goolsbee speaking, Fed's Williams speaking, Fed's Hammack speaking, Fed's Barr speaking, Fed's Daly speaking, Fed's Schmid speaking, 30Y T-Bond auction, Fed's weekly balance sheet report, weekly EIA natural gas inventory report, BMO Tech/Innovation Leaders Conference, RW Baird Industrial Conference, (ATI) investor day, (KHC) investor day, (CAH) annual meeting and the JPMorgan US Opportunities Forum could also impact global trading tomorrow.

US Equity Market Hours

• 9:30 am - 4:00 pm EST

Mid-Day Market Internals

NYSE Composite Index:

• Volume Running -13.9% Below 100-Day Average 
• Nasdaq/NYSE Volume Ratio 25.4 +12.2
• 7 Sectors Rising, 4 Sectors Declining
• 53.0% of Issues Advancing, 45.3% Declining 
• TRIN/Arms .90 +21.6%
• Non-Block Money Flow +$100.8M
  
• 38 New 52-Week Highs, 59 New Lows
• 45.7% (+1.1%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 58.4 +5.0

Polymarket: 

• Will China invade Taiwan by June 30th 2027? 5.0% -1.0 percentage point
• Strait of Hormuz traffic returns to normal by November 30th 2.0% -1.0 percentage point
• Iran agrees to end enrichment of uranium by Dec. 31st 3.0% -1.0 percentage point
• Israel withdraws from Lebanon by December 31st 2.0% unch.
• US Invades Iran before 2027 7.0% -2.0 percentage points
• US announces end of Iranian blockade by November 30th 14.0% -12.0 percentage points

Other

• Bloomberg Global Risk-On/Risk-Off Index 124.1 +3.0%
• Global Monitor Iran Instability Index 73.0 +2.0
• Strait of Hormuz Oil Tanker Traffic Curtailed Estimate 50.0% +15.0 percentage points
• US High-Yield Tech Sector OAS Index 493.0 -21.75 basis points
• France Sovereign CDS 86.4 +.2%
• Bloomberg Cyclicals/Defensives Index 260.9 +.2%
• Morgan Stanley Growth vs Value Index 139.7 +2.5%
• CNN Fear & Greed Index 38.0 (FEAR) +5.0
• 1-Day Vix 10.4 -25.2%
• Vix 17.7 -9.3%
• Total Put/Call .84 -10.6%

Wednesday Watch

Night Trading 

• Asian equity indices are -.25% to +1.25% on average. 
• Asia Ex-Japan Investment Grade CDS Index 70.25 unch.   
• China Sovereign CDS 34.5 -.5 basis point.
• China Iron Ore Spot 91.65 USD/Metric Tonne -1.0%. 
• Crude Oil 86.44/bbl. +.46%. 
• Gold 4,047.90 USD/t oz. +.45%. 
• Swiss Franc/Offshore Chinese Renminbi Cross 8.08 -.09%.
• Bloomberg Emerging Markets Currency Index 33.13 unch.
• Bloomberg Global Risk-On/Risk Off Index 121.4 +.7%.
• US 10-Year Yield 4.99% unch.
• Japan 30-Year Yield 3.93% +5.0 basis points.
• Volatility Index(VIX) futures 19.3 -1.4%.
• Euro Stoxx 50 futures +.58%. 
• S&P 500 futures +.46%.
• NASDAQ 100 futures +.88%.

Morning Preview Links

BOTTOM LINE: Asian indices are mostly higher, boosted by technology and financial shares in the region. I expect US stocks to open modestly higher and to maintain gains into the afternoon.  The Portfolio is 75% net long heading into the day.