Stocks Higher into Final Hour on Stimulus Hopes, Short-Covering, Oil Gain, Alt Energy/Homebuilding Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Higher
  

• Sector Performance: Most Sectors Rising
  

• Volume: Above Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 22.6 -10.0%
• Bloomberg Global Risk On/Risk Off Index 1,862.0 +282.0 points

• Euro/Yen Carry Return Index 132.0 +.33%

• Emerging Markets Currency Volatility(VXY) 10.7 +1.5%

• S&P 500 Implied Correlation 47.7 -3.1%

• ISE Sentiment Index 176.0 +61.0 points
  

• Total Put/Call .66 -15.4%

• NYSE Arms .74 +60.9%

Credit Investor Angst:

• North American Investment Grade CDS Index 5-.14 -3.34%
  

• US Energy High-Yield OAS 532.67 -1.71%

• European Financial Sector CDS Index 59.14 +1.98%

• Italian/German 10Y Yld Spread 108.0 -6.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 57.63 -.83%
  

• Emerging Market CDS Index 154.21 +.06%
  

• iBoxx Offshore RMB China Corporate High Yield Index 184.86 +.07%

• 2-Year Swap Spread 7.75 +.5 basis point

• TED Spread 15.5 -.75 basis point
  

• 3-Month EUR/USD Cross-Currency Basis Swap -2.25 -2.75 basis points
  
• MBS  5/10 Treasury Spread  67.5 -3.25 basis points
  
• IHS Markit CMBX BBB- 6 72.75 -.5 basis point

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 62.58 -.93%
• 3-Month T-Bill Yield .08% unch.
  

• Yield Curve 90.75 +.75 basis point
  

• China Iron Ore Spot 168.10 USD/Metric Tonne +3.24%

• Citi US Economic Surprise Index 64.20 +5.4 points

• Citi Eurozone Economic Surprise Index 166.40 -13.1 points
  

• Citi Emerging Markets Economic Surprise Index 70.20 -1.8 points

• 10-Year TIPS Spread 2.09 +5.0 basis points
• 100.0% chance of no change at March 17th meeting, 100.0% chance of no change at April 28th meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating +130 open in Japan 
• China A50 Futures: Indicating +122 open in China

• DAX Futures: Indicating +13 open in Germany

Portfolio:

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

• Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges
  

• Market Exposure: Moved to 75% Net Long

Bear Radar

Style Underperformer:

• Mid-Cap Value +.7%

Sector Underperformers:

• 1) Utilities -1.3% 2) Steel -1.1% 3) Defense -.6%

Stocks Falling on Unusual Volume: 

• LGIH, CAG, NVRO, BTBT, BBBY, FOX, PLCE, X, APAM, STOR, WLL, IIPR, CAG, ADS, DEA, PCVX. DEA, MRCY, UNFI, MSTG, NUVA, SRG, URBN, AYI, ECPG, PRAA  and MGNI
  

Stocks With Unusual Put Option Activity:

• 1) DDD 2) MGNI 3) VIAC 4) USB 5) LVS
  

Stocks With Most Negative News Mentions:

• 1) VNE 2) FLOW 3) TWTR 4) KO 5) AAL
  

Charts:

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

Bull Radar

Style Outperformer:

• Small-Cap Growth +2.1%

Sector Outperformers:

• 1) Alt Energy +7.6% 2) Banks +3.3% 3) Semis +2.9%

Stocks Rising on Unusual Volume:

• DDD, MARA, PLUG, IPOE, SOL, FCEL, SSYS, RIOT, ARCT, CLSK, IEA, CLNE, AMSC, MSTR, FATE, DM, ATOM, ANGO, BTAI, SNOW, DMTK, TXG, PSNL, ORA, STPK, BLNK, PCRX, USCR, ROKU, RUN, COLL, TEN, STRL, IPOC, PRSP, SI, ATNX, SPWR, DXC, IPOF, GBIO, WBA, ENPH, FSRV, FUBO, ALNY, MWK, DNB, ALB and DNMR
  

Stocks With Unusual Call Option Activity:

• 1) DDD 2) SRPT 3) WBT 4) ATHX 5) DGLY

Stocks With Most Positive News Mentions:

• 1) PLUG 2) DDD 3) ANGO 4) NVDA 5) LB
  

Charts:

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

Morning Market Internals

 NYSE Composite Index:

• Volume Running +18.7% Above 100-Day Average 
• 9 Sectors Rising, 2 Sectors Declining
• 61.0% of Issues Advancing, 37.3% Declining
• 313 New 52-Week Highs, 5 New Lows
• 85.6% of Issues Above 200-day Moving Average
• Average 14-Day RSI 54.9% 
• Bloomberg Global Risk-On/Risk-Off Index 1,870.0 +288.0 points
• Vix 22.7 -9.7%
• Total Put/Call .66 -15.4%
• TRIN/Arms .63 +37.0%

Thursday Watch

Evening Headlines

Bloomberg:      

• Beijing Sends Stark Message to Biden With Hong Kong Crackdown.  
• Xi’s Push Against Jack Ma Sparks New Threat for China Tech.
  
• Kim Jong Un Tells Ruling Party Congress He Wants Defense Boost.
• Asia Stocks Up on U.S. Senate Sweep; Bonds Steady: Markets Wrap.
• Oil Pares Gains With U.S. Capitol Protests Shaking Risk Appetite.  
• Stimulus Boost, Tokyo State of Emergency, BOE Caution: Eco Day.
  
• U.S. Imports No Saudi Crude Oil for First Time in 35 Years.
  
• Congress to Resume Electoral Vote Tally Once Capitol Secure.
  
• California Hospital Crisis Worsens; Moderna EU Nod: Virus Update.  
• Fed Officials All Backed Bond-Buying Pace, December Minutes Show.  
• States Urged to Widen Vaccination Pool Amid Slow U.S. Start.  
• What You Need to Know About Allergic Reactions to Covid Vaccines.

Wall Street Journal:

• Analysis | A Single Day Shakes Two Presidencies, Two Parties and One Nation to the Core.
• Live Coverage | Lawmakers in an Undisclosed Location.
• Capitol Police Weren’t Prepared for Rioters, Authorities Say.
• Biden to Name Merrick Garland as Attorney General.
• U.S. Weighs Adding Alibaba, Tencent to China Stock Ban.
• NYSE Says Again It Will Delist Three Chinese Telecom Stocks.
• Covid-19 Case Studies Offered at Business Schools.
• Dow Rises, Tech Trails as Investors Weigh Unrest at Capitol.

Fox News:    

• Trump addresses violence, maintains election was 'stolen'.
• WATCH LIVE: Congress resumes counting Electoral College votes after protesters at Capitol spark delay.
  

CNBC.com:

• Strategist picks three stocks to buy in 2021 and three to avoid.
• Roblox raises $520 million ahead of planned stock market direct listing.

MarketWatch.com:    

• 10 Biden tax plans that will sail through a Democratic-controlled Senate — and how to prepare for them. 

Zero Hedge:

• Trump Urges Protesters "To Go Home Now" In Video Blasting "Stolen Election".
• Twitter Has Locked President Trump's Account For 12 Hours, Threatens "Permanent Suspension".
• South Carolina Legislation Looks To Ban Mandatory Vaccines.
• Capitol Declared 'Secured'; Woman Shot During Standoff Has Died; Confirmation Process To Resume Tonight.
• Hank Paulson Returns To Wall Street To Run 'Climate-Focused' PE Fund.
• Iran Showcases Suicide Drones During Large-Scale UAV Combat Exercise.
• Omar, Pressley, & Pritzker Push Impeachment As Lobbyists Float 25th Amendment Counter-Coup.
• Despite No Lockdown/Mask-Mandate, Florida Has Same Hospitalization Rate As 2018 Flu Season.
• Northeast Braces For "High Impact" Snowstorms.
• Chicago's COVID And Crime Mess Captured In On Graphic.
• Failure To Contain Big Tech Is The Biggest Failure Of 2020.
• Big-Tech & Bonds Battered But Bitcoin Bid On 'Blue Wave', Gold Pumped'n'Dumped.

Newsmax:

• As Siege Abates, Curfew Takes Hold; Lawmakers to Resume Electoral Process This Eve.
• Protesters Move Inside Kansas Statehouse, Demonstrate at Others.  
• DOJ Says Its Emails Were Breached by SolarWinds Hackers.
  

TheGatewayPundit.com:

• BREAKING: Unarmed Woman Shot and Killed by Capitol Police Identified – 14-Year USAF Veteran (VIDEO).
• BREAKING REPORT: Former FBI Agent on the Ground at US Capitol Says at Least One Bus Load of Antifa Thugs Infiltrated Trump Demonstration.
• EXCLUSIVE: Evidence Reveals Individuals in the Capital Today Who Weren’t Trump Supporters.
• BREAKING: Twitter Deletes President Trump’s Video Calling for Peace – LOCKS OUT ACCOUNT – Threatens PERMANENT Suspension!
• Pence Betrayed General Flynn in 2017 and Today He Betrayed President Trump and America.

The Epoch Times: 

• Chinese Communist Party Says Biden a ‘New Window of Hope’.  
• Another Northern Chinese City Orders Mass COVID-19 Testing as Outbreak Intensifies.
• Chinese Citizens Decry Extreme Lockdown Measures in Northeastern China. 

ProtectTheVote.com: 

• Serious allegations of misconduct in the 2020 elections have resulted in unprecedented legal action to ensure our elections are -- and remain -- free and fair. Find out where we’re exposing fraud and how you can help.

HereIsTheEvidence.com:

• This is for aggregating publicly available items of voter fraud evidence in the US election that would be admissible in court.
  

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 -.25% to +1.5% on average.

• Asia Ex-Japan Investment Grade CDS Index 57.75 unch.

• China Sovereign CDS 28.5 unch.

• Bloomberg Emerging Markets Currency Index 63.14 -.05%.
• Bloomberg Global Risk-On/Risk Off Index 1,642.0 +61.0 points.
• Volatility Index(VIX) futures 25.5 -3.1%.
• FTSE 100 futures +.59%.

• S&P 500 futures +.61%.

• NASDAQ 100 futures +.88%.

Morning Preview Links

Earnings of Note 
Company/Estimate 

 

Before the Open: 

• (AYI)/1.86
• (ANGO)/-.02
• (BBBY)/.21
• (CCL)/-1.84
• (CAG)/.74
• (STZ)/2.24
• (HELE)/3.01
• (LNN)/.75
• (FIZZ)/.71
• (WBA)/1.04
  

After the Close:

• (MU)/.68
• (PSMT)/.67
• (WDFC)/1.03
  

Economic Releases

7:30 am EST

• The Challenger Job Cuts YoY report for Dec.
  

8:30 am EST

• Initial Jobless Claims for last week are estimated to rise to 803K versus 787K the prior week.
• Continuing Claims are estimated to fall to 5300K versus 5219K prior. 
• The Trade Deficit for Nov. is estimated to widen to -$67.3B versus -$63.1B in Oct.
  

10:00 am EST

• The ISM Services Index for Dec. is estimated to fall to 54.5 versus 55.9 in Nov.

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Eurozone Consumer Confidence report, China Trade Balance report, weekly EIA natural gas inventory report and the weekly Bloomberg Consumer Comfort Index could also impact trading today.

Market Hours
Normal:

• 9:30 am - 4:00 pm EST
  

BOTTOM LINE: Asian indices are mostly higher, boosted by commodity and industrial shares in the region. I expect US stocks to open modestly higher and to weaken into the afternoon, finishing mixed. The Portfolio is 50% net long heading into the day.

Mid-Day Market Internals

NYSE Composite Index:

• Volume Running +29.6% Above 100-Day Average 
• 8 Sectors Rising, 3 Sectors Declining
• 66.5% of Issues Advancing, 32.0% Declining
• 322 New 52-Week Highs, 6 New Lows
• 83.8% of Issues Above 200-day Moving Average
• Average 14-Day RSI 51.2% 
• Bloomberg Global Risk-On/Risk-Off Index 1,756.0 +400.0 points
• Vix 22.5 -11.2%
• Total Put/Call .79 +11.3%
• TRIN/Arms .54 -35.7%

Wednesday Watch

 Night Trading 

• Asian equity indices are -.75% to +.25% on average.

• Asia Ex-Japan Investment Grade CDS Index 57.75 +1.0 basis point.

• China Sovereign CDS 28.5 -.25 basis point.

• Bloomberg Emerging Markets Currency Index 62.98 +.01%.
• Bloomberg Global Risk-On/Risk Off Index 1,400.0 +44.0 points.
• Volatility Index(VIX) futures 27.0 +2.0%.
• FTSE 100 futures +.14%.

• S&P 500 futures -.30%.

• NASDAQ 100 futures -.45%.

Morning Preview Links

Earnings of Note 
Company/Estimate 

 

Before the Open: 

• (GBX)/-.10
• (MSM)/1.09
• (RPM)/.99
• (SMPL)/.21
  

After the Close:

• (JEF)/.49
• (RGP)/.17
  

Economic Releases

8:15 am EST

• The ADP Employment Change for Dec. is estimated to fall to 63K versus 307K in Nov.
  

10:00 am EST

• Factory Orders for Nov. is estimated to rise +.7% versus a +1.0% gain in Oct.

10:30 am EST

• Bloomberg consensus estimates call for a weekly crude oil inventory decline of -2,696,820 barrels versus a -6,065,000 decline the prior week. Gasoline supplies are estimated to rise by +57,360 barrels versus a -1,192,000 barrel decline the prior week. Distillate inventories are estimated to rise by +672,550 barrels versus a +3,095,000 barrel gain the prior week. Finally, Refinery Utilization is estimated to rise +.36% versus a +1.4% gain prior.

2:00 pm EST:

• FOMC Dec. 16 Meeting Minutes.

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The electoral college vote certification by Congress, China Services PMI report, Eurozone Services PMI report, weekly MBA Mortgage Applications report, 2021 Consumer Electronics Show, Goldman Sachs Global Energy Conference and (COST) Dec. sales results could also impact trading today.

Market Hours
Normal:

• 9:30 am - 4:00 pm EST
  

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

Stocks Rising into Afternoon on Vaccine Hopes, Stimulus Optimism, Oil Surge, Commodity/Retail Sector Strength

 Broad Equity Market Tone:

• Advance/Decline Line: Substantially Higher
  

• Sector Performance: Most Sectors Rising
  

• Volume: Around Average

• Market Leading Stocks: Outperforming
  

Equity Investor Angst:

• Volatility(VIX) 25.9 -4.2%
• Bloomberg Global Risk On/Risk Off Index 1,312.0 +159.0 points

• Euro/Yen Carry Return Index 130.72 -.07%

• Emerging Markets Currency Volatility(VXY) 10.9 +1.7%

• S&P 500 Implied Correlation 50.2 +2.0%

• ISE Sentiment Index 155.0 +54.0 points
  

• Total Put/Call .60 -33.3%

• NYSE Arms .74 -20.4%

Credit Investor Angst:

• North American Investment Grade CDS Index 51.54 -.94%
  

• US Energy High-Yield OAS 555.30 -.81%

• European Financial Sector CDS Index 58.83 -.34%

• Italian/German 10Y Yld Spread 114.0 -1.0 basis point
  

• Asia Ex-Japan Investment Grade CDS Index 57.34 +2.47%
  

• Emerging Market CDS Index 153.34 +1.02%
  

• iBoxx Offshore RMB China Corporate High Yield Index 184.57 +.07%

• 2-Year Swap Spread 7.25 unch.

• TED Spread 16.25 -1.75 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap .5 +1.5 basis points
  
• MBS  5/10 Treasury Spread  70.75 -.25 basis point
  
• IHS Markit CMBX BBB- 6 73.25 unch.

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 63.01 +.15%
• 3-Month T-Bill Yield .08% +1.0 basis point
  

• Yield Curve 80.5 -1.25 basis points
  

• China Iron Ore Spot 162.38 USD/Metric Tonne +1.64%

• Citi US Economic Surprise Index 58.80 +11.0 points

• Citi Eurozone Economic Surprise Index 179.50 +3.0 points
  

• Citi Emerging Markets Economic Surprise Index 72.10 +.3 point

• 10-Year TIPS Spread 2.04 +3.0 basis points
• 100.0% chance of no change at March 17th meeting, 100.0% chance of no change at April 28th meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating +37 open in Japan 
• China A50 Futures: Indicating unch. open in China

• DAX Futures: Indicating +38 open in Germany

Portfolio:

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

• Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges
  

• Market Exposure: Moved to 75% Net Long

Bear Radar

Style Underperformer:

• Large-Cap Growth +.1%

Sector Underperformers:

• 1) Homebuilding -.7% 2) Software -.5% 3) Utilities -.4%

Stocks Falling on Unusual Volume: 

• PRVB, AMCI, BEEM, FREE, BGS, ARCT, ARWR, BYSI, BPYU, BTAI, GATO, SBTX, OM, SRAC, EOSE, ASO, ODT, RLAY, NARI, AHCO, FSLR, SPRO, ALLK, BTBT and MRSN
  

Stocks With Unusual Put Option Activity:

• 1) APA 2) PXD 3) XHB 4) LB 5) NEE
  

Stocks With Most Negative News Mentions:

• 1) FSLR 2) KO 3) MDC 4) CALA 5) KO
  

Charts:

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

Bull Radar

Style Outperformer:

• Small-Cap Value +2.0%

Sector Outperformers:

• 1) Oil Service +7.7% 2) Energy +6.0% 3) Steel +3.9%

Stocks Rising on Unusual Volume:

• ATOM, BPFH, MARA, FUBO, GPRE, SKLZ, QS, GOEV, BCEI, FLGT, AOSL, BLI, DLX, RMO, STRO, ALB, CURI, DAN, HEES, BIGC, MWK, NBLX, MU, GRUB, XL, COHU, KTOS, NEP and DD
  

Stocks With Unusual Call Option Activity:

• 1) AES 2) CROX 3) TRXC 4) VRAY 5) CPRT

Stocks With Most Positive News Mentions:

• 1) FUBO 2) ATOM 3) MU 4) GFF 5) FCX
  

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running +3.7% Above 100-Day Average 
• 6 Sectors Rising, 5 Sectors Declining
• 62.4% of Issues Advancing, 35.1% Declining
• 65 New 52-Week Highs, 6 New Lows
• 83.8% of Issues Above 200-day Moving Average
• Average 14-Day RSI 49.1% 
• Bloomberg Global Risk-On/Risk-Off Index 1,200.0 +47.0 points
• Vix 27.3 +1.2%
• Total Put/Call .67 -25.6%
• TRIN/Arms 1.03 +8.6%