Monday Watch

Night Trading

• Asian indices are -.50% to +.25% on average.
• Asia Ex-Japan Investment Grade CDS Index 113.25 -2.25 basis points.
• Asia Pacific Sovereign CDS Index 34.0 +.25 basis point.
• Bloomberg Emerging Markets Currency Index 72.12 -.02%.
• S&P 500 futures +.04%.
• NASDAQ 100 futures +.13%.

Morning Preview Links

Earnings of Note

Company/Estimate

• (CAH)/1.20
• (SO)/1.18
• (LL)/-.21
• (LPX)/.36
• (L)/.72
• (D)/1.07
• (DO)/.03
• (WMB)/.17
• (ZBH)/1.79
• (APC)/-.56
• (RAIL)/.15
• (OLN)/.33
• (OHI)/.84
• (PPS)/.81
• (THC)/.17
• (TSO)/1.42
• (VNO)/1.27

Economic Releases
8:30 am EST

• Personal Income for September is estimated to rise +.4% versus a +.2% gain in August.
• Personal Spending for September is estimated to rise +.2% versus a -.1% decline in August. 
• The PCE Core MoM for September is estimated to rise +.1% versus a +.2% gain in August. 

9:45 am EST

• The Chicago Purchasing Manager for October is estimated to fall to 54.0 versus 54.2 in September.

10:30 am EST

• The Dallas Fed Manufacturing Activity Index for October is estimated to rise to 1.8 versus -3.7 in September.

Upcoming Splits

• None of note

Other Potential Market Movers

• The Eurozone CPI report, Australia central bank decision, China Manufacturing PMI report, (ASML) investor day and the (SO) financial analysts meeting could also impact trading today.

BOTTOM LINE: Asian indices are mostly lower, weighed down by technology 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 25% net long heading into the week.

Weekly Outlook

• Wall St. Week Ahead by Reuters.
• Weekly Economic Calendar by Briefing.com.

BOTTOM LINE: I expect US stocks to finish the week modestly lower on election uncertainty, technical selling, commodity weakness, yen strength, rising European/Emerging Markets/US High-Yield debt angst and earnings outlook concerns. My intermediate-term trading indicators are giving neutral signals and the Portfolio is 50% net long heading into the week.

Today's Headlines

Bloomberg:

• OPEC Splits Prevent Deal With Other Producers to Curb Supply. OPEC’s internal disagreements over how to implement oil-supply cuts agreed last month prevented a deal to secure the cooperation of other major suppliers. More than 18 hours of talks over two days in Vienna yielded little more than a promise that the world’s largest oil producers would keep on talking. Discussions will continue in late November, just days before the Organization of Petroleum Exporting Countries is supposed to finalize the accord that lifted oil prices to one-year highs. Non-OPEC nations ended talks with the group on Saturday without making any supply commitments, Brazil’s Oil and Gas Secretary Marcio Felix said after the meeting. The outcome of the process hinges on Iran and Iraq, two nations that are more interested in increasing production than reducing it, said Azerbaijan’s Energy Minister Natiq Aliyev.
• Pharma Stocks Struck as Drug Pricing Story Takes Its Toll. It’s been a brutal October for health-care investors. The worst may be yet to come. A year after presidential candidate Hillary Clinton first tweeted about outrageous price gouging, the reality of pricing pressure in the U.S. hit Wall Street in the most concrete way: earnings. From drug distributor McKesson & Co., to biotechnology giants Amgen Inc. and AbbVie Inc. and insulin maker Eli Lilly & Co., this week’s third-quarter results showcased widespread evidence that the industry has pulled back on prices under the growing pressure from politicians and pharmacy benefit managers. The crush has sent shares down in the U.S. and beyond, hitting foreign drugmakers like Denmark-based Novo Nordisk A/S, the world’s largest maker of insulin, that have a large portion of their business in the country.

Wall Street Journal:

• OPEC Fails to Finalize Proposal to Implement Production Cut. Cartel’s leader says there will be dire consequences for industry if OPEC doesn’t proceed with plan.
• The Progressive Mind and Poverty: A Wisconsin Case. Political careers like Russ Feingold’s depend on keeping people dependent on government.

Barron's:

• Had bullish commentary on (VMC), (CTXS), (ITT), (HLT) and (JEC).

Fox News:

• Abedin-Weiner electronic device was laptop, had tens-of-thousands of emails, source. (video)

CNBC:

• Shadow banks are taking over the mortgage market again. Shadow banks are on the cusp of taking the lead from their commercial counterparts in the mortgage market, new data suggests, a phenomenon that hasn't been seen since the 2008 financial crisis.

Zero Hedge:

• FBI Found "Tens Of Thousands Of Emails" Belonging To Huma Abedin On Weiner's Laptop.
• DOJ's Loretta Lynch Tried To Squash Comey's Letter To Congress.
• "Sometimes Bill And Hillary Have The Worst Judgment": Wikileaks Releases Part 22 Of Podesta Files; 36,190 Emails Total. 
• Bitcoin Is Soaring: Up Over 10% In One Week On Chinese Buying Spree. (graph)
• ABC/Wapo Effectively Admit To Poll Tampering As Hillary's "Lead" Shrinks To 2-Points.
• JPM Warns Shift To Passive Investing Increases Systemic Risk, Will Make Crashes Worse.
• "Global Economy Is Not Improving" - Anxious CEOs Blame Poor Data On Weak US Consumer. 
• The Story Of Durable Goods Is The Story Of The (Global) Economy. (graph)
• 'Balanced' Investors Stuck Between A Rock & A Hard Place.
• Paris Streets See Big Increase In Migrants After Calais "Jungle" Camp Closure. (video)
• New Research Finds Minimum Wage Ballot Initiatives Could Cost 300,000 Jobs In These 4 States.
• Dramatic 2006 Recording Captures Hillary Clinton Proposing To Rig The Palestine Election.
• New Clinton Emails Emerged As Part Of Probe Into Anthony Weiner's Electronic Devices: NYT.
• Clinton State Dept Spent 5.4 Million Taxpayer Dollars On 'Crystal Stemware', $630k On Facebook 'Likes'.
• David Einhorn Slams Elon Musk, Central Bankers In His Latest Letter.
• VIX Derivatives At "Scariest" Level Since August 2015 Crash. (graph)
• Weekend Reading: Stuck In The Middle - Again.
• Markets 'Turmoil' After Comey Crashes Clinton Party. (graph)

Business Insider:

• Things are starting to rumble in Southeast Asia.
• Australia dealt a massive blow to the UK government's Brexit plans.
• Multiple injuries reported after plane catches fire at Chicago's O'Hare airport.
• DAVID EINHORN: 'Central bankers behave as if we're still in crisis'.
• Bill Ackman is shaking up his hedge fund's fee structure after another year of losses.

Weekly Scoreboard*

Indices

• S&P 500 2,129.15 -.79%

• DJIA 18,175.60 -.22%

• NASDAQ 5,192.94 -1.44%

• Russell 2000 1,189.24 -2.45%

• S&P 500 High Beta 32.64 -.61%

• Goldman 50 Most Shorted 108.62 -4.46%

• Wilshire 5000 21,941.60 -1.15%

• Russell 1000 Growth 1,024.16 -1.27%

• Russell 1000 Value 1,022.62 -.49%

• S&P 500 Consumer Staples 540.33 +.79%

• Vanda Cyclicals-Defensives 1.2039 -.30%
  

• Morgan Stanley Technology 1,203.91 +.95%

• Transports 8,016.84 -.60%

• Utilities 661.13 +1.12%

• Bloomberg European Bank/Financial Services 82.75 +2.29%

• MSCI Emerging Markets 37.15 -1.07%

• HFRX Equity Hedge 1,141.74 -.24%

• HFRX Equity Market Neutral 996.93 -.37%

Sentiment/Internals

• NYSE Cumulative A/D Line 267,320 -.79%

• Bloomberg New Highs-Lows Index -90 -128

• Bloomberg Crude Oil % Bulls 9.52 -62.71%

• CFTC Oil Net Speculative Position 407,995 -1.37%

• CFTC Oil Total Open Interest 1,811,281 -3.68%

• Total Put/Call 1.05 +4.12%

• OEX Put/Call 4.46 +751.7%

• ISE Sentiment 55.0 -51.33%

• NYSE Arms .90 -26.67%

• Volatility(VIX) 16.5 +27.3%

• S&P 500 Implied Correlation 54.23 +39.28%

• G7 Currency Volatility (VXY) 9.29 -.54%

• Emerging Markets Currency Volatility (EM-VXY) 9.69 +2.23%

• Smart Money Flow Index 19,065.39 +.23%

• ICI Money Mkt Mutual Fund Assets $2.651 Trillion +.61%

• ICI US Equity Weekly Net New Cash Flow -$16.262 Billion

• AAII % Bulls 24.8 +4.3%

• AAII % Bears 34.1 -9.9%

Futures Spot Prices

• CRB Index 189.21 +.08%

• Crude Oil 48.76 -4.63%

• Reformulated Gasoline 146.72 -4.27%

• Natural Gas 3.11 +4.76%

• Heating Oil 154.58 -2.46%

• Gold 1,278.80 +1.27%

• Bloomberg Base Metals Index 156.10 +3.84%

• Copper 219.65 +4.97%

• US No. 1 Heavy Melt Scrap Steel 176.33 USD/Ton unch.

• China Iron Ore Spot 63.96 USD/Ton +8.92%

• Lumber 300.70 -2.82%

• UBS-Bloomberg Agriculture 1,189.62 +.67%

Economy

• Atlanta Fed GDPNow Forecast +2.1% +10.0 basis points
• ECRI Weekly Leading Economic Index Growth Rate +8.0% -50.0 basis points

• Philly Fed ADS Real-Time Business Conditions Index -.1574 +8.27%

• S&P 500 Blended Forward 12 Months Mean EPS Estimate 129.11 +.12%

• Citi US Economic Surprise Index -9.10 +13.9 points

• Citi Eurozone Economic Surprise Index 43.5 +26.9 points

• Citi Emerging Markets Economic Surprise Index -14.10 +4.3 points

• Fed Fund Futures imply 82.9% chance of no change, 17.1% chance of 25 basis point hike on 11/02

• US Dollar Index 98.37 -.30%
• MSCI Emerging Markets Currency Index 1,540.20 -.09%

• Euro/Yen Carry Return Index 120.07 +1.64%

• Yield Curve 99.0 +8.0 basis points

• 10-Year US Treasury Yield 1.85% +11.0 basis points

• Federal Reserve's Balance Sheet $4.415 Trillion -.29%

• U.S. Sovereign Debt Credit Default Swap 26.38 -.04%

• Illinois Municipal Debt Credit Default Swap 359.0 -.08%

• Western Europe Sovereign Debt Credit Default Swap Index 18.60 +2.65%

• Asia Pacific Sovereign Debt Credit Default Swap Index 33.90 -.53%
  

• Emerging Markets Sovereign Debt CDS Index 90.13 -3.81%
  

• Israel Sovereign Debt Credit Default Swap 67.0 -1.47%

• Iraq Sovereign Debt Credit Default Swap 749.96 +.66%

• Russia Sovereign Debt Credit Default Swap 222.66 -2.04%

• iBoxx Offshore RMB China Corporate High Yield Index 132.55 +.06%

• 10-Year TIPS Spread 1.73% +4.0 basis points
  

• TED Spread 60.75 +5.0 basis points

• 2-Year Swap Spread 22.75 -1.0 basis points

• 3-Month EUR/USD Cross-Currency Basis Swap -45.5 -2.25 basis points

• N. America Investment Grade Credit Default Swap Index 76.21 +2.4%

• America Energy Sector High-Yield Credit Default Swap Index 597.0 +13.2%

• European Financial Sector Credit Default Swap Index 96.0 +2.0%
  

• Emerging Markets Credit Default Swap Index 238.0 +2.1%
  

• CMBS AAA Super Senior 10-Year Treasury Spread to Swaps 140.0 unch.
  

• M1 Money Supply $3.298 Trillion -2.18%

• Commercial Paper Outstanding 903.10 -.2%

• 4-Week Moving Average of Jobless Claims 253,000 +1,250

• Continuing Claims Unemployment Rate 1.5% unch.

• Average 30-Year Mortgage Rate 3.47% -5.0 basis points

• Weekly Mortgage Applications 492.0 -4.07%

• Bloomberg Consumer Comfort 43.9 +.7 point

• Weekly Retail Sales +.6% -10.0 basis points

• Nationwide Gas $2.22/gallon -.01/gallon

• Baltic Dry Index 798.0 -5.23%

• China (Export) Containerized Freight Index 738.03 +1.15%

• Oil Tanker Rate(Arabian Gulf to U.S. Gulf Coast) 35.0 -12.5%

• Rail Freight Carloads 275,541 +2.34%

Best Performing Style

• Large-Cap Value -.5%

Worst Performing Style

• Small-Cap Growth -2.9%

Leading Sectors

• Computer Hardware +3.6%

• Defense +1.2%

• Steel +1.2%

• Utilities +1.1%

• Telecom +1.0%

Lagging Sectors

• Medical Equipment -3.5% 

• Alt Energy -3.7%

• Oil Service -6.6%

• Oil Tankers -10.5%

• Hospitals -16.2%

Weekly High-Volume Stock Gainers (30)

• MBVT, STRA, CPLA, AKAM, SAIA, BEAV, NCR, SJW, JNPR, RAI, NCI, OI, CR, AIT, JCOM, EVDY, FFIV, CTL, PLNT, BOOT, SFLY, YRCW, STBA, CLGX, IRBT, NOW, ALSN, TWX, SLAB and TMUS

Weekly High-Volume Stock Losers (48)

• NVEE, IART, ABG, T, CARE, GPK, DGI, EAT, WAB, AVY, CSGP, KMT, ANCX, HUBG, SONC, CMG, DXPE, WOOF, SHW, SHW, WAT, ABAX, DECK, WHR, MGPI, LH, SKX, DY, TREE, NUVA, MINI, ATHN, NLSN, DPLO, CYNO, PRXL, CLW, BCC, ABMD, ESND, UA, WNC, SRI, EW, LRN, ATI, TRNC and GNC

Weekly Charts

ETFs

• High-Volume Gainers

• High-Volume Losers

Stocks

• High-Volume Gainers

• High-Volume Losers

*5-Day Change