Today's Headlines

Bloomberg:    

• China’s Inflation Rises to Seven-Year High on Soaring Pork.

• Charting the Global Economy: EU Stimulus, World Manufacturing.

• A Red Alert Is Flashing on the Bond Trader’s Radar.

• Get Ready as ‘Beta-Chasing’ Stock Managers Try to Make Up Ground .

• House Republicans Seek Hunter Biden, Whistle-Blower’s Testimony.   

• Super Rich Rethink Buying Yachts in Uncertain Economy.  

• Warren’s Wealth Tax Could Drive Billionaires to Funds She Hates.  

• Bitcoin’s Break Below $9,000 Risks Erasing Xi-Inspired Rally.

• Oil Bulls Make Shy Comeback as Trade Deal Hopes Are Rekindled.

• Netflix, HBO and Cable Giants Are Coming for Password Cheats.

Wall Street Journal:

• Defending Trump: The Republican Playbook.

• PG&E Bankruptcy Protections Could Mean Less Money for Wildfire Victims

• Car Loans Force More Borrowers Underwater.

• Higher Education’s Enemy Within.

• Universities Buy SAT-Takers’ Names and Boost Exclusivity.

• The Great Streaming Battle Is Here. No One Is Safe.

• Investigators Find Clue to Vaping Injuries.

• Catalan Unrest Dims Spanish Socialists’ Hopes for Big Electoral Win.

• Hong Kong Arrests Pro-Democracy Lawmakers Ahead of Local Elections.

Barron's:

• Had bullish commentary on (HON), (DIS), (WBA), (BAC), (C), (FITB), (KEY) and (PNC).

MarketWatch.com:

• Opinion: 5 companies that Google(GOOG) should eye after buying Fitbit.

• S&P 500, Nasdaq finish at record highs as stocks notch weekly gains.

• Get ready for another Santa Claus rally to boost stocks, Fundstrat’s Tom Lee says.

Fox News:

• Trump wants Pelosi, Biden as impeachment witnesses, teases second phone call transcript.

• EXCLUSIVE: GOP wants Biden son, Ukraine whistleblower as impeachment inquiry witnesses.

CNBC:

• Saudi Aramco will offer less than 1% of shares to individual investors in IPO.

• Grading stocks’ comeback and whether this is the start of the next leg of the bull market.

• An investor’s guide to space, Wall Street’s next trillion-dollar industry.

• With a market at record highs, these are the most loved stocks on Wall Street from here.

• ETF inflows rise to a record $4 trillion and top industry expert says it’s still ‘early days’.

• Here are the best analyst calls of the week on Wall Street including Nike, Sonos.

Zero Hedge:

• Nunes Demands Schiff Testify After Lying; Also Wants Whistleblower And Hunter Biden To Appear.

• Visitor Logs Reveal 'Whistleblower' And DNC Contractor Visited Obama White House Multiple Times.

• Learn To Code: Traditional Bond Traders Now Being Overrun By Programming Quants.

• CTAs Are Almost Done Selling Bonds: Why The Market's "Great Rotation" Is Almost Over.

• Hong Kong Student Dies From Injuries In First Fatality Linked To Protests.

• "Wake-Up Call" To Europe: Iran Vows Increase Of Nuclear Activity Every 2 Months.

• Daimler To Slash 10% Of Management Amid Global Auto Industry Bust.

• China Auto Sales Fall 6% In October As Global Auto Recession Shows No Signs Of Slowing.

• Pentagon Official Warns China Exporting Killer AI Drones To Middle East.

• Facebook(FB) Scrubs All References To Alleged Whistleblower Eric Ciaramella.

• 4 Reasons Why Socialism Is Becoming More Popular.

• Harvard Wants Students To Bone Up On Oral And Anal Sex, Stop Judging Fatties.

• Moodys Downgrades UK Outlook To Negative On "Brexit Paralysis".

• "Incredibly Harsh Arctic Airmass" Set To Plunge Half Of US Into Record Cold.

• Musk-Einhorn Twitter War Erupts After Greenlight Responds To Tesla CEO's Taunts.

• Global Debt Tops $188,000,000,000,000 – Officially The Biggest Debt Bubble The World Has Ever Seen.

• Whistleblower Attorney Bragged About Getting Security Clearances For "Guys With Child Porn Issues".

• ISIS Urges Followers To Unleash Wildfires On America & Europe.

• Gold Suffers Worst Week In 3 Years As Fed Balance Sheet Explodes.

Business Insider: 

• Michael Bloomberg’s late entry into the 2020 race is based on a widespread fear among Democrats that Joe Biden’s campaign is in a ‘dire’ place.

• Plummeting participation in youth football is a huge opportunity for fall baseball leagues across the US, according to the CEO of Dick's.

Stocks Reversing Higher into Final Hour on Earnings Optimism, Diminishing Global Growth Worries, Technical Buying, Biotech/Tech Sector Strength

 Broad Equity Market Tone:

• Advance/Decline Line: Modestly Higher
  

• Sector Performance: Most Sectors Rising
  

• Volume: Aaround Average

• Market Leading Stocks: Outperforming

Equity Investor Angst:

• Volatility(VIX) 12.5 -1.6%

• Euro/Yen Carry Return Index 124.88 -.4%

• Emerging Markets Currency Volatility(VXY) 7.15 unch.

• S&P 500 Implied Correlation 28.9 -9.1%

• ISE Sentiment Index 125.0 +12
  

• Total Put/Call .95 +46.2%

• NYSE Arms .96 +31.5%

Credit Investor Angst:

• North American Investment Grade CDS Index 51.44 +.12%
  

• America Energy Sector High-Yield CDS Index 535.0 +.02%

• European Financial Sector CDS Index 57.13 +.42%

• Italian/German 10Y Yld Spread 145.5 +5.75 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 63.02 -.64%
  

• Emerging Market CDS Index 193.94 +1.43%
  

• iBoxx Offshore RMB China Corporate High Yield Index 167.55 +.03%

• 2-Year Swap Spread 4.5 +.25 basis point

• TED Spread 35.5 +.75 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -16.25 -.5 basis point

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 65.95 -.40%
• 3-Month T-Bill Yield 1.54% -1.0 basis point

• Yield Curve .24 +3.0 basis points

• China Iron Ore Spot 77.80 USD/Metric Tonne -2.31%

• Citi US Economic Surprise Index 7.20 -.3 point

• Citi Eurozone Economic Surprise Index -25.30 +1.9 points

• Citi Emerging Markets Economic Surprise Index -21.40 +2.1 basis points

• 10-Year TIPS Spread 1.73 +2.0 basis points
• 18.6% chance of Fed rate cut at Jan. 29th meeting, 30.9% chance of cut at March 18th meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating +78 open in Japan 
• China A50 Futures: Indicating +38 open in China

• DAX Futures: Indicating +21 open in Germany

Portfolio:

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

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

• Market Exposure: Moved to 100% Net Long

Morning Market Internals

NYSE Composite Index:

• Volume Running +9.9% Above 100-Day Average
• 7 Sectors Rising, 4 Sectors Declining
• 50.9% of Issues Advancing, 45.9% Declining
• 65 New 52-Week Highs, 38 New Lows
• 60.4% of Issues Above 200-day Moving Average
• Average 14-Day RSI 50.4%
• Vix 12.7 -.6%
• Total Put/Call .95 +46.2%
• TRIN/Arms 1.17 +60.3%

Friday Watch

Night Trading 

• Asian equity indices are -.25% to +.5% on average.

• Asia Ex-Japan Investment Grade CDS Index 64.75 +. basis point.

• China Sovereign CDS 36.75 -. basis point.

• Bloomberg Emerging Markets Currency Index  66.19 -.03%.
• FTSE 100 futures -.15%.

• S&P 500 futures -.17%.

• NASDAQ 100 futures -.24%.

Morning Preview Links

Earnings of Note 

Company/Estimate

Before the Open:

• (EPAY)/.28
• (DUK)/1.67
• (HMC)/99.09
• (MGA)/1.34
• (ZEUS)/.06

After the Close:

• None of note

Economic Releases

8:30 am EST

• Wholesale Trade Sales MoM for Sept. is estimated to rise +.2% versus unch. in Aug.

10:00 am EST

• Preliminary Univ. of Mich. Consumer Sentiment for Nov. is estimated at 95.5 versus 95.5 in Oct.

Upcoming Splits

• None of note

Other Potential Market Movers

• The Fed's Williams speaking, Fed's Brainard speaking, Fed's Daly speaking, China Loan Data report, Bloomberg Nov. US Economic Survey and the (STAA) investor day could also impact trading today.

BOTTOM LINE: Asian indices are mostly lower, weighed down by consumer and healthcare shares in the region. I expect US stocks to open modestly lower and rally into the afternoon, finishing mixed. The Portfolio is 75% net long heading into the day.

Stocks Modestly Higher into Final Hour on China Trade Deal Hopes, Earnings Optimism, Oil Gain, Energy/Tech Sector Strength

 Broad Equity Market Tone:

• Advance/Decline Line: Modestly Higher
  

• Sector Performance: Most Sectors Rising
  

• Volume: Above Average

• Market Leading Stocks: Performing In Line

Equity Investor Angst:

• Volatility(VIX) 12.7 +.4%

• Euro/Yen Carry Return Index 125.40 +.15%

• Emerging Markets Currency Volatility(VXY) 7.24 -1.09%

• S&P 500 Implied Correlation 29.33 +1.28%

• ISE Sentiment Index 113.0 +24
  

• Total Put/Call .65 -31.6%

• NYSE Arms .72 -39.5%

Credit Investor Angst:

• North American Investment Grade CDS Index 51.10 -1.47%
  

• America Energy Sector High-Yield CDS Index 535.0 +4.6%

• European Financial Sector CDS Index 56.89 -2.06%

• Italian/German 10Y Yld Spread 139.75 +6.25 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 63.24 -1.04%
  

• Emerging Market CDS Index 190.78 -1.52%
  

• iBoxx Offshore RMB China Corporate High Yield Index 167.49 +.08%

• 2-Year Swap Spread 4.25 +.25 basis point

• TED Spread 34.75 -1.25 basis points

• 3-Month EUR/USD Cross-Currency Basis Swap -15.75 -3.75 basis points

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 66.22 +.05%
• 3-Month T-Bill Yield 1.55% unch.

• Yield Curve .21 -2.0 basis points

• China Iron Ore Spot 79.90 USD/Metric Tonne -.51%

• Citi US Economic Surprise Index 7.50 +.4 point

• Citi Eurozone Economic Surprise Index -27.20 +.5 point

• Citi Emerging Markets Economic Surprise Index -23.50 +.2 basis point

• 10-Year TIPS Spread 1.71 +3.0 basis points
• 22.1% chance of Fed rate cut at Jan. 29th meeting, 33.9% chance of cut at March 18th meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating +195 open in Japan 
• China A50 Futures: Indicating +61 open in China

• DAX Futures: Indicating -23 open in Germany

Portfolio:

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

• Disclosed Trades: Added to my (IWM)/(QQQ) hedges

• Market Exposure: Moved to 75% Net Long