Stocks Higher into Final Hour on Stimlus Hopes, Virus Vaccine/Treatment Optimism, Less European/Emergiong Markets/US High-Yld Debt Angst, Tech/Transport Sector Strength

 Broad Equity Market Tone:

• Advance/Decline Line: Higher
  

• Sector Performance: Most Sectors Rising
  

• Volume: Below Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 25.4 -3.8%
• Bloomberg Global Risk On/Risk Off Index 386.0 +61.0 points

• Euro/Yen Carry Return Index 129.37 +.18%

• Emerging Markets Currency Volatility(VXY) 11.56 -.69%

• S&P 500 Implied Correlation 43.5 -4.9%

• ISE Sentiment Index 129.0 +6.6 points
  

• Total Put/Call .77 -1.3%

• NYSE Arms .90 +60.7%

Credit Investor Angst:

• North American Investment Grade CDS Index 53.3 -3.1%
  

• US Energy High-Yield OAS 808.19 -.48%

• European Financial Sector CDS Index 68.05 -3.75%

• Italian/German 10Y Yld Spread 125.0 -3.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 65.69 -4.26%
  

• Emerging Market CDS Index 197.96 -4.3%
  

• iBoxx Offshore RMB China Corporate High Yield Index 178.61 +.15%

• 2-Year Swap Spread 8.75 -.25 basis point

• TED Spread 12.5 -1.5 basis point
  

• 3-Month EUR/USD Cross-Currency Basis Swap -9.75 +.5 basis point
  
• MBS  5/10 Treasury Spread  85.0 +.5 basis point
  
• IHS Markit CMBX BBB- 6 67.5 +.5 basis point

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 59.83 +.70%
• 3-Month T-Bill Yield .09% unch.

• Yield Curve 62.5 -.25 basis point
  

• China Iron Ore Spot 121.0 USD/Metric Tonne +3.1%

• Citi US Economic Surprise Index 149.9 -3.6 points

• Citi Eurozone Economic Surprise Index 49.70 +2.1 points
  

• Citi Emerging Markets Economic Surprise Index 44.9 -1.2 points

• 10-Year TIPS Spread 1.73 +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 +11 open in Japan 
• China A50 Futures: Indicating +45 open in China

• DAX Futures: Indicating -7 open in Germany

Portfolio:

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

• Disclosed Trades: None
  

• Market Exposure: 75% Net Long

 

Bear Radar

Style Underperformer:

• Mid-Cap Value +.3%

Sector Underperformers:

• 1) Gaming -2.0% 2) Oil Service -1.6% 3) Energy -1.1%

Stocks Falling on Unusual Volume: 

• DKNG, CYTK, AMD, SNDX and FTV
  

Stocks With Unusual Put Option Activity:

• 1) XLNX 2) GME 3) TRGP 4) UAA 5) VNQ
  

Stocks With Most Negative News Mentions:

• 1) BTU 2) KNX 3) ACB 4) HXL 5) NKLA
  

Charts:

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

Bull Radar

Style Outperformer:

• Mid-Cap Growth +1.6%

Sector Outperformers:

• 1) Gold & Silver +3.6% 2) Alt Energy +2.9% 3) Airlines +2.1%

Stocks Rising on Unusual Volume:

• SPTN, KODK, IPOB, MATX, XLNX, FEAC, BE, DDOG, LILAK, NTLA, LMND, LILA, FSLY, TPTX, LL, CELH, CDNA, SSYS, SWTX, EBAY, NLS, IOVA, LQDT, PLUG, GME, LSCC, APOG, BG, FHI, SYNA, FSLR, NSTG, AFIB, NFIN and ATKR
  

Stocks With Unusual Call Option Activity:

• 1) XLNX 2) BLMN 3) PAGP 4) MJ 5) MVIS

Stocks With Most Positive News Mentions:

• 1) PGEN 2) NIU 3) NXPI 4) ZM 5) DDD
  

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running -10.4% Below 100-Day Average
• 7 Sectors Rising, 4 Sectors Declining
• 46.4% of Issues Advancing, 50.6% Declining
• 144 New 52-Week Highs, 10 New Lows
• 55.5% of Issues Above 200-day Moving Average
• Average 14-Day RSI 52.6% 
• Bloomberg Global Risk-On/Risk-Off Index 362.0 +38.0 points
• Vix 25.4 -3.6%
• Total Put/Call .79 +1.3%
• TRIN/Arms .92 +64.3%

 

Friday Watch

Night Trading 

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

• Asia Ex-Japan Investment Grade CDS Index 67.25 -2.75 basis points.

• China Sovereign CDS 40.5 -2.5 basis points.

• Bloomberg Emerging Markets Currency Index 59.48 +.09%.
• Bloomberg Global Risk-On/Risk Off Index 257.0 -67.0 points.
• Volatility Index(VIX) futures 30.25 -.58%
• FTSE 100 futures +.09%.

• S&P 500 futures +.38%.

• NASDAQ 100 futures +.26%.

Morning Preview Links

Earnings of Note 
Company/Estimate

Before the Open:

• None of note
  

After the Close:

• None of note
  

Economic Releases

10:00 am EST

• Wholesale Trade Sales MoM for Aug. 

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The UK GDP report and Bloomberg Oct. US Economic Survey 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 technology shares in the region. I expect US stocks to open mixed and to rally into the afternoon, finished modestly higher. The Portfolio is 75% net long heading into the day.

Stocks Higher into Afternoon on Vaccine Optimism, Stimulus Hopes, Oil Gain, Energy/Homebuilding Sector Strength

 Broad Equity Market Tone:

• Advance/Decline Line: Higher
  

• Sector Performance: Most Sectors Rising
  

• Volume: Below Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 27.1 -3.3%
• Bloomberg Global Risk On/Risk Off Index 254.0 +51.0 points

• Euro/Yen Carry Return Index 129.1 -.03%

• Emerging Markets Currency Volatility(VXY) 11.7 +.3%

• S&P 500 Implied Correlation 47.8 -6.9%

• ISE Sentiment Index 129.0 +25.0 points
  

• Total Put/Call .77 +2.7%

• NYSE Arms .55 -3.5%

Credit Investor Angst:

• North American Investment Grade CDS Index 54.84 -2.4%
  

• US Energy High-Yield OAS 816.71 -.87%

• European Financial Sector CDS Index 70.71 +.89%

• Italian/German 10Y Yld Spread 128.0 unch.
  

• Asia Ex-Japan Investment Grade CDS Index 68.51 -3.0%
  

• Emerging Market CDS Index 207.49 -1.5%
  

• iBoxx Offshore RMB China Corporate High Yield Index 178.36 +.10%

• 2-Year Swap Spread 9.0 +.5 basis point

• TED Spread 14.0 +1.0 basis point
  

• 3-Month EUR/USD Cross-Currency Basis Swap -10.25 -1.75 basis points
  
• MBS  5/10 Treasury Spread  85.75 +.75 basis points
  
• IHS Markit CMBX BBB- 6 67.0 unch.

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 59.43 +.05%
• 3-Month T-Bill Yield .09% unch.

• Yield Curve 62.75 +2.75 basis points
  

• China Iron Ore Spot 118.50 USD/Metric Tonne +.55%

• Citi US Economic Surprise Index 152.5 -2.7 points

• Citi Eurozone Economic Surprise Index 47.60 unch.
  

• Citi Emerging Markets Economic Surprise Index 46.1 -.7 point

• 10-Year TIPS Spread 1.72 +2.0 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 +33 open in Japan 
• China A50 Futures: Indicating +321 open in China

• DAX Futures: Indicating +5 open in Germany

Portfolio:

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

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

• Market Exposure: Moved to 75% Net Long