Tuesday Watch

Evening Headlines

Bloomberg:  

• Fear of Job Loss Haunts Half of World’s Workers as Crisis Rages.  
• India Infection Peak Seen; Green Lane Travel: Virus Update.
• U.S. Futures Tick Higher; Asian Stocks Drift: Markets Wrap.  U.S. futures rose Tuesday as investors held out some hope of a deal on stimulus talks. Asian stocks were little changed after a weak session on Wall Street overnight. S&P 500 Index futures climbed after a spokesman for House Speaker Nancy Pelosi said differences were narrowing in talks. Shares dipped in Japan and fluctuated in South Korea and Australia. The 10-year Treasury yield steadied around 0.77% and the dollar held losses versus major peers. Earlier, the S&P 500 Index fell to the lowest in almost two weeks as time draws short to reach agreement on a bill that could pass by Election Day on Nov. 3. Elsewhere, the Australian dollar slid after comments from the central bank’s assistant governor that short-term rates could fall below zero. Oil extended losses after an OPEC+ meeting made no mention of any changes to a plan to further ease output cuts from January. Global virus cases surpassed 40 million. S&P 500 futures rose 0.6% as of 9:03 a.m. in Tokyo. The S&P 500 Index slipped 1.6%. Topix index fell 0.2%. Australia’s S&P/ASX 200 Index was little changed. South Korea’s Kospi index slipped 0.4%. Hong Kong’s Hang Seng Index futures lost 0.6% earlier.
• Oil Edges Lower With OPEC+ Warning of Precarious Market Outlook.
• Intel Agrees to Sell Storage Unit to SK Hynix for $9 Billion.
• Piedmont Lithium to Issue U.S. Shares as Tesla Drives Interest.  
• California Sees Rise in Insurers Refusing Home-Policy Renewals.  
• Cut-Price Deals Show Shale’s Rapid Decline From Debt-Fueled Boom.

Wall Street Journal:

• The Myth of Moderate Democrats.
• Tax Raid in Arizona.
• Electric-Car Battery Fires Complicate Wider Rollout.
• Farmers Stick With Trump, Despite Trade-War Pain.
• Wisconsin Judge Restores Restrictions on Bars, Restaurants.
• CEOs of Moderna and Abbott Discuss Vaccines and Testing.
• France Vows to Root Out Islamist Extremism After Beheading of Teacher.
• Why Social Media Is So Good at Polarizing Us.

Fox News:

• Barr urged to investigate Biden's alleged ties to son Hunter's business dealings.
  

CNBC.com:

• Pelosi and Mnuchin make progress in stimulus talks, plan to speak again Tuesday.
• Biden’s tax plan could boost tax rates to 62% for some New Yorkers and Californians, studies show.
  

MarketWatch.com:      

• The ‘smart money’ just reversed its bets against tech stocks in a huge way.  
• 20 stocks to help you play a big ‘restocking’ of consumer goods, according to Jefferies.

Zero Hedge: 

• Hunter Biden Is Not The Problem, The Problem Is His Dad.
• Hunter Biden's Laptop "Is Not Some Russian Disinformation Campaign"; DNI Ratcliffe Slams Schiff.
• Streisand Effect: Twitter Ban On Biden Laptop Scandal Nearly Doubled Visibility According To MIT.
• TSA Passenger Traffic Tops One Million Sunday As Return To Normalcy Continues.
• "WHAT THE F*CK! IM OUT": Rapper 50 Cent Melts Down Over Biden-Harris Tax Plan, Endorses Trump.
• CNN, New Yorker Suspend Jeffrey Toobin For Masturbating During A Zoom Call.
• Bonuses For Wall Street Traders, Dealmakers Expected To Shrink In 2020 Despite Surge In IB Profits.
• Futures Rise After Pelosi, Mnuchin "Narrow Differences" On Stimulus.
• IBM Reports Lowest Revenue This Century, Slowdown In Cloud, And Another Grotesque EPS Fudge.
• Black-ish Monday: Stimulus Stumble Sparks Big-Tech's Worst Streak In 14 Months.

The Epoch Times:  

• As Xi Calls on Troops to Prepare for War, Chinese City Orders Residents To Prepare Emergency Supplies. 
• Hunter Biden’s Business Associates Helped Chinese Tycoons Meet With Obama White House Officials, Emails Show.
  

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 -.5% to unch. on average.

• Asia Ex-Japan Investment Grade CDS Index 65.75 -.25 basis point.

• China Sovereign CDS 39.5 +1.0 basis point.

• Bloomberg Emerging Markets Currency Index 59.46 unch..
• Bloomberg Global Risk-On/Risk Off Index 31.0 +13.0 points.
• Volatility Index(VIX) futures 29.75 -1.57%
• FTSE 100 futures -.1%.

• S&P 500 futures +.58%.

• NASDAQ 100 futures +.71%.

Morning Preview Links

Earnings of Note 
Company/Estimate

Before the Open:

• (CP)/4.23
• (CMA)/.84
• (LMT)/6.10
• (MAN)/.65
• (NVR)/59.89
• (OMC)/1.05
• (PCAR)/.96
• (PM)/1.36
• (PG)/1.42
• (RF)/.33
• (TRV)/3.10
  

After the Close:

• (IBKR)/.55
• (IRBT)/.97
• (NFLX)/2.14
• (SNAP)/-.05
• (THC)/.24
• (TER)/1.12
• (TXN)/1.29
• (WDFC)/1.13
  

Economic Releases

8:30 am EST

• Housing Starts for Sept. is estimated to rise to 1465K versus 1416K in Aug.
• Building Permits for Sept. is estimated to rise to 1520K versus 1470K in Aug.
  

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Fed's Brainard speaking, Fed's Quarles speaking, Italy Industrial Output report and the US weekly retail sales reports 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 financial and technology shares in the region. I expect US stocks to open modestly higher and to weaken into the afternoon, finished mixed. The Portfolio is 50% net long heading into the day.

Stocks Reversing Lower into Afternoon on Biden Presidency/Tax Hike Fears, Diminished Stimulus Hopes, Virus Worries, Road & Rail/Biotech Sector Weakness

 Broad Equity Market Tone:

• Advance/Decline Line: Lower
  

• Sector Performance: Most Sectors Declining
  

• Volume: Around Average

• Market Leading Stocks: Outperforming
  

Equity Investor Angst:

• Volatility(VIX) 28.3 +3.3%
• Bloomberg Global Risk On/Risk Off Index 87.0 -75.0 points

• Euro/Yen Carry Return Index 128.66 +.6%

• Emerging Markets Currency Volatility(VXY) 11.0 unch.

• S&P 500 Implied Correlation 50.9 +10.1%

• ISE Sentiment Index 90.0 -34.0 points
  

• Total Put/Call .69 -20.7%

• NYSE Arms .88 +15.8%

Credit Investor Angst:

• North American Investment Grade CDS Index 57.64 +1.98%
  

• US Energy High-Yield OAS 807.47 -.23%

• European Financial Sector CDS Index 72.44 +.98%

• Italian/German 10Y Yld Spread 135.0 +8.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 65.32 -2.24%
  

• Emerging Market CDS Index 206.74 +.61%
  

• iBoxx Offshore RMB China Corporate High Yield Index 179.26 +.09%

• 2-Year Swap Spread 8.75 unch.

• TED Spread 12.75 +.5 basis point
  

• 3-Month EUR/USD Cross-Currency Basis Swap -10.75 -1.5 basis points
  
• MBS  5/10 Treasury Spread  81.75 -.5 basis point
  
• IHS Markit CMBX BBB- 6 68.25 +.25 basis point

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 59.49 +.32%
• 3-Month T-Bill Yield .09% unch.

• Yield Curve 60.75 +1.5 basis points
  

• China Iron Ore Spot 116.20 USD/Metric Tonne +.66%

• Citi US Economic Surprise Index 130.6 -3.6 points

• Citi Eurozone Economic Surprise Index 21.70 -9.8 points
  

• Citi Emerging Markets Economic Surprise Index 41.40 -1.6 points

• 10-Year TIPS Spread 1.71 unch.
• 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 -71 open in Japan 
• China A50 Futures: Indicating -33 open in China

• DAX Futures: Indicating -55 open in Germany

Portfolio:

• Slightly Higher: On gains in my tech sector longs and index hedges
  

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

• Market Exposure: Moved to 25% Net Long

Bear Radar

Style Underperformer:

• Large-Cap Growth -.8%

Sector Underperformers:

• 1) Biotech -1.5% 2) Road & Rail -1.1% 3) Energy -1.1%

Stocks Falling on Unusual Volume: 

• VFC, RH, WLL, PZZA, DECK, AEO, CHRS, OPI, LEGN, SCPL, VLDR, VIR, RCUS, HGEN, MD, ICPT, BCLI, AERI and AEL
  

Stocks With Unusual Put Option Activity:

• 1) IRBT 2) UNFI 3) HTZ 4) XLNX 5) PM
  

Stocks With Most Negative News Mentions:

• 1) MD 2) LOOP 3) AERI 4) BLNK 5) VFC
  

Charts:

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

Bull Radar

 Style Outperformer:

• Mid-Cap Growth +.2%

Sector Outperformers:

• 1) Airlines +2.7% 2) Alt Energy +2.4% 3) Oil Service +1.2%

Stocks Rising on Unusual Volume:

• RESI, OSUR, STAA, SPWR, EGAN, ATHA, CIT, ANAB, LASR, CREE and FUBO
  

Stocks With Unusual Call Option Activity:

• 1) MPW 2) FLEX 3) HTZ 4) CNP 5) AMC

Stocks With Most Positive News Mentions:

• 1) ENDP 2) TSE 3) TEAM 4) CREE 5) KRNY
  

Charts:

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

Mid-Day Market Internals

NYSE Composite Index:

• Volume Running -4.8% Below 100-Day Average
• 1 Sector Rising, 10 Sectors Declining
• 48.5% of Issues Advancing, 48.1% Declining
• 83 New 52-Week Highs, 16 New Lows
• 54.0% of Issues Above 200-day Moving Average
• Average 14-Day RSI 48.7% 
• Bloomberg Global Risk-On/Risk-Off Index 121.0 -41.0 points
• Vix 28.0 +2.2%
• Total Put/Call .68 -21.8%
• TRIN/Arms .61 -19.7%

Monday Watch

Night Trading

• Asian indices are +.5% to +1.0% on average.
• Asia Ex-Japan Investment Grade CDS Index 66.0 -.5 basis point.
• China Sovereign CDS 38.5 -1.25 basis points.
• Bloomberg Emerging Markets Currency Index 59.34 +.07%.
• Bloomberg Global Risk-On/Risk Off Index 213.0 +50.0 points.
• Volatility Index(VIX) futures 28.7 -1.12%. 
• Euro Stoxx 50 futures +.4%.
• S&P 500 futures +.66%.
• NASDAQ 100 futures +.86%.

Morning Preview Links

Earnings of Note

Company/Estimate

Before the Open:

• (HAL)/.08
• (LII)/3.15
• (PETS)/.40
• (PHG)/.46
  

After the Close:

• (BXS)/.54
• (CDNS)/.61
• (CCK)/1.58
• (HXL)/.08
• (IBM)/2.58
• (LOGI)/.54
• (PPG)/1.92
• (STL)/.48
• (AMTD)/.90
• (ZION)/.89
  

Economic Releases

10:00 am EST

• The NAHB Housing Market Index for Oct. is estimated at 83.0 versus 83.0 in Sept.

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The China Home Price report could also impact trading today.

Market Hours
Normal:

• 9:30 am - 4:00 pm EST

BOTTOM LINE: Asian indices are higher, boosted by technology and industrial shares in the region. I expect US stocks to open modestly higher and to maintain gains into the afternoon.  The Portfolio is 50% net long heading into the week.