Stocks Slightly Lower into Final Hour on Policy-Induced Stagflation Fears, Rising Long-Term Rates, US Dollar Strength, Alt Energy/Healthcare Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Lower
  

• Sector Performance: Mixed
  

• Volume: Below Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 16.9 +3.7%
• Bloomberg Global Risk On/Risk Off Index 3,207.0 +41.0 points

• Euro/Yen Carry Return Index 133.98 -.33%

• Emerging Markets Currency Volatility(VXY) 9.1 +1.0%

• S&P 500 Implied Correlation 48.6 +1.3%

• ISE Sentiment Index 155.0  unch.
  

• Total Put/Call .79 +5.3%

• NYSE Arms .79 -29.5%

Credit Investor Angst:

• North American Investment Grade CDS Index 50.71 -.31%
  

• US Energy High-Yield OAS 383.0 +1.6%

• European Financial Sector CDS Index 57.40 +1.2%

• Italian/German 10Y Yld Spread 122.0 +1.0 basis point
  

• Asia Ex-Japan Investment Grade CDS Index 88.5 +.2%
  

• Emerging Market CDS Index 179.27 +.33%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 33.43 -.55%

• 2-Year Swap Spread 24.0 unch.
  

• TED Spread 11.5 +.5 basis point
  

• 3-Month EUR/USD Cross-Currency Basis Swap -21.25 +.5 basis point
  
• MBS  5/10 Treasury Spread  65.25 +1.25 basis points
  
• IHS Markit CMBX BBB- 6 73.0 unch.
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 57.59 -.07%
• 3-Month T-Bill Yield .04% -1.0 basis point
  

• Yield Curve 105.0 +2.0 basis points
  

• China Iron Ore Spot 88.0 USD/Metric Tonne -.02%

• Citi US Economic Surprise Index 15.9 +5.2 points

• Citi Eurozone Economic Surprise Index -49.5 -2.2 points
  

• Citi Emerging Markets Economic Surprise Index -19.9 +7.1 points

• 10-Year TIPS Spread 2.77 +1.0 basis point
• 93.2% chance of no change at Jan. 26th meeting, 78.8% chance of no change at March 16th meeting

US Covid-19:

• 176 new infections/100K people(last 7 days total) +21/100K people
• 33% of Jan. 7th, 2021 peak(highest daily avg. new infections) +4.0 percentage points
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -36 open in Japan 
• China A50 Futures: Indicating +61 open in China

• DAX Futures: Indicating -15 open in Germany

Portfolio:

• Slightly Higher: On gains in my consumer discretionary/industrial/commodity sector longs
  

• Disclosed Trades:  None
  

• Market Exposure:  100% Net Long
  

Bear Radar

Style Underperformer:

• Small-Cap Growth -.7%

Sector Underperformers:

• 1) Alt Energy -1.6% 2) Shipping -1.5% 3) Digital Health -1.2%

Stocks Falling on Unusual Volume: 

• MYGN, RIOT, VUZI, DRQ, NLOK, AQUA, GMED, STAR, VLTA, USAC, CELH, DIBS, IOVA, DT, CFLT, DUOL, FXLV, CRWD, BGFV, EVGO, TGTX, RCKT, SPLK, BTAI and TLS
  

Stocks With Unusual Put Option Activity:

• 1) SPLK 2) ECH 3) DG 4) DLTR 5) TSN
  

Stocks With Most Negative News Mentions:

• 1) BTAI 2) EVGO 3) OTLY 4) TLS 5) SAVA
  

Charts:

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

Bull Radar

Style Outperformer:

• Mid-Cap Value +.4%

Sector Outperformers:

• 1) Utilities +1.2% 2) Energy +1.1% 3) Airlines +.8%

Stocks Rising on Unusual Volume:

• MTTR, VVNT, GGPI, DLTR, ONDS, LAZR, PCT, AMEH, VGR, HUMA, SIX, CYXT, NEGG, BMBL, CRTX, FTCI, BRLT, LZ, SVFA, RDBX, BLDE, CUE, TTD, OLLI, QS, DBI, SPR, FLGT, SNAP, MCW, FLR, VRM, CNM, CONE, BA, VSTO, FLO, SEAH, FOLD, EPAY, COUP, MAX, TLRY, SLGC, INDI, GRWG, VVV, COLD, ASPN, FICO, IVAN, SYNH, BLNK, ALHC, PX, SWCH, ACM, TALO, U, DLR, RMD and SW
  

Stocks With Unusual Call Option Activity:

• 1) CONE 2) SPLK 3) ICPT 4) DLTR 5) REKR

Stocks With Most Positive News Mentions:

• 1) DLTR 2) EYPT 3) BLNK 4) IQST 5) COLL
  

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running -11.6% Below 100-Day Average 
• 8 Sectors Rising, 3 Sectors Declining
• 45.9% of Issues Advancing, 50.3% Declining
• 107 New 52-Week Highs, 22 New Lows
• 63.0% of Issues Above 200-day Moving Average
• Average 14-Day RSI 53.2%
• Bloomberg Global Risk-On/Risk-Off Index 3,195.0 +31.0 points
• Russell 1000: Growth/Value 18,129 -.27%
  
• Vix 16.9 +3.4%
• Total Put/Call .66 -12.0%
• TRIN/Arms .87 -21.4%

Monday Watch

Today's Headlines

Bloomberg:          

• China’s Slowdown Poses Threat for Global Recover.    
• Japan’s Economy Shrinks as Kishida Mulls Stimulus Package.
• Unvaccinated Austrians Locked Down to Stem Surge: Virus Update.   
• U.K. Home Asking Prices Drop at Sharpest Pace Since Lockdown.
• China Developer Sunac Raises $953 Million; Chairman Issues Loan.
• China May Seek Cyber Check for HK Listings of Firms Holding Data.   
• Stocks Set for Steady Start Ahead of China Data: Markets Wrap.  
• Oil Gains as Biden Faces Mounting Calls to Unleash SPR Crude.
• Morgan Stanley Economists See 2023 Fed Hike, Differ With Gorman.  
• Biden’s Approval Rating Slips to Fresh Low, Post-ABC Poll Shows.  
• Inflation-Wary Manchin Voters Put Biden’s Agenda in Peril.
• Why Pfizer Won't Share Its $36 Billion Secret Vaccine Formula.  
• How Long Will Boosters Last?   
• American Tower Nears $10 Billion Deal to Buy CoreSite.  
• Icahn Seeks to Topple Board at Southwest Gas, Name 10 Directors.  
• Anti-Woke ETFs Are Pitching to Conservatives Mad at Corporate America.

Wall Street Journal:

• Inflation Surge Drives Investors to Buy Riskier Assets.
• Rising Prices Push Biden to Shift Message.
• Covid-19 Cases Rise in North and West U.S., Halting Delta Decline.
• This Thanksgiving, the Masks Are Off, the Dinner’s Inside and the Relatives Are Back.
• Fight Over 5G and Aviation Safety Clouds AT&T, Verizon Outlays.
• Best Tech Gifts 2021: Our Favorite Gadgets.
• As Workers Leave Jobs in Record Numbers, a Closer Look at Who Is Quitting.
• Supermarkets Alter Layouts, Use Decoys to Fill Gaps.
• Chip Shortage Sees Manufacturers Pitch Lower-Tech Models.
• Democrats Try to Heal Rifts and Pass $2 Trillion Bill.
• On Inflation Surge, the Fed Is Running Out of Excuses.
• Democrats Invite More Inflation—and Political Disaster. Joe Manchin is right. Lawmakers should pivot to a responsible spending bill with sustainable financing.
• An Illegal Vaccine Mandate. An appellate court blocks OSHA in a withering rebuke.

Fox News:   

• Trump aims to oust 'RINOs,' 'losers' who voted for Dem infrastructure bill — with 3 notable exceptions.
• Meet the 13 Republicans who voted for the infrastructure bill.
• Cruz gives Cheney a brutal reality check as CNN speculates on 2024 prospects.

CNBC:

• China and India will have to explain themselves on coal, COP26 president says.
• Apple is sticking taxpayers with part of the bill for rollout of tech giant’s digital ID card.
• Airbus receives order for 255 jets in first major deal since Covid outbreak.
• Americans look forward to holiday travel this year but overspending, uncertainty could spoil the fun.
• Top Wall Street analysts see these stocks as long-term winners.

Zero Hedge:

• Worldwide Vaccine Failure. Deaths hitting new highs in Singapore (85% of the population fully vaccinated - NOT adults, the entire population):
• All Of A Sudden The CDC Has Stopped Talking About Herd Immunity.
• "I Keep Forgetting That You're Still Alive": Musk Taunts Bernie Sanders, Asks If He Should "Sell More Stock".
• Morgan Stanley's 2022 Outlook: The Training Wheels Come Off.
• Clock Just Hours From Midnight For Overwhelmed California Ports.
• "I Keep Forgetting That You're Still Alive": Musk Taunts Bernie Sanders, Asks If He Should "Sell More Stock". 
• Joe Biden Should Cancel His Virtual Summit With China.
• Oklahoma National Guard 'Goes Rogue' After New Commander Rejects Vaccine Mandate; Pentagon To Respond 'Appropriately'.
• CDC Admits No Record Of Naturally Immune Transmitting COVID-19.
• FBI Hacked, Over 100K Emails Sent From Official Address.
• The Real Reason Why The Fed Isn't Tightening.
• Inflation In Irrational Exuberance.
• Mexico Is The World's Deadliest Country For Journalists In 2021.
• Used Tractor Prices Skyrocket Amid Deere Strike.
• Smith: Leftists Support Tyranny, Conservatives Do Not; It's Time To Separate.
• Jan. 6 Defendants Taken Out Of Cells On Stretchers: Court Filing.
• "Revolution In Warfare" - Israel Unveils New Scorpius Electronic Warfare System.
• Traffic Deaths Are Surging Despite Less Miles Being Traveled.
• Australia Says It's "Inconceivable" Not To Join US In Defending Taiwan.

MarketWatch.com:                  

• These 25 semiconductor stocks could rise as much as 43% with chips in short supply.
  
• 5 infrastructure stocks to buy now that Biden’s bill has been passed, according to Jefferies.
  
• Opinion: 10 recommended stocks if you think value will beat growth as inflation surges.

NewsMax: 

• Republicans at 40-Year High in Key ABC Poll, Biden Hits Lowest Point Yet.

TheGatewayPundit.com:

• Latest Indictment Reveals Rod Rosenstein, FBI, DOJ Lied and Withheld Information from GOP House Investigators on Junk Russia Dossier.
• Dr. Fauci Admits Vaccines Did Not Work as Advertised and that Vaccinated Are in Great Danger Today. 
• Oklahoma Doctors Have Tremendous Success in Treating Nursing Home COVID Patients with Ivermectin.
• Serial Liar Adam Schiff Says He Doesn’t Regret Pushing Fake, Hillary-Funded Steele Dossier (VIDEO).
• Biden’s Surgeon General Brushes Off First Responders Leaving Workforce Due to Vaccine Mandates (VIDEO).
• RFK Jr. Completely DISMANTLES the “Covid Misinformation” Narrative – “It’s a Euphemism For Any Statement That Departs From Official Government Policy” – “They Are Engineering Destruction of Democracy Worldwide”.
• MUST WATCH: Texas HHS DENIES Monoclonal Antibody Treatments For Whites – “If I Were Black or Hispanic Then I Would Qualify?” – Nurse: “Yep, That’s Right” – (Video).
• Biden’s Economy Getting Worse – Ships Waiting to Unload in California Ports Now Waiting Record Number of Days to Unload.
• Brutal Numbers For Biden: If Midterms Were Held Today 51% of Registered Voters Say They Would Vote Republican; Just 41% For Dems – Largest Lead EVER For GOP.
• Austrian Chancellor Orders Nationwide Lockdown for Unvaccinated People.
  

The Epoch Times:

• COP26 Global Climate Deal Reached After China, India Pushed to Soften Language on Coal.

Covid-19(Data, Maps, Graphs):

• Our World in Data:  New Global Covid-19 Cases(7-day rolling average graphs). New US Covid Hospital Admissions/ICU Admissions/Deaths
  
• FT.com:  Fully Vaccinated by Country(graph). Global Lockdown Stringency Index(map).
• Bloomberg.com:  International Travel Restrictions.  Case Graphs by State.
  
• NYTimes.com:  County Trends and Clusters. Local ICU Occupancy.
  
• Brown School of Public Health:  Covid Severity by State/County(map).  US Hospital Capacity(region).
  
• CovidActNow:  Covid Severity/Infection Rate by Metro Area.
  
• KFF:  US Vaccinations by Race/Ethnicity.
  
• Carnegie Mellon: Covid-Like Symptoms in Community. Covid Symptom Searches on Google. Covid-Related Dr.Visits.  Restaurant Visits. Wearing Masks. (graphs)
  
• Safegraph.com:  Commerce Patterns(graphs).

Night Trading

• Asian indices are +.25% to +.75% on average.
• Asia Ex-Japan Investment Grade CDS Index 89.0 -1.25 basis points.
• China Sovereign CDS 52.5 -1.75 basis points.
• Bloomberg Emerging Markets Currency Index 57.60 -.05%.
• Bloomberg Global Risk-On/Risk Off Index 3,179.0 +15.0 points.
• Volatility Index(VIX) futures 20.1 -.3%. 
• Euro Stoxx 50 futures +.02%.
• S&P 500 futures +.15%.
• NASDAQ 100 futures +.26%.

Morning Preview Links

Earnings of Note

Company/Estimate

Before the Open:

• (TSN)/2.09
• (WMG)/.15
  

After the Close:

• (AAP)/2.84

Economic Releases

8:30 am EST

• Empire Manufacturing for Nov. is estimated to rise to 21.2 versus 19.8 in Oct.

Upcoming Splits

• (ANET) 4-for-1
  

Other Potential Market Movers

• The China Industrial Production report, Eurozone Trade Balance report, Stifel Healthcare Conference, Jefferies Healthcare Conference and the Needham Networking/Communications/Security Conference could also impact trading today.

US Equity Market Hours

• 9:30 am - 4:00 pm EST

BOTTOM LINE: Asian indices are modestly higher, boosted by industrial and technology shares in the region. I expect US stocks to open mixed and to rally into the afternoon, finishing modestly higher.  The Portfolio is 100% net long heading into the week.

Today's Headlines

Bloomberg:              

• Putin Says U.S. Support of Ukraine Drone Use Risks Escalation.  
• COP26 Finally Set Rules on Carbon Markets. What Does It Mean?  
• Deal Sealed After Late Pushback by India and China: COP26 Update.
• Ex-PBOC Official Urges Caution on Effects of Property Curbs.
• Ships Keep Coming, Pushing U.S. Port Logjam and Waits to Records.  
• Airbus Sees Pandemic as a Blip With 39,000 New Jets by 2040.
• Vulnerable Nations Say Deal Is Good Enough: COP26 Update.
• Breakups of GE, J&J Usher In New Era of Corporate Conglomerates.  
• Brainard’s Fed Contention Puts Focus on Inflation, Jobs Views.  
• Buyout Bosses Enjoying $1 Trillion Boom See Prices Go ‘Bananas’.  
• Boeing Signals Optimism on Resolving Dreamliner, Max Issues.  
• Retail Traders Show Signs of Pulling Back After Wild Market Ride. 
• Charting Global Economy: Inflation Shows Few Signs of Cooling.
• Wild Bidding Wars Erupt at Used-Tractor Auctions Across the U.S.
• Cracks Appear in World’s Biggest Bond Market as Fed Pulls Back.
• China’s Slowdown Poses Threat for Global Recovery: Eco Week. 
• FBI’s Email System Compromised, Hackers Warn of Cyber Threat.

Wall Street Journal: 

• As U.S. Races to Vaccinate Kids, Some Nations Wait.
• Black Lives Matter vs. Eric Adams.
• Bitcoin’s Creator Could Be Unmasked at Florida Trial.
• Boys Have Eating Disorders, Too. Doctors Think Social Media Is Making It Worse.
• Are AirPods Out? Why Cool Kids Are Wearing Wired Headphones.
• Robots vs. Fatbergs in America’s Sewers.
• Deere, UAW Reach New Tentative Agreement on Contract.
• Some GOP Backers of Infrastructure Bill Will Skip Signing Ceremony.

IG:

• Weekend Markets Trading Live.

Barron's:

• Had bullish commentary on (ANF), (JWN), (M) and (SIG).

CNBC:

• Federal appeals court calls Biden vaccine mandate ‘fatally flawed’.
• Elon Musk sold about $6.9 billion in Tesla stock this week.
• Fighter jets and freighters in focus at the first major air show since the Covid pandemic.
• Gold is set to rally the coming months, two experts say. The key level they’re watching.
  

MarketWatch.com:      

• High inflation is eating up the budgets of American households.

Fox News:

• Parents fight back after school board president exposed for detailed 'enemies list' of dissenters.
• Arizona school board president kept sensitive personal information on protesting parents, documents suggest.
• NSBA coordinated with White House, DOJ before sending notorious 'domestic terrorists' letter: emails.
• BLM co-founder's stark warning to incoming NYC mayor: 'There will be riots'. 
• Republican exposes the fine print of Biden's massive socialist spending bill.

Newsmax:  

• Mark Meadows: Dems Desperate to Keep Focus on Jan. 6. 
• Rep. Waltz: Our Foes 'Smell Weakness' in WH.

Apex World News:

• Dr. Ruben on the FDA panel says people are never going to "learn about how safe the vaccine is until we start giving it. That's the way it goes." (video)

Zero Hedge: 

• "It Raises Serious Constitutional Concerns" - Appeals Court Re-Affirms Stay On Biden Vaccine Mandate. 
• Why Wokeism Is A Religion.
• US Food Banks Struggle To Feed Hungry Amid 'Perfect Storm' Of Food Inflation.
• FDA Recalls Millions Of At-Home COVID-19 Tests Over False Positives.
• Goldman Quadruples-Down On Epic Year-End Meltup: "Expect $15 Billion In Demand Every Day To Close The Year".
• Here's One (More) Reason Inflation Could Accelerate Through Mid-2022.
• "Its Entirely Feasible That Herd Immunity Has Been Reached In The Current Environment".
• America Facing "Potentially Fatal Overdose Of Government": Rep. Davidson.
• Iceland Unveils Meta-Challenging '-Verse' Where "Everything Is Real".
• "What A Circus!" COP26 Climate Summit To Conclude With Plethora Of Hogwash Statements.
• "Kill The Bill" - Thousands Of Australians March Against Victoria's COVID Powers.
• Austria "Just Days Away" From Unleashing Lockdown On The "Shameful" Unvaccinated.
• More upside pain?
• How Soros' Secret Network Used Ukraine To Cover For Hillary, Hunter, & Target Donald Trump.
• Was COP26 Another Step Towards Disaster?
• Los Angeles Defunds Police, Uses Money For Guaranteed Income Experiment.
• Ranked: The Most Prescribed Drugs In The U.S.
• "Cyber Marines" Will Win The War Of Tomorrow On Digital Battlefield.
• Fauci Warned About Coronaviruses In 2003 – But Didn't Act On It.
• Medical Research Rapidly Adopts "Systemic Racism" As Truth, Risking Scientific Credibility, Part 1.
• Biden Education Dept Forgiving $2 Billion In Student Loans For Up To 30,000 Borrowers.
• Kyle Rittenhouse's Mother "Shocked" Biden Called Her Son A White Supremacist. 
• Loudon County Pharmacy Accidentally Vaxxed 112 Kids With Adult COVID Dose.

TheGatewayPundit.com:

• EXCLUSIVE: Potential Witness Tampering as Gaige Grosskreutz, the Felon Who Aimed His Gun at Kyle Rittenhouse, Had Two Prior Charges Dismissed by Prosecutors Only Days Before Trial. 
• Washington Post Writer Jennifer Rubin Calls for “Rules” That Would Prohibit Media Outlets From Treating Republicans as “Normal” (VIDEO).
• MUST SEE: OpenTheBooks Founder Adam Andrzejewski Lists the Staggering Costs of US Gear Left Behind for Taliban in Afghanistan (VIDEO).
• 13-Year-Old Watches Father Die as Staffing Shortages From Covid Vaccine Mandate in Seattle Delays Emergency Response.
• Oklahoma National Guard Won’t Impose Biden’s Vaccine Mandate — Defying Pentagon.
• EXCLUSIVE UPDATE: More on Report of New COVID-19 Lab Leak at East China University of Science and Technology in Shanghai.
• Majority Of Americans Say Biden Admin Not Doing Enough To Address Supply Chain Crisis.
• THEY HATE THEIR VOTERS: Senate Republicans Promote Dirtbag Lisa Murkowski as “Great Leader” Who’s “Fighting for Alaska” in New Promotion.
• JUST IN: Appeals Court Re-Affirms Halt on Biden’s Covid Vaccine Mandate for Private Businesses – Cites ‘Severe’ Risks.
• General Michael Flynn on Tucker Carlson: The Assaults on Our Freedoms Won’t End Soon – Where are the Republican Leaders? (VIDEO).
• More Georgia 2020 Corrupt Election Acts Revealed – 770,000 Ballots Ordered Shortly Before the 2020 Election Are Missing – Where Did They Go?

The Epoch Times:

• Chinese Regime in ‘Sprint’ to Nuclear Superiority: Experts.
• US Dollars Continue to Flow to China’s Genocide.

International Business Times:

• Pfizer Vaccine for Kids 'Harmful' Due to Inclusion of Tromethamine Used For Heart Attack Victims? Concerns Raised. The inclusion of Tromethamine, an ingredient used to stabilize heart attack victims, in Pfizer's Covid-19 vaccine for children aged 5-11 years has raised concerns about its harmful effects. The claim surfaced following Pfizer's request to modify its vax for kids aged 5-11 years olds. "Buried on Page 14 in the Pfizer paperwork with the FDA for the Covid vaccine for children is this disturbing nugget."

Covid-19(Data, Maps, Graphs):

• Our World in Data:  New Global Covid-19 Cases(7-day rolling average graphs). New US Covid Hospital Admissions/ICU Admissions/Deaths
  
• FT.com:  Fully Vaccinated by Country(graph). Global Lockdown Stringency Index(map).
• Bloomberg.com:  International Travel Restrictions.  Case Graphs by State.
  
• NYTimes.com:  County Trends and Clusters. Local ICU Occupancy.
  
• Brown School of Public Health:  Covid Severity by State/County(map).  US Hospital Capacity(region).
  
• CovidActNow:  Covid Severity/Infection Rate by Metro Area.
  
• KFF:  US Vaccinations by Race/Ethnicity.
  
• Carnegie Mellon: Covid-Like Symptoms in Community. Covid Symptom Searches on Google. Covid-Related Dr.Visits.  Restaurant Visits. Wearing Masks. (graphs)
  
• Safegraph.com:  Commerce Patterns(graphs).