Monday Watch

Night Trading

• Asian indices are -.25% to +.25% on average.
• Asia Ex-Japan Investment Grade CDS Index 96.75 -.5 basis point.
  
• China Sovereign CDS 60.5 -.25 basis point.
• China Iron Ore Spot 132.4 USD/Metric Tonne -1.1%.
  
• Bloomberg Emerging Markets Currency Index 41.8 +.02%.
• Bloomberg Global Risk-On/Risk Off Index 70.0 +3.9%.
• Bloomberg US Financial Conditions Index .49 +1.0 basis point. 
  
• Volatility Index(VIX) futures 14.0 +1.1%. 
• Euro Stoxx 50 futures -.14%.
• S&P 500 futures -.16%.
• NASDAQ 100 futures -.27%.

Morning Preview Links

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

Wednesday Watch

Night Trading 

• Asian equity indices are -.50% to +.25% on average.

• Asia Ex-Japan Investment Grade CDS Index 98.25 -3.25 basis points.

• China Sovereign CDS 58.25 +1.25 basis points.
  
• China Iron Ore Spot 133.4 USD/Metric Tonne +.1%.

• Bloomberg Emerging Markets Currency Index 41.8 -.04%.
• Bloomberg Global Risk-On/Risk Off Index 67.0 +3.4%
  
• Bloomberg US Financial Conditions Index .30 -5.0 basis points
  
• Volatility Index(VIX) futures 14.4 -.2%.
• Euro Stoxx 50 futures +.16%.

• S&P 500 futures -.06%.

• NASDAQ 100 futures -.18%.  

Morning Preview Links

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

Stocks Modestly Lower into Final Hour on US Policy-Induced Stagflation Fears, Earnings Outlook Worries, China Economy Concerns, Alt Energy/Airlines Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Lower
  

• Sector Performance: Mixed
  

• Volume: Around Average

• Market Leading Stocks: Underperforming
  

Equity Investor Angst:

• Volatility(VIX) 13.2 -1.4%
• DJIA Intraday % Swing .23% -75.2%
  
• Bloomberg Global Risk On/Risk Off Index 64.5 -3.0%

• Euro/Yen Carry Return Index 173.2 -.26%

• Emerging Markets Currency Volatility(VXY) 7.8 unch.

• CBOE S&P 500 Implied Correlation Index 19.4 -.62% 

• ISE Sentiment Index 140.0 -13.0
  

• Total Put/Call 1.14 +15.2%

• NYSE Arms 1.26 +20.0% 
• NYSE Non-Block Money Flow -$77.6M 
  

Credit Investor Angst:

• North American Investment Grade CDS Index 63.7 -.2%
  

• US Energy High-Yield OAS 340.91 +.53%
• Bloomberg TRACE # Distressed Bonds Traded 366 +10
  

• European Financial Sector CDS Index 79.66 +.04% 
• Deutsche Bank Subordinated 5Y Credit Default Swap 251.39 +.73%
  

• Italian/German 10Y Yld Spread 175.0 basis points +2.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 99.3 -4.7%
  

• Emerging Market CDS Index 188.79 +.78%
• Israel Sovereign CDS 116.9 -3.0%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 25.51 +.51%

• 2-Year SOFR Swap Spread -19.0 basis points unch.
  

• TED Spread 24.75 basis points +.25 basis point
  

• 3-Month EUR/USD Cross-Currency Basis Swap -15.0 -1.5 basis points
  
• MBS  5/10 Treasury Spread 157.0 -2.0 basis points
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 943.0 +1.0 basis point
  
• Avg. Auto ABS OAS 95.0 unch.
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 41.9 -.16%
• 3-Month T-Bill Yield 5.38% -1.0 basis point
  

• China Iron Ore Spot 133.9 USD/Metric Tonne +.5%
• Dutch TTF Nat Gas(European benchmark) 44.07 euros/megawatt-hour -3.8%

• Citi US Economic Surprise Index 33.9 -3.7 points

• Citi Eurozone Economic Surprise Index -33.4 -1.7 points

• Citi Emerging Markets Economic Surprise Index 21.6 -.4 point
• S&P 500 Current Quarter EPS Growth Rate YoY(478 of 500 reporting) +2.6% -.2 percentage point
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 241.04 unch.:  Growth Rate +9.1% unch., P/E 18.8 unch.
  
• S&P 500 Current Year Estimated Profit Margin 12.16% +2.0 basis points
  
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(7 of 10 reporting) +38.4% unch.
  
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 276.81 -.11: Growth Rate +63.3% -.1 percentage point, P/E 29.9 unch.
  
• Bloomberg US Financial Conditions Index .31 -1.0 basis point
  
• Bloomberg Euro-Zone Financial Conditions Index .36 +10.0 basis points
  
• US Yield Curve -47.5 basis points (2s/10s) -1.75 basis points
  
• US Atlanta Fed 4Q GDPNow Forecast +1.97% unch.
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +3.55% unch.: CPI YoY +3.07% -3.0 basis points
  
• 10-Year TIPS Spread 2.26 -5.0 basis points
  
• Highest target rate probability for Jan. 31st FOMC meeting: 94.8%(-3.0 percentage points) chance of 5.25%-5.5%. Highest target rate probability for March 20th meeting: 67.9%(-3.1 percentage points) chance of 5.25%-5.5%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -159 open in Japan 
• China A50 Futures: Indicating -47 open in China

• DAX Futures: Indicating +62 open in Germany

Portfolio:

• Slightly Lower:  On losses in my tech sector longs
  

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

• Market Exposure: Moved to 75% Net Long
  

Bear Radar

Style Underperformer:

• Small-Cap Value -1.1%
  

Sector Underperformers:

• 1) Alt Energy -3.2% 2) Airlines -2.6% 3) Digital Health -1.9%

Stocks Falling on Unusual Volume: 

• J, OLMA, KSS and AEO
  

Stocks With Unusual Put Option Activity:

• 1) JWN 2) AEO 3) SYM 4) KSS 5) BBY
  

Stocks With Most Negative News Mentions:

• 1) FSR 2) RCEL 3) DMTK 4) FTCH 5) LOW
  

Charts:

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

Bull Radar

Style Outperformer:

• Mid-Cap Growth +.2%
  

Sector Outperformers:

• 1) Gold & Silver +2.7% 2) Insurance +.9% 3) Medical Equipment +.9%

Stocks Rising on Unusual Volume:

• SYM, BURL, DY, AORT, HIBB, CAL, A, BRBR, CAMT, AGI, DWAC, CRH, DKS and OR
  

Stocks With Unusual Call Option Activity:

• 1) PBR 2) SYM 3) TCOM 4) AEO 5) ZM

Stocks With Most Positive News Mentions:

• 1) DKS 2) BURL 3) HIBB 4) DY 5) ENTA
  

Charts:

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

Tomorrow's Earnings/Economic Releases of Note; Market Movers

Earnings of Note 
Company/Estimate 

Before the Open:

• (DE)/7.46

After the Close: 

• None of note
  

Economic Releases

8:30 am EST

• Initial Jobless Claims for last week is estimated to fall to 228K versus 231K the prior week.
• Continuing Claims is estimated to rise to 1875K versus 1865K prior.
• Durable Goods Orders for Oct. is estimated to fall -3.2% versus a +4.6% gain in Sept.
• Durables Ex Transports for Oct. is estimated to rise +.1% versus a +.4% gain in Sept.
• Cap Goods Orders Non-Defense Ex-Air for Oct. is estimated to rise +.1% versus a +.5% gain in Sept.
  

10:00 am EST

• Final Univ. of Mich. Sentiment readings.

10:30 am EST

• Bloomberg consensus estimates call for a weekly crude oil inventory gain of +510,170 barrels versus a +3,592,000 barrel gain the prior week. Gasoline supplies are estimated to fall by -745,170 barrels versus a -1,540,000 barrel decline the prior week. Distillate inventories are estimated to fall by -862,330 barrels versus a -1,422,000 decline the prior week. Finally, Refinery Utilization is estimated to rise by +.7% versus a +.9% gain prior.
  

Upcoming Splits 

• None of note
  

Other Potential Market Movers

• The weekly MBA Mortgage Applications report, weekly EIA natural gas inventory report, Baker Hughes Oil Rig Count and the Atlanta Fed 4Q GDPNow update could also impact global trading tomorrow.

US Equity Market Hours

• 9:30 am - 4:00 pm EST