Tuesday Watch

Night Trading 

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

• Asia Ex-Japan Investment Grade CDS Index 70.75 +.75 basis point.

• China Sovereign CDS 61.75 +.75 basis point.
  
• China Iron Ore Spot 105.4 USD/Metric Tonne +.3%

• Bloomberg Emerging Markets Currency Index 37.4 +.01%.
• Bloomberg Global Risk-On/Risk Off Index 68.6 +.7%.
• Volatility Index(VIX) futures 16.6 +.1%.
• Euro Stoxx 50 futures -.06%

• S&P 500 futures -.04%.

• NASDAQ 100 futures +.04%.  

Morning Preview Links

BOTTOM LINE: Asian indices are mostly lower, weighed down by commodity and healthcare 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 day.

Stocks Rising into Final Hour on Earnings Outlook Optimism, Stable Long-Term Rates, Technical Buying, Tech/Defense Sector Strength

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 37.4 unch.
• 3-Month T-Bill Yield 4.33% +1.0 basis point
  

• China Iron Ore Spot 105.0 USD/Metric Tonne -.04%
• Dutch TTF Nat Gas(European benchmark) 40.3 euros/megawatt-hour -2.3%

• Citi US Economic Surprise Index 16.10 -3.1 points
  

• Citi Eurozone Economic Surprise Index -11.7 -11.3 points

• Citi Emerging Markets Economic Surprise Index -3.8 -2.6 points
• S&P 500 Current Quarter EPS Growth Rate YoY(4 of 500 reporting) +9.7% unch.
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 271.28 +.32:  Growth Rate +13.7% +.1 percentage point, P/E 22.4 +.1
  
• S&P 500 Current Year Estimated Profit Margin 12.56% +1.0 basis point
  
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(0 of 10 reporting) n/a
  
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 386.03 +1.16: Growth Rate +23.1% +.3 percentage point, P/E 35.5 +.8
  
• Bloomberg US Financial Conditions Index .90 +2.0 basis points
  
• Bloomberg Euro-Zone Financial Conditions Index .98 -15.0 basis points
  
• US Yield Curve 14.75 basis points (2s/10s) -1.0 basis point
  
• US Atlanta Fed Q4 GDPNow Forecast +3.33% unch.
  
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 26.9% -.7 percentage point
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +2.97% unch.: CPI YoY +2.86% unch.
  
• 10-Year TIPS Spread 2.33 -2.0 basis points
  
• Highest target rate probability for Jan. 29th FOMC meeting: 79.9%(+1.6 percentage points) chance of 4.25%-4.5%. Highest target rate probability for March 19th meeting: 50.6%(-1.4 percentage point) chance of 4.0%-4.25%. (current target rate is 4.5-4.75%)
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +332 open in Japan 
• China A50 Futures: Indicating -59 open in China

• DAX Futures: Indicating +62 open in Germany

Portfolio:

• Higher:  On gains in my tech/industrial/financial/consumer discretionary sector longs and emerging market shorts
  

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

• Market Exposure: Moved to 100% Net Long
  

Bear Radar

Style Underperformer:

• Large-Cap Value -.2%
  

Sector Underperformers:

• 1) Energy -2.8% 2) Healthcare Providers -1.7% 3) Telecom -1.6%

Stocks Falling on Unusual Volume: 

• UNH, HRI, RWAY, FLG, FLNG, OCSL, TASK, BNED, AOSL and RH
  

Stocks With Unusual Put Option Activity:

• 1) KBE 2) LW 3) BB 4) XLB 5) EOSE
  

Stocks With Most Negative News Mentions:

• 1) MAPS 2) SMCI 3) CVS 4) F 5) CI
  

Sector ETFs With Most Negative Money Flow:

• 1) FTXL 2) XLF 3) XLC 4) KBE 5) FDN

Charts:

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

Bull Radar

Style Outperformer:

• Small-Cap Growth +1.3%
  

Sector Outperformers:

• 1) Semis +2.4% 2) Cyber Security +2.3% 3) Defense +1.6%

Stocks Rising on Unusual Volume:

• QUBT, RCAT, AEHR, VRDN, EWTX, IONQ, SUPV, BKSY, QURE, BMA, BKKT, SHYF, AGIO, SERV, ASAN, SOUN, BTDR, BCYC, BBAR, NBIS, AVGO, DAVE, RIOT, SMLR, ARQQ, SGRY, MARA, GRND, AVAV, HUT, GGAL, HOOD, NN, INOD, LC, PRAA, MBLY, LC, RIVN, BHVN, MU, AHCO, PLAY, AMBA, NBIX, LMND, KTOS, AEIS, TER, WU, LOCO, IONS, ANF, TSLA, CLSK, ETSY, MPWR, GOOG, TSEM, LW, MTCH, MPWR, DCTH, FL, XMTR, RDDT, TKO, PPTA, ATEN, CRGX, MRVL, OKTA, WSR, MSTR and MESO
  

Stocks With Unusual Call Option Activity:

• 1) KOS 2) BBY 3) AEHR 4) ONDS 5) IYR

Stocks With Most Positive News Mentions:

• 1) AVGO 2) BMA 3) AEHR 4) LBRG 5) EWTX
  

Sector ETFs With Most Positive Money Flow:

• 1) FXO 2) XLV 3) ITB 4) VGT 5) SOXX
  

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:

• None of note
  

After the Close: 

• (HEI)/.98
• (WOR)/.52
• (CALM)/3.69
• (NEOG)/-.01
  

Economic Releases

8:30 am EST

• Retail Sales Advance MoM for Nov. is estimated to rise +.6% versus a +.4% gain in Oct.
• Retail Sales Ex Autos MoM for Nov. is estimated to rise +.4% versus a +.1% gain in Oct.
• Retail Sales Ex Autos and Gas for Nov. is estimated to rise +.4% versus a -.1% decline in Oct.
• NY Fed Services Business Activity Index for Dec.
  

9:00 am EST

• Bloomberg Dec. US Economic Survey.
  

9:15 am EST

• Industrial Production MoM for Nov. is estimated to rise +.3% versus a -.3% decline in Oct.
• Capacity Utilization for Nov. is estimated to rise +.5% versus a -.5% decline in Oct.
• Manufacturing Production for Nov. is estimated to rise +.5% versus a -.5% decline in Oct.
  

10:00 am EST

• Business Inventories for Oct. is estimated to rise +.1% versus a +.1% gain in Sept.
• The NAHB Housing Market Index for Dec. is estimated to rise to 47.0 versus 46.0 in Nov.

Upcoming Splits

• (TSCO) 5-for-1

Other Potential Market Movers

• The Atlanta Fed GDPNow 4Q update, 20Y T-Note auction, weekly API crude oil stock report, weekly US retail sales reports, (GWRE) annual meeting, (IR) analyst meeting, (WGO) annual meeting, (LOVE) investor day and the (A) investor day could also impact global trading tomorrow.

US Equity Market Hours

• 9:30 am - 4:00 pm EST

Mid-Day Market Internals

NYSE Composite Index:

• Volume Running +8.4% Above 100-Day Average 
• Nasdaq/NYSE Volume Ratio 17.1 +3.0
  
• 4 Sectors Declining, 7 Sectors Rising
• 48.3% of Issues Advancing, 48.9% Declining 
• TRIN/Arms 1.0 +19.1%
  
• Non-Block Money Flow -$110.2M
  
• 54 New 52-Week Highs, 92 New Lows
• 60.0% (+.02%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 40.0 unch.
  

Other:

• Bloomberg Global Risk-On/Risk-Off Index 67.8 -1.7%
• Bloomberg Cyclicals/Defensives Index 252.0 +.07%
  
• Russell 1000: Growth/Value 21,749.4 +.9%
• CNN Fear & Greed Index 56.0 (GREED) +6.0
  
• 1-Day Vix 6.2 -28.0%
  
• Vix 14.4 +4.3%
  
• Total Put/Call .87 +3.6%