Wednesday Watch

Night Trading 

• Asian equity indices are +.75% to +1.75% on average. 
• Asia Ex-Japan Investment Grade CDS Index 67.5 unch.
• China Sovereign CDS 46.5 +1.0 basis point.
• China Iron Ore Spot 106.0 USD/Metric Tonne +.2%. 
• Swiss Franc/Offshore Chinese Renminbi Cross 8.78 +.1%.
• Bloomberg Emerging Markets Currency Index 36.13 +.01%.
• Bloomberg Global Risk-On/Risk Off Index 89.5 +.8%.
• US 10-Year Yield 4.0% unch.
• Volatility Index(VIX) futures 19.3 -.1%.
• Euro Stoxx 50 futures +.59%. 
• S&P 500 futures +.21%.
• NASDAQ 100 futures +.29%.

Morning Preview Links

BOTTOM LINE: Asian indices are modestly higher, boosted by financial 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 day.

Stocks Surging into Final Hour on Fed Rate-Cut Hopes, Earnings Outlook Optimism, Short-Covering, Consumer Discretionary/Transport Sector Strength

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 36.1 +.14%
• US 10-Year T-Note Yield 4.0% -2.0 basis points
• 3-Month T-Bill Yield 3.77% -4.0 basis points

• China Iron Ore Spot 105.9 USD/Metric Tonne +.1%
• Dutch TTF Nat Gas(European benchmark) 29.4 euros/megawatt-hour -1.2%

• Citi US Economic Surprise Index 4.9 -4.7 points

• Citi Eurozone Economic Surprise Index 17.2 +.4 point

• Citi Emerging Markets Economic Surprise Index 28.8 +1.8 points
• S&P 500 Current Quarter EPS Growth Rate YoY(479 of 500 reporting) +13.1% unch.
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 303.98 +.25:  Growth Rate +13.1% +.1 percentage point, P/E 22.2 +.2
• S&P 500 Current Year Estimated Profit Margin 13.51% unch.
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(8 of 10 reporting) +17.6% unch.
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 504.54 +.82: Growth Rate +24.2% +.2 percentage point, P/E 32.4 +.3
• Bloomberg US Financial Conditions Index .39 +12.0 basis points
• Bloomberg Euro-Zone Financial Conditions Index 1.18 +15.0 basis points
• Bloomberg Global Trade Policy Uncertainty Index 1.5 -.1
• US Yield Curve 54.0 basis points (2s/10s) +.5 basis point
• US Atlanta Fed GDPNow Q2 Forecast +4.0% -.2 percentage point
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 37.4% +1.8 percentage points

• Cleveland Fed Inflation Nowcast Core PCE YoY +2.85% unch.: CPI YoY +2.96% unch.
• 1-Year TIPS Spread 2.49 -5.0 basis points
• 10-Year TIPS Spread 2.23 unch.
• Highest target rate probability for Jan. 28th FOMC meeting: 63.9% (-2.2 percentage points) chance of 3.5%-3.75%. Highest target rate probability for March 18th meeting: 42.7%(-.9 percentage point) chance of 3.5%-3.75%. (current target rate is 3.75-4.0%)
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +400 open in Japan 
• China A50 Futures: Indicating +37 open in China

• DAX Futures: Indicating +130 open in Germany

Portfolio:

• Higher: On gains in my tech/industrial/consumer discretionary/biotech sector longs
• Disclosed Trades: None
• Market Exposure: 100% Net Long

Bull Radar

Style Outperformer:

• Small-Cap Value +2.4%

Sector Outperformers:

• 1) Retail +4.4% 2) Airlines +4.3% 3) Homebuilding +4.1%

Stocks Rising on Unusual Volume:

• KSS, ANF, SYM, AMTM, WWD, JACK, INSP, SEM, ZIM, ZM, PSNL, HSAI, CENTA, RGNX, JMIA, KEYS, EAT, BBWI, PRCT, URBN, ALHC, WSC, QFIN, DOOO, DIN, JANX, PACS, KYIV, VIK, GAP, RPD, VCYT, BZH, CBLL, UPWK, BROS, MBC, VLTO, XPEL, FSLY, WRBY, ICLR, FLG, LEN, AVBP, FWRG, UCTT, BBY, PRAA, AGIO, CHEF, PTCT, RCL, MBUU, UTI, SN, MAMA, SNCY, TMDX, WD, BKU, MGM, NVO, ZTS, PONY, TTAM, EBC, HD, ZTO, OI, FBNC, CARR, FIBK, RYAAY, MRK, KEP, RXST, CAKE, MCHB, RL, OSIS, CCL, POST, LIVN, ALC, KLIC, NFBK, ADI, MT, HBNC, MOFG, GMED, ABNB, CVBF, BTI, ALGN, FLO, DAVE, PFS, UAL, XENE, WDAY and GEHC

Stocks With Unusual Call Option Activity:

• 1) FHN 2) LVS 3) ZM 4) NTNX 5) XLB

Stocks With Most Positive News Mentions:

• 1) KSS 2) SYM 3) ANF 4) TITN 5) AMTM

Sector ETFs With Most Positive Money Flow:

• 1) XBI 2) KRE 3) SMH 4) FDN 5) IBB

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)/3.84

After the Close: 

• (NNE)/-.31

Economic Release 

8:30 am EST

• Initial Jobless Claims for last week is estimated to rise to 225K versus 220K the prior week. 
• Continuing Claims is estimated to fall to 1964K versus 1974K prior.
• Durable Goods Orders for Sept. is estimated to rise +.5% versus a +2.9% gain in Aug.
• Durables Ex Transports for Sept. is estimated to rise +.2% versus a +.3% gain in Aug.
• Cap Goods Orders Non-Defense Ex Air for Sept. is estimated to rise +.2% versus a +.4% gain in Aug. 

9:45 am EST

• MNI Chicago PMI for Nov. is estimated at 43.8 versus 43.8 in Oct. 

2:00 pm EST

• Fed releases Beige Book report. 

Upcoming Splits

• None of note

Other Potential Market Movers

• The Atlanta Fed GDPNow Q4 update, 7Y T-Note auction, weekly MBA Mortgage Applications report, weekly US Baker Hughes rig count, Fed's weekly balance sheet report, (SEE) annual meeting and the Jefferies Industrial Summit 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 -8.8% Below 100-Day Average 
• Nasdaq/NYSE Volume Ratio 14.4 +1.0
• 3 Sectors Declining, 8 Sectors Rising
• 75.4% of Issues Advancing, 23.1% Declining 
• TRIN/Arms 1.25 -20.4%
• Non-Block Money Flow +$229.9M
  
• 80 New 52-Week Highs, 15 New Lows
• 60.1% (+5.9%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 52.0 +5.4

Polymarket:

• Supreme Court Rules in Favor of Trump's Tariffs? 26.0% unch.
• Will there be another US government shutdown by January 31st? 27.0% -2.0 percentage points
• Will China invade Taiwan by end of 2026? 14.0% unch.
• US-Venezuela military engagement by Dec. 31st 43.0% -21.0 percentage points

Other:

• Bloomberg Global Risk-On/Risk-Off Index 88.1 +1.4%
• US High-Yield Tech Sector OAS Index 448.5 -.5 basis point
• Bloomberg Cyclicals/Defensives Index 251.5 +.2%
  
• Morgan Stanley Growth vs Value Index 158.8 -1.1%
• CNN Fear & Greed Index 14.0 (EXTREME FEAR) unch.
• 1-Day Vix 11.5 -19.3%
  
• Vix 19.4 -5.3%
  
• Total Put/Call .89 +1.1%

Tuesday Watch

Around X:

• @Business  

• A patriarch for one of Asia’s biggest finance fortunes is joining other members of the global rich in bolstering artificial intelligence investments, defying fears of a bubble.
• Prime Minister Mark Carney and Alberta Premier Danielle Smith have agreed to the broad terms of a deal that would support a new oil pipeline to Canada’s west coast, CBC reported. 
• Google owner Alphabet gained as much as 2.7% in late trading after the Information reported that Meta is in talks to spend billions of dollars on the search giant’s artificial intelligence chips. 
• Bain Capital offered a block of Coherent shares for as much as $1.14 billion, according to sources, as the private equity firm continues to sell down its stake in the laser equipment maker.
• President Trump signed an executive order establishing the “Genesis Mission,” a federal effort to boost innovation using AI — the latest step by the administration to promote AI technology and its adoption. 
• Get up to speed on what's moving global markets.
• Here's what you need to know to start your day.  

• @ZeroHedge

• Ukraine Rejects Key Aspects Of Trump's Peace Plan, Won't Cede Territory.
• "It's A Tinder Box": GOP Members Consider Following MTG Into Retirement, Say White House Treats Them 'Like Garbage'.
• DOGE Slams Reuters For Pushing "Fake News" On Shutdown Story.
• Insurrection Chic.
• US Export-Import Bank To Spend $100 Billion To Secure Critical Minerals, Nuclear & LNG Supply Chains
  .   
• Modular Reactor Tide Rising: Nano Nuclear To Study Siting Multiple MMRs To Generate 1GW Energy In Texas; X-Energy Raises $700 Million
  .
• *US BEA TO RELEASE 3Q GDP ON DEC 23
  . 
• If they had social media in 1974.
• Venezuela Says Trump Has Designated 'Non-Existent' Drug Cartel As Terrorist Org; US Covert Ops Believed 'Imminent'.
• *SANDISK TO REPLACE INTERPUBLIC IN S&P 500.
• The Big Short...at Lows. (graph) 
   
• 'Buy All The Things': There's Dip-Buyers Galore As Rate-Cut Odds Soar.

• @CNBC

• CNBC Daily Open: A risky alpha bet in markets to revive AI trade. 
• Tuesday's big stock stories: What’s likely to move the market in the next trading session. 
• Asia-Pacific markets set to track Wall Street's tech recovery after Alphabet leads AI rally.
• U.S. stock futures are little changed after tech rally boosts stocks: Live updates. 
• Stocks making the biggest moves after hours: Zoom, Semtech, Agilent Technologies and more.

• @WSJ  

• Allies of Federal Reserve Chair Jerome Powell have laid the groundwork for him to push a rate cut through a divided committee at December’s meeting even though it could draw multiple dissents.

• @MarioNawful

• CANDACE OWENS: I'M WILLING TO PROVIDE CHARLIE'S ASSASSIN'S NAME TO THE WHITE HOUSE. "I have informed people in the Federal government and the White House of the France and Israeli assassination plot and am willing to provide full details, as well as the name of the assassins and international accounts in France and Canada through which money was exchanged.
  

• @HealthRanger

• Called it. James Comey gets off scot-free. Was super easy to see this coming, because NO ONE is being held accountable for treason in this country, it seems. And the main people in prison (like Tina Peters) are innocent! So the traitors walk free while the innocent are behind bars. No wonder people have lost all faith in the system.

• @ImMeme0

• BREAKING: Campbell Soup’s VP and Chief Information Security Officer, Martin Bally, was secretly recorded saying the company uses bioengineered meat, their products aren’t healthy, and that it’s mostly poor people who buy them. "We have shit for fucking poor people. Who buys our shit? I don’t buy Campbell’s products barely anymore. It’s not healthy now that I know what the fuck‘s in it. Bioengineered meat! I don’t wanna eat a fucking piece of chicken that came from a 3-D printer."

• @WallStreetApes

• Lara Logan interviews Former CIA operations officer Gary Berntsen who explains how elections are being stolen in America. He describes there are teams of statisticians, mathematicians, and hackers who map out every county and identify where margins can be quietly adjusted. Different techniques are used in each location so nothing matches in a recount. When a 70-30 county becomes 68-32, nobody notices. But when you add up these differences across an entire state, those tiny amounts of fraud decide outcomes. Both former CIA operations officer Gary Berntsen and author Ralph Pezzullo explain the strategy. They explain they don't flip the big blue cities. Instead they shave votes in the places no one ever audits. (video)

• @KnoxieLuv

• Project Veritas coming with more receipts that Candace is and has been in danger for a long time. "Blackmail her faster"? What kind of Banana Republic is this? These people should have been investigated and prosecuted years ago!

• @GeneralMCNews

• BREAKING: President Trump is considering removing his current chief of staff, Susie Wiles.

• @JimFergusonUK

• RIC GRENELL JUST SAID WHAT EVERYONE ELSE IS TOO SCARED TO SAY — AND HE’S RIGHT. Former DNI @RichardGrenell just warned Tulsi Gabbard (current DNI) and CIA Director John Ratcliffe that Democrats aren’t debating President Trump… They’re mounting an insurrection from inside the intelligence community. Grenell didn’t mince words: “This video by Democrat elected officials is a call to arms… They’re trying to get the last remaining people inside intel and the bureaucracy to stand up and fight. What they are trying to do is mount an insurrection from within.” Read that again.

Night Trading 

• Asian equity indices are +.5% to +1.25% on average. 
• Asia Ex-Japan Investment Grade CDS Index 67.5 -2.0 basis points.
• China Sovereign CDS 45.5 -.75 basis point.
• China Iron Ore Spot 106.0 USD/Metric Tonne +.9%. 
• Swiss Franc/Offshore Chinese Renminbi Cross 8.77 -.18%.
• Bloomberg Emerging Markets Currency Index 36.1 unch.
• Bloomberg Global Risk-On/Risk Off Index 87.9 +1.3%.
• US 10-Year Yield 4.04% +1.0 basis point.
• Volatility Index(VIX) futures 20.0 +.3%.
• Euro Stoxx 50 futures -.27%. 
• S&P 500 futures -.02%.
• NASDAQ 100 futures -.02%.

Morning Preview Links

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 day.