Bear Radar

Style Underperformer:

• Mid-Cap Value +1.1%

Sector Underperformers:

• 1) Paper -1.4% 2) Tobacco -.5% 3) Foods -.2%

Stocks Falling on Unusual Volume: 

• GNL, TIF, SJM, PDCO, PZZA, HIBB, SIG and FOSL

Stocks With Unusual Put Option Activity:

• 1) PHM 2) TIF 3) VNQ 4) AKRX 5) PGR

Stocks With Most Negative News Mentions:

• 1) CHS 2) PDCO 3) CME 4) CBRL 5) TX

Charts:

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

Bull Radar

Style Outperformer:

• Small-Cap Growth +2.7%

Sector Outperformers:

• 1) Steel +4.1% 2) Internet +3.5% 3) Software +3.4%

Stocks Rising on Unusual Volume:

• AFSI, EFAV, IEFA, SWX, EEX, EFII, EFV, NOBL, IGV, BV, USMV, FDT, COMT, BURL, AIA, ADUS, W, CFO, CRM, BST, SSNC, ZYME, EFG, ACAD, WB, ATKR, EHTH, NTNX, HTZ, HIIQ, AFSI, SAVE, ALK, JNPR, VCRA, CENTA, BR, BKE and AVNS

Stocks With Unusual Call Option Activity:

• 1) XON 2) KEYS 3) JNPR 4) XME 5) DKS

Stocks With Most Positive News Mentions:

• 1) CRM 2) W 3) BURL 4) NTNX 5) SAVE

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running -.16% Below 100-Day Average
• 7 Sectors Rising, 4 Sectors Declining
• 42.3% of Issues Advancing, 54.7% Declining
• 17 New 52-Week Highs, 134 New Lows
• 24.0% of Issues Above 200-day Moving Average
• Average 14-Day RSI 43.0%
• Vix 19.30 +1.5%
• Total Put/Call 1.07 +21.6%
• TRIN/Arms 1.13 +46.8%

Tuesday Watch

Evening Headlines

Bloomberg:        

• Trump and Xi to Meet for Dinner Saturday in Pivotal Moment for Trade War. 

• Asia Stocks Mixed Amid Trade Talk; Dollar Steady. Asian stocks traded mixed Wednesday as investors mulled comments from Federal Reserve officials and the chances of a breakthrough in the U.S.-China trade dispute. The dollar maintained gains. Shares rose in Tokyo and were little changed in Sydney and Seoul. Futures pointed to gains in Shanghai and Hong Kong after the S&P 500 Index climbed for a second day. The 10-year Treasury yield was steady as Federal Reserve Vice Chairman Richard Clarida backed gradual rate hikes ahead of Jerome Powell’s speech on Wednesday. The euro slipped after a report that U.S. President Donald Trump may impose tariffs on European cars as early as next week. Japan’s Topix index advanced 0.3 percent as of 9:16 a.m. in Tokyo. Australia’s S&P/ASX 200 Index slipped 0.1 percent. FTSE China A50 futures rose 0.6 percent. Futures on Hong Kong’s Hang Seng gained 0.4 percent. S&P 500 futures rose 0.1 percent.  

• Five Things You Need to Know to Start Your Day.  

• Trump-Xi Dinner, Mediocre Australia, Fed's Missing Word: Eco Day.

• Fed Officials Acknowledge Economic Weaknesses Yet Remain Upbeat.

• Salesforce(CRM) Surges After Annual Sales Forecast Exceeds Estimates. 

• 50 Companies to Watch in 2019.  

• Bitcoin ETFs Roadblocked by Lack of Safeguards, SEC's Chief Says.

Wall St. Journal:

• Illegal Immigration to the U.S. Hit a Low Point in 2016, Fueled by Drop in Mexican Nationals.

• Fake Signals and Illegal Flags: How North Korea Uses Clandestine Shipping to Fund Regime.

• Fed Enters a New, Less Predictable Policy-Making Phase.

• Multibillion-Dollar Hedge Fund Ascend Capital to Return Money.

MarketWatch.com:

• Fed talk is changing so quickly that markets may soon expect a ‘Powell put,’ El-Erian says

Fox News:  

• CNN star spars with Sarah Sanders in White House briefing room after temporary ban.

CNBC:          

• Salesforce(CRM) shares rise on better-than-expected third-quarter results.

• Apple's(AAPL) stock holds the key to the end of the bear market, Jim Cramer says.

• Here's what to expect from Fed Chief Powell's most important speech yet 

• Trump attacks Fed Chairman Powell: 'I'm not even a little bit happy with my selection of Jay'.

• Kudlow: White House and China are holding trade talks 'at all levels' ahead of Trump-Xi meeting.

• Cramer: Volatility charts suggest now is the time to buy into stocks.

• A Santa rally depends on Trump making trade truce and easier tone from Fed.

• Alibaba's(BABA) Jack Ma has been a Communist Party member since the 1980s.

• Wall Street bull sees 12%+ market surge over next 5 weeks.

• Stocks making the biggest moves after hours: Salesforce(CRM), Nutanix(NTNX) and more.

• Amazon(AMZN) confirms project to mine patient records and more accurately diagnose diseases.

Zero Hedge:    

• In "Absolute Coincidence", Goldman Signed Queens Real Estate Deal Same Day As Amazon HQ2 Announcement.

• Ukrainian President Warns Of "Full-Scale War With Russia" In Televised Interview.

• Univ. Of Iowa Asks Students To Reflect On Their "Whiteness".

• Deutsche Bank To Part Ways With More Top Executives.

• "Like Playing With Fire" - China Rules Out Treasury-Selling As Trade Weapon.

• Christine Blasey Ford Thanks America For $650,000 Payday, Hopes Life "Will Return To Normal".

• WTI Extends Rebound Despite 10th Weekly Crude Build In A Row.

• Why Was Nancy Pelosi 'Buying The F**king Dip' In AMZN, AAPL, & FB Shares?

• Dow Surges Despite Crude, Credit, Crypto, & Kudlow Chaos.

Night Trading 

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

• Asia Ex-Japan Investment Grade CDS Index 97.0 +.75 basis point. 

• Asia Pacific Sovereign CDS Index 10.5 +.25 basis point.

• Bloomberg Emerging Markets Currency Index 66.87 -.05%.

• FTSE 100 futures +.17%.

• S&P 500 futures +.05%.

• NASDAQ 100 futures +.14%.

Morning Preview Links

Earnings of Note
Company/Estimate
Before the Open:

• (BURL)/1.06

• (CHS)/.08

• (DKS)/.25

• (JLL)/.09

• (SJM)/2.29

• (MOV)/1.12

• (RY)/2.15

• (SINA)/.72

• (TIF)/.77

• (WB)/.72

After the Close:

• (GES)/.16

• (LZB)/.44

• (OXM)/.17

• (SMTC)/.61

Economic Releases

8:30 am EST

• Advance Goods Trade Balance for October is estimated at -$77.0B versus -$76.3B in September.

• Wholesale Inventories MoM for October are estimated to rise +.4% versus a +.4% gain in September. 

• Retail Inventories MoM for October are estimated to rise +.5% versus a +.1% gain in September.

• 3Q GDP is estimated to rise +3.5% versus a prior estimate of a +3.5% gain.

• 3Q Personal Consumption is estimated to rise +3.9% versus a prior estimate of a +3.9% gain.

• 3Q Core PCE is estimated to rise +1.6% versus a prior estimate of a +1.6% gain.

10:00 am EST

• New Home Sales for October are estimated to rise to 575K versus 553K the prior week.

• The Richmond Fed Manufacturing Index for November is estimated at 15.0 versus 15.0 in October.
  

Upcoming Splits

• None of note

Other Potential Market Movers

• The Fed's Powell speaking, $32B 7Y T-Note auction, weekly MBA Mortgage Applications report, Goldman Metals/Mining Conference and the Deutsche Bank Gaming/Lodging/Leisure/Restaurants Conference could also impact trading today.

BOTTOM LINE:  Asian indices are mostly higher, boosted by technology and industrial 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 Reversing Slightly Higher into Final Hour on Stable Long-Term Rates, Bargain-Hunting, Technical Buying, Transport/Alt Energy Sector Strength

 Broad Equity Market Tone:

• Advance/Decline Line: Lower
  

• Sector Performance: Mixed
  

• Volume: Around Average

• Market Leading Stocks: Performing In Line

Equity Investor Angst:

• Volatility(VIX) 18.7 -.9%

• Euro/Yen Carry Return Index 133.63 -.11%

• Emerging Markets Currency Volatility(VXY) 10.19 -.2%

• S&P 500 Implied Correlation 44.64 +2.67%

• ISE Sentiment Index 88.0 +14.3%
  

• Total Put/Call .86 -9.47%

• NYSE Arms .80 +27.0%

Credit Investor Angst:

• North American Investment Grade CDS Index 79.19 -.21%
  

• America Energy Sector High-Yield CDS Index 705.0 +.33%

• European Financial Sector CDS Index 102.54 +2.75%

• Italian/German 10Y Yld Spread 294.0 +3.25 basis points
  

• Asia Pacific Sovereign Debt CDS Index 10.42 +.97%

• Emerging Market CDS Index 219.95 +1.12%
  

• iBoxx Offshore RMB China Corporate High Yield Index 146.76 -.85%

• 2-Year Swap Spread 17.75 -.25 basis point

• TED Spread 29.75 -.5 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -25.25 +2.25 basis points

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 66.88 -.04%

• 3-Month T-Bill Yield 2.39% unch.

• Yield Curve 22.75 -.5 basis point

• China Iron Ore Spot 62.18 USD/Metric Tonne -.19%

• Citi US Economic Surprise Index -1.4 -.6 point

• Citi Eurozone Economic Surprise Index -63.70 +.5 point

• Citi Emerging Markets Economic Surprise Index -6.60 +3.1 points

• 10-Year TIPS Spread 1.92 -5.0 basis points

• 78.4% chance of Fed rate hike at Jan. 30th meeting, 89.7% chance at March 20th meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating +103 open in Japan 

• China A50 Futures: Indicating +52 open in China

• DAX Futures: Indicating +5 open in Germany

Portfolio: 

• Slightly Lower: On losses in my biotech/industrial sector longs

• Disclosed Trades: None

• Market Exposure: 75% Net Long