Wednesday Watch

Evening Headlines

Bloomberg:           

• Back to Square One: When Big Economies Will Hit Pre-Virus GDP.
• Cases Pass 100 Million; Hong Kong Lifts Lockdown: Virus Update.  
• Asian Stocks Mixed; U.S. Tech Rises After Hours: Markets Wrap.  
• China Bubble Trouble, IMF Lifts Forecast, Fink Net-Zero: Eco Day.
• Schumer Says Democrats May Advance Stimulus Bill Without Republicans.
• How a Penny Stock Explodes From Obscurity to 451% Gains Via Chat Forums.  
• Internet Traffic Surge Triggers Massive Outage on East Coast.   
• Yellen Cites Treasury-Fed Coordination in New Crisis Campaign.  
• Lumber Buyers ‘Pay Up or Run Out’ Amid U.S. Homebuilding Surge.  
• Starbucks Falls Amid Sales Slump and Brewer’s Departure.
• Short-Squeezed Hedge Funds Are Now Getting Hit on Their Bullish Bets Too.

Wall Street Journal:

• Other Reddit YOLO Favorites That Aren’t GameStop.
• Biden’s Age of Climate Decadence.

Fox News: 

• What Biden's immigration overhaul could mean for national security.
• Newsom nears recall vote threshold; here's what's next.
  

CNBC.com:

• Stocks making the biggest moves after hours: Microsoft, GameStop, Starbucks & more.
• Microsoft reports 17% revenue growth as cloud business accelerates.
• How a band of Reddit traders drove GameStop stock up 275% in a week.
• Biden administration orders additional 200 million doses of Covid-19 vaccine.
• Walgreens taps Starbucks operating chief Roz Brewer as its next CEO.
• AMD beats, driven by game console and PC sales.
• America’s top-tier malls were resilient, but values are now crumbling, down 45% from 2016 levels.

MarketWatch.com:   

• It isn’t just GameStop: Here are some of the other heavily shorted stocks shooting higher .
  
• GameStop trading could be ‘systemically wrong,’ state regulator says.  
• The ‘ice is cracking’ on the bull market, one stock-market analyst warns.

Zero Hedge:

• 'They're Wasting Our Time': Rand Paul Shreds 'Unconstitutional' Trump Impeachment, Lists Examples Of 'Democrat Incitement'.
• Musk Tweet Sends Gamestop Soaring (Even More) After Hours.
• Are EVs Good For The Environment? ...Mostly Not.
• Germany Poised To Cut International Air Travel "To Almost Zero" On Virus Variant Fears.
• "Your Order Is A Direct Attack": Utah Tribe Seeks Exemption From Biden Drilling Pause.
• "Inside The Industry, We're All Pretty Panicked": Global Semi Shortage Continues To Slam Auto Industry.
• Las Vegas Schools Forced To Reopen Amid Rash Of Student Suicides .
• Compulsory Political Ideology For Illinois K-12 Teachers And Classrooms Moves Closer To Finalization.
• WTI Erases Losses After Bigger-Than-Expected Crude Draw.
• Microsoft Soars On Blowout Earnings Thanks To Surging Cloud Revenue; Returns $10BN To Shareholders.
• "Most Shorted" Stocks Massive Melt-Up Continues; Bonds, Bitcoin, & Bullion Flat.

Newsmax:  

• Retroactive Tax Hikes Aren’t the ‘First Choice,’ Biden Aide Says.
• US 'Actively Looking' at Mandating COVID-19 Testing for Domestic Air Travel.
• Ex-Rep. Gabbard: John Brennan, Adam Schiff 'Domestic Enemies' of US.

TheGatewayPundit.com:

• The Highest Paid Federal Government Employee Is the Same Guy Who Cost Millions of Americans Their Jobs.
• BREAKING: Senate Votes 55-45 to Set Aside Rand Paul’s Point of Order That Impeachment Unconstitutional – 5 Republicans Vote with Democrats.
• ‘Kiss My Ear’ – Joe Biden Jumbles Words During Covid Presser, Calls Out Lawmaker For Refusing to Wear a Face Mask (VIDEO).
• Video From Press Corps at Biden Inauguration Reveals Only About a Hundred People in Attendance Outside of Military and Press.
• Add Virginia to the List of States Where a Forensic Audit of the 2020 Election Results is Absolutely Necessary.
• MUST WATCH: Rand Paul Goes Off on “Sham Impeachment,” Media and Democrat Hypocrisy in Scorched Earth Speech.
• Biden’s Pick for Secretary of State, Tony Blinken, Is Connected to Biden Family in Their Shady Deals with China and Ukraine.

The Epoch Times:

• China’s Jilin Province Building Mobile Hospitals as Virus Outbreak Worsens.
• As CCP Virus Continues to Spread in Beijing, Residents Grow Angry Over Lockdown and Soaring Food Prices.

HereIsTheEvidence.com:

• This is for aggregating publicly available items of voter fraud evidence in the US election that would be admissible in court.
  

Digital Blackboard:

• Daily New Cases by Region.

Worldometer:

• New Cases/Deaths by state.

Rt Covid-19:

• How fast virus is growing by state.

KFF:

• State Data(Tests/Hospitalizations).

Night Trading 

• Asian equity indices are -.25% to +.75% on average.

• Asia Ex-Japan Investment Grade CDS Index 61.5 +.25 basis point.

• China Sovereign CDS 31.0 +.25 basis point.

• Bloomberg Emerging Markets Currency Index 62.30 +.02%.
• Bloomberg Global Risk-On/Risk Off Index 2,025.0 +24.0 points.
• Volatility Index(VIX) futures 25.7 +1.14%.
• FTSE 100 futures -.2%.

• S&P 500 futures +.05%.

• NASDAQ 100 futures +.46%.

Morning Preview Links

Earnings of Note 
Company/Estimate 

 

Before the Open: 

• (ABT)/1.35
• (ANTM)/2.52
• (T)/.73
• (ADP)/1.29
• (BA)/-1.63
• (EAT)/.34
• (GLW)/.48
• (GD)/3.54
• (HES)/-.64
• (KNX)/.91
• (NDAQ)/1.45
• (NSC)/2.48
• (PGR)/1.42
• (VFC)/.89
  

After the Close:

• (AAPL)/1.41
• (CP)/5.02
• (CCI)/1.55
• (FB)/3.20
• (LRCX)/4.46
• (LVS)/-.33
• (RJF)/1.68
• (NOW)/1.06
• (SYK)/2.55
• (TSLA)/1.03
• (URI)/4.26
• (WHR)/6.20
  

Economic Releases

8:30 am EST

• Durable Goods Orders for Dec. is estimated to rise +1.0% versus a +1.0% gain in Nov.
• Durables Ex Transports for Dec. is estimated to rise +.5% versus a +.4% gain in Nov.
• Cap Goods Shipments Non-Defense Ex-Air for Dec. is estimated to rise +.6% versus a +.5% gain in Nov.
  

2:00 pm EST

• The FOMC is expected to leave the benchmark Fed Funds Rate at 0-.25%.
  

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The German GFK Consumer Confidence Index, $62B 7Y T-Note auction, weekly MBA Mortgage Applications report, TD Securities Mining Conference and the (KMI) analyst meeting could also impact trading today.

Market Hours
Normal:

• 9:30 am - 4:00 pm EST
  

BOTTOM LINE: Asian indices are mostly higher, boosted by consumer 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 75% net long heading into the day.

Stocks Slightly Higher into Final Hour on Stimulus Hopes, Stable Long-Term Rates, Short-Covering, Retail/Alt Energy Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Lower
  

• Sector Performance: Mixed
  

• Volume: Heavy

• Market Leading Stocks: Underperforming
  

Equity Investor Angst:

• Volatility(VIX) 22.9 -1.3%
• Bloomberg Global Risk On/Risk Off Index 1,995.0 -33.0 points

• Euro/Yen Carry Return Index 130.45 +.08%

• Emerging Markets Currency Volatility(VXY) 10.27 -.19%

• S&P 500 Implied Correlation 50.5 +2.9%

• ISE Sentiment Index 143.0 +18.0 points
  

• Total Put/Call .71 unch.

• NYSE Arms .80 +12.7%

Credit Investor Angst:

• North American Investment Grade CDS Index 52.48 +1.56%
  

• US Energy High-Yield OAS 515.75 +.19%

• European Financial Sector CDS Index 60.76 -1.7%

• Italian/German 10Y Yld Spread 118.0 -5.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 61.20 +.91%
  

• Emerging Market CDS Index 169.50 -2.4%
  

• iBoxx Offshore RMB China Corporate High Yield Index 185.36 -.07%

• 2-Year Swap Spread 7.75 unch.

• TED Spread 14.75 unch.
  

• 3-Month EUR/USD Cross-Currency Basis Swap -4.5 +.75 basis point
  
• MBS  5/10 Treasury Spread  69.0 -1.0 basis point
  
• IHS Markit CMBX BBB- 6 73.75 unch.

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 62.33 +.44%
• 3-Month T-Bill Yield .06% -1.0 basis point
  

• Yield Curve 92.0 -5.0 basis points
  

• China Iron Ore Spot 161.85 USD/Metric Tonne -.15%

• Citi US Economic Surprise Index 78.20 n/a

• Citi Eurozone Economic Surprise Index 142.0 n/a
  

• Citi Emerging Markets Economic Surprise Index 60.30 n/a

• 10-Year TIPS Spread 2.07 unch.
• 100.0% chance of no change at March 17th meeting, 100.0% chance of no change at April 28th meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating +199 open in Japan 
• China A50 Futures: Indicating +50 open in China

• DAX Futures: Indicating +9 open in Germany

Portfolio:

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

• Disclosed Trades: None
  

• Market Exposure: 75% Net Long
  

Bear Radar

Style Underperformer:

• Mid-Cap Growth -.8%

Sector Underperformers:

• 1) Steel -3.2% 2) Shipping -2.5% 3) Road & Rail -1.4%

Stocks Falling on Unusual Volume: 

• LMT, VZ, RSI, GSAH, BBIO, ROK, CCIV, CEVA, PRLD, BLI, IPOD, DMTK, UWMC, TSIA, AXDX, WPF and RYTM
  

Stocks With Unusual Put Option Activity:

• 1) TJX 2) IRBT 3) AMCX 4) LB 5) XRT
  

Stocks With Most Negative News Mentions:

• 1) FVRR 2) IZEA 3) FORM 4) PDD 5) CCL
  

Charts:

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

Bull Radar

Style Outperformer:

• Large-Cap Growth +.2%

Sector Outperformers:

• 1) Alt Energy +3.4% 2) Retail +3.3% 3) Airlines +1.1%

Stocks Rising on Unusual Volume:

• GME, VIR, PRTS, WKHS, BLNK, OSTK, SPCE, BYND, NKLA, TPGY, CRTX, STAA, RXT, OTRK, CLXT, XONE, RIDE, PSAC, RVP, APPN, CLOV, HYLN, RGS, CLII, RMO, SDC, DNMR, CLPT, XL, PBH, MDLA, ONDS, APO, HEAR, FOXA, FIZZ and TR
  

Stocks With Unusual Call Option Activity:

• 1) MITT 2) BCLI 3) DS 4) PRTS 5) FOXA

Stocks With Most Positive News Mentions:

• 1) BZUN 2) MYOV 3) ALV 4) EVRI 5) DKNG
  

Charts:

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

Mid-Day Market Internals

NYSE Composite Index:

• Volume Running +34.6% Above 100-Day Average 
• 4 Sectors Rising, 7 Sectors Declining
• 40.9% of Issues Advancing, 56.7% Declining
• 124 New 52-Week Highs, 2 New Lows
• 85.3% of Issues Above 200-day Moving Average
• Average 14-Day RSI 51.1% 
• Bloomberg Global Risk-On/Risk-Off Index 1,965.0 -63.0 points
• Vix 23.2 +.2%
• Total Put/Call .72 +1.4%
• TRIN/Arms .93 +31.0%

Tuesday Watch

Evening Headlines

Bloomberg:           

• China’s Economy Picks Up in January, Building on 2020’s Recovery.
• Tencent Shares Drop After Approaching $1 Trillion Valuation.
• WHO Warns on Vaccine; U.N. Issues Call for Equity: Virus Update.  
• Asian Stocks Slip on Stimulus Timing; Bonds Steady: Markets Wrap. 
• Oil Rises With Tighter Supply Outook Overshadowing Vaccine Woes.
• Treasury Market’s Grip on 1% Yields at Risk of Slipping Away  
• U.S. States Ease Covid Restrictions Even as Variants Take Hold.
• IAC’s Vimeo Raises New Funds at $6 Billion Valuation.
• National Guard Plans 5,000 Troops in Washington Until Mid-March.  
• Biden Open to Negotiate on Stimulus Talks, Seeks GOP Backing.  
• GameStop Short-Sellers Reload Bets After $6 Billion Loss.  
• Crypto Hedge Funds Underperformed Bitcoin During Rally Last Year.   
• A ‘Bear’ in This Market Is Someone Who Is Only 75% Long Stocks.

Wall Street Journal:

• Ricchetti Brothers Rise in D.C., One a Lobbyist, the Other in the White House.
• Moderna Developing Booster Shot Against South Africa Strain.
• U.S. Lifts Ban on Transgender Military Service Members.
• You Tested Positive for Covid-19. Now What?

Fox News:  

• As Americans await stimulus checks, Biden offers $4B to migrant countries.
• Welding foreman says he broke down as Biden order forced him to lay off team.
  

CNBC.com:

• Mania in stocks like GameStop, surging options activity suggest a market pullback is coming.
• Apollo’s Leon Black to retire as CEO but remain chairman after he is cleared in internal Epstein probe.
• GOP worried about raising money for midterm House races as corporations cut donations after riot.
• Exploring reparations for Black Americans is ‘necessary,’ says NAACP president.
• Minnesota confirms first known U.S. case of more contagious Covid variant originally found in Brazil.

MarketWatch.com: 

• Reddit moderator slams Wall Street ‘fat cats’ as GameStop’s wild ride continues.
  
• Life after the COVID-19 vaccine: Americans won’t rush back to restaurants, ball games — or public transportation.
  
• When the bull market breaks, it’s ‘likely to break hard,’ warns longtime bear who is wary of vaccine euphoria.  
• GameStop stock is just the latest sign of a speculative frenzy.  
• Robinhood day traders are squeezing the hedge funds — here’s why it may continue.

Zero Hedge:

• House Delivers Impeachment Article To Senate But Biden Doesn't Think Trump Will Be Convicted.
• Leon Black Steps Down As Apollo CEO After Review Finds He Paid Jeffrey Epstein $158 Million.
• Democrats Have Released A Roadmap To One-Party Rule.
• Janet Yellen Confirmed As US Treasury Secretary.
• Trump Campaign Disavows Link To 'Patriot Party' In Official Filing.
• Biden Signs Order Boosting Federal Spending On US Products.
• The First Casualty Of The Big Short Squeeze: Melvin Capital Gets $2.75BN Bailout From Citadel, Point72 After Its Shorts Explode.
• Godiva Closing All US Stores On Plunging Sales.
• Italian Premier To Resign As He Plots Latest Political Comeback.
• Is This The Reason Behind's Today's Surreal Market Action.
• "New McCarthyism Will Prove An Orwellian Mistake" Says US Historian.
• Twitter Unveils "Birdwatch," A New Platform Where Users Fact-Check Tweets.
• "Sell Mortimer": Short Squeeze Turmoil Triggers Market Rollercoaster.

TheGatewayPundit.com:

• At Least One Third of the Nation Believes Joe Biden Stole the Election – Unchanged from December.
• Biden Admin Ramping Up Effort to Remove Andrew Jackson and Put Harriet Tubman on $20 Bill (VIDEO).
• RUDY BRINGS THE FIRE: Giuliani Responds to $1.3 Billion Dominion Lawsuit AND IT’S EPIC.
• Republican State Lawmakers to Introduce New Bills to Limit Vote-by-Mail, Require Photo ID to Vote, Clean Dirty Voter Rolls.
• President Trump Announces ‘Office of the Former President’ – Will Carry On the Agenda of the Trump Administration.
• Newsom Lifts Strict Stay-at-Home Order From All CA Regions Even Though Covid Cases Are Higher Than When Order Started in December.
• Democrats Announce Trump Impeachment Trial Will Start February 8th — GOP Senators May Ask for a Secret Ballot to Hide Their Vote from Constituents.
• Biden Proposes $200 Gun Tax and Firearm Buyback Program Along with 13 page Form that Asks for Fingerprints and Photograph.
• Good News! Three of Ten Pro-Impeachment Republicans Including Liz Cheney ALREADY Have Primary Opponents.

The Epoch Times:

• Conservatives Call on Ottawa to Declare Beijing’s Repression of Uyghurs a ‘Genocide’.
• Chinese City Facing Food Crisis After Authorities Impose Hard COVID-19 Lockdown.

HereIsTheEvidence.com:

• This is for aggregating publicly available items of voter fraud evidence in the US election that would be admissible in court.
  

Digital Blackboard:

• Daily New Cases by Region.

Worldometer:

• New Cases/Deaths by state.

Rt Covid-19:

• How fast virus is growing by state.

KFF:

• State Data(Tests/Hospitalizations).

Night Trading 

• Asian equity indices are -1.0% to unch. on average.

• Asia Ex-Japan Investment Grade CDS Index 61.25 unch.

• China Sovereign CDS 30.75 +.75 basis point.

• Bloomberg Emerging Markets Currency Index 62.04 -.02%.
• Bloomberg Global Risk-On/Risk Off Index 2,013.0 -16 points.
• Volatility Index(VIX) futures 26.1 +.37%.
• FTSE 100 futures +.24%.

• S&P 500 futures -.33%.

• NASDAQ 100 futures -.29%.

Morning Preview Links

Earnings of Note 
Company/Estimate 

 

Before the Open: 

• (MMM)/2.17
• (ALK)/-2.93
• (AXP)/1.30
• (ADM)/1.09
• (ALV)/1.85
• (DHI)/1.72
• (FCX)/.40
• (JNJ)/1.83
• (LMT)/6.31
• (NEE)/.38
• (PCAR)/1.20
• (PII)/2.90
• (RTX)/.69
• (ROK)/1.87
• (VZ)/1.17
  

After the Close:

• (AMD)/.30
• (BXP)/1.59
• (CHRW)/.97
• (CNI)/1.42
• (COF)/2.77
• (FFIV)/2.46
• (MRTN)/.22
• (MXIM)/.63
• (MSFT)/1.41
• (SBUX)/.55
• (TXN)/1.35
• (VAR)/1.03
  

Economic Releases

9:00 am EST

• The FHFA House Price Index MoM for Nov. is estimated to rise +.8% versus a +1.5% gain in Oct.
• The S&P CoreLogic CS 20-City MoM for Nov. is estimated to rise +1.0% versus a +1.61% gain in Oct. 
  

10:00 am EST

• The Conference Board Consumer Confidence Index for Jan. is estimated to rise to 89.0 versus 88.6 in Dec. 
• The Richmond Fed Manufacturing Index for Jan. is estimated at 19.0 versus 19.0 in Dec.
  

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Fed Press Conference, UK Unemployment report, $61B 5Y T-Note auction, weekly retail sales report and the (PLUG) business update could also impact trading today.

Market Hours
Normal:

• 9:30 am - 4:00 pm EST
  

BOTTOM LINE: Asian indices are mostly lower, weighed down by industrial and financial 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 day.