Stocks Slightly Lower into Final Hour on Labor/Product Shortage Fears, Higher Long-Term Rates, Tax Hike Worries, Tech/Medical Equipment Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Higher
  

• Sector Performance: Mixed
  

• Volume: Around Average

• Market Leading Stocks: Outperforming
  

Equity Investor Angst:

• Volatility(VIX) 18.3 +2.8%
• Bloomberg Global Risk On/Risk Off Index 3,228.0 +1.0 point

• Euro/Yen Carry Return Index 134.03 +.09%

• Emerging Markets Currency Volatility(VXY) 8.7 -.9%.

• S&P 500 Implied Correlation 55.5 +2.9%

• ISE Sentiment Index 108.0  +28.0 points
  

• Total Put/Call .80 -18.4%

• NYSE Arms .43 -48.8%

Credit Investor Angst:

• North American Investment Grade CDS Index 50.93 -.12%
  

• US Energy High-Yield OAS 373.64 -1.6%

• European Financial Sector CDS Index 55.26 -.23%

• Italian/German 10Y Yld Spread 102.0 +1.0 basis point
  

• Asia Ex-Japan Investment Grade CDS Index 87.0 +1.68%
  

• Emerging Market CDS Index 176.74 +1.2%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 37.19 +.03%

• 2-Year Swap Spread 11.25 -.5 basis point
  

• TED Spread 10.75 +.75 basis point
  

• 3-Month EUR/USD Cross-Currency Basis Swap -2.5 -.25 basis point
  
• MBS  5/10 Treasury Spread  72.75 -1.5 basis points
  
• IHS Markit CMBX BBB- 6 71.75 unch.
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 59.12 -.07%
• 3-Month T-Bill Yield .03% unch.
  

• Yield Curve 118.0 -1.0 basis point
  

• China Iron Ore Spot 117.55 USD/Metric Tonne unch.

• Citi US Economic Surprise Index -28.8 +2.0 points

• Citi Eurozone Economic Surprise Index -63.8 -.3 point
  

• Citi Emerging Markets Economic Surprise Index -.8 -1.4 points

• 10-Year TIPS Spread 2.36 +2.0 basis points
• 98.5% chance of no change at Dec. 15th meeting, 98.5% chance of no change at Jan. 26th meeting

US Covid-19:

• 257 new infections/100K people(last 7 days total) -16/100K people
• 48% of Jan. 7th, 2021 peak(highest daily avg. new infections) -3.0 percentage points
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -135 open in Japan 
• China A50 Futures: Indicating +38 open in China

• DAX Futures: Indicating +15 open in Germany

Portfolio:

• Slightly Higher: On gains in my industrial/consumer discretionary sector longs,
  

• Disclosed Trades: None
  

• Market Exposure: 100% Net Long
  

Bear Radar

 Style Underperformer:

• Mid-Cap Growth -1.1%

Sector Underperformers:

• 1) Medical Equipment -2.2% 2) Software -1.6% 3) Robotics -1.2%

Stocks Falling on Unusual Volume: 

• PRGS, ONEM, TASK, CRL, ATUS and OMER
  

Stocks With Unusual Put Option Activity:

• 1) BKLN 2) UUP 3) MJ 4) CAR 5) CLNE
  

Stocks With Most Negative News Mentions:

• 1) RWLK 2) NTZ 3) ATUS 4) APPH 5) OPK
  

Charts:

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

Bull Radar

 Style Outperformer:

• Small-Cap Value +2.5%

Sector Outperformers:

• 1) Oil Service +6.0% 2) Energy +3.3% 3) Banks +3.1%

Stocks Rising on Unusual Volume:

• SD, PBF, AMTX, REKR, GOSS, SAVA, EQT, KRA, CAR, CC, CNX, DMYI, DBI, WFRD, VZIO, CHX, RDUS, OXY, XEC, TSE, XLRN, AOSL, LNC, MRO, TCBI, MGY, BALY, LIND, VNOM, SBNY, DOW, CONN, APA, CCXI, DVN, PAGP, BBY, AAWW, CCL, EHTH, RBC, SNDX, LAUR, AFRM, RCL, ATSG, WYNN, ATKR, ENVX, CHEF, FLS, CHPT, XOM, PSN and TILE
  

Stocks With Unusual Call Option Activity:

• 1) PRTY 2) ENG 3) SEEL 4) GT 5) FLR

Stocks With Most Positive News Mentions:

• 1) SWN 2) NAKD 3) BBIG 4) PBF 5) OXY
  

Charts:

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

Mid-Day Market Internals

NYSE Composite Index:

• Volume Running +.7% Above 100-Day Average 
• 6 Sectors Rising, 5 Sectors Declining
• 59.0% of Issues Advancing, 37.6% Declining
• 94 New 52-Week Highs, 33 New Lows
• 60.7% of Issues Above 200-day Moving Average
• Average 14-Day RSI 45.4%
  
• Bloomberg Global Risk-On/Risk-Off Index 3,144.0 -83.0 points
• Russell 1000: Growth/Value 17,649 -1.69%
  
• Vix 18.3 +3.0%
• Total Put/Call .76 -22.5%
• TRIN/Arms .42 -50.0%

Monday Watch

Today's Headlines

Bloomberg:                

• China’s Growth Forecasts Downgraded as Power Crunch Worsens.  
• China’s Recovery Is Coming Under Pressure From Weak Demand.
  
• China’s Power Crisis Moves From the Factory Floor to Homes.
  
• Evergrande’s EV Unit Plunges After Warning of Cash Shortage.
• From Nairobi to Ningbo: See the Supply Shocks Spanning Globe.
• Chinese Regulators Are Serious About Crypto Ban This Time.
• Scholz Has Edge as German Election Leaves Outcome Undecided.
• China Stocks Rise as Liquor Firms Surge to Offset Power-Cut Woes.  
• Stocks, Futures Gain; Oil Rises on Tight Supply: Markets Wrap.
• Oil Extends Surge as WTI Jumps Above $75 on Global Energy Crunch.
• Five Things You Need to Know to Start your Day.
• Pelosi Sets Thursday Vote on Infrastructure Bill in Crucial Week.
  
• Beaten-Down Airline Stocks Celebrate Easing of Travel Rules.  
• Mayorkas Says U.S. Won’t Protect Southern Border With Wall.  
• Apple’s Modest iPhone 13 Update Sets the Stage for Bigger iPhone 14 Changes Next Year.

Zero Hedge: 

• Pelosi Plays Chicken With House Progressives, Schedules Three Votes For Next Week That "Must Pass".
• NYC Fast Resembling San Fran & Vancouver 'Cities Of The Walking Dead' As Junkies, Dealers Take Over Midtown Streets With Impunity.
• As Biden Releases 12K Haitians Into US, Thousands More Arrive In Panama For Northbound Trek.
• Taliban Hangs 4 Bodies In Public Square - Says Will Resume "Cutting Off Of Hands".
• The Key Market Flows Behind "Yet Another Quick Selloff".
• Gasflation.
• As Advisory Panel Warned, CDC Director's Anti-Science Decision Makes Boosters 'Available To Anyone Who Wants One'.
• Not Again. Costco Warns Of Toilet Paper Shortage.
• CDC Not Changing Definition Of "Fully Vaccinated"...For Now: Walensky.
• At Least 3 Dead, Dozens Injured After Amtrak Train Derails In Montana.
• 30 Facts You Need To Know: A COVID Cribsheet.
• The Problem Is Not Just Xi Jinping; It Is Communism.
• Democrats In Congress Try To Abolish Space Force.
• Hedge Fund Net Leverage At All Time Highs As No Dips Are Sold.
• Texas Moves To Divest From Ben & Jerry’s Over Israeli Settlement Ban. 
• Never Say Neigh: FDA Lists 'Horse Drug' As Approved COVID Treatment. 
• Just How Many Containers Of Cargo Are Stuck Off California's Coast?

 Jerusalem Post:

• COVID-19: New 'Mu variant' from Colombia could be vaccine resistant - WHO.

NewsMax:

• Sen. Sullivan: Americans Don't Want 'Socialist, Reckless Spending Bill'.

OANN:

• Sen. Paul: Biden, Fauci Continue To Ignore ‘The Science’ Of Natural Immunity.

NY Times:

• Covid-19 cases are plunging in the South over the last two weeks despite packed college football games and campuses. Florida -46%(vaccination rate: 57%), Louisiana -43%(vaccination rate: 45%), Tennessee -36%(vaccination rate: 45%), Georgia -36%(vaccination rate: 45%), Texas -33%(vaccination rate: 51%), Mississippi -29%(vaccination rate: 43%), South Carolina -29%(vaccination rate: 47%), Arkansas -28%(vaccination rate: 45%) and Alabama -26%(vaccination rate: 42%).

TheGatewayPundit.com:

• DHS Chief Mayorkas Admits More Than 12,000 Haitian Illegals Have Been Released Into US – No Vaccine Mandate, No Covid Testing (VIDEO).
• Arizona Audit Final Report Was Watered Down: Reports from Cyber Ninjas Were Edited, Most Damning Statements Removed – What Else Was Removed?
• Biden Gang Wants Closer Ties with China While Ignoring China’s COVID Guilt and Intimidating Flights Over Taiwan.
• ROCK BOTTOM: Even Kamala’s Poll Numbers Are Now 6 Points Higher Than Joe Biden.
• “Patently False” – CNN’s Jake Tapper Calls Out Biden Admin For Lying About Mounted Border Patrol Agents in Texas (VIDEO).
• American Stasi: Chris Wray’s FBI Is Investigating Veterans’ Group that Is Saving Americans in Afghanistan that Biden Left Stranded.
• POLL: People Who Voted For Joe Biden Are Now Abandoning Him In Droves. 
• Dozens of Massachusetts State Troopers Resign Ahead of Deadline for State’s Mandatory Vaccine Mandate.
  

The Epoch Times:

• CCP Is Carrying Out ‘Cold Genocide’ Against Falun Gong, Professor Says.

Covid-19(Data, Maps, Graphs):

• Our World in Data:  New Global Covid-19 Cases(7-day rolling average graphs). New US Covid Hospital Admissions/ICU Admissions/Deaths
  
• FT.com:  Fully Vaccinated by Country(graph). Global Lockdown Stringency Index(map).
• Bloomberg.com:  International Travel Restrictions.  Case Graphs by State.
  
• NYTimes.com:  County Trends and Clusters. Local ICU Occupancy.
  
• Brown School of Public Health:  Covid Severity by State/County(map).  US Hospital Capacity(region).
  
• CovidActNow:  Covid Severity/Infection Rate by Metro Area.
  
• KFF:  US Vaccinations by Race/Ethnicity.
  
• Carnegie Mellon: Covid-Like Symptoms in Community. Covid Symptom Searches on Google. Covid-Related Dr.Visits.  Restaurant Visits. Wearing Masks. (graphs)
  
• Safegraph.com:  Commerce Patterns(graphs).

Night Trading

• Asian indices are -.25% to +.75% on average.
• Asia Ex-Japan Investment Grade CDS Index 86.25 +3.25 basis points.
• China Sovereign CDS 44.25 +2.0 basis points.
• Bloomberg Emerging Markets Currency Index 59.19 +.05%.
• Bloomberg Global Risk-On/Risk Off Index 3,197.0 -30.0 points.
• Volatility Index(VIX) futures 19.50 -1.6%. 
• Euro Stoxx 50 futures +.62%.
• S&P 500 futures +.42%.
• NASDAQ 100 futures +.41%.

Morning Preview Links

Earnings of Note

Company/Estimate

Before the Open:

• None of note
  

After the Close:

• (JEF)/.85
  

Economic Releases

8:30 am EST

• Durable Goods Orders for Aug. is estimated to rise +.7% versus a -.1% decline in July.
• Durables Ex Transports for Aug. is estimated to rise +.5% versus a +.8% gain in July.
• Cap Goods Orders Non-Defense Ex-Air for Aug. is estimated to rise +.3% versus a +.1% gain in July.
  

10:30 am EST

• Dallas Fed Manufacturing Activity for Sept. is estimated to rise to 11.0 versus 9.0 in Aug.
  

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Eurozone PPI report, 2/5Y T-Note auction and the Cantor Fitzgerald Healthcare Conference could also impact trading today.

US Equity Market Hours

• 9:30 am - 4:00 pm EST

BOTTOM LINE: Asian indices are mostly higher, boosted by commodity and technology shares in the region. I expect US stocks to open modestly higher and to maintain gains into the afternoon.  The Portfolio is 100% net long heading into the week.

Today's Headlines

Bloomberg:   

• U.S. Move to End Huawei Saga Help China Ties - but at a Cost.  
• China Funds Counting On Beijing to Contain Evergrande Contagion.
• China Frees Canadians After Huawei CFO Leaves, Ending Crisis.  
• China’s Guangdong Calls for Reduced Power Use at Shops, Offices.
• CEO of Embattled HNA Detained in China Is a U.S. Citizen.  
• What Markets Expect From the German Election.
• The Fight to Control the $2 Trillion Crypto Market Is Heating Up.
• To Reach Vaccine Holdouts, Scientists Take a Page From Digital Marketing.
• Crypto Exchange Stops Taking China Users as Beijing Widens Ban.  
• House Panel Set to Advance Biden’s Giant Tax, Spending Bill.  
• NYC Temporarily Blocked From Imposing Schools Vaccine Mandate.
• Acceleron Is in Advanced Talks for $11 Billion Sale.  
• Fed Economist Bemoans ‘Criminally Oppressive’ Social Order.  
• Why Your New Couch Will Be Delivered Only in 2022.  
• Profiling Coronavirus Mutations Helps Scientists Find Weak Spots.   
• U.S. Condo Fees Surge 19% as Energy, Wage Bills Pile Up.   
• Palm Oil May Touch 4,400 Ringgit on Tight Supplies, Mistry Says.
• A Faang Taper Quake Is What Active Manager Dreams Are Made Of.
• A Crypto Firm CEO’s Bull Case for NFTs: ‘Money Is Just a Meme’.

Wall Street Journal:  

• Stablecoins Eyed as U.S. Lays Ground for Crypto Rules.
• Covid-19 Panel Probing Virus Origins Is Disbanded.
• The Five Biggest Issues Dividing Democrats in Budget Bill Talks.
• What the ‘Smart Money’ Knows About China’s Evergrande Crisis.
• Designers Try Selling Clothes First, Making Them Later.  
• Joe Biden Wants to Undo a Rail Success.  
• A Green Energy Texas Whitewash.  
• Vindication Over Hunter’s Emails.
• For Self-Driving Cars, the Hot New Technology Is… Radar.
  

IG:

• Weekend Markets Trading Live.

CNBC:

• Toast survived `suicide mission’ to build $30 billion restaurant-tech business.
• Retail bids farewell to layaway as shoppers embrace buy now, pay later options.
• Costco, Nike and FedEx are warning there’s more inflation set to hit.
• Here’s what Robinhood execs allegedly said internally at the height of the GameStop short squeeze.
• Bitcoin and ether slide as China intensifies crackdown on cryptocurrencies.

Fox News:    

• Tucker Carlson: Biden and media are lying about COVID, here’s proof. 
• President Biden issues new COVID policy to distract from multiple crises overseas and at home.
• Cruz blames Biden for Haitian migrant crisis, cites 'canceled' deportation flights.
• Dem bill has $6B 'slush fund' GOP aide warns could backdoor earmarks.

Newsmax:    

• Texas Orders Audit of 2020 Election.

OANN:

• Sen. Paul: Biden, Fauci Continue To Ignore ‘The Science’ Of Natural Immunity.
  

Jerusalem Post:

• COVID-19: New 'Mu variant' from Colombia could be vaccine resistant - WHO.

NBC News: 

• More than 20,000 Haitians are gathered in Colombia for possible migration to U.S. 

Zero Hedge: 

• AZ 2020 Election Audit Finds Massive Irregularities, But Biden Still Wins State.
• 3,000 NYC Teachers Asked For Vaccination Exemptions, Union Says. 
• Sam To Become Major Hurricane Today.
• What's Really Going On In China.
• Wealthy Germans Fearing Leftist Victory In Sunday's Vote Scramble To Move Fortunes To Switzerland.
• UK's Fertilizer Crisis Spreads To EU After Another Firm Slashes Output.
• Buchanan: The Coming Climate Crisis Shakedown In Scotland.
• Panic Hoarding Gasoline Begins As UK Plunges Towards "Winter Of Discontent".
• Italy Orders Companies Not To Pay Unvaccinated Workers.
• Kemp: Worldwide Energy Shortage Shows Up In Surging Coal, Gas And Oil Prices.
• “The Housing Market Is Almost Frozen" - An Even Bigger Problem Emerges For China.
• It Never Happened: Photographer Who Took Viral Border Patrol 'Whipping' Photo Says Nobody Was Whipped.
• "Immunity As A Service" - The Snake-Oil Salesmen & The COVID-Zero Con.
• Visualizing The World's Biggest Pharmaceutical Companies.
• Is China Using Wokeism To Erode American Democracy?
• US Air Force Official: China Might 'Strike From Space'.
• Renewables Not So Reliable As US Hydropower Plunges 14%.
• Black Lives Matter NYC Leader Promises "Uprising" Against City's "Racist" Vaccine Passports.
• Texas National Guard Urges Members To Volunteer Amid Border Crisis.
• Personal Tracking Devices Moving Toward A "Dangerous" New Era.
• Containers Quickly Pile Up At US Rail Terminals, Add To Port Strains.
• First Weekly Outflow From Stocks In 2021.

TheGatewayPundit.com:

• REASONS TO DECERTIFY AZ – THE LIST: 70,000 Duplicated, Fraudulent, Illegal or Ghost Ballots (7 Times Biden’s Margin of Victory), Devices Missing, Data Deleted, Criminal Acts Referred to Authorities.
• THEY CAUGHT THEM AND THE CROWD CHEERED!! AZ Audit Team CAUGHT Maricopa County Officials DELETING COMPUTER ELECTION FILES — VIDEO.
• American Suicide: While China And Russia Expand Into Space, Dems Push To Abolish The U.S. Space Force.
• Arizona Audit Finds 25-30% of Duplicated Ballots Received Between November 4th-9th After They Knew How Many Ballots Were Needed.
• More from Australia Where Police Are Engaging in Violent Acts to Mandate COVID Restrictions(Video).
• BREAKING EXCLUSIVE: Report Shows Fulton County, GA 2020 Election Had $2 million in Unsupported OT, 15 Missing Routers, an Agreement with the SPLC to Put in Place Drop Boxes, and More.
• Arizona Senate Audit: Dominion Machines Contained Non-Maricopa County Data — From South Carolina and Washington State (VIDEO).

The Epoch Times:

• Distinguished US Professors Participated in Controversial Chinese Recruitment Plan: Leaked Documents.
• The Chinese Regime Aims to Influence and Control All Human Endeavors.

NY Times:

• Covid-19 cases are plunging in the South over the last two weeks despite packed college football games and campuses. Florida -46%(vaccination rate: 57%), Louisiana -43%(vaccination rate: 45%), Tennessee -36%(vaccination rate: 45%), Georgia -36%(vaccination rate: 45%), Texas -33%(vaccination rate: 51%), Mississippi -29%(vaccination rate: 43%), South Carolina -29%(vaccination rate: 47%), Arkansas -28%(vaccination rate: 45%) and Alabama -26%(vaccination rate: 42%).

Japan Today: 

• Nurses are quitting, and replacing them won’t be easy.

Covid-19(Data, Maps, Graphs):

• Our World in Data:  New Global Covid-19 Cases(7-day rolling average graphs). New US Covid Hospital Admissions/ICU Admissions/Deaths
  
• FT.com:  Fully Vaccinated by Country(graph). Global Lockdown Stringency Index(map).
• Bloomberg.com:  International Travel Restrictions.  Case Graphs by State.
  
• NYTimes.com:  County Trends and Clusters. Local ICU Occupancy.
  
• Brown School of Public Health:  Covid Severity by State/County(map).  US Hospital Capacity(region).
  
• CovidActNow:  Covid Severity/Infection Rate by Metro Area.
  
• KFF:  US Vaccinations by Race/Ethnicity.
  
• Carnegie Mellon: Covid-Like Symptoms in Community. Covid Symptom Searches on Google. Covid-Related Dr.Visits.  Restaurant Visits. Wearing Masks. (graphs)
  
• Safegraph.com:  Commerce Patterns(graphs).