Friday Watch

Night Trading 

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

• Asia Ex-Japan Investment Grade CDS Index 98.75 +.5 basis point.

• China Sovereign CDS 59.5 +2.0 basis points.
  
• China Iron Ore Spot 130.0 USD/Metric Tonne +.32%.

• Bloomberg Emerging Markets Currency Index 41.7 -.02%.
• Bloomberg Global Risk-On/Risk Off Index 63.9 +2.8%.
  
• Bloomberg US Financial Conditions Index .52 +6.0 basis points.
  
• Volatility Index(VIX) futures 13.8 +.31%.
• Euro Stoxx 50 futures +.18%.

• S&P 500 futures -.08%.

• NASDAQ 100 futures -.17%.  

Morning Preview Links

BOTTOM LINE: Asian indices are mostly lower, weighed down by technology and commodity 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 Close at Session Highs on US Economic "Soft-Landing" Hopes, Earnings Outlook Optimism, Technical Buying, Healthcare/Road & Rail Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Around Even
  

• Sector Performance: Most Sectors Rising
  

• Volume: Above Average

• Market Leading Stocks: Outperforming
  

Equity Investor Angst:

• Volatility(VIX) 13.0 -.2%
• DJIA Intraday % Swing .52% +76.2%
  
• Bloomberg Global Risk On/Risk Off Index 62.3 +1.8%

• Euro/Yen Carry Return Index 172.8 -.05%

• Emerging Markets Currency Volatility(VXY) 7.8 +1.2%

• CBOE S&P 500 Implied Correlation Index 20.7 +1.5% 

• ISE Sentiment Index 116.0 -38.0
  

• Total Put/Call .87 +10.1%

• NYSE Arms .80 -27.9% 
• NYSE Non-Block Money Flow +$153.9M 
  

Credit Investor Angst:

• North American Investment Grade CDS Index 62.88 -.25%
  

• US Energy High-Yield OAS 335.04 -.81%
• Bloomberg TRACE # Distressed Bonds Traded 330 +3.0
  

• European Financial Sector CDS Index 78.18 +1.1% 
• Deutsche Bank Subordinated 5Y Credit Default Swap 238.21 -1.7%
  

• Italian/German 10Y Yld Spread 178.0 basis points +4.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 98.79 +.2%
  

• Emerging Market CDS Index 188.19 +.94%
• Israel Sovereign CDS 115.11 +.38%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 25.4 unch.

• 2-Year SOFR Swap Spread -18.0 basis points -2.0 basis points
  

• TED Spread 24.0 basis points -1.75 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -12.25 +1.75 basis points
  
• MBS  5/10 Treasury Spread 153.0 -1.0 basis point
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 946.0 unch.
  
• Avg. Auto ABS OAS 91.0 unch.
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 41.7 -.33%
• 3-Month T-Bill Yield 5.40% -1.0 basis point
  

• China Iron Ore Spot 129.2 USD/Metric Tonne -.29%
• Dutch TTF Nat Gas(European benchmark) 42.1 euros/megawatt-hour +1.9%

• Citi US Economic Surprise Index 29.8 +1.8 points

• Citi Eurozone Economic Surprise Index -30.6 -16.9 points

• Citi Emerging Markets Economic Surprise Index 22.0 +1.5 points
• S&P 500 Current Quarter EPS Growth Rate YoY(490 of 500 reporting) +4.5% +.2 percentage point
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 242.01 +.08:  Growth Rate +9.3% unch., P/E 18.8 -.1
  
• S&P 500 Current Year Estimated Profit Margin 12.13% -1.0 basis point
  
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(9 of 10 reporting) +50.6% unch.
  
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 284.0 +.14: Growth Rate +33.2% -.2 percentage point, P/E 28.9 -.3
  
• Bloomberg US Financial Conditions Index .52 +6.0 basis points
  
• Bloomberg Euro-Zone Financial Conditions Index .18 -6.0 basis points
  
• US Yield Curve -36.5 basis points (2s/10s) +2.0 basis points
  
• US Atlanta Fed 4Q GDPNow Forecast +1.77% -33.0 basis points
  
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 57.2% -.8 percentage point
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +3.46% -9.0 basis points: CPI YoY +3.04% unch.
  
• 10-Year TIPS Spread 2.25 +3.0 basis points
  
• Highest target rate probability for Jan. 31st FOMC meeting: 87.9%(-5.3 percentage points) chance of 5.25%-5.5%. Highest target rate probability for March 20th meeting: 51.1%(+3.1 percentage points) chance of 5.25%-5.5%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +38 open in Japan 
• China A50 Futures: Indicating -2 open in China

• DAX Futures: Indicating +67 open in Germany

Portfolio:

• Higher:  On gains in my tech/industrial/utility/transport sector longs
  

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

• Market Exposure: Moved to 100% Net Long
  

Bear Radar

Style Underperformer:

• Large-Cap Growth -.3%
  

Sector Underperformers:

• 1) Disk Drives -2.3% 2) Semis -1.0% 3) Video Gaming -.7%

Stocks Falling on Unusual Volume: 

• SSL, FRO, CPNG, CRDO, GME, CBRL, AAOI, ARVN, PSTG and ARWR
  

Stocks With Unusual Put Option Activity:

• 1) UMC 2) IMGN 3) PSTG 4) NTNX 5) NAT
  

Stocks With Most Negative News Mentions:

• 1) CBRL 2) MOV 3) FSR 4) PSTG 5) EXPR
  

Charts:

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

Bull Radar

Style Outperformer:

• Mid-Cap Value +.6%
  

Sector Outperformers:

• 1) Steel +1.7% 2) Healthcare Providers +1.7% 3) Biotech +1.5%

Stocks Rising on Unusual Volume:

• IMGN, SWTX, VSCO, CABA, BMEA, LZB, EVER, CRM, XENE, PVH, SNOW, NVRO, SNAP, ERJ, OLMA, PSX, XMTR, IMCR, RILY, MRUS, WWD, TAL, GFL, CYTK, SBLK, EDU, NTNX, ARGX and UBS
  

Stocks With Unusual Call Option Activity:

• 1) PSTG 2) IMGN 3) MOR 4) LVS 5) OKTA

Stocks With Most Positive News Mentions:

• 1) IMGN 2) REX 3) CRM 4) SNOW 5) ZUO
  

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:

• (BMO)/2.09
• (GCO)/.83
  

After the Close: 

• None of note
  

Economic Releases

10:00 am EST

• Construction Spending MoM for Oct. is estimated to rise +.3% versus a +.4% gain in Sept.
• ISM Manufacturing for Nov. is estimated to rise to 47.8 versus 46.7 in Oct.
• ISM Prices Paid for Nov. is estimated to rise to 45.8 versus 45.1 in Oct.
  

Upcoming Splits 

• None of note
  

Other Potential Market Movers

• The Fed's Jerome Powell speaking, Fed's Barr speaking, Fed's Goolsbee speaking and the (HON) business update call 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 +13.3% Above 100-Day Average 
• Nasdaq/NYSE Volume Ratio 9.0 -.3
  
• 4 Sectors Declining, 7 Sectors Rising
• 56.3% of Issues Advancing, 40.7% Declining 
• TRIN/Arms 1.06 -4.5% 
• Non-Block Money Flow +$123.4M
  
• 63 New 52-Week Highs, 17 New Lows
• 47.5%(+2.5%) of Issues Above 200-day Moving Average
• Average 14-Day RSI 69.0 +1.0

Other:

• Bloomberg Global Risk-On/Risk-Off Index 61.7 +.8%
  
• Russell 1000: Growth/Value 18,443.0 -1.0%
  
• 1-Day Vix 9.7 -6.9%
  
• Vix 13.3 +2.2%
  
• Total Put/Call .79 unch.