Thanks for reading my Diary today and all week.

I hope you found it value-added and thought-provoking.

Enjoy the weekend!

My thoughts on the day and week to this point:

• Breathtaking advance in the early going and a slow dribble over the balance of the day (albeit from elevated levels).
• Win for the bulls today and the week.
• Is KaloBios Pharmaceuticals (KBIO), which has seen its share double today, the next Iomega ... or is it the next K-tel?
• Taxable bonds gave back some in price.
• Municipals were up modestly in price and lower in yield. I continue to use the strength to reduce my muni bond exposure.
• HIgh yield was mixed,  though Blackstone/GSO Strategic Credit Fund (BGB) hit another low.
• The U.S. dollar strengthened and we are approaching the old and recent highs.
• Crude is modestly better but energy stocks are lower. I remain short Exxon Mobil (XOM) and Schlumberger (SLB); both are on my Best Ideas List as shorts. SunEdison (SUNE) hit a new low. Jimmy and I chimed in on this one on The Street yesterday. 
• Gold stinking up the joint, again.
• (T)FANG -- Tesla (TSLA), Facebook (FB), Amazon (AMZN), Netflix (NFLX) and Google, now Alphabet (GOOGL) -- strong, though TSLA lower on recall.
• NOSH -- Nike (NKE), O'Reilly (ORYL), Starbucks (SBUX) and Home Depot (HD) -- is tasty, too, led by Nike.
• Banks are mixed. (I noted earlier that the yield curve has flattened recently.)
• Consumer staples are stronger, ignoring the strength of the dollar.
• Retail is mixed, with home improvement, led by Home Depot and Lowe's (LOW), the shining stars.
• I am a buyer of Best Buy (BBY) on weakness if the market ever corrects! 
• I am planning to make Macy's (M) a large holding based on my assessment that it is an M&A candidate.
• Autos still well-bid.
• Old tech is stronger, led by Intel (INTC) and IBM (IBM).
• Biotech reverses yesterday's gains, led by Allergan (AGN) and Valeant Pharmaceuticals (VRX). UnitedHealth Group (UNH) is trading up after yesterday's guidance lower.
• Chipotle Mexican Grill (CMG) sells off sharply -- down at this writing almost 9% -- after the Centers for Disease Control reports E-Coli linked to 26 restaurants.
• I am eyeing Morgan Stanley (MS) and Goldman Sachs (GS) still.

I did very little on the trading and investing sides today.

Here's a good summary of the important macro events this week from Peter Boockvar:

"Positives:

1) Initial jobless claims totaled 271,000, in line with expectations and down from 276,000 last week. The four-week average moved to 271,000 from 268,000, as a 259,000 print from five weeks ago dropped out. Continuing claims fell by 2,000 to just above 15-year lows.

2) Single-family housing permits rose 17,000 in October to 711,000 the most since December 2007. Permits to built multifamily totaled 439,000, up 28,000 from September.

3) The average 30-year mortgage rate rose by another 6 basis points w/o/w to 4.18%. That's up 20 basis over the past three weeks, and at the highest point in four months. Fence sitters got off their butts. Purchase-mortgage applications rebounded 11.9% w/o/w, while refi applications rose 2.3% after three weeks of declines.

4) The November Philly Fed manufacturing index rose to 1.9. While weak, that was a touch above the estimate of -0.5 and off of negative prints of -4.5 and -6.0 in the prior two months. The six-month outlook for business activity rose almost seven points, but only after falling by about seven points in October. Capital-spending plans rose to 25.9 from 7.2 in October, but are below the 27.2 reading from September.

5) Germany's November ZEW investor-confidence survey for the coming six month rose to 10.4 from 1.9 in October. That was above the 6.0 estimate and almost got back the 10.2 points lost in October. The current-conditions component was little changed at 54.4 vs. 55.2 last month, but that's the lowest reading since February. ZEW said: 'The currently high level of consumption in Germany, the recent decline in the external value of the euro, and the ongoing recovery in the U.S. are likely to bolster the robust development of the German economy."

6) The U.K. headline Consumer Price Index fell 0.1% y/o/y, unchanged from September and in line with expectations. The core rate rose one-tenth to 1.1% and has held pretty steady this year, as the monthly average year to date is +1%.

7) October eurozone core inflation was revised up a one-tenth to a 1.1% gain y/o/y. That's the highest since October 2013, as services inflation is now running at 1.3% y/o/y (the most since May). Headline inflation was left unchanged at a 0.1% y/o/y gain, thanks to an 8.5% drop in energy.

Negatives:

1) Religious fanaticism wrecks havoc again on the lives of innocent civilians.

2) European Central Bank chief Mario Draghi says: 'We will do what we must to raise inflation as quickly as possible.' He can guarantee himself a European recession if he gets it, because there's little chance wages will rise 'as quickly as possible,' too. Draghi also said: 'Low core inflation is not something we can be relaxed about, as it has in the past been a good forecaster for where inflation will stabilize in the medium term.' He says this days after the core October CPI printed up 1.1% y/o/y, the highest since August 2013.

3) The Federal Open Market Committee minutes introduced us to 'the concept of an equilibrium real interest rate -- sometimes labeled the "neutral" or "natural" real interest rate, or "r*"-- that can serve as a benchmark to help gauge the stance of monetary policy.' Based on current growth rates, this model tells the Fed rates should be very low. I will include this quote again from The Wall Street Journal back in June: 'The Fed has consistently estimated that its near zero interest rate policy and bond buying would produce faster growth. Yet each year, yields disappointment. Then, the Fed uses the reality of slower growth to explain why it needs to continue the policies that haven't produced faster growth. The Fed has been in a perpetual policy-feedback loop.'

4) October U.S. housing starts totaled 1.06 million, 100,000 less than expected. September was revised down by 15,000. The total level of starts is at the lowest since March. Single-family starts fell by 18,000 m/o/m to 722,000, the lowest since June. And multifamily starts slowed dramatically to 338,000 from 451,000 in the month prior. That's the slowest pace since March.

5) The November New York Fed manufacturing survey was little changed at -10.7 vs. -11.4 in October. The estimate called for -6.5, and the index has been below zero now for four straight months and six of the past eight. The overall business-conditions six-month outlook fell 3 points to 20.3, the lowest since November 2012. The New York Fed said: 'Optimism about future conditions remained tepid.' Capital spending plans were basically unchanged at 12.7 vs. the six-month average of 14.4, while and technology-spending plans fell almost four points to a five-month low.

6) October Industrial production fell 0.2% m/o/m vs. expectations of +0.1%. However, manufacturing rose 0.4% m/o/m -- twice the expectation -- driven by production of motor vehicles/parts (up 0.7% m/o/m and 10.9% y/o/y) and machinery. The drag on the headline IP figure was a 2.5% drop in utility output, which is clearly due to the mild weather. Mining production fell for a second month and is down 6.9% y/o/y for obvious reasons.

7) The U.S. October Consumer Price Index rose .2% m/o/m in both the headline and core, as expected. The y/o/y gains were 0.2% and 1.9%, respectively. That core rate of gain matches the most since May 2014, as services inflation ex energy rose .3% m/o/m for the second straight month and 2.8% y/o/y. Just wait until next year, when oil prices' declines over the past year cycles out of the headline figure.

8) Foreigners bought $17.4 billion worth of Treasuries in September, but purchases were north of $400 billion in both 2011 and 2012. They fell to as little as $41 billion in 2013 and quickened to $165 billion in 2014. The trend is clear that foreigners (China and Japan in particular) are buying less U.S. debt. I get the U.S. dollar rally on a Fed rate hike, but is the rally really on firm footing if the dramatic slowdown in Treasury buying continues? Just something to think about.

9) Japan's economy is technically back in a recession after reporting a second-straight 0.2% q/o/q GDP decline.

10) October Japanese exports fell 2.1% y/o/y, in line with the estimate but the first drop since August 2014. The volume of exports fell for the fifth month in the past six on a y/o/y basis. Imports dropped by 13.4% y/o/y, worse than the estimate of -8.6% and the second-lowest print since 2009.

11) Chinese apartment prices continued their recovery in October on a y/o/y basis, but cooled a bit on a m/o/m look. For new apartments, y/o/y prices rose in 16 cities of 70 surveyed vs. 12 in September and one back in May. On a m/o/m basis, prices rose in 27 cities vs. 39 in September and just two back in January. For existing apartments, prices rose in 24 cities vs. 15 in the prior month and one city back in April. Prices were little changed m/o/m.

12) Collateral damage from China -- Indonesia's October exports fell 21% y/o/y vs. the estimate of a 17% drop. That is the sharpest decline since one month in 2012 and in 2009 before that. A 43% y/o/y drop in oil-and-gas exports served as the main reason, but non-energy exports still fell by 17%. Imports collapsed by 28% y/o/y vs. the forecast of a 22% fall.

13) U.K. October retail sales ex fuel fell .9% m/o/m, three-tenths worse than expected, while September was revised down by two-tenths. The 3% y/o/y gain was the slowest since September 2014."

I'm finally back in the office.

The market looks like it's been steadily dribbled lower (albeit from elevated morning highs) most of the afternoon.

Volume remains sluggish as I get re-acclimated. I would expect most of the excitement and price change is abut over as we move closer to week's end.

And what a week it's been!

KaloBios Pharmaceuticals (KBIO) is the new Iomega ... or is it the new K-tel?

This short idea involving Universal Insurance Holdings (UVE) is getting a lot of traction and coverage this week.

The latest from Sir Arthur Cashin:

"Bulls try consolidate gains as crude only moves marginally. Volume swollen by expiration rather than frenzied trading.

There's a suggestion today (out of Brown Brothers, I think) that the Federal Reserve could use Monday's discount-rate meeting to further prep markets for a rate hike. At the last meeting, five of 12 regional banks voted to lift the discount rate."

There's a good column on the Baltic Freight Index out today from The Maritime Executive magazine.

An excerpt:

"The Baltic Dry Index has fallen to 498 points, its all-time lowest, down 36 percent from the start of this year and some 95 percent from its peak in 2008.

Industry representatives and analysts have described the current state of affairs in no uncertain terms.

This is 'absolutely uncharted territory for the market,' said Khalid Hashim, director of Thailand dry-cargo shipowner Precious Shipping.

'This market is looking like a disaster, and the rates are a reflection of that. It is looking scary for the market, and it doesn't look like there is going to be any life in the market in the near term,' Eirik Haavaldsen, a shipping analyst at Oslo-based Pareto Securities, told media."

Mr. Market expands his lead today, impervious to the real economy.

The hedge-fund community is offsides, both in terms of stocks and market exposure.

Peter Boockvar comments this morning on the euro, the two-year Treasury yield's rise, European Central Bank chief Mario Draghi's rhetoric and the flattening yield curve (a good reason not to chase bank stocks):

"The two-year Treasury yield is now above 0.90% at 0.91 to 0.915%. If it closes here, that would be the first time it's done so since May 2010. Coincident with this is a further flattening of the yield curve, with the 2s/10s spread narrowing to 134 basis points.

That's the smallest spread since April, as well as down from 136 basis points yesterday and 141 points before the Federal Open Market Committee meeting minutes came out on Wednesday. As I stated yesterday: 'If the bear flattening from here forward continues, it will say a lot about how the Treasury market thinks the U.S. economy can handle rate hikes.'

Mario Draghi continues to tell the market that he doesn't like the results so far of his Quantitative Easing program and Negative Interest Rate Policy, and the euro is lower as a result. Speaking today in Germany, Draghi said: 'If we decide that the current trajectory of our policy is not sufficient to achieve that objective, we will do what we must to raise inflation as quickly as possible.'

Draghi can guarantee himself a European recession if he gets 'inflation as quickly as possible,' because there's little chance European wages will rise enough to offset it. The ECB chief also keeps bringing up 'low core inflation' as his reason to do more. Today, he said: 'Low core inflation is not something we can be relaxed about, as it has in the past been a good forecaster for where inflation will stabilize in the medium term.'

Well, he should be more relaxed, because the core Consumer Price Index rose 1.1% y/o/y in October -- the most since August 2013. I believe Draghi in panic mode and just making up excuses to get even deeper into a policy that he'll eventually find almost impossible to get out of in a smooth way. Just ask Federal Reserve chair Janet Yellen and Bank of Japan Gov. Haruhiko Kuroda.

Pushing back against Draghi is Bundesbank head Jens Weidmann, who said: 'I see no reason to talk down the economic outlook and paint a gloomy picture. ... Crucially, the decline in oil prices is more of an economic stimulus for the euro area than a harbinger of deflation.' Weidmann also said the 'longer we stay in ultra-loose policy, the less effective policy will become.'

Draghi is losing credibility in my eyes by the day. Short-term European sovereign bond yields are down a touch in response to his latest comments."

As previously noted, I've recently increased my exposure to retail stocks through purchases of Bed Bath & Beyond (BBBY), Macy's (M) and Wal-Mart (WMT).

I view Bed Bath & Beyond and Macy's as investments, but Wal-Mart as just a trade. And now, I plan to add Best Buy (BBY) to my holdings on any dip.

BBY has been another poor performer in the retail space over the past year. 

But the stock's weakness following yesterday's release of perfectly fine third-quarter earnings could constitute a buying opportunity in the near future. (I haven't yet purchased BBY because I was out most of yesterday afternoon.)

While I recognize that selling electronics is a difficult and volatile business, Best Buy is the last national chain standing. But Wall Street currently values the company at just 4.2x current cash flow even though BBY generates significant amounts of free cash.

At the same time, the product cycle for television sets is clearly turning, while BBY has built an online business that can credibly compete with Amazon (AMZN).

Let's do a deeper dive into the reasonably good results that BBY reported yesterday:

• BBY has been quietly exiting some low-margin or money-losing businesses, freeing up cash and management time in the process. The chain reported a 6% overall sales decline, but comparable-store sales rose 0.8%. EBITD also increased by 8.5% and has almost doubled in three years. No one is looking at things on that basis.

• All-important online sales grew 18%, a figure that suggests gains vs. all of retailing (although not necessarily vs. AMZN).

• Reflecting the generation of strong free cash flow, interest costs fell by $5 million, or 23%.

• Pretax profits grew a solid 21% on an as-reported basis. Earnings per share rose 20% -- far more than the average U.S. corporate or retail EPS.

• Reflecting confidence in its outlook, BBY has begun quietly buying back its stock, making $385 million of purchases since Jan. 1. Share count has declined 2.8% from its first-quarter peak, dropping by 1.5% in the latest quarter alone. Cash flow also covers interest almost 30 times over, so the company has a good margin of safety.

• Management's fourth-quarter forecast calls for lower sales and EBIT margin pressure, but some of that stems from the fact that the Super Bowl will take place in the next quarter. (The NFL championship game is all-important to the consumer-electronics industry). And having watched this management team since it appeared on the scene a few years ago, I have yet to see a forecast that BBY didn't ultimately exceed.

• The economy and energy prices are big tailwinds, although Best Buy has a significant business in troubled Canada. I also think BBY will benefit from a market-cycle transition currently underway in television sets, as well as from and what could be terminal problems at Sears Holdings (SHLD). That should boost BBY's appliance sales. Best Buy also sells products from Apple (AAPL), which should help results as well.

• Operating leverage is a positive force during the fourth quarter in the retail subsegment that BBY sits in, as margins are high. Above-budget sales can quickly wipe out the margin decline that management is currently predicting.

• Best Buy has more than $1.7 billion in net cash, and that will grow by year's end as the chain sells off its seasonal inventories. (Note: Inventories in no way look excessive to me.)

At 4.2x cash flow, Best Buy represents an excellent value to me, although I've just recently had a chance to digest the earnings report and listen to the conference call.

BBY rallied back from a sharp premarket decline yesterday to close the regular trading day at $30.67, down some 2.1% for the session. At last check, the stock was up slightly in premarket trading today.

After listening to the conference call, BBY's rebound looks understandable to me. Consider what company executives said:

• Management complained about the sequential weakness in category sales representing 65% of the business. What's happening is that consumers are delaying electronics purchases ahead of expected Black Friday deals. But Black Friday is basically morphing into "Black November." Executives noted that early November's sales were much better. Management also indicated that it's very comfortable with its prices -- and, therefore, with BBY's profit margins.

• Best Buy has invested heavily into preparing for the transition in the TV segment to 4K, which will be big year-over-year during the fourth quarter. The chain has added hundreds of "shops within shops" for Sony and Samsung. But it appears that management is trying to underplay this very meaningful new product cycle, which could be helpful to BBY's service business due to installation revenues.

• The latest iPhone's release late in the quarter actually hurt results, but that should correct itself in the current quarter.

• Best Buy will continue to see foreign-exchange problems at its formidable Canadian business, as sales when translated into U.S. dollars are falling 30%. The book tax rate will also be an adverse factor. However, there will be mountains of free cash flow at this level of profitability, while the cash returns from stock buybacks are extremely high.

The Bottom Line

I likely would have purchased BBY in yesterday's early morning weakness, but frankly didn't have time to process the quarterly report. So, I'll wait for another buying opportunity, as this is a stock that I want to own.

In the meantime, I must admit that the idiocy I often see in pre- and post-market trading fascinates me. These sorts of opportunities often arise for opportunistic traders, and I do as much as 50% of my buying and selling before or after regular market hours. The computers must have a lot of fun in these periods playing over/unders -- but there's a good saying among backgammon players: "Speed kills."

The people behind these computers might eventually develop wallet problems, as the machines only win for a brief period. It takes humans a while to figure out what an earnings release's numbers and verbiage (vetted by layers of lawyers) actually mean, but patience is frequently rewarded.

Some important reads:

• The New York Timesreports on the latest from Mali, where terrorists have taken 170 hostages at a Radisson hotel.

• Bloomberg looks at word that UnitedHealth (UNH) might be quitting the retail insurance market created under Obamacare.

• BOJ Keeps Policy Unchanged After Recession, Weak Demand, Bloomberg (Nov. 18, 2015)

• The Wall Street Journal (log-in required) reports on the Chinese central bank's decision to cut rates for the country's standing lending facility.

• The Stock Trader's Almanac's Jeff Hirsch looks at the market's history of seasonal strength in December.

• Where Does the 2016 Race Stand Post-Paris?, The Cook Political Report (Nov. 18, 2015)

• Conservative Review and the Washington Examiner analyze Republican presidential candidate Marco Rubio's immigration views.

• The Washington Postreports on the House decision yesterday to pass a bill tightening Syrian immigration rules.

• Trump Rides a Blue-Collar Wave, The Wall Street Journal (Nov. 17, 2015; log-in required)