Friday, September 27, 2013

Friday Watch

Evening Headlines 
  • Soros Adviser Turned Lawmaker Sees Crisis by 2020: Japan Credit. Takeshi Fujimaki, a former adviser to billionaire George Soros and now a member of Japan’s upper house of parliament, said a fiscal crisis in Asia’s second-biggest economy is inevitable and neither a higher sales tax nor the 2020 Olympics will be able to stop it. “I decided to become a politician because I think financial crisis will come sooner or later,” Fujimaki said in a Sept. 24 interview in Tokyo. “This total debt will continue to increase. I don’t think Japan can survive until 2020.”    
  • Japan Inflation Accelerates to Fastest Since 2008 on Energy. Consumer prices excluding fresh food increased 0.8 percent from a year earlier, the statistics bureau said today in Tokyo. The median forecast of 30 economists surveyed by Bloomberg News was for a gain of 0.7 percent. Stripping out energy and perishables, prices fell 0.1 percent.
  • Asia Stocks Set for Best Monthly Gain Since Sept. 2010. Tokyo Electric Power Co. (9501) gained 7.5 percent as the operator of the crisis-ridden Fukushima Dai-Ichi nuclear station received approval for nuclear safety checks. Australand Property Group gained 1.3 percent in Sydney after JPMorgan Chase & Co. advised buying shares of the developer. Mirabela Nickel Ltd. (MBN) slumped 52 percent after the Australian producer of the metal said it may miss its output forecast. The MSCI Asia Pacific Index rose 0.1 percent to 140.66 as of 9:53 a.m. in Hong Kong.
  • Copper Drops, Paring Quarterly Gain, as Data Stoke Stimulus Bets. Copper declined for the first time in three days, paring the biggest quarterly gain since March 2012, as reports showed the U.S. economy improved, boosting the case that the Federal Reserve may reduce its stimulus. The metal for delivery in three months on the London Metal Exchange fell as much as 0.3 percent to $7,227 a metric ton and traded at $7,240.25 by 11:04 a.m. in Tokyo.
Wall Street Journal:
  • No Clear Path to Avoid Shutdown as House GOP Stands Firm. Congress's rocky path to avoiding a government shutdown became even rougher Thursday, as Speaker John Boehner said the House wouldn't accept the spending plan likely to emerge from the Senate. The Ohio Republican's announcement foreshadows a set of last-minute legislative volleys between the House and Senate to fund federal agencies ahead of a deadline Monday, the final day of the fiscal year. he Senate is expected to pass a bill Friday that would fund the government for the first 1½ months of the new fiscal year. But Senate Democrats plan to restore money for the Affordable Care Act that House Republicans had stripped out, leaving the two chambers in conflict.
Zero Hedge:
Business Insider:
New York Times:
  • Report Warns of Chinese Municipal Debt Risks. A report by Nomura said Thursday that Chinese municipal debt, a focal point of major concern about the country’s economy, had grown at an alarming 39 percent clip in recent years. The report by Nomura estimated that the financing vehicles used by local governments to raise cash had created debts totaling at least 19 trillion renminbi, or $3.1 trillion, by the end of last year and posed a “major risk to the economy.”
Mish's Global Economic Trend Analysis:
  • Some U.S. brokers not policing 'hold' recommendations: regulator. Some securities brokerages are struggling with an industry rule requiring, among other things, policies to make sure that recommendations to hold securities are appropriate for their investors, according to findings this week by Wall Street's industry-funded watchdog. The Financial Industry Regulatory Authority (FINRA) rule, which took effect in July 2012, required that investments recommended by brokerage firms be suitable for investors at all times, and not just when investors buy them. In the past, brokers mainly had to worry only that their "buy" and "sell" recommendations were suitable at the time of sale.
Economic Information Daily:
  • China's Local Debt May Have Doubled From End-2010. New audit of local government debt shows size of debt may have almost doubled from 2011 results, citing a person involved in the audit. China found outstanding local government debt of 10.7t yuan at end-2010, according to audit results released in 2011, the report said.
Evening Recommendations 
  • None of note
Night Trading
  • Asian equity indices are -.25% to +.50% on average.
  • Asia Ex-Japan Investment Grade CDS Index 149.50 +.5 basis point.
  • Asia Pacific Sovereign CDS Index 116.25 -1.25 basis points. 
  • FTSE-100 futures +.22%.
  • S&P 500 futures -.01%.
  • NASDAQ 100 futures +.06%.
Morning Preview Links

Earnings of Note

  • (AZZ)/.66
  • (BBRY)/-0.47
  • (FINL)/.46
Economic Releases 
8:30 am EST
  • Personal Income for August is estimated to rise +.4% versus a +.1% gain in July.
  • Personal Spending for August is estimated to rise +.3% versus a +.1% gain in July.
  • The PCE Core for August is estimated to rise +.1% versus a +.1% gain in July.
 9:55 am EST
  • Final Univ. of Mich. Consumer Confidence for September is estimated to rise to 78.0 versus a prior estimate of 76.8.
Upcoming Splits
  • None of note
Other Potential Market Movers
  • The Fed's Dudley speaking, Fed's Evans speaking, Fed's Rosengren speaking, Fed's Evans speaking, Eurozone CPI Report, Eurozone Consumer Confidence Report and the Eurozone Industrial Production Report could also impact trading today.
BOTTOM LINE: Asian indices are mostly higher, boosted by consumer and industrial shares in the region. I expect US stocks to open mixed and to weaken into the afternoon, finishing modestly lower. The Portfolio is 25% net long heading into the day.

1 comment:

theyenguy said...

US fiscal risks send stock futures lower, portending a gap open lower in the financial markets.

AP reports Preparing for Shutdown, Government Plans Furloughs. More than a third of federal workers would be told to stay home if the government shuts down, forcing the closure of national parks from California to Maine and all the Smithsonian museums.