Friday, November 22, 2013

Friday Watch

Posted by Gary .....at 12:11 AM
Evening Headlines 
Bloomberg: 
  • McLaren Sees China Slowdown Persisting Amid Bling Crackdown. McLaren Automotive Ltd., maker of the million-dollar P1 supercar, said it has yet to see signs of a recovery in demand in China since the ruling Communist Party began cracking down on conspicuous extravagance late last year. “The visibility that used to be an asset -- we used to be OK just a few years ago -- now it’s not really a plus,” Mirko Bordiga, regional director of the British supercar maker, said in an interview yesterday in Guangzhou, southern China. “There are many issues that are in the market that doesn’t really let us hope that the market is growing that much.”  
  • IMF’s Zhu Sees Tapering as Key Risk to Growth in Emerging Asia. Several emerging economies in Asia face a “key source of risk” in the eventual tapering of monetary stimulus in advanced nations, an International Monetary Fund official said. “Global growth is in low gear and downside risks persist,” IMF Deputy Managing Director Zhu Min said in prepared remarks for a conference in Port Vila, Vanuatu. He didn’t specify which countries were at risk from the scaling back of so-called quantitative easing policies that the central banks of Japan and the U.S. have adopted.
  • Asian Stocks Rise First Time in Four Days as Yen Weakens. Asian stocks rose, with the benchmark regional index climbing for the first time in four days, as the yen weakened against the dollar, boosting the earnings outlook for Japanese exporters. Toyota Motor Corp. (7203), Asia’s largest carmaker, advanced 1.8 percent in Tokyo. SoftBank Corp. gained 4.1 percent after a person familiar with the matter said Daniel Loeb’s Third Point LLC hedge fund has taken a stake of more than $1 billion in the Japanese wireless carrier. Glorious Property Holdings Ltd. soared by a record 33 percent in Hong Kong after Chinese billionaire Zhang Zhirong offered as much as HK$4.57 billion ($589 million) to take the real-estate developer private. The MSCI Asia Pacific Index gained 0.5 percent to 141.74 as of 11:26 a.m. in Hong Kong, with seven of the 10 industry groups on the gauge climbing.
  • Rebar Rises in Shanghai as Steel Mill Maintains Product Price. Steel reinforcement-bar futures in Shanghai advanced as China’s biggest producer of the building material maintained product prices. Rebar for May delivery, the most-active contract on the Shanghai Futures Exchange, advanced as much as 0.6 percent to 3,635 yuan ($597) a metric ton, before trading at 3,622 yuan at 11:22 a.m. local time. Futures were poised for the first weekly gain since Nov. 1.
  • Taylor, Jamison Outpace Commodity Hedge Funds Suffering Losses. Commodity hedge funds run by George “Beau” Taylor and Stephen Jamison are posting gains this year as peers lose money and investors. The $860 million Taylor Woods Masters Fund advanced 18 percent from January through October, heading for the best year since the February 2011 debut, according to a letter to clients obtained by Bloomberg News. Jamison’s $1.5 billion Koppenberg Macro Commodity Fund Ltd. rose about 6 percent in the period, according to two people with direct knowledge of the matter.
  • Iran Deal Falters as Negotiators Cite Little Progress. Negotiators weren’t able to reach agreement on a first-step accord to resolve a decade-old dispute over Iran’s nuclear program, reducing the likelihood that foreign ministers will arrive to strike a deal after two days of negotiations in Geneva. Talks between Iranian Foreign Minister Mohammad Javad Zarif and Catherine Ashton, the European Union foreign policy chief representing world powers at the talks, broke up late yesterday after more than six hours of intense consultations, the EU said in a statement. The sides will reconvene today.
Wall Street Journal: 
  • Democrats Rein In Senate Filibusters. In Contentious Move, Bar Now Set at 51 Votes, Down From 60, to Advance President's Nominees. A bitterly divided Senate voted Thursday to eliminate filibusters for most presidential nominees, a momentous and politically risky step that limits the ability of Republicans to block President Barack Obama's choices for executive-branch and most judicial posts. The change gives Mr. Obama more flexibility to shape the federal judiciary and to staff his administration for the remaining years of his presidency. But it could hand more power to Republicans if the GOP should win the White House and control of the Senate.
Fox News:
  • California health exchange votes to not enact Obama health plan 'fix'. California’s health insurance exchange voted Thursday to not allow insurance companies to extend policies that do not meet current benefit requirements under ObamaCare, despite President Obama’s “fix” last week. The Covered California Board of Directors unanimously decided to stick with its current approach of phasing out the non-compliant policies by year’s end, saying Obama’s request that insurers let Americans keep those plans through 2014 will not help consumers in the end.
Zero Hedge: 
Business Insider: 
Washington Examiner: 
National Journal:
MNI:
  • Official Says PBOC to Continue to Force Banks to Deleverage. People's Bank of China will mainly use higher money-market interest rates to push banks to reduce leverage, citing a PBOC official who is involved in monetary policy. The central bank will also continue to drain money from market through open market operations in the coming months, the official said. China interbank financing activities have been growing at an abnormal pace, the official said. China may issue rules early next year to bank banks from using tri-party agreements to transfer assets off their balance sheets so they can boost lending. China's M2 money supply is too high while velocity is very slow, the official said. Without deleveraging, the market will get more volatile, the official said.
    The Obama administration will press ahead Friday with tough requirements for new coal-fired power plants, moving to impose for the first time strict limits on the pollution blamed for global warming. The proposal would help reshape where Americans get electricity, away from a coal-dependent past into a future fired by cleaner sources of energy. It's also a key step in President Barack Obama's global warming plans, because it would help end what he called "the limitless dumping of carbon pollution" from power plants.
    Read more at http://www.philly.com/philly/news/politics/20130919_ap_0f857b20e0c144a5a1e1b9dddc9f9d72.html#YRThyDOhArykUeYy.99
Telegraph:
Economic Daily:
  • HTC Asks Suppliers to Cut Prices by 20%. Co. asks suppliers of components, such as touch panels, casings and camera lenses, to lower prices, citing suppliers.
Evening Recommendations
  • None of note
Night Trading
  • Asian equity indices are -.25% to +.50% on average.
  • Asia Ex-Japan Investment Grade CDS Index 133.50 +1.0 basis point.
  • Asia Pacific Sovereign CDS Index 103.25 -1.0 basis point. 
  • FTSE-100 futures +.07%.
  • S&P 500 futures -.05%.
  • NASDAQ 100 futures +.02%.
Morning Preview Links

Earnings of Note
Company/Estimate
  • (ANN)/.86
  • (FL)/./66
  • (HIBB)/.65
  • (PETM)/.86
Economic Releases
10:00 am EST
  • JOLTs Job Openings for September are estimated to fall to 3840 versus 3883 prior.
11:00 am EST
  • Kansas City Fed Manf. Activity for November is estimated at 6 versus 6 in October.
Upcoming Splits
  • None of note
Other Potential Market Movers
  • The Fed's Taruillo speaking, Fed's George speaking, (Y) investor day and the (NVS) investor day could also impact trading today.
BOTTOM LINE: Asian indices are mostly higher, boosted by commodity and technology shares in the region. I expect US stocks to open modestly lower and to rally into the afternoon, finishing mixed. The Portfolio is 50% net long heading into the day.

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