Monday, July 25, 2016

Tuesday Watch

Evening Headlines
  • Chinese Stocks Send Sell Signal With Growth Concerns Lingering. (graph
  • Japan's Risky Stimulus Decision
  • South Korea’s Growth Improves on Consumption, Construction. South Korea’s growth rate advanced in the second quarter supported by gains in private consumption and construction.
  • Vancouver Wields Foreigner Property Tax After $1 Billion Inflow. Overseas investors buying homes in Vancouver, one of North America’s hottest housing markets, will face an additional 15 percent tax after more than C$1 billion ($760 million) of foreign money surged into local property in five weeks alone. The additional property transfer tax will apply to foreign nationals and overseas corporations registering the purchase of residential property in the Metro Vancouver area starting Aug. 2, the province of British Columbia said Monday in a statement as it moved to cool a market that’s shot beyond the reach of many buyers.
  • Yen Rallies on Haven Demand as Stocks Slump Before Fed, BOJ Meet. The yen climbed for a second day as a slump in global equities and crude oil spurred demand for the safest assets. Japan’s currency strengthened against all of its 16 major peers before central bank meetings in the U.S. and Japan this week. Asian stocks fell Tuesday, with the Nikkei 225 Stock Average tumbling more than 1 percent, after U.S. equities retreated from a record and oil in New York closed at its lowest in three months. 
  • Ringgit Set for Longest Losing Streak in More Than a Year on Oil. Malaysia’s ringgit was set for the longest losing streak in almost 14 months as crude’s slide below $45 a barrel renewed concerns about the finances of Asia’s only major net oil-exporting nation. The ringgit weakened 0.5 percent to 4.0875 per dollar as of 8:34 a.m. in Kuala Lumpur, according to prices from local banks compiled by Bloomberg. It has declined 3.4 percent in the past seven days, the longest run of losses since the period ended June 2, 2015. The dollar held its recent gains before the Federal Reserve Open Market Committee starts its two-day policy meeting in Washington Tuesday.
  • Asia Stocks Fall With Global Shares Before Central Bank Meetings. Asian stocks fell, after U.S. equities slipped from a record, before policy meetings by the Federal Reserve and Bank of Japan this week. The MSCI Asia Pacific Index slid 0.2 percent to 133.90 as of 9:04 a.m. in Tokyo.
Wall Street Journal:
  • ISIS Suicide Bombing Sets Germany on Edge. Series of attacks over past week add new fuel to debate over migrants and security. Terror militia Islamic State on Monday claimed responsibility for a suicide bombing in southern Germany—the latest in a string of attacks that have shattered the country’s sense of calm and stoked tensions over accepting migrants. 
  • For the Bernie Sanders Army, the Fight Isn’t Over. At the Democratic convention, the senator’s supporters vent their unhappiness.
  • Obama’s Age of Discord. He has achieved most of his progressive agenda. So why is America so unhappy? President Obama said in 2008 that he wanted to be the reverse Ronald Reagan, and in one sense he has been. As he takes the Democratic stage in Philadelphia Wednesday he can rightly claim to have fulfilled most of his major progressive policy goals. The difference is the results. After eight years of Reagan, the Cold War was on the way to ending and the U.S. economy had grown by the size of Germany. Mr. Obama is leaving to his successor a world of spreading disorder and a country as economically anxious and more politically...
  • Is Europe Helpless? A civilization that believes in nothing will ultimately submit to anything.
Fox News:
  • DNC Convention: Live Blog
  • China tightens grip on internet media, reports say. Major online companies in China such as Sina and Tencent Holdings have been ordered to stop original news reporting as the country’s media crackdown continues. Citing Chinese media, Bloomberg reports that the Cyberspace Administration of China placed the ban on a number of the country’s major news portals, including and NetEase. The news was reported in identically worded articles that cited an unnamed official from the Cyberspace Administration’s Beijing office, according to Bloomberg.
  • At least 19 dead, dozens injured in knife attack outside Tokyo. At least 19 people were killed, and up to 45 injured when a knife-wielding man went on a rampage early Tuesday at a facility for the disabled in the Japanese city of Sagmihara. The Sagamihara City fire department told the Associated Press that 19 people are confirmed dead in the attack.
Zero Hedge:
Business Insider:
Financial Times:
Night Trading 
  • Asian equity indices are -.75% to +.50% on average.
  • Asia Ex-Japan Investment Grade CDS Index 120.0 +1.75 basis point.
  • Asia Pacific Sovereign CDS Index 48.75 +1.25 basis points.
  • Bloomberg Emerging Markets Currency Index 71.88 -.02%
  • S&P 500 futures +.09%. 
  • NASDAQ 100 futures +.13%.
Morning Preview Links

Earnings of Note

  • (MMM)/2.07
  • (AKS)/.00
  • (BAX)/.40
  • (BP)/.05
  • (CAT)/.96
  • (DD)/1.10
  • (LLY)/.85
  • (FCX)/-.01
  • (JBLU)/.49
  • (MCD)/1.39
  • (PCAR)/1.02
  • (HOT)/.73
  • (UA)/.02
  • (UTX)/1.68
  • (VLO)/1.02
  • (VZ)/.94
  • (WWW)/.23
  • (AKAM)/.64
  • (APC)/-.79
  • (AAPL)/1.39
  • (BWLD)/1.26
  • (CB)/2.32
  • (ETH)/.52
  • (ILMN)/.73
  • (JNPR)/.47
  • (PNRA)/1.74
  • (TWTR)/.09
  • (X)/-.54 
Economic Releases 
9:00 am EST
  • The S&P/CS 20 City MoM SA for May is estimated to rise +.1% versus a +.45% gain in April.
9:45 am EST
  • Preliminary Markit US Services PMI for July is estimated to rise to 52.0 versus 51.4 in June.
10:00 am EST
  • Consumer Confidence for July is estimated to fall to 96.0 versus 98.0 in June.
  • The Richmond Fed Manufacturing Index for July is estimated to rise to -4.0 versus -7.0 in June.
  • New Home Sales for June are estimated to rise to 560K versus 551K in May.
Upcoming Splits 
  • (EBIX) 3-for-1
Other Potential Market Movers
  • The China Industrial Profits report, $34B 5Y T-Note auction, weekly US retail sales reports and the (PII) analyst meeting could also impact trading today.
BOTTOM LINE:  Asian indices are mostly lower, weighed down by technology 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 50% net long heading into the day.

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