Friday Watch

Evening Headlines
Bloomberg:

• Crisis Gauge Flags China Cash Squeeze Followed by Growth Hit. Traders in China’s interest-rate swap market are bracing for a cash shortage as the central bank cools an overheated property market. Bond investors are preparing to benefit from the slower economic growth that may result. That’s how strategists are interpreting a blowout in the premium for the one-year swap rate over the similar-maturity sovereign bond yield to 50 basis points, the widest since July 2015. China’s version of the so-called TED spread, a gauge of financial stress that compares funding costs for banks and the government, is well below the 140 basis points reached during the trust finance crackdown of early 2014.
• Japan’s Consumer Prices Keep Falling, Household Spending Slips. Japan’s consumer prices fell for a seventh straight month and household spending slumped in September, underscoring the challenges Prime Minister Shinzo Abe and Bank of Japan Governor Haruhiko Kuroda face in trying to revive the world’s third-largest economy. The jobless rate was at the lowest since 1995.
• Bonds Selloff Deepens as Japanese Stocks Buoyed by Weaker Yen. 

Wall Street Journal:

• Chip Makers Cut Deals as Cars Get Smarter. Automotive industry is becoming more attractive as companies differentiate offerings.

Fox News:

• Podesta relative earned six-figure fees lobbying Clinton's State Dept. during his tenure there. Amid the tumult of the 2016 presidential campaign, John Podesta is best known as Hillary Clinton’s campaign chairman and the individual from whose private account WikiLeaks is presently publishing some 50,000 hacked emails.

CNBC:

• Baker Hughes(BHI) spikes on report that GE(GE) in talks to acquire it.
• Google(GOOG) parent Alphabet sees earnings, revenue beat and announces $7 billion buyback.

Zero Hedge:

• Jared Dillian: "The Fed Is More Hawkish Than You Think".
• Slumping Used Car Prices Spell Disaster For Subprime Auto Securitizations.
• Waking Up In Hillary Clinton's America.
• Caught On Tape: How Russian Soldiers Prepare For Nuclear War. (video)
• US Taxpayers Pay AT&T Millions A Year For The Privilege Of Being Spied Upon.
• Amazon(AMZN) Plunges After Missing Earnings, Guides Below Expectations.
• KKR Calls The Top: PE Giant Selling Distressed Debt It Bought Earlier This Year.
• Bond Bloodbath Sinks Stocks As Dollar Spikes To 9-Month Highs. (graph)

Telegraph:

• China capital flight flashes warning as authorities forced to prick property bubble.

Night Trading 

• Asian equity indices are -.75% to +.25% on average.

• Asia Ex-Japan Investment Grade CDS Index 115.5 +.75 basis point.

• Asia Pacific Sovereign CDS Index 33.75 +.25 basis point.

• Bloomberg Emerging Markets Currency Index 72.15 +.01%.

• S&P 500 futures +.12%.

• NASDAQ 100 futures +.18%.

Morning Preview Links 

Earnings of Note 

Company/Estimate

• (BUD)/.90
• (AN)/1.15
• (B)/.67
• (CBOE)/.56
• (CVX)/.39
• (XOM)/.60
• (GT)/1.16
• (HSY)/1.19
• (MA)/.98
• (PSX)/.88
• (RCL)/3.10
• (WY)/.22

Economic Releases

8:30 am EST

• The 3Q Employment Cost Index is estimated to rise +.6% versus a +.6% gain in 2Q.
• 3Q GDP is estimated to rise +2.5% versus a +1.4% gain in 2Q.
• 3Q Personal Consumption is estimated to rise +2.6% versus a +4.3% gain in 2Q.
• The 3Q GDP Price Index is estimated to rise +1.4% versus a +2.3% gain in 2Q.
• The 3Q Core PCE is estimated to rise +1.6% versus a +1.8% gain in 2Q.

10:00 am EST

• Final Univ. of Mich. Consumer Sentiment for October is estimated to rise to 88.2 versus 87.9 in September.

Upcoming Splits

• None of note

Other Potential Market Movers

• The Eurzone GDP report could also impact trading today.

BOTTOM LINE: Asian indices are lower, weighed down by industrial and technology 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.