Thursday, October 20, 2016

Friday Watch

Posted by Gary .....at 9:56 PM
Evening Headlines
Bloomberg: 
  • PineBridge Sees China Dollar Debt Flood Knocking Developer Bonds. PineBridge Investments says a rally in dollar junk bonds sold by Chinese developers is about to fizzle as they return to the offshore market to raise funds. Chinese builders issued $2.4 billion of high-yield U.S. currency notes in the third quarter, 63 percent more than the same period last year. The higher supply widened yield premiums over Treasuries on China’s dollar-denominated junk bonds by 30 basis points from a nine-year low on Oct. 10. PineBridge, which manages $81 billion of globally, is “very concerned about the current spread,” said Arthur Lau, co-head of emerging-market fixed income in Hong Kong.
  • Residents Who Fled Fukushima Meltdown Fear Return to Ghost Town. Weed-engulfed buildings and shuttered businesses paint an eerie picture of a coastal Japanese town abandoned after a monstrous earthquake and tsunami triggered meltdowns in the Fukushima nuclear plant. Namie, one of the communities hardest hit by the 2011 disaster, had 21,000 residents before they fled radiation spewing from the reactors eight kilometers (five miles) away. Prime Minister Shinzo Abe is now looking to repopulate the town as early as next year, a symbolic step toward recovery that might also help soften opposition to his government’s plan to restart Japan’s mostly mothballed nuclear industry.
  • Asian Shares Outside Japan Slip as Dollar Revival Weighs on Oil. Asian stocks outside of Japan retreated following a pullback in oil prices, as the dollar solidified its rebound amid a weaker euro. Equities in Sydney and Seoul declined, while Tokyo shares fluctuated, following a drop in the S&P 500 Index amid mixed earnings results. The yen weakened for a second day as the greenback gained against New Zealand’s currency and its Asian emerging-market peers, while the euro lingered near its lowest point since June. U.S. crude was below $51 a barrel after sinking Thursday as Russia’s largest oil company said the nation could boost output. The MSCI Asia Pacific excluding Japan Index fell 0.2 percent as of 9:25 a.m. Tokyo time, declining for a second session to trim its gain in the week to 0.9 percent.
  • In Global Iron Ore, Singapore Is Bossing China in Setting Prices. In the $7 billion-a-day global iron ore futures market, size doesn’t matter when it comes to clout. Contracts in Singapore have greater pricing power than those traded in China even though the volumes in the city-state are more than 20 times smaller, according to Goldman Sachs Group Inc.
  • Whole Foods(WFM) Declines on Hepatitis Investigation in Detroit. Whole Foods Market Inc. shares declined as much as 2.5 percent after the Detroit Health Department said it’s investigating two cases of hepatitis A that may be connected to one of the chain’s stores.
Wall Street Journal:
Fox News:
Zero Hedge:
Business Insider:
Night Trading 
  • Asian equity indices are -.25% to unch. on average.
  • Asia Ex-Japan Investment Grade CDS Index 113.25 -3.25 basis points. 
  • Asia Pacific Sovereign CDS Index 34.0 +.25 basis point.
  • Bloomberg Emerging Markets Currency Index 72.37 -.05%. 
  • S&P 500 futures -.11%. 
  • NASDAQ 100 futures -.04%.
Morning Preview Links

Earnings of Note
Company/Estimate 
  • (GE)/.30
  • (HON)/1.66
  • (MAN)/1.72
  • (MCD)/1.48
  • (MWW)/.06
  • (MCO)/1.20
  • (PH)/1.57
  • (SAP)/.96
  • (STI)/.89
Economic Releases
  • None of note
Upcoming Splits 
  • None of note
Other Potential Market Movers
  • The Fed's Tarullo speaking, Fed's Williams speaking and the Eurozone Consumer Confidence report could also impact trading today.
BOTTOM LINE:  Asian indices are slightly lower, weighed down by commodity 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.

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