Tuesday, October 18, 2016

Wednesday Watch

Evening Headlines

  • Why China's Territorial Disputes Could Mean War. (video)
  • China Unicom Profit Declines 81% as Network, Sales Costs Climb. China Unicom (Hong Kong) Ltd.’s profit dropped about 81 percent in the first nine months of the year as spending to catch up with bigger rival China Mobile Ltd. in 4G services and costs for marketing rose. Net income was about 1.59 billion yuan ($236 million), the company reported Tuesday on a preliminary basis, compared with 8.18 billion yuan a year earlier. The carrier added about 9.76 million subscribers in the period, bringing the total to 262 million, it said.
  • Stocks in Asia Extend Gains Before China Data Amid Weaker Dollar. Asian stocks rose for a second day amid speculation the Federal Reserve will stick to a gradual tightening of monetary policy and as investors awaited key economic data from China. The MSCI Asia Pacific Index gained 0.1 percent to 139.49 as of 9:02 a.m. in Tokyo. A gauge of global equities jumped the most in almost four weeks on Tuesday amid mounting speculation that the Federal Reserve will boost interest rates in December but take a slow path when it comes to further increases amid mixed signals from the U.S. economy. Investors are bracing ahead of the release of Chinese data on industrial production, retail sales and gross domestic product Wednesday after a report last week showed the nation’s exports unexpectedly dropped in September.
Wall Street Journal:
Zero Hedge:
Night Trading 
  • Asian equity indices are -.25% to +.50% on average.
  • Asia Ex-Japan Investment Grade CDS Index 114.25 -2.25 basis points.
  • Asia Pacific Sovereign CDS Index 34.5 +1.0 basis point.
  • Bloomberg Emerging Markets Currency Index 72.43 +.05%.
  • S&P 500 futures +.06%.
  • NASDAQ 100 futures +.02%.

Earnings of Note 
  • (ABT)/.58
  • (ASML)/.96
  • (BBT)/.71
  • (CP)/2.79
  • (GPC)/1.28
  • (HAL)/-.06
  • (MTB)/2.04
  • (MS)/.63
  • (NTRS)/1.09
  • (RAI)/.64
  • (STX)/.91
  • (STJ)/1.01
  • (SVU)/.10
  • (TUP)/.80
  • (USB)/.83
  • (AXP)/.96
  • (BXS)/.40
  • (CCK)/1.30
  • (EBAY)/.44
  • (GGG)/.89
  • (KMI)/.16
  • (LRCX)/1.78
  • (LSTR)/.81
  • (MAT)/.71
  • (STLD)/.65
  • (TSCO)/.66
  • (URI)/2.44
  • (VMI)/1.49
  • (WDFC)/.82
  • (XLNX)/.54  
Economic Releases
8:30 am EST
  • Housing Starts for September are estimated to rise to 1175K versus 1142K in August.
  • Building Permits for September are estimated to rise to 1165K versus 1139K in August.
10:30 am EST
  • Bloomberg consensus estimates call for a weekly crude oil inventory build of +2,181,500 barrels versus a +4,850,000 barrel gain the prior week. Gasoline supplies are estimated to fall by -903,000 barrels versus a -1,907,000 barrel decline the prior week. Distillate supplies are estimated to fall by -1,620,000 barrels versus a -3,746,000 barrel decline the prior week. Finally, Refinery Utilization is estimated to rise by +.03% versus a -2.8% decline prior.
2:00 pm EST
  • US Fed releases Beige Book.
Upcoming Splits
  • None of note
Other Potential Market Movers
  • The Fed's Williams speaking, Fed's Dudley speaking, Fed's Kaplan speaking, Australia Employment Change, Eurozone Construction Output report and the weekly MBA mortgage applications report 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 mixed and to weaken into the afternoon, finishing modestly lower. The Portfolio is 50% net long heading into the day.

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