Thursday, November 17, 2016

Friday Watch

Evening Headlines
Bloomberg:
  • Global Trade Is Slowing. “China had a great run, but it’s over.” Around the world, many companies that binged on easy credit after the global financial crisis have excess capacity and are struggling to find buyers, since economic growth in the U.S., Europe, and Japan is relatively weak, and China’s economy is cooling. “The pie is growing more slowly, and that makes domestic producers more defensive about their share of it and more willing to fight when threatened,” says Tim Condon, chief Asia economist in Singapore with ING.
  • China Home-Price Growth Slows as Property Curbs Start to Bite. China’s runaway property market cooled slightly in October, as authorities intensified home-buying curbs to avert a potential housing bubble. New-home prices, excluding government-subsidized housing, gained last month in 62 of the 70 cities tracked by the government, compared with 63 in September, the National Bureau of Statistics said Friday. Prices dropped in seven cities, compared with six a month earlier. They were unchanged in one.
  • Japan’s Abe Says Trump Is Trustworthy Leader After First Meeting. Japanese Prime Minister Shinzo Abe said Donald Trump was a trustworthy leader in comments after his first meeting with the U.S. President-elect whose statements on trade and security have sparked concern in Japan. Abe told reporters in New York he had frank discussions in a "warm atmosphere" at the meeting at Trump Tower that lasted more than an hour. He had sought to turn on the charm ahead of the appointment, referring to Trump’s "extraordinary talents" in a congratulatory message, and telling reporters as he left Tokyo that it was a "tremendous honor" to be holding talks with Trump ahead of other world leaders. He changed his schedule for a trip to Peru to spend time in New York.
  • Asian Stocks Extend Gains as Yellen Rate Commentary Buoys Dollar. Stocks from Australia to Japan paced gains in the U.S., while the dollar extended its advance versus Asian emerging-market currencies after Federal Reserve Chair Janet Yellen signaled an interest-rate hike could be imminent. Bonds in the region swung back to losses. Japan’s Topix index led the climb in Asia, on track for its longest run of gains in more than a year, after the S&P 500 Index came within four points of a record on Thursday. The yen swung around a five-month low as the Bloomberg Dollar Spot Index traded at its strongest level since February. The Korean won was the biggest decliner in Asia, followed by the Thai baht. The greenback’s gains weighed on oil and nickel as gold maintained losses. Sovereign debt from New Zealand to Japan to reversed a portion of their mid-week gains. The Topix index rose 0.4 percent as of 10:05 a.m. Tokyo time, rallying for a seventh day to extend gains at its highest level since early February. About 60 more equities climbed as fell on the MSCI Asia Pacific Index.
  • Mnuchin’s Bank Accused of Redlining Black, Latino Home Buyers. (video) OneWest Bank, the lender Steven Mnuchin built and then sold last year, broke federal laws by keeping branches out of minority neighborhoods and making few mortgages to black and Latino borrowers, two housing advocacy groups alleged to U.S. regulators
Wall Street Journal:
Fox News:
Zero Hedge
Business Insider:
Telegraph:
Night Trading 
  • Asian equity indices are -.25% to +.50% on average.
  • Asia Ex-Japan Investment Grade CDS Index 127.5 -.75 basis point. 
  • Asia Pacific Sovereign CDS Index 43.75 -.25 basis point.
  • Bloomberg Emerging Markets Currency Index 69.26 -.14%
  • S&P 500 futures -.10%
  • NASDAQ 100 futures -.04%.
Morning Preview Links

Earnings of Note
Company/Estimate 

  • (ANF)/.24
  • (BKE)/.52
  • (FL)/1.10
  • (HIBB)/.74
Economic Releases 
10:00 am EST
  • The Leading Index for October is estimated to rise +.1% versus a +.2% gain in September.     
11:00 am EST
  • The Kansas City Fed Manufacturing Activity Index for November.
Upcoming Splits 
  • None of note
Other Potential Market Movers
  • The Fed's Kaplan speaking, Fed's George speaking, Fed's Powell speaking, Fed's Bullard speaking, Canada CPI report, (PG) Analyst Meeting, (AIG) Investor Day and the (LRCX) Analyst Meeting could also impact trading today.
BOTTOM LINE:  Asian indices are mostly higher, boosted by industrial and financial shares in the region. I expect US stocks to open modestly lower and to rally into the afternoon, finishing mixed. The Portfolio is 75% net long heading into the day.

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