Sunday, November 06, 2016

Monday Watch

Today's Headlines
  • China's Moves to Cool Property Prices May Be Working. The push by China’s policy makers to rein in property bubbles looks to be getting traction, according to early indicators from the nation’s biggest cities. Beijing home sales volume plunged 41 percent year-on-year last month while Shanghai’s slumped 18 percent, China Real Estate Information Corp. data show, after new purchase restrictions and tightened mortgage lending. Transactions fell 50 percent in smaller cities. Now policy makers must balance deflating property prices with safeguarding the expansion. Efforts to curb excessive gains could cut 0.6 percentage point from 2017 economic growth, and as much as 1 point with aggressive national tightening, according to Morgan Stanley. 
  • Hong Kong Home Prices Set to Plunge on Policy Change. Hong Kong leaders’ surprise move to cool the world’s least affordable home market is set to spur an immediate plunge in prices and transactions as buyers and sellers hit the pause button. Louis Chan, chief executive of the residential unit of Centaline Property Agency Ltd., sees transaction volumes plunging by 60 percent to 70 percent in the next three months, and now expects a 5 percent to 8 percent drop in prices, after previously projecting an increase in that range. Ricacorp Properties Ltd.’s Willy Liu said transactions will drop 30 percent to 40 percent in the next two months and prices will fall 5 percent. 
  • Korea Divisions Boost Odds Park Will Resist Calls to Step Down. One of the few bright spots for President Park Geun-hye as she fights to stay in power: South Koreans are split on who should replace her. Tens of thousands of people rallied in Seoul on Saturday to demand that Park step down over an influence-peddling scandal that has spawned protests across the nation. Authorities on Sunday arrested two of her former aides for allegedly helping Choi Soon-sil, a long-time friend of Park who is facing charges over using her relationship with the president for personal gain.
  • May Is Steadfast on Brexit Timing as U.K. Schism Deepens. Theresa May insisted Britain’s exit from the European Union won’t be obstructed by judges or lawmakers as the backlash after last week’s constitutional ruling deepened the country’s political schism. May said her government had a strong legal case to make on appeal. “While others seek to tie our negotiating hands, the government will get on with the job of delivering the decision of the British people,” the prime minister said in the Sunday Telegraph, her first public remarks since the High Court declared that lawmakers should vote on the start of negotiations with the EU. “MPs and peers who regret the referendum result need to accept what the people decided.” 
  • U.S. Stock Futures Jump as FBI Letter Seen Aiding Clinton Chance. December contracts on the S&P 500 Index surged 1.4 percent to 2,108.25 at 6:50 p.m. in New York. The cash index fell 0.2 percent Friday to cap a ninth straight slide that’s erased $725 billion in value from U.S. equities. Dow Jones Industrial Average futures added 199 points to 17,999.
  • Oil Rebounds Before U.S. Election Amid OPEC Deal Uncertainty. Oil rebounded amid a broader market rally ahead of the U.S. election as Algeria remains confident OPEC will set output quotas at its next meeting to manage production. Futures advanced as much as 1.3 percent in New York as equities climbed after the Federal Bureau of Investigation said it maintains the view that Hillary Clinton’s handling of her e-mails wasn’t a crime. There is no going back on the agreement set in Algiers in September to curb output, Algeria’s energy minister said, according to state-run news agency APS.
Wall Street Journal:
Fox News:

Night Trading
  • Asian indices are +.25% to +1.0% on average.
  • Asia Ex-Japan Investment Grade CDS Index 117.75 -1.0 basis point.
  • Asia Pacific Sovereign CDS Index 36.25 unch.
  • Bloomberg Emerging Markets Currency Index 72.06 unch.
  • S&P 500 futures +1.21%.
  • NASDAQ 100 futures +1.37%.

Earnings of Note
  • (CTSH)/.84
  • (DF)/.36
  • (FDC)/.34
  • (MGM)/.17
  • (BID)/-.57
  • (VSH)/.24
  • (ANDE)/.20
  • (HTZ)/2.75
  • (MAR)/.88
  • (MCHP)/.87
  • (PCLN)/29.88
  • (TDW)/-1.11
Economic Releases
10:00 am EST
  • The Labor Market Conditions Index for October.
3:00 pm EST
  • Consumer Credit for September is estimated to fall to $17.5B versus $25.873B in August.
Upcoming Splits
  • (MNST) 3-for-1
Other Potential Market Movers
  • The Fed's Evans speaking, Eurozone Retail Sales report, Baird Industrial Conference and the (FLR) Investor Day could also impact trading today.
BOTTOM LINE: Asian indices are mostly higher, boosted by technology and industrial shares in the region. I expect US stocks to open modestly higher and to maintain gains into the afternoon. The Portfolio is 50% net long heading into the week.

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