Wednesday, November 02, 2016

Thursday Watch

Evening Headlines
  • Vancouver Home Sales Fall 39% as New Rules Chill Market. Vancouver home sales plunged 39 percent in October from a year earlier, the biggest drop since 2010, as new regulations chill Canada’s most expensive property market. Sales in the Pacific coast city fell to 2,233 in the month, from 3,646 a year earlier, the Real Estate Board of Greater Vancouver said Wednesday. That was 15 percent below the 10-year average for October.
  • Stock Slump Deepens in Asia Amid Election Angst as Bonds Advance. The selloff in equities continued in Asia after the Federal Reserve standing pat on monetary policy did little to ease market angst ahead of next week’s U.S. presidential election. New Zealand’s benchmark entered a correction, while shares in Sydney sank for a third day. Futures on equity gauges in South Korea and Hong Kong tracked a slump in U.S. stocks with Japanese markets closed Thursday. Haven assets maintained gains, with the yen near a two-week high versus the dollar, gold rising for a sixth straight session and government debt in Australia and New Zealand advancing as well. Copper futures retreated, while oil was below $46 a barrel after a record jump in U.S. stockpiles fueled concerns over the glut.
  • December Fed hike odds approach 80 percent as traders pivot to payrolls. The 78 percent probability traders are assigning to a rate hike is up from 68 percent on Tuesday, according to data compiled by Bloomberg, as policy makers noted growing confidence that inflation is on track to reach their 2 percent target.
Zero Hedge:
Business Insider:
Night Trading 
  • Asian equity indices are -.75% to unch. on average.
  • Asia Ex-Japan Investment Grade CDS Index 118.5 +.75 basis point. 
  • Asia Pacific Sovereign CDS Index 36.25 +.5 basis point.
  • Bloomberg Emerging Markets Currency Index 72.19 +.05%
  • S&P 500 futures +.01%
  • NASDAQ 100 futures -.20%.
Morning Preview Links

Earnings of Note

  • (DDD)/.09
  • (APA)/-.14
  • (BDX)/2.08
  • (CHK)/-.04
  • (CI)/1.90
  • (H)/.29
  • (ICPT)/3.64
  • (IGT)/.44
  • (PWR)/.55
  • (SFM)/.17
  • (TK)/-.37
  • (CBS)/.98
  • (CSC)/.47
  • (LOCO)/.19
  • (FEYE)/-.31
  • (FOSL)/.31
  • (GPRO)/-.34
  • (FLR)/.88
  • (LVS)/.60
  • (MHK)/3.45
  • (MNST)/1.12
  • (SWKS)/1.43
  • (SBUX)/.55
  • (TWLO)/-.08
  • (WTW)/.45
Economic Releases
7:30 am EST
  • Challenger Job Cuts YoY for October.
8:30 am EST
  • Preliminary 3Q Non-Farm Productivity is estimated to rise +2.1% versus a -.6% decline in 2Q.
  • Preliminary 3Q Unit Labor Costs are estimated to rise +1.2% versus a +4.3% gain in 2Q.
  • Initial Jobless Claims for last week are estimated to fall to 256K versus 258K the prior week.
  • Continuing Claims are estimated to rise to 2043K versus 2039K prior.   
9:45 am EST
  • Final Markit US Services PMI for October is estimated at 54.8 versus a 54.8  prior estimate.
10:00 am EST
  • ISM Non-Manufacturing Composite for October is estimated to fall to 56.0 versus 57.1 in September.
  • Factory Orders for September are estimated to rise +.2% versus a +.2% gain in August.
  • Final Durable Goods Orders for September are estimated to fall -.1% versus a prior estimate of a -.1% decline. 
Upcoming Splits 
  • (ICE) 5-for-1
Other Potential Market Movers
  • The weekly Bloomberg Consumer Comfort Index, (LB) October Sales report and the (MAT) analyst day could also impact trading today.
BOTTOM LINE:  Asian indices are mostly 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.

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