Wednesday, November 16, 2016

Thursday Watch

Evening Headlines
  • BOJ Announces First Unlimited Bond Purchases After Yields Jumped. The Bank of Japan announced its first operations to purchase bonds at a fixed rate, a tool it introduced when deciding in September it would seek to control the yield curve. The central bank said on Thursday in statements it will carry out two operations, one to buy securities maturing in one to three years, and another for debt of three to five years maturity. A selloff in Japanese bonds had threatened to test Governor Haruhiko Kuroda’s determination to keep yields stable with unlimited debt purchases -- a weapon he had so far kept in reserve. He had said in September that the bank would hold unlimited purchases as needed, setting a fixed rate, in order to control yields.
  • Most Asian Stocks Fall as Dollar Retreats Amid Rebound in Bonds. Most Asian stocks fell and the dollar weakened versus most peers as investors mulled the outlook for Donald Trump’s presidency amid expectations that the Federal Reserve will raise interest rates next month. About five shares declined for every three that advanced on the MSCI Asia Pacific Index in early trading in the region as futures foreshadowed losses in Hong Kong, Taiwan and South Korea, where markets are opening an hour late owing to national exams. Bloomberg’s dollar index retreated from a nine-month high and benchmark U.S. Treasuries rise before American inflation data and testimony from Fed Chair Janet Yellen. 
  • Cisco(CSCO) Sales Forecast Points to Slower Technology Spending. 
Wall Street Journal:
Fox News:
  • Cuban-American leaders, dissidents urge Trump to get tough with Castro regime. Cuban-American leaders and human rights activists within the island nation are hoping that the incoming Trump administration will scale back President Obama’s efforts to restore relations between the two countries, measures they say emboldened the communist regime and brought the U.S. little in return.
Zero Hedge:
Business Insider:
Economic Information Daily:
  • China to Add 4 More Cities to Property Tightening List. China will add Chijiazhuang, Qingdao, Nanchang and Changsha to the key property control list, wihch will have 20 cities in total, citing a person familiar with the matter.
China Securities Journal:
  • China Probes Developers' Holding of Bank Stakes. China is investigating a rise of smaller developers' holdings of local bank stakes, citing people at local bank regulators. Growth in lending to property development will slow in medium- to long-term due to government guidance and risk control, citing a person familiar with the matter.
Night Trading 
  • Asian equity indices are -.25% to +.25% on average.
  • Asia Ex-Japan Investment Grade CDS Index 128.25 +2.5 basis points. 
  • Asia Pacific Sovereign CDS Index 44.0 +1.25 basis points.
  • Bloomberg Emerging Markets Currency Index 69.72 unch
  • S&P 500 futures +.12%
  • NASDAQ 100 futures +.19%.
Morning Preview Links

Earnings of Note

  • (BBY)/.47
  • (SJM)/1.93
  • (JASO)/.06
  • (PERY)/.16
  • (SSI)/-.35
  • (SPLS)/.34
  • (SMRT)/-.15
  • (PLCE)/2.02
  • (WMT)/.96
  • (CRMT)/.52
  • (AMAT)/.66
  • (GPS)/.60
  • (INTU)/.03
  • (MRVL)/.12
  • (NUAN)/.39
  • (POST)/.44
  • (ROST)/.56
  • (CRM)/.21
  • (WSM)/.77
Economic Releases 
8:30 am EST
  • Housing Starts for October are estimated to rise to 1159K versus 1047K in September.
  • Building Permits for October are estimated to fall to 1195K versus 1225K in September.
  • The CPI MoM for October is estimated to rise +.4% versus a +.3% gain in September.
  • The CPI Ex Food & Energy MoM for October is estimated to rise +.2% versus a +.1% gain in September.
  • Initial Jobless Claims are estimated to rise to 257K versus 254K the prior week.
  • Continuing Claims are estimated to fall to 2030K versus 2041K prior.
  • The Philly Fed Business Outlook Index for November is estimated to fall to 7.6 versus 9.7 in October.     
Upcoming Splits 
  • None of note
Other Potential Market Movers
  • The Fed's Yellen testifying before Congress, Fed's Brainard speaking, Fed's Dudley speaking, Fed's Evans speaking, China House Price report, UK Retail Sales report, Eurozone CPI report, Bloomberg Nov. US Economic Survey, weekly Bloomberg Consumer Comfort Index, weekly EIA natural gas inventory report, (FFIV) Analyst Meeting, (BDX) Analyst Day, (TSLA) Special Shareholders Meeting and the (TDC) Analyst Day could also impact trading today.
BOTTOM LINE:  Asian indices are mostly lowr, weighed down by industrial and technology shares in the region. I expect US stocks to open modestly higher and to weaken into the afternoon, finishing mixed. The Portfolio is 75% net long heading into the day.

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