Monday, November 28, 2016

Tuesday Watch

Evening Headlines
Bloomberg:
  • Japan’s Household Spending, Retail Sales Decline in October. Japan’s household spending dropped for an eighth straight month and retail sales fell slightly in October, underscoring weak domestic consumption. The unemployment rate remained at the lowest in two decades. 
  • Dollar Retreat Deepens as Bonds Recover While Japan Stocks Drop. The dollar continued to retreat amid further gains in government debt, with investors’ focus shifting from Donald Trump’s election win to other potential threats to market stability. Japanese stocks snapped their longest rally in 18 months as oil fell. The Bloomberg Dollar Spot Index edged lower for a third straight session, extending its decline from a decade high reached last week as 10-year Treasury yields dropped. The yen’s recovery weighed on Japan’s Topix index, which fell for the first time in 13 days, while other Asian benchmarks fluctuated. The euro held gains after concern over Italy’s forthcoming referendum on constitutional reform sank European bank stocks. U.S. oil fell for the third time in four sessions amid anxiety ahead of the OPEC meeting.
  • OPEC Said to Remain Split as Saudis Call Cut Not Essential. OPEC officials failed on Monday to bridge their differences on an agreement to cut production and revive oil prices, following comments from Saudi Arabia that output curbs aren’t essential. With just two days left before ministers from the Organization of Petroleum Exporting Countries meet to finalize the first decline in production in eight years, the foundations for a deal are looking increasingly shaky.
  • Oil Investors Have $490 Billion Riding on Big OPEC Decision. After two tough years of falling oil prices and company valuations, investors in the world’s biggest energy producers have some cause for hope as crude prices continue their recovery from a 12-year low. They will be looking to OPEC not to dash it. Oil and gas producers including Exxon Mobil Corp. and Royal Dutch Shell Plc have together added $490 billion to their market value this year, the biggest gain in six years following a 27 percent rise in benchmark Brent crude, according to data compiled by Bloomberg. This follows a $850 billion loss in value last year and $720 billion in 2014 as crude prices plunged.  
Wall Street Journal: 
Fox News: 
  • Jill Stein -- Fighting election fraud or lining her own pockets? (video) President-elect Donald Trump isn’t mincing words. He believes the recount effort – and multimillion-dollar fundraising goal – led by Green Party candidate Jill Stein is nothing more than a scam. Stein and her party are raising money for presidential recounts in Wisconsin, Michigan and Pennsylvania. Hillary Clinton’s campaign has offered help, but Clinton’s own lead counsel admitted that the recount won’t likely lead to any changes in the outcome of the presidential election.
Zero Hedge
Business Insider:
Night Trading 
  • Asian equity indices are -.25% to unch. on average.
  • Asia Ex-Japan Investment Grade CDS Index 127.5 +.5 basis point 
  • Asia Pacific Sovereign CDS Index 44.25 unch.
  • Bloomberg Emerging Markets Currency Index 69.02 +.%
  • S&P 500 futures +.02%
  • NASDAQ 100 futures -.02%.
Morning Preview Links

Earnings of Note
Company/Estimate 

  • (MNK)/1.99
  • (TIF)/.67
  • (ADSK)/-.24
  • (SPLK)/.08
Economic Releases 
8:30 am EST
  • 3Q GDP is estimated to rise +3.0% versus a prior estimate of a +2.9% gain.
  • 3Q Personal Consumption is estimated to rise +2.3% versus a prior estimate of a +2.1% gain.
  • The 3Q GDP Price Index is estimated to rise +1.5% versus a prior estimate of a +1.5% gain.
  • The 3Q Core PCE is estimated to rise +1.7% versus a prior estimate of a +1.7% gain. 
9:00 am EST
  • The S&P CoreLogic CS 20-City MoM for September is estimated to rise +.4% versus a +.24% gain in August. 
10:00 am EST
  • Consumer Confidence for November is estimated to rise to 101.5 versus 98.6 in October.
Upcoming Splits 
  • None of note
Other Potential Market Movers
  • The Fed's Fischer speaking, Fed's Dudley speaking, Eurozone Industrial Production/Consumer Confidence reports, French GDP report, Japan Housing Starts, CSFB Industrials Conference, Jefferies Energy Conference, Citi Basic Materials Conference, Piper Jaffray Healthcare Conference and the (UNH) Investor Conference could also impact trading today.
BOTTOM LINE:  Asian indices are mostly lower, weighed down by commodity and industrial 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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