Tuesday, November 29, 2016

Wednesday Watch

Evening Headlines
  • Japan’s Industrial Production Rises Slightly in October. Japan’s industrial production was slightly stronger than economists forecast in October, as exports compensated for continued weak domestic spending. 
  • Crude Near Two-Week Low as OPEC Deal Founders; Asian Stocks Rise. Oil remained below $46 a barrel ahead of the make-or-break OPEC meeting on stabilizing the crude market, as gains in Asian property shares outweighed losses among commodity producers. The dollar trimmed its steepest monthly advance since May. Crude bounced off a two-week low reached Tuesday, when 10 hours of technical talks failed to resolve differences between oil-producing nations ahead of Wednesday’s formal meeting in Vienna. While miners and energy shares drove Australian stocks lower, Japan’s Topix index rose with equities in South Korea. The New Zealand dollar led currency gains in Asia along with the Korean won, as the Bloomberg Dollar Spot Index maintained declines. Gold rose amid the pre-OPEC talks jitters, while copper futures extended losses. The MSCI Asia Pacific Index added .3% as the Topix rose .2%, while the Kospi jumped .3%.
  • Treasuries Having Worst Month Since 2009 on Trump Ripple Effect. Treasuries are having their worst month since 2009 after investors pulled money from the U.S. bond market on speculation Donald Trump’s victory in the presidential election will pave the way for increased fiscal stimulus. A Bloomberg Barclays index that tracks the Treasuries market has lost 2.5 percent this month through Nov. 28. Meanwhile, benchmark 10-year yields have soared the most in back-to-back months since the 2013 taper tantrum as investors shifted into assets such as stocks, which they expect to benefit should Trump succeed in pushing through his proposals.
  • Carrier Reaches Deal With Trump on Indiana Jobs, CNBC Says. Carrier agreed to keep about 1,000 factory jobs at its furnace plant in Indiana, CNBC reported, handing President-elect Donald Trump a victory on an issue that had become a rallying cry in his campaign. A deal between Trump and Carrier, a division of United Technologies Corp., includes new inducements from the state, CNBC reporter David Faber said on Twitter. Vice President-elect and Indiana Governor Mike Pence spearheaded the negotiating effort and Trump will travel to the factory on Thursday to announce the agreement, Faber said.
Wall Street Journal:
Fox News:
  • Trump to nominate Steven Mnuchin for Treasury Secretary, sources say. (video) President-elect Donald Trump will nominate former Goldman Sachs banker Steven Mnuchin to be his Treasury Secretary, two sources close to the transition told Fox News late Tuesday.  One source told Fox that a formal announcement of Mnuchin's nomination could come as early as Wednesday. Mnuchin had long been considered a favorite for the Treasury position. Two weeks ago, businessman and close Trump associate Carl Icahn tweeted that Trump was considering Mnuchin for the post. Mnuchin, 53, was appointed Trump's campaign finance chair this past May. He previously worked at Goldman Sachs for 17 years, eventually rising to run the firm's technology division. According to the Wall Street Journal, Mnuchin left Goldman in 2002 and was later hired to run a credit fund set up by liberal billionaire George Soros.
Zero Hedge
Business Insider:
China Securities Journal:
  • More Chinese Cities May Introduce Property Curbs. More cities will likely introduce curbs following Shenzhen, Hangzhou, Shanghai and Tianjin, according to a front-page commentary. Curbs aim to prevent asset bubbles and risks in mid-to-long term rather than a short-term remedy to control property prices, the commentary said.
Night Trading 
  • Asian equity indices are -.25% to +.50% on average.
  • Asia Ex-Japan Investment Grade CDS Index 126.0 -1.5 basis points 
  • Asia Pacific Sovereign CDS Index 43.5 -.75 basis point.
  • Bloomberg Emerging Markets Currency Index 69.33 unch
  • S&P 500 futures +.02%
  • NASDAQ 100 futures +.05%.
Morning Preview Links

Earnings of Note

  • (AEO)/.41
  • (TITN)/.06
  • (GES)/.14
  • (LZB)/.38
  • (PVH)/2.40
  • (SMTC)/.36
  • (SNPS)/.77
Economic Releases 
8:15 am EST
  • The ADP Employment Change for November is estimated to rise to 170K versus 147K in October. 
8:30 am EST
  • Personal Income for October is estimated to rise +.4% versus a +.3% gain in September.
  • Personal Spending for October is estimated to rise +.5% versus a +.5% gain in September. 
  • The PCE Core MoM for October is estimated to rise +.1% versus a +.1% gain in September. 
9:45 am EST
  • The Chicago Purchasing Manager Index for November is estimated to rise to 52.5 versus 50.6 in October.
10:00 am EST
  • Pending Home Sales MoM for October are estimated to rise +.1% versus a +1.5% gain in September.
10:30 am EST
  • Bloomberg consensus estimates call for a weekly crude oil inventory build of +677,780 barrels versus a -1,255,000 barrel decline the prior week. Gasoline supplies are estimated to rise by +1,194,890 barrels versus a +2,317,000 barrel gain the prior week. Distillate inventories are estimated to rise by +1,454,220 barrels versus a +327,000 barrel gain the prior week. Finally, Refinery Utilization is estimated to rise by +.51% versus a +1.6% gain prior.
2:00 pm EST
  • US Fed Beige Book release.
Upcoming Splits 
  • None of note
Other Potential Market Movers
  • The Fed's Powell speaking, Fed's Kaplan speaking, Fed's Mester speaking, OPEC meeting, weekly MBA Mortgage Applications report, China Manufacturing PMI report, Eurozone CPI report and German Unemployment Rate could also impact trading today.
BOTTOM LINE:  Asian indices are mostly higher, boosted 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 50% net long heading into the day.

No comments: