Tuesday, November 08, 2016

Wednesday Watch

Evening Headlines
  • U.S. Stock Futures Tumble as Election Narrows Into Dead Heat. (video) U.S. stock futures plunged as investors rushed to price in a potential victory by Donald Trump in the U.S. presidential race, as rising odds of victory for the Republican in a succession of key swing stakes shocked investors into a near-panic and threw global markets into disarray. December contracts on the S&P 500 Index lost 3.1 percent to 2,068 at 9:48 p.m. in New York, wiping out gains that reached 0.8 percent. Key battlegrounds of Virginia, North Carolina and New Hampshire are among other states where polls have closed and results have been too close to call, but show Trump leading over Democrat Hillary Clinton.
  • China’s Factory Prices Quicken as Drag on Global Inflation Eases. China’s factory-gate inflation picked up further last month while consumer prices accelerated, suggesting government efforts to reduce overcapacity have gained some traction and alleviating a source of global disinflationary pressure.
  • Asian Stocks Drop as Results Show Tight Race for U.S. PresidencyAsian stocks fell in volatile trading as investors await the outcome of the U.S. presidential election, with early results showing Democrat Hillary Clinton and Republican Donald Trump locked in a tight race. The MSCI Asia Pacific Index lost 1.1 percent to 136.29 as of 11:25 a.m. in Tokyo, after rising as much as 0.8 percent.
  • OPEC Boss Warns of Oil-Market Instability If No Deal on Output. OPEC’s chief warned of prolonged instability in the oil market if the producer group and other major crude suppliers fail to act jointly to limit output and curb a global glut. An inability of the Organization of Petroleum Exporting Countries to implement the deal it reached in Algiers in September will have “negative consequences on the already fragile state of the industry,” OPEC Secretary-General Mohammed Barkindo said Tuesday at a briefing in Abu Dhabi. Markets are “eagerly awaiting” combined action by OPEC and non-OPEC producers, he said.
  • Icahn More Than Doubles Hertz(HTZ) Stake as Earnings Miss Slams Stock. Billionaire investor Carl Icahn more than doubled his stake in Hertz Global Holdings Inc., after the rental-car company reported third-quarter profit that badly missed estimates. Icahn, 80, bought an additional 15.1 million Hertz shares, boosting his stake to 33.77 percent from about 15.6 percent, according to a filing Tuesday. The investor, who first revealed a stake in Hertz in 2014, was already the company’s biggest shareholder.
  • GoPro(GPRO) to Recall New Karma Drones on Reports of Power Failure.
Zero Hedge:
Business Insider:
Night Trading 
  • Asian equity indices are -2.75% to -1.5% on average.
  • Asia Ex-Japan Investment Grade CDS Index 118.75 +2.5 basis points. 
  • Asia Pacific Sovereign CDS Index 35.25 unch.
  • Bloomberg Emerging Markets Currency Index 71.89 -.94%
  • S&P 500 futures -4.02%
  • NASDAQ 100 futures -4.04%.
Morning Preview Links

Earnings of Note

  • (DISH)/.68
  • (VIAB)/.65
  • (WEN)/.10
  • (TCS)/.05
  • (ETP)/.33
  • (FLO)/.21
  • (MYL)/1.46
  • (NTES)/2.95
  • (SHAK)/.14
  • (SCTY)/-2.48
  • (SPWR)/.44
  • (TASR)/.07
Economic Releases
10:00 am EST
  • Final Wholesale Inventories MoM for September are estimated to rise +.2% versus a prior estimate of a +.2% gain.
  • Final Trade Sales MoM for September are estimated to rise +.5% versus a prior estimate of a +.7% gain.    
10:30 am EST
  • Bloomberg consensus estimates call for a weekly crude oil inventory gain of +1,332,100 barrels versus a +1,442,000 barrel gain the prior week. Gasoline supplies are estimated to fall by -1,590,000 barrels versus a -2,207,000 barrel decline the prior week. Distillate inventories are estimated to fall by -2,055,400 barrels versus a -1,828,000 barrel decline the prior week. Finally, Refinery Utilization is estimated to rise by +.43% versus a -.4% decline the prior week.
Upcoming Splits 
  • None of note
Other Potential Market Movers
  • The Fed's Williams speaking, Fed's Kashkari speaking, $23B 10Y T-Note auction, USDA WASDE Crop report, weekly US retail sales reports, weekly MBA mortgage applications report, Australian inflation report, RBC Tech/Internet/Media/Telecom Conference, (SYK) analyst meeting, (STZ) investor meeting and the Wells Fargo Tech/Media/Telecom Conference could also impact trading today.
BOTTOM LINE:  Asian indices are sharply lower, weighed down by industrial and technology shares in the region. I expect US stocks to open sharply lower and to maintain losses into the afternoon. The Portfolio is 50% net long heading into the day.

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