Tuesday Watch

Evening Headlines

Bloomberg:

• BofA's Woo: U.S. and China on a Collision Course. (video)
• Asian Stocks Drop With Dollar Amid Fed Countdown as Bonds Rally. Japanese indexes fell from their highest levels this year, and equity futures in Hong Kong and China tipped further losses after the worst day for mainland stocks since June distracted from Monday’s global rally. Sovereign debt from Australia to the U.S. snapped declines as oil failed to build on gains spurred by OPEC’s deal at the weekend with rivals to curb production. The yen held its advance versus the dollar as the Korean won and Thai baht led gains in Asia. About 80 more stocks fell as rose on the dollar-denominated MSCI Asia Pacific Index as of 10:03 a.m. Tokyo time, with Japan's Topix index declining at least .2% with the Nikkei 225 Stock Average. FTSE China A50 Index futures lost .3% following Monday's 2.5% slide in the Shanghai Composite Index.
  
• Bill Gates Pushes Green Energy on Call With Trump, While Building $1 Billion Fund. Microsoft co-founder, while hopeful, fears for federal support of renewable projects under new US president.
• Quest Diagnostics Says 34,000 Customer Accounts Hacked. Medical laboratory operator Quest Diagnostics Inc. says a hack of an internet application on its network has exposed the personal health information of about 34,000 people. The Madison, New Jersey-based company says "an unauthorized third party" on Nov. 26 gained access to customer information including names, dates of birth, lab results and in some instances, telephone numbers. The stolen data did not include Social Security numbers, credit card accounts, insurance details or any other financial information.

Wall Street Journal:

• McConnell Backs Intelligence Committee Probe of Russian Hacking in Elections. McConnell says election cyberattacks must be investigated in nonpartisan manner.
• Trump’s Punitive Power Over Companies Appears Hedged. President-elect could impose tariffs on a specific firm’s goods, but would likely face legal challenges if he did so.

Fox News:

• Intel committee chairman: Report on Russia meddling conflicts with DNI testimony. (video)

Zero Hedge:

• Iran Warns Of "World War, The Destruction Of Israel", If Trump Tears Up Nuclear Pact.
• US Budget Deficit Doubles As November Spending Hits All Time Monthly High.
• Two New Jersey Traders Arrested For Manipulating $10 Billion Worth Of Stocks, Making $26 Million In Profit.
• Boeing(BA) Stock Jumps To New Record Highs After Cutting 777 Production, But Raising Dividend, Buybacks.
• World's "Most Bearish Hedge Fund" Suffers Worst Month In History, Refuses To Capitulate.
• The Big 3 Broken Trendlines. (graph)
• The Dow Is The Most Overbought In Over 20 Years (And Options Traders Have Never Been More Bullish). (graph)
• Trump's Wisconsin Victory Confirmed - Gained Net 162 Votes In Statewide Recount.
• Beware "Extreme Volatility" Ahead Of Quad-Witching Friday: BMO.
• Hillary Begs For Benghazi Lawsuit Dismissal While Plaintiffs Blast "Special Favors" For "Political Elite".
• "Extremely Greedy" Traders 'Shocked' As Stocks Stumble Most Since Election, Dollar Dumps. (graph)

Business Insider:

• Here's what Point72 President Doug Haynes looks for when hiring young people.
• Bank insiders are selling stock like there's no tomorrow.
• Goldman Sachs'(GS) No. 2 exec will get a big payout now that he's joining Trump's administration.

Telegraph:

• China powerless against Trump's economic threats but can beat war drums.

Economic Information Daily:

• China Should Closely Watch Rising Local Fiscal Risks. China should be vigilant about rising fiscal risks at local governments in non-eastern regions, citing a report by MOF's fiscal science institute as saying. 32.6% of cities and counties in northeaster regions reported negative or no growth in fiscal revenue in first 3 quarters, according to the report.

Night Trading 

• Asian equity indices are -.25% to unch. on average.
• Asia Ex-Japan Investment Grade CDS Index 119.5 +1.5 basis points.
• Asia Pacific Sovereign CDS Index 36.25 +.25 basis point.
• Bloomberg Emerging Markets Currency Index 70.31 -.02%. 
• S&P 500 futures +.04%. 
• NASDAQ 100 futures +.07%.

Morning Preview Links

Earnings of Note
Company/Estimate 

• (ABM)/.50

Economic Releases
6:00 am EST

• The NFIB Small Business Optimism Index for November is estimated to rise to 96.5 versus 94.9 in October.  

8:30 am EST

• The Import Price Index MoM for November is estimated to fall -.4% versus a +.5% gain in October.

Upcoming Splits 

• None of note

Other Potential Market Movers

• The German ZEW Index, Japan Industrial Production report, $12B 30Y T-Bond auction, IEA Release, US weekly retail sales reports, (JBLU) investor day, (BG) investor day, (SYNA) analyst meeting, (CNX) investor day, (TEX) analyst meeting and the (WY) investor meeting 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.