Tuesday Watch

Evening Headlines

Bloomberg:

• China's Banks More Squeezed Than You Think.
• China December Factory Prices Jump 5.5% on Year, Consumer Prices Rise 2.1%. China's producer price index jumped 5.5 percent in December from a year earlier, compared to the median estimate of 4.6 percent in a Bloomberg survey and the 3.3 percent gain in November. The consumer-price index rose 2.1 percent, versus a 2.2 percent increase forecast by analysts.
  
• Asian Shares Track U.S. Retreat While Bonds Climb: Markets Wrap. Japanese equities fell on their first day of trading this week, tracking losses in the U.S., where the S&P 500 Index dropped from a record high. U.S. crude was around $52 a barrel after sinking the most in more than five weeks Monday amid concern over Iraq’s compliance with OPEC’s production cuts. The yen maintained its rebound as gold edged higher for the fifth time in six days, while Australian and New Zealand debt paced gains in Treasuries. The won rallied following its worst day since November. Japan’s Topix index fell 0.2 percent as of 9:41 a.m. Tokyo time, as more than twice as many stocks declined as rose on the dollar-denominated MSCI Asia Pacific Index.

Wall Street Journal:

• The Obama Legacy. A Presidency of great promise ends in rancor and disappointment.
• U.S. Pilots See Close Calls With Russian Jets Over Syria. As planes share crowded airspace fighting parallel wars, militaries struggle to minimize threat of an accident.
• Just Had a Baby? Prepare to Spend $233,610 Raising It. The cost of child-rearing rose 3% in 2015, the government says.

Fox News:

• Trump gets revenge, helps oust Kasich loyalist from Ohio GOP post. (video)

CNBC:

• ExxonMobil(XOM) and Iran did business under Secretary of State nominee Tillerson. (video)
• Carl Icahn: Trump can stop this 'idiocy' with overregulation. (video)
• UK prime minister reminds everyone that Brexit is actually happening and that’s hitting the pound. (video)
• JPMorgan's(JPM) Dimon says strong economy will speed interest rate hikes.

Zero Hedge: 

• Trump Backs Delay Of Obamacare Repeal After Pressure From Rand Paul.
• Snowden, Bergdahl? Obama Set For 'Pardon Frenzy' As He Leaves Office.
• Glenn Greenwald Blasts "Fake News" Peddling Washington Post For Lack Of "Basic Journalistic Skepticism".
• Trump Is Set To Label China A "Currency Manipulator": What Happens Then? (graph)
• Marissa Mayer Resigns From Yahoo(YHOO) Board; Yahoo To Be Renamed To Altaba.
• Consumer Credit Soars, Driven By Near Record Credit Card-Fueled Spending. (graph)
• "Dash For Trash" Continues - Lower Quality Stocks Have Led Market Over Past 3 Months. (graph)
• Crude Crushed, Dollar Dumps As Bonds & Bullion Bounce. (graph)

Busines Insider:

• Apple(AAPL) plans 'high-tech manufacturing' of data-center gear in Arizona.
• There’s a catch with OPEC’s plan to cut production.

ABC News: 

• Jewish Centers in Several States Targeted With Bomb Threats.

Reuters: 

• Fed's Rosengren calls for faster interest rate hikes. Boston Fed President Eric Rosengren on Monday called for the U.S. central bank to step up its pace of interest rate increases from the once-a-year pattern it has pursued since 2015, warning of inflation risks if it does not. "I expect that appropriate monetary policy will need to normalize more quickly than over the past year," Rosengren told the Connecticut Business and Industry Association.

Night Trading 

• Asian equity indices are -.50% to +.25% on average.
• Asia Ex-Japan Investment Grade CDS Index 115.75 +1.75 basis points.
• Asia Pacific Sovereign CDS Index 34.5 +1.5 basis points.
• Bloomberg Emerging Markets Currency Index 69.86 +.01%. 
• S&P 500 futures -.12%. 
• NASDAQ 100 futures -.09%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (SNX)/2.09

Economic Releases
6:00 am EST

• The NFIB Small Business Optimism Index for December is estimated to rise to 99.5 versus 98.4 in November. 

10:00 am EST

• Wholesale Trade Sales MoM for November is estimated to rise +.5% versus a +1.4% gain in October.
• JOLTS Job Openings for November are estimated to fall to 5500 versus 5534 in October.
  

Upcoming Splits 

• None of note

Other Potential Market Movers

• The China Money Supply report, $24B 3Y T-Note auction, weekly US retail sales reports and the Needham Growth Conference could also impact trading today.

BOTTOM LINE:  Asian indices are mostly lower, weighed down by industrial and commodity 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.