Wednesday, February 15, 2017

Thursday Watch

Evening Headlines
  • Aussie Unemployment Rate Falls Despite Full-Time Jobs Plunge. (video) Australia’s unemployment rate unexpectedly fell in January, despite a plunge in full-time jobs, underscoring the mixed picture of the country’s labor market.
  • Asia Stocks Rally Fizzles, Dollar and Bonds Steady. Stocks in Tokyo fluctuated while those in Sydney slipped after the MSCI All-Country World Index closed at a record high. Evidence of firming U.S. inflation had spurred bets that the economy can withstand higher interest rates as it waits for stimulus from the Trump administration, boosting American equities. Treasuries were flat on Thursday after falling for five straight days, while the Bloomberg Dollar Spot Index held Wednesday’s losses. Japan’s Topix swung between gains and losses, while Australia’s S&P/ASX 200 Index fell 0.1 percent. FTSE China A50 Index and Hang Seng futures both added 0.1 percent.
  • Here's Why the World of Copper Is Transfixed by Strike in Chile.
  • Yellen Says Trump Budget Won't Necessarily Prompt Higher Rates. Federal Reserve Chair Janet Yellen rejected suggestions that the central bank would respond willy-nilly to any changes in tax and spending plans by President Donald Trump with stepped-up increases in interest rates. That’s “not quite accurate,” she told lawmakers on Wednesday when asked about a media report that the central bank would seek to offset changes in fiscal policy with alterations in its own stance.
  • Five Reasons to Be Constructive on U.S. Stocks. (video)
  • Another Health Insurer Threatens to Quit Obamacare After Losses. Another U.S. health insurer is threatening to drop out of Obamacare after posting massive financial losses related to the program. Molina Healthcare Inc., which had been one of the Affordable Care Act’s financial success stories, on Wednesday said that its health insurance plans under Obamacare had lost $110 million last year.
  • Anthem(ANTM) Wins Bid to Block Cigna(CI) From Dumping $48 Billion Deal.
  • Toll Brothers(TOL) to Pay Taxes on Manhattan Condos to Lure in Buyers. Luxury developer Toll Brothers Inc. has a deal for those shopping for a condo in Manhattan: buy something soon, and we’ll pay the taxes on your purchase. The publicly traded homebuilder is offering to pay the city transfer tax and the New York state “mansion tax” -- an effective discount totaling almost 2.5 percent -- on deals made at three of its developments by Feb. 20, the company said in a statement Wednesday. The closing incentives apply to any apartment bought at Toll’s under-construction projects at 100 Barrow St., in the West Village, and 55 West 17th St., in Chelsea. The deal is also being offered at the Sutton, a development in the East 50s, where sales began in early 2015.
  • Pharma Lobby May Boot Company That Introduced High-Priced Drug.
Wall Street Journal:
Zero Hedge:
Busines Insider:
Night Trading 
  • Asian equity indices are -.50% to +.25% on average.
  • Asia Ex-Japan Investment Grade CDS Index 101.0 +.75 basis point.
  • Asia Pacific Sovereign CDS Index 27.0 -.25 basis point.
  • Bloomberg Emerging Markets Currency Index 71.64 +.05%
  • S&P 500 futures -.12%. 
  • NASDAQ 100 futures -.03%.
Morning Preview Links

Earnings of Note

  • (ALXN)/1.24
  • (AVP)/.10
  • (CAB)/1.22
  • (DF)/.41
  • (DUK)/.83
  • (H)/.27
  • (LH)/2.15
  • (MGM)/.18
  • (RS)/.74
  • (SHPG)/1.08
  • (WEN)/.09
  • (ZTS)/.46
  • (FLS)/.65
  • (WBMD)/.67
Economic Releases
8:30 am EST
  • Housing Starts for January are estimated at 1226K versus 1226K in December.
  • Building Permits for January are estimated to rise to 1230K versus 1210K in December. 
  • Initial Jobless Claims for last week are estimated to rise to 245K versus 234K the pior week.
  • Continuing Claims are estimated to fall to 2050K versus 2078K prior.  
  • Philly Fed Business Outlook for February is estimated to fall to 18.0 versus 23.6 in January. 
Upcoming Splits
  • (CMCSA) 2-for-1
Other Potential Market Movers
  • The Eurozone Car Registrations, Bloomberg Economic Expectations Index for February, weekly Bloomberg Consumer Comfort Index, (WEN) investor day, (EMR) investor conference, the weekly EIA natural gas inventory report and the (MOH) investor meeting could also impact trading today.
BOTTOM LINE:  Asian indices are mostly lower, weighed down by consumer and commodity shares in the region. I expect US stocks to open modestly lower and to rally into the afternoon, finishing mixed. The Portfolio is 100% net long heading into the day.

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