Tuesday Watch

Evening Headlines

Bloomberg:

• Have China's FX Reserves Dipped Below $3 Trillion? (video)
• Asian Stocks Fall After Yen Climbs on Haven Demand. Asian equities declined after the yen led a rally in haven assets with political uncertainty infecting markets across the globe. Japan’s Topix index dropped for the first time in three days, after the yen touched the highest level since November. That comes after the S&P 500 Index retreated from near-record levels, with shares most tied to economic growth struggling after sagging wagegains and uneven retail results. The euro slumped with French, Italian and Spanish bonds amid political uncertainty in France. Gold surged to the highest price since November on Monday, while 10-year Treasury yields touched a two-week low. The Topix index fell 0.6 percent as of 9:23 a.m. in Tokyo, after a two-day gain. Toyota Motor Corp. dropped 2.5 percent after reporting a 39 percent decline in third-quarter operating profit. Australia’s S&P/ASX 200 Index declined 0.2 percent. South Korea’s Kospi Index retreated 0.1 percent. New Zealand’s main benchmark was down 0.2 percent.

Wall Street Journal:

• Tiger Hedge Funds Become Wall Street Prey. Funds managed by disciples of Julian Robertson have fallen on hard times.
• Donald Trump’s Administration Argues in Travel-Ban Appeal That Security At Risk. Ninth U.S. Circuit Court of Appeals to hold oral arguments Tuesday afternoon, after which a ruling could be made at any time.
• Conservative Republicans Double Down on Push to Repeal Health Law. Some fear losing momentum to undo the Affordable Care Act as more GOP members sound cautious notes.

Fox News:

• ‘Right-to-work’ movement claims victory in Missouri, eyes NH next. (video)
• Details of Iran nuclear deal still secret as US-Tehran relations unravel.

CNBC:

• After-hours buzz: FOXA, GPS, FMC & more.
• Consumers could see 20% price hike with border adjustment tax, retail group says. (video)
• Fed's Harker says March 'should be considered' for next rate hike.

Zero Hedge:

• California Senate Leader Admits: "Half Of My Family" In Country Illegally With "False Social Security Cards".
• Shock Poll Shows Merkel Losing Chancellorship If Elections Held Today; JPMorgan Stunned.
• Chinese Auto Dealers Hit Panic Button As Tax Hike Triggers "Inventory Early Warning". (graph)
• This Is What America's Top Trading Partners Export To The US.
• Grant Williams: A Punch In The Face For Central Bankers Is Coming.
• According To Credit Suisse, This Is The Only Thing That Matters To Markets.
• Yield Curve Inverts, Swap Spreads Spike Signal Panic As Debt-Ceiling Looms. (graph)
• Gold Jumps To 3-Month Highs Amid China Tightening, Europe Turmoil, & Trump. (graph)

Night Trading 

• Asian equity indices are -.25% to unch. on average.
• Asia Ex-Japan Investment Grade CDS Index 108.75 -1.25 basis points.
• Asia Pacific Sovereign CDS Index 30.0 -1.0 basis point.
• Bloomberg Emerging Markets Currency Index 71.30 -.11%. 
• S&P 500 futures -.05%. 
• NASDAQ 100 futures -.01%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (AGCO)/.71
• (ADM)/.80
• (BP)/.04
• (EMR)/.43
• (GM)/1.17
• (ICE)/.69
• (KORS)/1.64
• (MOS)/.12
• (STE)/1.04
• (VSH)/.21
• (VMC)/.85
• (WCG)/.52
• (AKAM)/.68
• (BWLD)/1.31
• (TCS)/.09
• (GILD)/2.60
• (MCHP)/.90
• (MYGN)/.24
• (ORLY)/2.54
• (PNRA)/2.00
• (TDW)/-1.23
• (DIS)/1.49
• (ZG)/.11 

Economic Releases
8:30 am EST

• The Trade Deficit for December is estimated at -$45.0B versus -$45.2B in November. 
  

10:00 am EST

• The JOLTS Job Openings report for December is estimated to rise to 5569 versus 5522 in November.

3:00 pm EST

• Consumer Credit for December is estimated at $20.0B versus $24.532B in November.

Upcoming Splits

• None of note

Other Potential Market Movers

• The $24B 3Y T-note auction, German Industrial Production report, Reserve Bank of Australia decision, Reserve Bank of India decision, weekly US retail sales reports and the (IDTI)  analyst day could also impact trading today.

BOTTOM LINE:  Asian indices are mostly lower, weighed down by commodity and consumer shares in the region. I expect US stocks to open mixed and to rally into the afternoon, finishing modestly higher. The Portfolio is 75% net long heading into the day.