Monday, February 13, 2017

Tuesday Watch

Evening Headlines
  • Le Pen Lures French Farmers Angered by Worst Crisis in Decades. Every time French farmer Nicolas Menier looks at his black-and-white milk cows, he’s reminded that he loses money on each one. That’s why he sent 14 of his 60 Prim’Holsteins to the slaughterhouse in the past year. It didn’t net him much: Beef prices are falling too. So are grains. Menier’s small corner of Brittany is a microcosm of French farming’s deepest crisis since World War II, and that could have an impact on April’s presidential election. He blames his woes on politicians from establishment parties, saying they haven’t protected farmers from falling prices and international competition. He plans to vote for the National Front’s Marine Le Pen, whom he calls the only candidate who understands farmers and whose threats to pull France out of the European Union could bring him relief.
  • Steven Mnuchin Is Confirmed by Senate to Be Treasury Secretary. Steven Mnuchin was confirmed as U.S. Treasury secretary, filling the role of chief spokesman for the dollar and steward for the Trump administration’s economic priorities. The former Goldman Sachs banker won in a 53-47 Senate vote on Monday in which only one Democrat broke ranks and supported Mnuchin. After several delays in the Senate vetting process, Mnuchin is expected to push ahead quickly with top administration goals to dismantle financial regulations and slash taxes. Almost immediately, he’ll be immersed in preparing for the expiration of the debt limit suspension and his first meeting of G-20 finance ministers and central bank governors in Germany, both coming up next month.
  • Australian Business Conditions Surge to Highest Level Since 2007. Australian business conditions jumped to the highest level in more than nine years and the employment gauge surged, diminishing the likelihood of interest-rate cuts in the near term. The business conditions index -- a measure of hiring, sales and profits -- jumped to 16 in January from a revised 10 in December, a National Australia Bank Ltd. survey of more than 400 firms conducted from Jan. 27 to Feb. 3 showed. Business confidence climbed to 10 from 6, the best result in almost three years, and a gauge of employment rose to the highest level since 2011.
  • U.S. Hits Venezuelan Vice President With 'Kingpin' Act Sanctions. (video) The Trump administration imposed sanctions against Venezuelan Vice President Tareck El Aissami, after years of investigation by U.S. authorities into his alleged participation in drug trafficking and money laundering. The Treasury Department announced the move Monday, placing El Aissami and another Venezuelan on a U.S. list of foreign nationals with suspected ties to drug trafficking. El Aissami has consistently denied all allegations against him. His office declined to comment on the U.S. decision after it was announced.
  • Asian Stocks Keep Global Rally Going as Bonds Drop. Asian equities continued their march to the highest levels in more than a year after U.S. equities surged to a fresh round of records. Bonds retreated before testimony from the Federal Reserve’s Janet Yellen. Equities in Japan, Australia and New Zealand gained after the S&P 500 Index closed at an unprecedented high and the MSCI All-Country World Index came within a whisker of its May 2015 record close. With reflation trades regaining their vigor, Treasuries nursed a three-day slide. The dollar was steady after a three-day advance while oil edged higher after Monday’s declines. The MSCI Asia Pacific Index climbed 0.1 percent to the highest since July 2015.
  • Iraq Oil Flow to Slump as Maintenance Helps With OPEC Cut Pledge. (video) Iraq’s oil exports are poised to decline to a seven-month low in March as ongoing maintenance at some of its biggest fields coincides with a seasonal slump in shipments, potentially helping the country to meet a pledge to OPEC that it would restrict crude supply. The second-biggest producer in the Organization of Petroleum Exporting Countries will export 3.01 million barrels a day of crude from its Persian Gulf export terminals, down from 3.64 million in February, loading programs obtained by Bloomberg show. The March figure is the lowest since August, while this month’s flows are scheduled to be the highest since October 2015.
Zero Hedge:
Night Trading 
  • Asian equity indices are unch. to +.5% on average.
  • Asia Ex-Japan Investment Grade CDS Index 104.25 -3.5 basis points.
  • Asia Pacific Sovereign CDS Index 29.25 +.25 basis point.
  • Bloomberg Emerging Markets Currency Index 71.27 +.03%. 
  • S&P 500 futures -.01%. 
  • NASDAQ 100 futures -.02%.
Morning Preview Links

Earnings of Note

  • (AB)/.49
  • (CPLA)/.95
  • (DBD)/.32
  • (DISCA)/.50
  • (INCY)/.23
  • (ITT)/.42
  • (MLM)/1.60
  • (TAP)/.61
  • (A)/.49
  • (AIG)/1.16
  • (DVN)/.18
  • (ESRX)/1.87
  • (FOSL)/1.21
  • (OMI)/.50
Economic Releases 
6:00 am EST
  • The NFIB Small Business Optimism Index for January is estimated to fall to 104.9 versus 105.8 in December. 
8:30 am EST
  • PPI Final Demand MoM for January is estimated to rise +.3% versus a +.3% gain in December.
  • PPI Ex Food and Energy MoM for January is estimated to rise +.2% versus a +.2% gain in December.
Upcoming Splits
  • (CMCSA) 2-for-1
Other Potential Market Movers
  • The Fed's Yellen speaking, Fed's Lacker speaking, Fed's Kaplan speaking, Fed's Lockhart speaking, Eurozone GDP report, UK CPI report, Eurozone Industrial Production report, Australia Consumer Confidence report, weekly US retail sales reports, Stifel Transport/Logistics Conference and the Goldman Tech/Internet conference could also impact trading today.
BOTTOM LINE:  Asian indices are higher, boosted by technology 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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