Sunday, March 05, 2017

Monday Watch

Today's Headlines
  • North Korea Fires Multiple Missiles Which Fall Into Japan's EEZ. North Korea fired four ballistic missiles early Monday with three falling into Japan’s exclusive economic zone, the government in Tokyo said. South Korea’s Yonhap News said the regime may have launched an intercontinental ballistic missile, though there was no official confirmation of that. The move comes as South Korea and the U.S. undertake annual military drills that Pyongyang has called a prelude to an invasion.
  • Draghi Seen Keeping Cool on Stimulus Drive Amid Inflation Surge. A timeline for the end of European Central Bank stimulus is taking shape among economists. Policy makers will wait until at least June before upgrading their assessment of the risks to the euro-area recovery and won’t announce another reduction in bond purchases until September, according to most respondents in a Bloomberg survey. Tapering quantitative easing and starting to raise interest rates will take until at least the end of next year and possibly into 2019.
  • Wave of Islamic State Car Bombs Targets Iraqi Troops in West Mosul. Iraqi troops encountered the "heaviest" clashes yet with Islamic State group fighters Sunday in western Mosul since the start of the new push more than two weeks ago, according to a senior commander. Maj. Gen. Haider al-Maturi of the Federal Police Commandos Division told The Associated Press that IS militants dispatched at least six suicide car bombs, which were all destroyed before reaching the troops. The militants, he said, are moving from house to house and deploying snipers.
Wall Street Journal:
  • China to strengthen defenses, but budget details excluded. China pledged more support to its military on Sunday including strengthening maritime and air defenses amid efforts to safeguard sovereignty, but unusually did not give spending figures for 2017 despite promises of transparency.
Zero Hedge:
  • Erdogan compares German conduct with Nazi period. President Tayyip Erdogan accused Germany of behaving as in Nazi times in cancelling political meetings of resident Turks that were due to be addressed by Turkish officials. German authorities withdrew permission last week for two rallies by Turkish residents in German cities amid growing public outrage over Ankara's arrest of a Turkish-German journalist, dragging bilateral ties to a new low.
Night Trading
  • Asian indices are -.50% to unch. on average.
  • Asia Ex-Japan Investment Grade CDS Index 94.75 +1.0 basis point.
  • Asia Pacific Sovereign CDS Index 26.5 +.25 basis point.
  • Bloomberg Emerging Markets Currency Index 71.15 -.08%.
  • S&P 500 futures -.39%.
  • NASDAQ 100 futures -.36%.

Earnings of Note
  • (KFY)/.53
  • (ALOG)/.99
  • (CASY)/.89
  • (DCO)/.45
  • (THO)/1.22 
Economic Releases
10:00 am EST
  • Factory Orders for January are estimated to rise +1.0% versus a +1.3% gain in December.
  • Final Durable Goods Orders for January are estimated to rise +1.0% versus a prior estimate of a + 1.8% gain.
Upcoming Splits
  • None of note
Other Potential Market Movers
  • The Fed's Kashkari speaking, Deutsche Bank Media/Intenet/Telecom Conference, Cowen Health Care Conference, Sandler O'Neil Financial Services Conference and the (FAST) Feb. sales report could also impact trading today.
BOTTOM LINE: Asian indices are mostly lower, weighed down by technology and industrial shares in the region. I expect US stocks to open modestly lower and to rally into the afternoon, finishing mixed. The Portfolio is 75% net long heading into the week.

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