Wednesday, March 15, 2017

Thursday Watch

Evening Headlines
  • A New Baby Boom Is Happening in China's Smaller Cities. China’s smaller cities are struggling to cope with a baby boom after the nation ended its one-child policy in 2015, demonstrating that it’s too early to further relax the new two-child ceiling. So says lawmaker Sun Xiaomei, who criticizes calls for an immediate easing of the current two-child policy, and says her visits to small cities and towns showed her that already-stretched hospitals, pediatricians and kindergartens are finding it hard to cope with increased births.
  • Most Asian Stocks Climb After Fed; Dollar Drops. Most Asian equities followed U.S. stocks higher, after Treasuries rallied and the dollar tumbled as the Federal Reserve raised interest rates without accelerating its timeline for future tightening. Shares from Australia to South Korea climbed after the S&P 500 Index jumped by the most in two weeks. Japanese stocks slipped as the yen strengthened ahead of the Bank of Japan’s policy decision Thursday. The yield on 10-year Treasury notes tumbled below 2.5 percent while gold and oil climbed. The euro rose to a one-month high after Dutch Prime Minister Mark Rutte’s Liberals easily beat the anti-Islam Freedom Party of Geert Wilders. The kiwi fell as New Zealand’s economy grew less than economists forecast. The MSCI Asia Pacific Index rallied 0.8 percent as of 9:14 a.m. in Tokyo, poised for the highest closing level since July 2015. South Korea’s Kospi jumped 0.9 percent. Australia’s S&P/ASX 200 Index rose 0.4 percent and New Zealand’s S&P/NZX 50 Index increased 0.7 percent. Japan’s Topix fell 0.3 percent, dropping for a third straight day as banks and insurers led declines.
Wall Street Journal:
  • Fed Raises Interest Rates, Remains on Track to Keep Tightening. As in December, officials penciled in three quarter-point rate increases this year. The Federal Reserve said it would raise short-term interest rates a quarter percentage point and keep lifting them later this year, signaling the central bank is moving into a new phase in which it will more aggressively withdraw easy money from the financial system as the economy improves.
  • Lawmakers Promise Results Soon on Wiretap and Election Probes. Top Republican and Democrat on House intelligence panel repudiate Trump’s accusation. Lawmakers of both parties on Wednesday promised the public would soon get a more detailed look at the progress of several investigations into the 2016 presidential campaign, including a definitive answer to whether any evidence exists for President Donald Trump’s unsubstantiated allegation that he was wiretapped by his predecessor.
Zero Hedge:
Business Insider:
Night Trading 
  • Asian equity indices are unch. to +.75% on average.
  • Asia Ex-Japan Investment Grade CDS Index 90.25 -2.5 basis points.
  • Asia Pacific Sovereign CDS Index 27.25 -.25 basis point
  • Bloomberg Emerging Markets Currency Index 71.65 +.06%
  • S&P 500 futures +.06%. 
  • NASDAQ 100 futures +.07%.
Morning Preview Links

Earnings of Note

  • (DG)/1.41
  • (ADBE)/.87
  • (JASO)/-.08
Economic Releases
8:30 am EST 
  • Housing Starts for February are estimated to rise to 1264K versus 1246K in January.
  • Building Permits for February are estimated to fall to 1268K versus 1285K in January.
  • Initial Jobless Claims for last week are estimated to fall to 240K versus 243K the prior week. 
  • Continuing Claims are estimated to fall to 2050K versus 2058K prior.    
  • Philly Fed Business Outlook Index for March is estimated to fall to 30.0 versus 43.3 in February. 
10:00 am EST
  • JOLTS Job Openings for January are estimated to rise to 5562 versus 5501 in December.
Upcoming Splits
  • None of note
Other Potential Market Movers
  • The BoE rate decision, President Trump's budget release, Eurozone CPI report, Australia Employment Change, Bloomberg Economic Expectations Index for March, weekly Bloomberg Consumer Comfort Index, weekly EIA natural gas inventory report and the (OMI) investor day could also impact trading today.
BOTTOM LINE:  Asian indices are mostly higher, boosted by technology and commodity shares in the region. I expect US stocks to open mixed and to rally into the afternoon, finishing modestly higher.  The Portfolio is 100% net long heading into the day.

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