- Tillerson Finds Asia Debut Dominated by North Korea's Missiles. Less than two months into his tenure as U.S. secretary of state, Rex Tillerson arrives in Asia Wednesday looking for fresh approaches to a challenge that has bedeviled the U.S. for 25 years: North Korea and its nuclear ambitions. The urgency of Tillerson’s task in Tokyo, Seoul and Beijing this week is only rising after recent tests show the reach of North Korea’s ballistic missiles edging closer and closer to the continental U.S. Tillerson will see if his outsider’s perspective and deal-making chops after four decades at Exxon Mobil Corp. can work some magic where seasoned diplomats have failed.
- A Mountain of Bad Debt Looms Over Modi. With a resounding domestic political victory behind him, Indian Prime Minister Narendra Modi turns attention back to policies this week. One area key to watch for investors: progress on resolving a mountain of bad debt that’s restraining the private economy. Modi, who swept to power in federal elections in 2014 and this weekend notched a decisive win in India’s largest state, has championed reforms for businesses yet overseen an expansion that’s been propelled by the public sector. Key to that shortfall has been a decline in credit exacerbated by the lack of a national plan to clean out non-performing loans.
- Asian Stocks Follow U.S. Lower Amid Wild Oil Swing. Crude oil whipsawed on stockpiles and Saudi Arabian production reports, while Asian stocks followed U.S. and European equities lower ahead of an expected interest-rate hike by Federal Reserve policy makers. Oil dropped as much as 2.7 percent Tuesday after OPEC data showed Saudi Arabia raised its production back above 10 million barrels a day, and then erased its decline as an industry report was said to show U.S. inventories unexpectedly fell last week. Stocks were lower from Sydney to Tokyo, while the dollar was slightly lower after Tuesday’s gains. The yield on 10-year Treasuries dropped, trading near 2.6 percent. Japan’s Topix index fell 0.5 percent and South Korea’s Kospi lost 0.1 percent. Australia’s S&P/ASX 200 Index slipped 0.4 percent and New Zealand’s S&P/NZX 50 declined 0.6 percent. Futures on the Hang Seng were down 0.2 percent in most recent trading.
- Oil at $40 No Problem as U.S. Drillers Snub OPEC With Hedges. OPEC’s worst enemy isn’t U.S. shale drillers. It’s the hedges propping them up. American oil explorers who survived the worst of the 2014-2016 market rout are shrugging off the 14 percent slide in prices this year from a high of $55.24 to less than $48 a barrel Tuesday. The price would have to drop to the $30s or lower to dent the bottom line of many drillers now working U.S. shale fields, said Katherine Richard, the CEO of Warwick Energy Investment Group, which own stakes in more than 5,000 oil and natural gas wells.
- U.S. to Plan Indictments Related to Yahoo(YHOO) Hacking, Source Says. U.S. officials are planning to issue indictments related to the hacking attacks against Yahoo! Inc., according to a person briefed on the matter. The Department of Justice is accusing four people of participating in massive online security breaches that compromised hundreds of millions of user accounts. The hacks came to light last year and threatened to derail the sale of Yahoo’s web operations to Verizon Communications Inc., said the person, who asked not to be identified discussing sensitive legal matters.
- EPA Official Accused of Helping Monsanto `Kill' Cancer Study. The Environmental Protection Agency official who was in charge of evaluating the cancer risk of Monsanto Co.’s Roundup allegedly bragged to a company executive that he deserved a medal if he could kill another agency’s investigation into the herbicide’s key chemical. The boast was made during an April 2015 phone conversation, according to farmers and others who say they’ve been sickened by the weed killer. After leaving his job as a manager in the EPA’s pesticide division last year, Jess Rowland has become a central figure in more than 20 lawsuits in the U.S. accusing the company of failing to warn consumers and regulators of the risk that its glyphosate-based herbicide can cause non-Hodgkin’s lymphoma.
Wall Street Journal:
- GOP Senators Say House Health Bill Won’t Pass Without Changes. Concerns mounted after independent report showed millions would be uninsured.
- Steve Bannon and the Making of an Economic Nationalist. The controversial White House counselor says his father’s 2008 financial trauma helped crystallize his antiglobalist views and led to a political hardening; ‘I’m going to be totally wiped out’.
- Gas Glut Reverses Lucrative 2016 Trade. Natural-gas futures have fallen 25% in the oversupplied market, hurting plans to grow U.S. exports.
- Rachel Maddow Claims To Have Trump's 2005 Tax Returns; White House Slams "Dishonest Media". Mr. Trump paid $38 million dollars even after taking into account large scale depreciation for construction, on an income of more than $150 million dollars, as well as paying tens of millions of dollars in other taxes such as sales and excise taxes and employment taxes and this illegally published return proves just that. Despite this substantial income figure and tax paid, it is totally illegal to steal and publish tax returns.
Earnings of Note
8:30 am EST
- Asian equity indices are -.5% to unch. on average.
- Asia Ex-Japan Investment Grade CDS Index 93.75 unch.
- Asia Pacific Sovereign CDS Index 27.5 -.25 basis point
- Bloomberg Emerging Markets Currency Index 70.83 +.01%.
- S&P 500 futures +.02%.
- NASDAQ 100 futures -.02%.
Earnings of Note
8:30 am EST
- Empire Manufacturing for March is estimated to fall to 15.0 versus 18.7 in February.
- The CPI MoM for February is estimated unch. versus a +.6% gain in January.
- The CPI Ex Food & Energy MoM for February is estimated to rise +.2% versus a +.3% gain in January.
- Real Avg. Weekly Earnings YoY for February.
- Advance Retail Sales MoM for February is estimated to rise +.1% versus a +.4% gain in January.
- Retail Sales Ex Autos MoM for February is estimated to rise +.1% versus a +.8% gain in January.
- Retail Sales Ex Autos and Gas for February is estimated to rise +.2% versus a +.4% gain in December.
- The NAHB Housing Market Index for March is estimated at 65.0 versus 65.0 in February.
- Business Inventories for January are estimated to rise +.3% versus a +.4% gain in December.
- Bloomberg consensus estimates call for a weekly crude oil inventory build of +3,246,500 barrels versus a +8,209,000 barrel build the prior week. Gasoline supplies are estimated to fall by -1,666,400 barrels versus a -6,555,000 barrel decline the prior week. Distillate inventories are estimated to fall by -1,244,500 barrels versus a -2,676,000 barrel decline the prior week. Finally, Refinery Utilization is estimated to rise by +.47% versus a -.1% decline the prior week.
- The FOMC is expected to raise the benchmark Fed Funds rate 25.0 basis points to .75%-1.0%.
- Net Long-Term TIC Flows for January.
- None of note
- The FOMC Policy Update/Economic Projections/Press Conference, Japan Industrial Production report, President Trump's meeting with auto execs and the weekly MBA Mortgage Applications report could also impact trading today.