Tuesday Watch

Evening Headlines

Bloomberg:

• French Race Up for Grabs Days Before Voters Cast First Ballots. France’s presidential race enters its final stretch with no clear winner in sight as the main contenders scrap for votes in a flurry of campaign rallies. “Everyone is petrified,” said Edouard Lecerf, head of the political department at polling firm Kantar Sofres. “The challenge for each of the four candidates is to seek new votes without alienating their base. French voters are like fish, like eels -- very slippery.” With almost a third of the electorate still undecided, and the front-runners clustered around 20 percent in the polls for the first round on April 23, the race is the most unpredictable the country has seen in recent history. With two of the four candidates also hostile to the institutions of the European Union, the result of the runoff two weeks later will have far-reaching implications not just for France but for the region as a whole.

• Tech Stocks in Malaysia Hit 10-Year High, Buoyed by Chip Boom. As growth in semiconductor usage underpins a 38 percent surge in Malaysian technology stocks, companies like Vitrox Corp. are expanding. The manufacturer of inspection machines for the semiconductor industry is building a 120 million ringgit ($27.2 million) factory, quadrupling its output as Managing Director Chu Jenn Weng predicts another record year for earnings.

• Asian Stocks Climb While Yen Slips as Risks Fade. Asian equities gained after U.S. stocks rose the most in six weeks, while the yen weakened as geopolitical threats eased and American economic data damped the odds for a Federal Reserve rate hike in June. Japanese and South Korean stocks rose for a second day, while Australian shares slid as the market reopened after the Easter holiday. Bloomberg’s dollar index strengthened after Treasury Secretary Steven Mnuchin told the Financial Times the greenback’s strength is “a good thing.” The yield on 10-year Treasuries continued to edge higher from a November low. Gold declined for a third day. The yen declined 0.3 percent to 109.21 per dollar as of 9:16 a.m. in Tokyo. The Bloomberg Dollar Spot Index added less than 0.1 percent after falling 0.2 percent Monday to the lowest closing level since March 27. Japan’s Topix advanced 1 percent, after a 0.5 percent increase on Monday. South Korea’s Kospi also gained for a second day, adding 0.1 percent. Australia’s S&P/ASX 200 fell 0.5 percent and New Zealand’s benchmark climbed 0.2 percent.

• Your Evening Briefing.

• Exxon(XOM), Shell Join Ivanka Trump to Defend Paris Climate Pact. (video) As President Donald Trump contemplates whether to make good on his campaign promise to yank the United States out of the Paris climate accord, an unlikely lobbying force is hoping to talk him out of it: oil and coal producers. A pro-Paris bloc within the administration has recruited energy companies to lend their support ahead of a high-level White House meeting on the subject taking place as soon as Tuesday, according to two people familiar with the effort who asked not to be identified.

Wall Street Journal: 

• U.S. Turns Up Heat on North Korea. In visit to demilitarized zone, Pence calls U.S. alliance with South Korea ironclad.

• In Afghanistan, Battle With ISIS Grinds On After Big Bomb. U.S. dropped ‘Mother of All Bombs’ as part of offensive to dislodge militants from stronghold.

• 5 Things to Watch in Goldman Sachs's Results.

Fox News:

• North Korea tensions have Hawaii pols revisiting emergency attack plans. (video)

MarketWatch:

• Netflix(NFLX) stock swings as subscriber growth, earnings forecast come up short: Live blog recap.

CNBC:

• Netflix(NFLX) has committed to spend a whopping $15.3 billion on streaming content.

Zero Hedge: 

• Despite What They Say, GM's Inventory Build Is Anything But 'Normal'. (graph)

• Angst In America - Disappearing Pensions.

• Houston Commercial Rents Plunge As Vacancies Hit 22-Year High. (graph)

• Former 'Permabull' Strategist Sees More Warning Signs For Stocks.

• Traders Buy The Thermonuclear War Threat Dip. (graph)

Business Insider:

• Saudi Arabia warns Iran is trying to turn Yemen into a 'missile base'.

• Former White House official slams Obama: ‘I think he left a more dangerous world’.

• United Airlines(UAL) beats on earnings and sales.

• CREDIT SUISSE: Here's why Amazon's(AMZN) stock is going to soar.

Night Trading 

• Asian equity indices are -.25% to +.5% on average.

• Asia Ex-Japan Investment Grade CDS Index 101.25 unch. 

• Asia Pacific Sovereign CDS Index 23.75 +.25 basis point.

• Bloomberg Emerging Markets Currency Index 72.18 -.04%.

• S&P 500 futures unch. 

• NASDAQ 100 futures +.1%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (BAC)/.35

• (SCHW)/.36

• (CMA)/.97

• (GS)/5.19

• (HOG)/1.02

• (JNJ)/1.77

• (PGR)/.68

• (RF)/.22

• (UNH)/2.17

• (ADTN)/.15

• (IBM)/2.35

• (IBKR)/.39

• (ISRG)/4.97

• (LRCX)/2.55

• (YHOO)/.14

Economic Releases
8:30 am EST 

• Housing Starts for March are estimated to fall to 1250K versus 1288K in February.

• Building Permits for March are estimated to rise to 1250K versus 1213K in February  

9:15 am EST

• Industrial Production MoM for March is estimated to rise +.4% versus unch. in February.

• Capacity Utilization for March is estimated to rise to 76.2% versus 75.4% in February.

• Manufacturing Production for March is estimated unch. versus a +.5% gain in February. 
  

Upcoming Splits

• (HEI) 5-for-4

Other Potential Market Movers

• The Fed's George speaking, China March Property Price report and the US weekly retail sales report could also impact trading today.

BOTTOM LINE:  Asian indices are mostly higher, boosted by industrial and technology 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.