Tuesday, May 16, 2017

Wednesday Watch

Evening Headlines
Bloomberg:
  • Nikki Haley Tells Countries to Choose Between U.S., North Korea. The U.S. ambassador to the United Nations urged other countries to do more to pressure North Korea over its weapons program, saying, “You either support North Korea or you support us, you are either with North Korea or not.” Ambassador Nikki Haley made the comments Tuesday, two days after Kim Jong Un’s regime launched a rocket it said could carry a “large-size heavy nuclear warhead.” The launch was the latest defiance of UN sanctions and provides an early challenge for South Korea’s new leader, Moon Jae-in, who has vowed to engage with the regime to bring peace to the peninsula.
  • Risk Off With U.S. Political Concern Center Stage. Growing concerns over the turmoil engulfing President Donald Trump’s administration weighed on risk appetite, boosting the yen and gold and sending U.S. stock futures lower. Contracts on the S&P 500 Index declined and stocks in Asia slid on reports that Trump asked FBI Director James Comey to drop an investigation into former National Security Adviser Michael Flynn. The dollar was already in retreat after a report that the U.S. president shared terrorism intelligence with Russian officials, an action he has since defended. The Bloomberg Dollar Spot Index dropped for a sixth day to the lowest since November. Crude extended losses. Japan’s Topix slid 0.5 percent, while Australia’s S&P/ASX 200 Index lost 0.7 percent. South Korea’s Kospi index fell 0.1 percent and Singapore’s Straits Times Index declined 0.5 percent.
Wall Street Journal:
Fox News: 
  • White House disputes explosive report that Trump asked Comey to end Flynn probe. (video) The White House grappled late Tuesday with the political ghost of James Comey, as an explosive new report said a memo written by the ousted FBI chief claimed President Trump once asked him to end the probe into former national security adviser Michael Flynn. The White House sharply disputed the report, as Democrats seized on it as potential proof of "obstruction" of justice.
Night Trading 
  • Asian equity indices are -.5% to +.25% on average.
  • Asia Ex-Japan Investment Grade CDS Index 89.75 +.5 basis point
  • Asia Pacific Sovereign CDS Index 20.0 -.5 basis point.
  • Bloomberg Emerging Markets Currency Index 73.17 -.02%.
  • S&P 500 futures -.57%.
  • NASDAQ 100 futures -.48%.
Morning Preview Links

Earnings of Note
Company/Estimate

  • (AEO)/.17
  • (CTRN)/.68
  • (TGT)/.91
  • (CSCO)/.58
  • (LB)/.30
  • (SMRT)/.18
  • (SNPS)/.86
Economic Releases 
10:30 am EST
  • Bloomberg consensus estimates call for a weekly crude oil inventory decline of -2,693,130 barrels versus a -5,247,000 barrel decline the prior week. Gasoline supplies are estimated to fall by -1,199,380 barrels versus a -150,000 barrel decline the prior week. Distillate inventories are estimated to fall by -1,601,750 barrels versus a -1,587,000 barrel decline the prior week. Finally, Refinery Utilization is estimated to rise by +.41% versus a -1.8% decline the prior week.
Upcoming Splits
  • None of note
Other Potential Market Movers
  • The UK Jobless Claims report, weekly MBA Mortgage Applications report, Keefe Bruyette Financials conference, Goldman Sachs Industrials conference, BMO Farm conference, JPMorgan Homebuilding/Products conference, (TMO) analyst meeting, (BP) annual meeting, (FL) annual meeting and the (GPS) annual meeting could also impact trading today.
BOTTOM LINE:  Asian indices are mostly lower, weighed down by financial 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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