Sunday, June 18, 2017

Monday Watch

Today's Headlines
  • Hammond Shifts Brexit Tone as He Dodges Questions on May. Chancellor of the Exchequer Philip Hammond said Britain should aim for a gentle departure from the European Union, an explicit challenge to the confrontational strategy adopted by the now weakened Prime Minister Theresa May. British officials travel to Brussels Monday to formally start the EU departure negotiations, amid confusion over whether the government is going to change its priorities after failing to win voter endorsement in the June 8 election. At home, May is struggling to stay in office as her Conservative Party questions both her election strategy and her handling of a London tower block fire that has left scores dead.
  • Italy, EU Race to Find Solution for Two Troubled Banks. Italian finance officials and the European Commission are racing to find a solution for two troubled banks in the northern Veneto region that have weighed on the nation’s financial system. Finance Minister Pier Carlo Padoan said Sunday the matter of Veneto Banca SpA and Banca Popolare di Vicenza is being worked on “actively,” without offering details. European Commission Vice President Valdis Dombrovskis told a news conference Friday in Luxembourg that he was in close contact with the Italian authorities but declined to comment further.
  • Japan Has Surprise Deficit as Import Growth Overpowers Exports. Japan’s trade has seen a sustained pickup since the start of the year, with five consecutive months of growth in both exports and imports. It’s indicative of an increasingly healthy global economy and a relatively competitive yen. The Bank of Japan has expressed optimism that private consumption will join exports in helping drive Japan’s economic recovery.
  • Asian Stocks Gain as Yen Falls, Kiwi Nudges Higher. Stocks in Asia rose, with a weaker yen supporting Japanese equities, while South Korean and Australian shares also pushed higher. The euro gave up early gains despite indications French president Emmanuel Macron’s party is poised to win the biggest majority in 15 years. The voter turnout was only about 44 percent. The pound slipped with formal negotiations on the U.K.’s exit from the European Union due to start. The kiwi climbed as a gauge of the services industry expanded at a faster pace. Oil edged lower. Japan’s Topix index jumped 0.6 percent, and Australia’s S&P/ASX 200 Index rose 0.5 percent. South Korea’s Kospi index also gained 0.5 percent. Futures on the Hang Seng Index futures lost 0.2 percent.
Wall Street Journal:
Zero Hedge: 
Night Trading
  • Asian indices are +.25% to +.5% on average.
  • Asia Ex-Japan Investment Grade CDS Index 84.0 +.5 basis point.
  • Asia Pacific Sovereign CDS Index 17.25 unch.
  • Bloomberg Emerging Markets Currency Index 73.21 +.02%.
  • S&P 500 futures +.22%.
  • NASDAQ 100 futures +.38%.

Earnings of Note
  • None of note
Economic Releases
  • None of note
Upcoming Splits
  • None of note
Other Potential Market Movers
  • The Fed's Evans speaking, Fed's Dudley speaking, BIO International Convention, China Property Price report, (LLY) Business Update, (HAE) analyst meeting and the (ADBE) annual meeting could also impact trading today.
BOTTOM LINE: Asian indices are higher, boosted by industrial and technology shares in the region. I expect US stocks to open modestly higher and to maintain gains into the afternoon. The Portfolio is 100% net long heading into the week.

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