Wednesday, June 21, 2017

Thursday Watch

Evening Headlines
  • China Bad Debt Prices Surge 30% as New Gold Rush Gets Under Way. (video) Bad loans are rapidly becoming the latest hot commodity in China as more domestic and foreign investors rush into the market and bid up prices. Non-performing loan prices have risen more than 30 percent this year, according to distressed investor Belos Capital Asia Ltd. The average selling price of NPLs has climbed to around 50 cents on the dollar in the past two years, from 30 cents, said Victor Jong, a partner in the deals and business recovery services unit of PricewaterhouseCoopers LLP in Shanghai. Such a high level is “very rare” in international markets, Jong said. “There are just too many buyers grabbing a limited supply of NPLs,” said Hanson Wong, CEO of Belos Capital in Hong Kong. “At these prices, it’s pretty hard for these NPLs to be profitable.”
  • Russia Cancels Talks With U.S. Over Latest Round of Sanctions. Russia canceled talks with a top U.S. official to protest the latest sanctions punishing Russian companies and individuals over the conflict in Ukraine, in a fresh setback for President Donald Trump’s bid to improve ties with President Vladimir Putin’s government.
  • Asian Stocks Rise as Oil Halts Slide; Yen Climbs. Oil’s rout showed signs of easing, helping to feed a rebound in Asian equity markets. The yen strengthened while gold rose for a second day. West Texas Intermediate crude halted three days of declines that’s driven oil into a bear market amid concern over stockpiles in America. Australian shares bounced back after the biggest one-day drop since November, while Japanese equities climbed despite the yen’s strength. The kiwi rose after the nation’s central bank maintained its neutral policy stance. Japan’s Topix index rose 0.1 percent, after dropping 0.4 percent on Wednesday. South Korea’s Kospi index added 0.3 percent. Australia’s S&P/ASX 200 Index rose 0.5 percent, after tumbling 1.6 percent on Wednesday to erase its gain for the year. Hong Kong’s Hang Seng was little changed, while the Shanghai Composite Index increased 0.3 percent. MSCI Inc. announced this week that it would include mainland Chinese shares in its benchmark global indexes.
Wall Street Journal:
Zero Hedge:
Night Trading 
  • Asian equity indices are unch. to +.5% on average.
  • Asia Ex-Japan Investment Grade CDS Index 87.0 +2.5 basis points. 
  • Asia Pacific Sovereign CDS Index 18.50 +.5 basis point.
  • Bloomberg Emerging Markets Currency Index 72.37 +.03%.
  • S&P 500 futures -.12%.
  • NASDAQ 100 futures -.09%.
Morning Preview Links

Earnings of Note

  • (ACN)/1.52
  • (APOG)/.60
  • (BKS)/-.23
  • (CCL)/.47
  • (CMC)/.26
  • (BBBY)/.66
  • (SONC)/.41
Economic Releases 
8:30 am EST
  • Initial Jobless Claims for last week are estimated to rise to 240K versus 237K the prior week.
  • Continuing Claims are estimated to fall to 1930K versus 1935K prior.
9:00 am EST
  • The FHFA House Price Index MoM for April is estimated to rise +.5% versus a +.6% gain in March.
10:00 am EST
  • The Leading Index for May is estimated to rise +.3% versus a +.3% gain in April.
11:00 am EST
  • The Kansas City Fed Manufacturing Activity Index for June is estimated to rise to 9.0 versus 8.0 in May.
Upcoming Splits
  • None of note
Other Potential Market Movers
  • The Dodd Frank Stress Test Results, Eurozone Consumer Confidence report, Bloomberg Economic Expectations Index for June, weekly Bloomberg Consumer Comfort Index, weekly EIA natural gas inventory report, JMP Securities Financial Services/Real Estate Conference, (V) investor day and the (KR) general meeting could also impact trading today.
BOTTOM LINE:  Asian indices are modestly higher, boosted by financial and industrial shares in the region. I expect US stocks to open modestly lower and to rally into the afternoon, finishing modestly higher.  The Portfolio is 75% net long heading into the day.

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