Thursday, July 27, 2017

Friday Watch

Evening Headlines
  • China Bond Opening Fails to Inspire Asian Funds Wary of Policy. Investors who were granted a new gateway to China’s $10 trillion bond market this month say accessibility was the least of their worries. Tokyo-based Mitsubishi UFJ Kokusai Asset Management says it’s avoiding Chinese corporate notes now because of uncertainties about the nation’s policy outlook. Japan’s Fukokushinrai Life Insurance Co. is reluctant unless China improves its debt market infrastructure such as credit ratings. Samsung Asset Management in Seoul says it would need to invest in lower-rated Chinese debt to earn sufficient yields when currency hedging costs are considered, but it’s uncomfortable doing so because of a lack of transparency in the market.
  • Asia Stocks Face Mixed Start; Dollar Rebounds. Stocks in Asia looked set for a mixed end to the week as the dollar recovered losses and investors digested a raft of earnings from Inc. to Baidu Inc. The American equity session was dominated by a bout of volatility that sent the Nasdaq 100 Index lower and pushed up the CBOE Volatility Index, though that eased late in the day. The dollar rebounded as data showed U.S. durable-goods orders climbed more than expected, while Treasuries fell. Japan’s Topix index fell 0.2 percent and Australia’s S&P/ASX 200 Index sank 0.9 percent. South Korea’s Kospi index declined 0.6 percent.
Wall Street Journal:
Zero Hedge:
Business Insider:
Night Trading 
  • Asian equity indices are -1.0% to -.25% on average.
  • Asia Ex-Japan Investment Grade CDS Index 81.50 -.5 basis point
  • Asia Pacific Sovereign CDS Index 20.0 -.25 basis point.
  • Bloomberg Emerging Markets Currency Index 73.85 -.04%.
  • S&P 500 futures -.36%.
  • NASDAQ 100 futures -.52%.
Morning Preview Links

Earnings of Note

  • (ABBV)/1.40
  • (AXL)/.83
  • (BHGE)/-.12
  • (B)/.68
  • (CVX)/.87
  • (XOM)/.86
  • (GT)/.73
  • (MRK)/.87 
  • (COL)/1.58
  • (WFT)/-.28
  • (WY)/.27
Economic Releases  
8:30 am EST
  • 2014-16 GDP revisions.
  • 2Q GDP is estimated to rise +2.6% versus a +1.4% gain in 1Q.
  • 2Q Personal Consumption is estimated to rise +2.8% versus a +1.1% gain in 1Q.
  • The 2Q GDP Price Index is estimated to rise +1.3% versus a +1.9% gain in 1Q.
  • The 2Q Core PCE is estimated to rise +.7% versus a +2.0% gain in 1Q.
  • The 2Q Employment Cost Index is estimated to rise +.6% versus a +.8% gain in 1Q.
Upcoming Splits
  • None of note
Other Potential Market Movers
  • The Fed's Kashkari speaking, Canada GDP report and the (CRUS) annual meeting could also impact trading today.
BOTTOM LINE:  Asian indices are mostly lower, weighed down by commodity and technology shares in the region. I expect US stocks to open modestly lower and to maintain losses into the afternoon.  The Portfolio is 50% net long heading into the day.

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