Sunday, July 09, 2017

Monday Watch

Today's Headlines
  • Trump Says He Wants to Work ‘Constructively’ With Russia. Home from the Group of 20 meeting in Germany, President Donald Trump tweeted that he’d discussed creating a cyber security unit with Russian President Vladimir Putin -- drawing howls of criticism from fellow Republicans as well as Democrats. “It’s not the dumbest idea I’ve ever heard, but it’s pretty close.” Republican Senator Lindsey Graham of South Carolina said on NBC’s “Meet the Press” in response. At the same time Trump was signaling a desire to move beyond Russian hacking in the 2016 presidential election, Secretary of State Rex Tillerson said at a briefing in Kiev that sanctions on Russia will remain in place until Moscow meets its commitments on Ukraine under the Minsk agreement.
  • Trump Says He and Putin Discussed Creating Cybersecurity Unit. Home from the Group of 20 meeting, President Donald Trump tweeted that it’s time to begin working constructively with Russia, and that he’d discussed creating a cybersecurity unit with Russian President Vladimir Putin. Trump cited the cease-fire in parts of Syria announced after his meeting with Putin as evidence of success, but his comment about “forming an impenetrable Cyber Security unit’’ with Russia to guard against future election interference raised eyebrows.
  • Tillerson Reassures Ukraine Following Trump-Putin G-20 Talks. U.S. Secretary of State Rex Tillerson visited Ukraine to reaffirm support for the former Soviet republic two days after the first meeting between President Donald Trump and Russian leader Vladimir Putin. Although Trump and Putin held more than two hours of talks at the Group of 20 nations meeting in Hamburg, Germany, on Friday, little was disclosed about their discussions on Ukraine, which has been locked for more than three years in a conflict with its neighbor over the annexation of Crimea and Russian backing for an insurgency.
  • Iraqi Government Declares Mosul Liberated From Islamic State. Iraqi Prime Minister Haider al-Abadi arrived in Mosul to declare it liberated from Islamic State, three years after the city’s abrupt fall to the jihadists alerted the world to the group’s growing strength, territorial ambitions and barbarity. Al-Abadi congratulated the Iraqi people and fighters on a “great victory” after the last pockets under Islamic State control were retaken, according to a tweet from his media office.
  • Weakened May Appeals to Opponents to Help Deliver Brexit Success. U.K. Prime Minister Theresa May will call on opposition lawmakers to help steer Britain out of the European Union as she seeks to reset after her standing was diminished by last month’s disastrous general election.
  • Forget Korea and China Risks, Asia Currencies Edge Peers in Poll. Never mind the tensions with North Korea and China’s deleveraging drive, Asian currencies have emerged victorious in a Bloomberg survey of emerging market watchers. India’s rupee and the Indonesian rupiah -- the region’s two highest-yielding currencies -- took first and third place in the poll, in which 18 investors, traders and strategists were asked to gauge the resilience of currencies when it comes to a suite of risk factors looming in the second half.
  • Cosco Shipping to Acquire Orient Overseas for $6.3 Billion. Cosco Shipping Holdings Ltd. agreed to buy Orient Overseas International Ltd. for $6.3 billion in cash, creating the world’s third-largest container-shipping company as the industry shrinks after years of losses and overcapacity.
  • Stocks Signal Small Gain as Bonds Remain Pressured. Stocks in Asia pointed to small gains as bonds remain under pressure following unexpectedly strong U.S. hiring data that reinforced confidence in global growth. Inflation data coming Monday provides the latest clues on the strength of China’s economy. That follows broad-based American payroll gains that spurred equities higher in the U.S. and extended further losses for Treasuries. Equity-index futures in Japan, Australia and Hong Kong all rose, while Australian bonds will likely add to declines. The yen held near an eight-month low. Most recent trading on Nikkei 225 Stock Average futures added 0.4 percent in Singapore. Australia’s S&P/ASX 200 Index contracts gained 0.2 percent and those on Hong Kong’s Hang Seng Index rose 0.1 percent. WTI crude rose 0.6 percent in early Monday trading following its 2.8 percent slide on Friday.
  • Libya, Nigeria May Be Asked to Cap Oil Output Soon, Kuwait Says. Libya and Nigeria, which have both boosted oil production since they were exempt from global cuts this year, may be asked to cap their crude output soon in an effort to help rebalance the market, Kuwait Oil Minister Issam Almarzooq told Bloomberg.
Wall Street Journal:
Night Trading
  • Asian indices are +.25% to +.5% on average.
  • Asia Ex-Japan Investment Grade CDS Index 89.25 +1.0 basis point.
  • Asia Pacific Sovereign CDS Index 23.0 +.5 basis point.
  • Bloomberg Emerging Markets Currency Index 72.41 +.03%.
  • S&P 500 futures +.11%.
  • NASDAQ 100 futures +.12%.

Earnings of Note
  • (HELE)/1.29
  • (CUDA)/1.8
  • (WDFC)/.91
Economic Releases 
10:00 am EST
  • The Labor Market Conditions Index for June.
3:00 pm EST
  • Consumer Credit for May is estimated to rise to $12.7B versus $8.197B in April.
Upcoming Splits
  • None of note
Other Potential Market Movers
  • The Fed's Williams speaking, China CPI report, Eurozone Trade Balance report and the (AMTD) revenue update could also impact trading today.
BOTTOM LINE: Asian indices are modestly 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 week.

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