Tuesday, July 11, 2017

Wednesday Watch

Evening Headlines
  • Asia Stocks to Slip With Attention Back on Yellen. Attention in financial markets reverts to central bank policy after a brief flurry of activity spurred by reports about Donald Trump’s election campaign’s possible involvement with Russia last year. Stocks in Japan look set to open with small declines as the yen nudged higher, with futures on equity gauges in Australia and Hong Kong also retreating after the S&P 500 Index rebounded to end the day flat. Oil surged amid reports of a decline in stockpiles. Treasury 10-year yields lost one basis point to 2.36 percent. Japan’s Topix Index lost 0.3 percent. Australia’s S&P/ASX 200 Index declined 0.5 percent and South Korea’s Kospi Index was little changed. WTI crude climbed 1.4 percent to $45.68 a barrel. Gold was up 0.1 percent at $1,218.38 an ounce.
  • Oil Majors Face Ratings Cuts Amid Weak Recovery, S&P Global SaysExxon Mobil Corp., Chevron Corp. and other oil majors could see their credit ratings slashed again if they fail to cut costs and reduce their growing debt loads in the next year, according to an S&P Global Ratings report. The world’s largest drillers failed to take advantage of high prices during the boom years before 2014 to repay debt, according to the report published on Tuesday. Instead they embarked on costly investments in new projects and dividends, leaving them unprepared for the painful downturn that ensued.
  • Five Things You Need to Know to Start Your Day.
  • Fidelity Dismisses Hundreds of Workers, Axios ReportsMutual-fund giant Fidelity Investments let hundreds of employees go Tuesday, according to a report by website Axios, which didn’t say where it got the information. Adam Banker, a spokesman for the Boston-based firm, responded in an e-mailed statement that the company doesn’t comment about hiring or reductions.
          Wall Street Journal:
              Night Trading 
              • Asian equity indices are -.5% to +.25% on average.
              • Asia Ex-Japan Investment Grade CDS Index 87.25 -.75 basis points. 
              • Asia Pacific Sovereign CDS Index 22.0 -.25 basis point.
              • Bloomberg Emerging Markets Currency Index 72.55 +.09%.
              • S&P 500 futures -.05%.
              • NASDAQ 100 futures -.09%.
              Morning Preview Links

              Earnings of Note

              • (OZRK)/.73
              • (FAST)/.49
              • (MSM)/1.09
              Economic Releases 
              10:30 am EST
              • Bloomberg consensus estimates call for a weekly crude oil inventory decline of -2,305,220 barrels versus a -6,299,000 barrel decline the prior week. Gasoline supplies are estimated to fall by -813,110 barrels versus a -3,669,000 barrel decline the prior week. Distillate inventories are estimated to rise by +720,440 barrels versus a -1,850,000 barrel decline the prior week. Finally, Refinery Utilization is estimated to rise by +.32% versus a +1.1% gain the prior week. 
              2:00 pm EST
              • The Fed's Beige Book report.
              Upcoming Splits
              • None of note
              Other Potential Market Movers
              • The Fed's Yellen testifying to House, Fed's George speaking, WASDE crop report, $20B 10Y T-Note auction, Eurozone industrial production report, UK employment change, weekly MBA mortgage applications report, (GIS) investor day and the (FAST) June sales report could also impact trading today.
              BOTTOM LINE: Asian indices are mostly lower, weighed down by industrial and commodity 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 day.

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