Tuesday, September 05, 2017

Wednesday Watch

Evening Headlines
Bloomberg:
  • Florida Hunkers Down Ahead of Hurricane Irma. (video) Businesses are bracing for the worst as Hurricane Irma barrels toward South Florida, packing potentially catastrophic winds. Insurers led the S&P 500 Index lower Tuesday, as forecasters struggled to predict whether the strongest storm to form in the open Atlantic Ocean will slam into the third most-populous U.S. state. A direct hit on Miami could theoretically inflict damages in the $200 billion range, according to Enki Research risk modeler Chuck Watson.
  • Plastic Film Covering 12% of China's Farmland Contaminates Soil. China will expand its agricultural use of environment-damaging plastic film to boost crop production even as authorities try to curb soil pollution, a government scientist said. Some 1.45 million metric tons of polyethylene are spread in razor-thin sheets across 20 million hectares (49 million acres) — an area about half the size of California — of farmland in China. Use of the translucent material may exceed 2 million tons by 2024 and cover 22 million hectares, according to Yan Changrong, a researcher with the Chinese Academy of Agricultural Sciences in Beijing.
  • Asian Stocks Set to Fall as Korea Tensions Persist. Equity-index futures signaled declines from Tokyo to Sydney, and S&P 500 Index contracts retreated in early Asian trading. The cash measures snapped a six-day rally and the Dow Jones Industrial Average fell 234 points Tuesday, while 10-year Treasuries climbed amid reports North Korea is planning a ballistic missile launch. Also in the mix: Hurricane Irma is barreling toward another U.S. economic hub. The greenback dropped amid dovish comments from Federal Reserve Governor Lael Brainard. Futures on the Nikkei 225 Stock Average fell 0.1 percent as of 7:12 a.m. Tokyo time, while they dropped 0.3 percent on the Kospi index in South Korea and 0.5 percent on Australia’s main gauge
Wall Street Journal:
CNBC:
Zero Hedge:
Night Trading 
  • Asian equity indices are -.5% to unch. on average.
  • Asia Ex-Japan Investment Grade CDS Index 77.50 +1.5 basis points. 
  • Asia Pacific Sovereign CDS Index 19.0 +.5 basis point.
  • Bloomberg Emerging Markets Currency Index 74.70 +.02%.
  • S&P 500 futures -.07%.
  • NASDAQ 100 futures -.03%.
Morning Preview Links

Earnings of Note
Company/Estimate

  • (FRED)/-.17
  • (GIII)/-.26
  • (HDS)/.64
  • (JKS)/.67
  • (NAV)/.27
  • (ABM)/.54
  • (KFY)/.53
  • (NX)/.32
  • (RH)/.47
Economic Releases 
8:30 am EST
  • The Trade Balance for July is estimated to widen -$44.7B versus -$43.6B .
10:00 am EST
  • ISM Non-Manufacturing for August is estimated to rise to 55.5 versus 53.9 in July.
2:00 pm EST
  • Fed Beige Book release.
Upcoming Splits
  • None of note
Other Potential Market Movers
  • The Eurozone Factory Orders report, weekly MBA mortgage applications report, Cowen Transport Conference, Baird Healthcare Conference, Keefe Bruyette Insurance conference, Citi Tech Conference, Goldman Retail Conference, Citi Biotech Conference, UBS Chemical/Paper/Packaging Conference and the Wells Fargo Healthcare Conference could also impact trading today.
BOTTOM LINE:  Asian indices are mostly lower, weighed down 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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