Thursday Watch

Evening Headlines

Bloomberg:

• Japan’s Trade Recovery Powers Ahead With Strong September Growth. (video) Japanese exports grew by double digits for a third straight month in September, as a trade recovery underway this year showed no signs of letting up.

• Australian Unemployment Unexpectedly Drops on East-Coast Hiring. (video) Australian unemployment unexpectedly dropped in September after a burst of hiring in the two most populous states.

• Profits Buoy Equities as Bonds Drop, Dollar Swings. A solid U.S. earnings season is coinciding with higher chances of the Federal Reserve lifting borrowing costs by the end of this year. More than 80 percent of the 52 members of the S&P 500 Index that have already reported earnings for the most recent quarter beat analysts’ forecasts. Fed funds futures indicate a roughly 80 percent chance that U.S. policy makers will raise rates at their December meeting, up from 72 percent Friday. By then, President Donald Trump may have announced his choice for the next Fed chair, a decision that’s expected in the next two weeks. Japan’s Topix index rose 0.3 percent as of 9:18 a.m. in Tokyo. Australia’s S&P/ASX 200 Index added 0.2 percent as did South Korea’s Kospi index. Contracts on Hong Kong’s Hang Seng Index were 0.3 percent higher.

• Five Things You Need to Know to Start Your Day. (video)

• Iraq Turmoil Threatens Billions in Oil Trader Deals With Kurds. The crisis unfolding around the Iraqi city of Kirkuk has left some of the world’s largest commodity trading houses worried the country’s autonomous Kurdish region will struggle to repay billions of dollars in cash-for-oil loans. The approximately $3.5 billion in debts were going to be met with the roughly 500,000 to 600,000 barrels a day of crude that the northern region of Iraq was pumping, according to people familiar with the information, asking not to be named discussing private information. But output has now collapsed to about half that level after the federal government in Baghdad recaptured some oilfields that the Kurds seized in 2014.

• Alcoa(AA) Sees Aluminum Market Balancing as China Cuts Start to Bite. Alcoa Corp. sees Chinese cuts in aluminum production returning the global market to “relative balance” as the Asian nation’s supply-side reforms begin to bite. The largest U.S. aluminum producer reduced its global surplus forecast for the lightweight metal this year as China appears to be holding to its promise to curb capacity to meet pollution-control targets.

• JPMorgan(JPM) Executive Is Named to Run SEC Trading and Markets Unit. A JPMorgan Chase & Co. executive was picked to run the Securities and Exchange Commission unit that regulates U.S. stock markets and Wall Street brokerages. Brett Redfearn, head of market structure at the New York-based bank, will oversee the SEC’s trading and markets division, according to a statement from the regulator Wednesday. Bloomberg News broke the news earlier. The position has been open since January.

Wall Street Journal:

• For ISIS, Losing Territory Means Losing Revenue. The terror group’s ability to make money from taxes and oil sales is taking a hit with its battlefield defeats.

Fox News:

• Sanders slams Dem rep's criticism of Trump call to Army widow: 'Appalling and disgusting'. (video)

• George Soros transfers $18 billion to his liberal philanthropic foundation.

CNBC:

• Tax reform failure could cost the market anywhere from 4 to 10 percent, strategist says. (video)

• 'Everyone should stand for the national anthem,' NFL Commissioner Goodell says.

• Gilead(GILD) gains 4% after FDA approves lymphoma drug.

• GE(GE) expected to release plan to cut thousands of corporate-level jobs: WSJ.

• American Express(AXP) earnings: $1.50 per share vs $1.48 EPS expected. (video)

• Adobe(ADBE) shares jump more than 5 percent on 2018 profit forecast.

Zero Hedge:

• FBI Informant "Threatened" After Offering Details Linking Clinton Foundation To Russian Bribery Case.

• "Doing Better Each Day" - Missing Vegas Massacre Security Guard Resurfaces... 

• "This Is Very Rare" - Apple Slashes iPhone 8 Supplier Orders By 50% As Demand Dries Up.

• LAPD Gets Approval To Unleash Drone Program As Protesters Take To The Streets.

• FBI Reports 61% Surge In "Felonious" Cop Killings Year Over Year.

• The Scandalous Truth About Obamacare Is Laid Bare.

• Catalan Leader Vows To Declare Independence If Spain Triggers "Nuclear Option".

• Big Blue Blasts Dow To (Another) New Record High As Chinese Yield Curve Inverts. (graph)

Night Trading 

• Asian equity indices are -.25% to +.50% on average.

• Asia Ex-Japan Investment Grade CDS Index 76.25 -1.0 basis point. 

• Asia Pacific Sovereign CDS Index 16.25 unch.

• Bloomberg Emerging Markets Currency Index 73.67 +.01%.

• S&P 500 futures unch.

• NASDAQ 100 futures -.05%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (ADS)/5.04

• (BBT)/.78

• (BX)/.55

• (BK)/.92

• (DHR)/.95

• (DOV)/1.12

• (GPC)/1.28

• (KEY)/.35

• (NUE)/.79

• (NVR)/36.07

• (PM)/1.38

• (POOL)/1.16

• (PPG)/1.53

• (DGX)/1.36

• (SAP)/1.01

• (SNA)/2.42

• (TSM)/3.41

• (TXT)/.62

• (TRV)/.37

• (VZ)/.98

• (ETFC)/.51

• (ISRG)/1.99

• (MXIM)/.56

• (PYPL)/.43

• (WERN)/.32

Economic Releases 
8:30 am EST

• Initial Jobless Claims for last week are estimated to fall to 240K versus 243K the prior week.

• Continuing Claims are estimated to rise to 1890K versus 1889K prior.

• The Philly Fed Business Outlook Index for October is estimated to fall to 22.0 versus 23.8 in September.

10:00 am EST

• The Leading Index for September is estimated to rise +.1% versus a +.4% gain in August.
  

Upcoming Splits

• None of note

Other Potential Market Movers

• The Australia Unemployment report, China GDP/Retail Sales/Industrial Production reports, Bloomberg Economic Expectations Index for October, weekly Bloomberg Consumer Comfort Index and the weekly EIA natural gas inventory report could also impact trading today.

BOTTOM LINE:  Asian indices are mostly 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 day.