Tuesday Watch

Evening Headlines

Bloomberg:

• Australia’s Central Bank Reaffirms Growth Is Set to ‘Increase Gradually’. The Reserve Bank of Australia says economic conditions at home and abroad “had been more positive since 2016,” according to minutes of this month’s policy meeting where interest rates were left unchanged.

• Initial Coin Offerings Rake in Another Billion in Under 2 Months.

• Asian Stocks to Gain as Fed Chair Talk Hits Bonds. Equity benchmarks rose in Tokyo and Sydney. Global stocks began the week supported by Fed chair Janet Yellen saying that she expects to continue raising rates gradually amid solid U.S. growth, even as inflation remains surprisingly low. Treasuries slid as John Taylor, a candidate for Fed chairman who is known for a monetary policy rule that would generally advocate higher interest rates, was said to have impressed President Donald Trump in an interview last week. The pound was steady after breaking a five-day winning streak on speculation that Brexit talks could be headed for a breakdown. Japan’s Topix index added 0.4 percent as of 9:12 a.m. Tokyo time. Australia’s S&P/ASX 200 Index rose 0.5 percent and South Korea’s Kospi index was little changed. Contracts on Hong Kong’s Hang Seng Index were flat.

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

• Rio on Track for Record Iron Ore Exports as China Imports Surge. Rio Tinto Group is on track for record annual shipments of iron ore as the world’s second-largest exporter’s rail capacity increases and imports by China’s steel mills keep surging. The company confirmed shipments from Western Australia will hit about 330 million metric tons in 2017, London-based Rio said Tuesday in its production report that showed quarterly cargoes continued to gain. The total would top the 327.6 million tons exported last year.

Wall Street Journal:

• U.S. Seeks to Stay Neutral in Iraq Conflict. Trump’s declaration comes as Baghdad government forces push into Kirkuk amid conflict with Kurds over disputed territory, threatening to disprupt fight against Islamic State.

• How Google’s(GOOGL) Quantum Computer Could Change the World. The ultra-powerful machine has the potential to disrupt everything from science and medicine to national security—assuming it works.

• Trump and McConnell Declare They Have a Common Agenda. President says they’re both ‘fighting for lower taxes’ and they’re ‘closer than ever’ after months of tension.

MarketWatch.com: 

• These stocks have popped more than 75% since Trump was elected.

Fox News:

• Comey drafted letter on Clinton email investigation before completing interviews, FBI confirms. (video)

• Las Vegas guard Jesus Campos vanished after visiting urgent-care clinic, union leader says. The Mandalay Bay security guard who disappeared last week moments before he was scheduled to break his silence in television interviews has not been seen since he went to a walk-in health clinic, his union president said.

CNBC:

• Netflix(NFLX) adds 5.3 million subscribers during Q3, beating analyst estimates. (video)

• Nobel-winning economist Shiller calls bitcoin a fad. (video)

• Apple(AAPL) explored buying a medical-clinic start-up as part of a bigger push into health care.

• CBS(CBS) earnings to disappoint due to weak NFL ratings, Credit Suisse says.

• US shale oil output will grow by another 81,000 barrels a day in November, Dept of Energy forecasts.

• Trump to interview Yellen about Fed chair appointment this week.

Zero Hedge: 

• Kobe Steel Scandal Goes Nuclear: Company Faked Data For Decades, Had A "Fraud Manual".

• North Korea Drops Propaganda Leaflets On Seoul: "Let's Behead Mad Dog Trump, Death To The Old Lunatic".

• "That Money's Already Been Spent" - Clinton Foundation Won't Return $250,000 Weinstein Donation.

• "He Shivved Me": Angry Hillary Lashes Out At Comey And Assange In Australian TV Interview.

• Catalan Independence Movement Furious After Spain Jails Two Leaders For Possible Sedition.

• Stocks Surge To Moar Record Highs But Taylor Chatter Spooks Bonds, Dollar, & Gold. (graph)

Night Trading 

• Asian equity indices are unch. to +.5% on average.

• Asia Ex-Japan Investment Grade CDS Index 77.25 -.25 basis point. 

• Asia Pacific Sovereign CDS Index 16.0 unch.

• Bloomberg Emerging Markets Currency Index 73.80 -.09%.

• S&P 500 futures -.03%.

• NASDAQ 100 futures -.02%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (CMA)/1.23

• (CSX)/.51

• (GS)/4.16

• (HOG)/.40

• (JNJ)/1.80

• (MS)/.81

• (PGR)/.36

• (UNH)/2.57

• (WWW)/.37

• (CP)/2.86

• (CREE)/.04

• (IBM)/3.28

• (IBKR)/.37

• (LRCX)/3.27

• (SCSS)/.68

Economic Releases 
8:30 am EST

• The Import Price Index MoM for September is estimated to rise +.6% versus a +.6% gain in August.

• The Export Price Index MoM for September is estimated to rise +.5% versus a +.6% gain in August.

9:15 am EST

• Industrial Production MoM for September is estimated to rise +.3% versus a -.9% decline in August.

• Capacity Utilization for September is estimated to rise to 76.2% versus 76.3% in August.

• Manufacturing Production for September is estimated to rise +.2% versus a -.3% decline in August.
  

10:00 am EST

• The NAHB Housing Market Index for October is estimated at 64 versus 64 in September.
  

4:00 pm EST

• Net Long-Term TIC Flows for August.
  

Upcoming Splits

• None of note

Other Potential Market Movers

• The Eurozone CPI report, UK CPI report, weekly US retail sales reports, BIO Investor Forum and the (YUMC) investor day could also impact trading today.

BOTTOM LINE:  Asian indices are mostly higher, boosted by commodity 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.