Tuesday, October 24, 2017

Wednesday Watch

Evening Headlines
Bloomberg:
  • Stocks in Asia Rise on Earnings. Japan’s stocks opened higher with the Nikkei 225 Stock Average poised to extend gains for a 17th session. Profit at Caterpillar Inc., a bellwether for global growth, reinforced the view that the international economic expansion is the most synchronized since the start of the decade. Alongside solid manufacturing readings from Europe, Japan and the U.S., that pushed 10-year Treasury yields to 2.42 percent and lifted the greenback to the highest level since July. Japan’s Topix index and the Nikkei 225 each climbed 0.4 percent as of 9:13 a.m. in Tokyo. Australia’s S&P/ASX 200 Index rose 0.1 percent as did South Korea’s Kospi index. Hang Seng Index futures gained 0.5 percent.
  • Five Things You Need to Know to Start Your Day.
  • Senate Passes Hurricane Relief Bill Granting Puerto Rico Loans. The Senate sent President Donald Trump a $36.5 billion hurricane relief bill Tuesday that gives Puerto Rico access to $4.9 billion in low-interest Treasury loans, amid concerns that recovery efforts from the recent disasters will require significantly more funding. The measure, passed 82-17, also would replenish the troubled National Flood Insurance Program, which runs out of money as early as this week.
  • Rising Corporate Earnings Have Market Bulls Feeling Vindicated. “You have two very important factors -- better-than-expected earnings from companies like Caterpillar, viewed as a proxy for domestic and global growth, and you have economic data that support growth outlook,” said Bruce Bittles, Robert W. Baird & Co. chief investment strategist. “These factors are pretty good tailwinds to the markets, and they send a clear risk-on message.”
  • Texas Instruments(TXN) Gives Upbeat Forecast on Industrial Demand. Texas Instruments Inc. gave an upbeat forecast and reported earnings that indicated semiconductor orders remain strong from industrial-equipment manufacturers and automakers. Fourth-quarter profit will be $1.01 to $1.15 a share, the Dallas-based company said Tuesday in a statement. Revenue will be $3.57 billion to $3.87 billion. Analysts on average projected net income of $1 a share on sales of $3.67 billion, according to data compiled by Bloomberg.
Wall Street Journal:
CNBC:
Zero Hedge: 
Telegraph:
Night Trading 
  • Asian equity indices are unch. to +.5% on average.
  • Asia Ex-Japan Investment Grade CDS Index 75.0 +.25 basis point. 
  • Asia Pacific Sovereign CDS Index 15.5 -.25 basis point.
  • Bloomberg Emerging Markets Currency Index 73.08 -.02%.
  • S&P 500 futures -.13%.
  • NASDAQ 100 futures -.10%.
Morning Preview Links

Earnings of Note
Company/Estimate

  • (ALK)/2.30
  • (AB)/.52
  • (BAX)/.59
  • (BA)/2.65
  • (KO)/.49
  • (DPS)/1.16
  • (EXP)/1.58
  • (FCX)/.31
  • (GD)/2.43
  • (HES)/-1.29
  • (IR)/1.43
  • (IP)/1.05
  • (LH)/2.39
  • (LEA)/3.74
  • (NSC)/1.64
  • (NOC)/2.92
  • (OC)/1.26
  • (S)/.00
  • (UTHR)/4.57
  • (V)/.85
  • (WYN)/2.02
  • (AFL)/1.63
  • (AMGN)/3.10
  • (ABX)/.16
  • (BGG)/-.34
  • (BWLD)/.79
  • (ETH)/.28
  • (FFIV)/2.20
  • (LSTR)/.97
  • (LVS)/.68
  • (NXPI)/1.69
  • (ORLY)/3.16
  • (RJF)/1.32
  • (TSCO)/.68
  • (VAR)/1.19
  • (XLNX)/.63
Economic Releases 
8:30 am EST
  • Preliminary Durable Goods Orders for September is estimated to rise +1.0% versus a +2.0% gain in August.
  • Preliminary Durables Ex Transports for September is estimated to rise +.5% versus a +.5% gain in August.
  • Cap Goods Orders Non-Defense Ex-Air for September is estimated to fall -.1% versus a +1.1% gain in August.
9:00 am EST
  • The FHFA House Price Index MoM for August is estimated to rise +.4% versus a +.2% gain in September.
10:00 am EST
  • New Home Sales MoM for September is estimated to fall -1.1% versus a -3.4% decline in August.
10:30 am EST
  • Bloomberg consensus estimates call for a weekly crude oil inventory  decline of -2,625,330 barrels versus a -5,731,000 barrel decline the prior week. Gasoline supplies are estimated to rise by +397,440 barrels versus a +908,000 barrel gain the prior week. Distillate inventories are estimated to fall by -179,670 barrels versus a +528,000 barrel gain prior. Finally, Refinery Utilization is estimated to rise by +1.69% versus a -4.7% decline prior.
Upcoming Splits
  • None of note
Other Potential Market Movers
  • The German IFO report, UK GDP report, Australia Consumer Price Index report, $34B 5Y T-Note auction, weekly MBA Mortgage Applications report and the (NKE) investor day could also impact trading today.
BOTTOM LINE:  Asian indices are slightly higher, boosted by industrial and technology shares in the region. I expect US stocks to open modestly lower and to rally into the afternoon, finishing mixed.  The Portfolio is 75% net long heading into the day.

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