Thursday Watch

Evening Headlines

Bloomberg:

• China Factory Gauge Unexpectedly Rises as Global Demand Firms Up. The manufacturing purchasing managers index rose to 51.8 in November, compared with the 51.4 forecast in a Bloomberg survey of economists and 51.6 the previous month. The non-manufacturing PMI climbed to 54.8 from 54.3 in October, the National Bureau of Statistics said on Thursday.

• Australian Banks Face Wide-Ranging Probe Amid String of Scandals. (video)

• Asia Stocks to Open Mixed as Tech Rout Roils U.S. Technology shares in the U.S. tumbled, while the S&P 500 Index ended the day flat, amid signs of a rotation away from the year’s leaders into financial stocks as tax legislation proceeded through the Senate. Futures on equity gauges in Japan were flat, while Hong Kong contracts were down. Australian shares opened lower with banks declining after the government announced an inquiry into the industry. Treasuries dropped after Federal Reserve Chair Janet Yellen called economic growth “increasingly broad based.” Futures on Japan’s Nikkei 225 Stock Average were flat, while contracts on Hong Kong’s Hang Seng Index slid 0.7 percent. Australia’s S&P/ASX 200 Index declined 0.7 percent. The nation’s big four banks were the main drag on the benchmark after Prime Minister Malcolm Turnbull said he would hold a wide-ranging public inquiry into the banks.

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

• OPEC and Russia Ready to Extend Oil-Supply Cuts Until End-2018. OPEC and Russia are ready to extend their oil production cuts until the end of next year to ensure global stockpiles keep falling and prices maintain recent gains. All OPEC members and Russia, the biggest producer outside the group to join the deal, agree the cuts should last until the end of 2018, according to delegates in Vienna to attend Thursday’s meeting. On Wednesday, a committee charged with overseeing the agreement on behalf of the whole group also recommended extending until the end of next year, two delegates said.

• EPA to Reward Iowa by Holding the Biofuel Mandate Steady.

• Marvin Goodfriend Is Nominated to Be a Fed Governor.

• Flattening Curve Aside, Bonds Haven't Been This Calm Since 1979. For all the hullabaloo around the flattening U.S. yield curve in November, the 10-year yield is still on track for its least turbulent month in almost four decades. The note’s yield, which serves as a benchmark for everything from U.S. mortgages to borrowing costs for municipalities, fell in November to as low as 2.3 percent and topped out at 2.41 percent. That’s the narrowest range since 1979. Even with volatility largely suppressed, the rate has swung about 32 basis points on average every month over the past five years. 

• This Is What Could Pop the Bitcoin Bubble.

Wall Street Journal:

• Bitcoin Mania: Even Grandma Wants In on the Action. The digital currency has gone from tech curiosity to mainstream topic, leading its value to jump more than 10-fold in 2017.

• Corporate Tax Rate in Flux as Senate Votes to Open Debate. Deficit hawks want tax triggers in case economic growth is slower than forecast.

• U.S. Economy Reaches Its Potential Output for First Time in Decade. U.S. GDP growth revised up to 3.3% rate for third quarter, with more business investment in equipment and software, and heftier government spending.

MarketWatch.com:

• Automation could impact 375 million jobs by 2030, new study suggests.

Fox News:

• Matt Lauer sexual harassment allegations include exposing himself, gifting a sex toy. (video)

CNBC:

• Nokia prepares offer to buy Juniper(JNPR); shares skyrocket nearly 20%.

• Yellen: $20 trillion national debt 'should keep people awake at night'.

• OPEC meeting becomes 'Russian psycho-drama' but deal still expected.

Zero Hedge:

• Sex Toys, Penis Shots, & Sexting: Details Emerge About Matt Lauer's Sexual Harassment.

• Kellyanne Conway Will Be White House Opioid Czar.

• In Critical Test Of Tax Reform Bill, Senate Narrowly Approves Motion To Start Debate With 52-48 Vote.

• WaPo Reporter Caught On Hidden Camera Being A Bit Too Honest; Admits "No Evidence" Of Trump-Russia Collusion. (video)

• Christmas Crisis: 15,000 American Air Flights Without Pilots Over Holidays Due To "Glitch".

• Turmoil... (graph)

Business Insider:

• The bitcoin exchange Coinbase has been ordered to hand the IRS info on 14,355 of its highest-rolling customers.

• 'We're dragging our heels, protecting our colleagues': Younger Democrats are fed up with slow-moving sexual harassment investigation into Rep. John Conyers.

Night Trading 

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

• Asia Ex-Japan Investment Grade CDS Index 72.75 - basis points. 

• Asia Pacific Sovereign CDS Index 13.75 -. basis point.

• Bloomberg Emerging Markets Currency Index 73.32 -.%.

• S&P 500 futures -.%.

• NASDAQ 100 futures -.%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (BKS)/-.26

• (DCI)/.42

• (KR)/.40

• (MIK)/.43

• (PERY)/.22

• (SHLD)/-4.46

• (TITN)/.08

• (TD)/1.38

• (AMBA)/.67

• (ULTA)/1.66

• (VMW)/1.28

• (ZUMZ)/.48

Economic Releases 

8:30 am EST

• Initial Jobless Claims for last week are estimated to rise to 240K versus 239K the prior week.

• Continuing Claims are estimated to fall to 1890K versus 1904K prior.

• Personal Income for October is estimated to rise +.3% versus a +.4% gain in September.

• Personal Spending for October is estimated to rise +.3% versus a +1.0% gain in September.

• The PCE Core MoM for October is estimated to rise +.2% versus a +.1% gain in September.

9:45 am EST

• The Chicago Purchasing Manager for November is estimated to fall to 63.0 versus 66.2 in October.

Upcoming Splits

• (CGNX) 2-for-1

Other Potential Market Movers

• The Senate vote on tax reform, Fed's Quarles speaking, Fed's Kaplan speaking, OPEC meeting, Japan Jobless Rate/CPI reports, China Manufacturing PMI report, Eurozone Unemployment Rate, French GDP report, weekly EIA natural gas inventory report, (ZUMZ)/(LB)/(BKE) monthly sales reports, Goldman Sachs Automotive Conference, (SKX) investor meeting and the (GM) self-driving future event could also impact trading today.

BOTTOM LINE:  Asian indices are mostly higher, boosted by industrial and financial shares in the region. I expect US stocks to open mixed and to rally into the close, finishing modestly higher.  The Portfolio is 100% net long heading into the day.