Monday Watch

Today's Headlines

Bloomberg:

• Japan's November Exports Rise 16.2% Year-on-Year, Beating Estimates. Japan’s exports grew for a 12th straight month in November, as external demand fueled the nation’s longest stretch of economic growth since the 1990s. The value of exports rose 16.2 percent from a year earlier (forecast +14.7 percent). Imports increased 17.2 percent (forecast +18 percent). The trade surplus was 113.4 billion yen ($1 billion). The forecast was for a deficit of 40 billion yen.

• EU Banks Told to Get Crisis-Ready by Removing Wind-Down Hurdles. Big euro-area lenders face a choice; clean up the complicated corporate structures that make them difficult to wind down in a crisis, or watch Elke Koenig do it for them. Koenig, head of the Brussels-based Single Resolution Board, said in an interview that streamlining banks’ architecture and ensuring they can fund their own demise without taxpayers’ help will be priorities in the year ahead. “You have banks where you end with something that looks more like a spider web than a clean structure,” Koenig said. The message that those banks will receive is: “Please tidy up,” she said.

• Asia Stocks Set to Open Higher on U.S. Tax Plans. Futures contracts in Japan and Hong Kong advanced, and Australia’s equities opened higher, after the S&P 500 Index, Dow Jones Industrial Average and Nasdaq 100 Stock Index closed at records last week. Mid-week votes in the House and Senate are planned on the legislation that will reduce corporate and individual tax rates. Lawmakers are aiming for the bill to land on President Donald Trump’s desk for a signature before Christmas. Futures on the Nikkei 225 Stock Average were up about 0.7 percent as of 8:09 a.m. Tokyo time. Australia’s S&P/ASX 200 Index rose 0.5 percent in early trading. Contracts on the Hang Seng Index were up 0.5 percent.

• Five Things You Need to Know to Start Your Day.

• ‘Star Wars: The Last Jedi’ Reaps $105 Million in Friday Opening.

Wall Street Journal:

• Delivery Companies Brace for the Pre-Christmas Crush. FedEx(FDX), UPS(UPS) and Postal Service expect record number of packages; a Monday Christmas adds complication.

• Humana(HUM) and Private-Equity Firms in Talks to Buy Kindred Healthcare. TPG and Welsh, Carson would take over long-term care facilities in deal valuing Kindred at $4 billion including debt.

• Prosecutors Treat Opioid Overdoses as Homicides, Snagging Friends, Relatives.

• Congress Faces Crunch Time on Spending, Immigration. Government-funding deadline gives Democrats leverage on so-called Dreamers.

• Deduction Rollback Hurts High-Tax States, But Exodus Isn’t Assured. Taxes look to be just one of many factors in Americans’ decisions about where to live.

• Banks to Funds: Have Some Leverage With That Deal. Funds get financing to lever up risky loans and esoteric investments.

• The Fast and the Financed: China’s Well-Funded Auto Startups Race to Overtake Tesla(TSLA). Shanghai-based NIO’s first production car, the ES8, launched Saturday to rival Tesla’s Model X.

• Chinese IPOs in the U.S. Are Saddling Investors With Big Losses. Ten of the 16 Chinese firms debuting on the New York Stock Exchange or Nasdaq this year are trading below their IPO prices.

• Democrats Against Tax Reform. Unlike the past, the GOP has had no help passing these tax cuts.

Barron's:

• Had bullish commentary on (ETP), (VZ), (T), (RIG), (SUI), (AMCX), (ONCE), (TCO), (SPG) and (EPD). 

Fox News:

• Mnuchin says 'no doubt' Congress will pass tax reform bill this week. (video)

• Gregg Jarrett: Mueller's allegedly lawless acts have corrupted his probe and demand his removal.

CNBC: 

• Second-ranking Senate Republican expects tax bill to pass Tuesday.

• Does Pentagon still have a UFO program? The answer is a bit mysterious.

• Power outage at Atlanta airport grounds flights.

• The Global Sports Financial Exchange trades pro-sports teams like stocks.

Zero Hedge:

• Top FBI And DOJ Officials To Be Subpoenaed: McCabe, Strzok, Page In The Crosshairs.

• Former NBC Staffer Paid Off After Accusing Chris Matthews Of Sexual Harassment: Report.

• Pandemonium: Atlanta Airport Power Outage Grounds Flights, Traps Travelers; Evacuation Underway.

• Bitcoin Futures Open Above $20,000... Then Dump. (graph)

• Putin Called Trump To Thank Him For CIA Tip That Prevented Terrorist Bombings.

• Uh-Oh Canada! (graph)

• President Trump: "I'm Not" Considering Firing Robert Mueller, But It's "Not Looking Good".

• Stunning Visualization Of The Explosion Of ICO Activity In The Last Four Years. (video)

• Goldman Sachs: 2017 In 100 Charts. (graph)

• The Media's Reign Of Error Exposed.

• McCain To Miss Critical Tax Vote, Returning To Arizona After Chemo Treatment.

Business Insider:

• Here's what 12 Wall Street pros are predicting for the stock market in 2018.

• JPMorgan's quant guru says traders are waiting for tax cuts to unleash more stock market gains.

• Bitcoin's illiquidity is going to be a huge problem when the bubble bursts.

Night Trading

• Asian indices are unch. to +.75% on average.

• Asia Ex-Japan Investment Grade CDS Index 70.0 -1.0 basis point.

• Asia Pacific Sovereign CDS Index 13.5 -.25 basis point.

• Bloomberg Emerging Markets Currency Index 73.21 -.01%.

• S&P 500 futures +.15%.

• NASDAQ 100 futures +.24%.

Morning Preview Links

Earnings of Note

Company/Estimate

• (HEI)/.58

Economic Releases   
10:00 am EST

• The NAHB Housing Market Index for December is estimated at 70.0 versus 70.0 in November.
  

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The China November Property Price Report, China CPI report and the Eurozone CPI report could also impact trading today.

BOTTOM LINE: Asian indices are mostly higher, boosted by technology and industrial shares in the region. I expect US stocks to open modestly higher and to maintain gains into the afternoon.  The Portfolio is 100% net long heading into the week.