Tuesday Watch

Evening Headlines

Bloomberg:

• Asian Stocks Decline After Rally in U.S. Fades. (video) Stocks fell in Tokyo, Sydney and Seoul, while stock-index futures pointed to a weaker open in Hong Kong. Tech stocks on the MSCI Asia Pacific Index paced declines after tech-heavy Nasdaq fell. The S&P 500 Index reversed gains of as much as 0.9 percent as investors assessed a rally that’s propelled stocks to numerous records this year. The dollar pulled back in early Asian trading as optimism about tax reform died down and Treasury yields handed back part of their advance on Monday. The Topix index fell 0.3 percent as of 9:22 a.m. in Tokyo and the Nikkei 225 Stock Average lost 0.5 percent. Australia’s S&P/ASX 200 Index dropped less than 0.1 percent and the Kospi index in Seoul was down 0.4 percent.

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

• Americans’ Nest Eggs Have Never Been Bigger. As U.S. stocks continue hitting new highs, President Donald Trump is encouraging Americans to check out their retirement accounts. “Look at your 401-k’s since Election,” the president tweeted Monday morning. “Highest Stock Market EVER! Jobs are roaring back!” Indeed, equity market gains have pushed average IRA and 401(k) balances to record levels. Unfortunately, there’s nothing to see for about half of American households that have no such retirement-savings vehicles.

• Senate's ‘Unpleasant Surprise’ Hurts Tax Breaks for Tech, Others. (video) One of the last-minute, late-night changes Senate Republicans made to their tax-overhaul plan may mean higher taxes for corporations, including technology firms, than the bill’s drafters intended, experts say. As amended, the Senate tax bill would preserve the existing 20 percent corporate alternative minimum tax, a levy designed to stymie companies’ tax avoidance that applies to fewer than 1 percent of U.S. companies under current law. But under the Senate plan, retaining the AMT could prevent companies from making use of planned tax breaks related to intellectual property, to spending on new equipment and to research and development. The AMT may fall hardest on technology and utilities companies -- though the snag would apply broadly, experts say.

• This CEO Sees Robot Taxis and Delivery Cars Coming in 2018.

Wall Street Journal:

• Companies Push to Repeal AMT After Senate’s Last-Minute Move to Keep It Alive. Business lobbyists say keeping corporate alternative minimum tax would undercut several goals of legislation.

Fox News:

• FBI agent fired from Russia probe oversaw Flynn interviews, softened Comey language on Clinton email actions.

CNBC:

• House Republicans introduce 2-week stop-gap to fund government, children's health insurance program.

• Stocks making the biggest moves after hours: ASNA, AAP & more.

• Death rate among people hospitalized for opioids quadrupled since 2000 — with Medicare patients big driver.

• Tax bill is reshaping this bull market for the better with more stocks than just tech participating.

• In wake of CVS-Aetna tie-up, deal speculation abounds. Here are the players to watch.

Zero Hedge:

• Anti-Trump FBI Agent Changed Language Of Hillary Email Scandal From "Grossly Negligent" To "Extremely Careless".

• Can A 16 Year Old Math Genius And Semi-Naked Women Sell The First Ever ICO Tranche.

• Eating Meat Perpetuates "Hegemonic Masculinity", Professor Says.

• China's Central Bank Warns "Bitcoin Will Die" - Here's How.

• "For The First Time In Modern History" US Government Debt Will Surpass Household Debt.

• In Major Victory For Trump, Supreme Court Lets Travel Ban Take Full Effect.

• Tech Wreck Erases 'Ross Rout' Rebound As Government Shutdown Fears Grow. (graph)

Night Trading 

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

• Asia Ex-Japan Investment Grade CDS Index 73.0 -.25 basis point. 

• Asia Pacific Sovereign CDS Index 14.0 +.25 basis point.

• Bloomberg Emerging Markets Currency Index 73.44 +.06%.

• S&P 500 futures +.10%.

• NASDAQ 100 futures +.08%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (AZO)/9.79

• (BOBE)/.35

• (GIII)/1.54

• (HDS)/.75

• (TOL)/1.20

• (AVAV)/-.09

• (PLAY)/.23

• (OXM)/.12

• (RH)/1.04

Economic Releases

8:30 am EST

• The Trade Balance for October is estimated to widen to -$47.5B versus -$43.5B in September.

10:00 am EST:

• The ISM Non-Manufacturing Composite for November is estimated to fall to 59.0 versus 60.1 in October.
  

Upcoming Splits

• None of note

Other Potential Market Movers

• The Fed's Services PMI report, Eurozone GDP report, China Services PMI report, Australia Retail Sales report, weekly US retail sales reports, Goldman Sachs Financial Services Conference, Barclays Discretionary Conference, Scotiabank Mining Conference, (AVID) investor day and the (FSLR) analyst day could also impact trading today.

BOTTOM LINE:  Asian indices are mostly lower, weighed down by consumer 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.