Tuesday Watch

Evening Headlines

Bloomberg:

• How Central Banks Are Using Big Data to Help Shape Policy. Central bankers around the world have set up or are creating departments to embrace big data in the quest for deeper insight into the economies they manage."Isaac Asimov once said, ‘I do not fear computers. I fear the lack of them,’" David Hardoon, chief data officer at the Monetary Authority of Singapore, said in a recent speech."We are now starting to put in place the necessary tools, infrastructure and skillsets to harness the power of data science to unlock insights, sharpen surveillance of risks, enhance regulatory compliance and transform the way we do work."

• Asian Stocks Hold Gains, Bond Yields Head Higher. Japanese shares were little changed, while those in Sydney and Seoul advanced after U.S. gauges climbed to fresh records. The yen gave back gains late in the U.S. session Monday, even as the dollar slid against most of its G-10 peers. South Africa’s rand reached its strongest since March as Cyril Ramaphosa won the ruling African National Congress party’s leadership contest. Ten-year U.S. yields are trading in the upper end of their range over the past seven weeks, and their Australian counterparts also rose Tuesday. Japan’s Topix Index was little changed as of 9:12 a.m. in Tokyo, while the Nikkei 225 Stock Average edged up 0.2 percent. Australia’s S&P/ASX 200 Index was up 0.4 percent. Futures on Hong Kong’s Hang Seng Index rallied 0.5 percent.

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

• The Major Tax Changes in the Republican Bill.

• A Small Fintech Stock Surged 2,600% in a Week After Announcing It’s a Crypto Company. That’s how much the value of LongFin Corp. surged to after the microcap’s stock rocketed by as much as 2,600 percent since debuting Wednesday. Most of the gains came since Friday, when the company issued a press release saying it bough Ziddu.com, “a blockchain-empowered global micro-lending solutions provider” that transacts only in cryptocurrencies.

• Hedge Fund Managers Expect a 39% Bonus Bump.

Wall Street Journal:

• Tax Plan Strikes at Tech Giants’ Foreign Profits. Firms such as Microsoft pay low taxes overseas, but their rates might go up.

• Trump Lays Out World View in Which Economic Strength Bolsters Security. President criticizes predecessors’ nation-building efforts in speech; carrots and sticks for China and Russia.

• Fatalities Reported as Amtrak Train Derails in Washington State. Some of its cars have spilled down onto Interstate 5. (video)

• U.S. Government-Bond Prices Fall on Signs of Progress on Tax-Cut Plan. Investors are selling bonds to buy stocks after lawmakers released fresh details of their tax-cut plan.

• It’s Official: North Korea Is Behind WannaCry. The massive cyberattack cost billions and put lives at risk. Pyongyang will be held accountable.

MarketWatch.com:

• Stock-market volatility isn’t going to come roaring back: Morgan Stanley.

Fox News:

• Jumping the gun? Holder, liberal activists gear up for Mueller firing with elaborate protest plans. (video)

CNBC:

• Tax reform not fully priced in, rally still has ‘a lot of room to run:’ Analyst.

• You'll soon be able to sell your genetic info for a new cryptocurrency called Luna Coin.

• It's official: Spammy phone calls have almost doubled in the past two years, and New Jersey and Delaware got hit worst.

• Big deals from Hershey and Campbell show the stakes are higher for Big Food.

• Global defense spending to reach levels not seen since end of Cold War, says report.

• Bull market could have the S&P up another 11% next year, Federated Investors says. (video)

• US shale oil drillers set to kick off the new year with big production gains. (video)

Zero Hedge:

• "Miss Germany" Mistress Sues Married Hedge-Funder: "Promised An Ostrich Farm, Gave Me An STD".

• Dershowitz: "Mueller Playing Into Trump's Hands, No Need To Fire".

• China's Growth Story... Don't Look For A Happy Ending!

• Overstock Belatedly Launches $250 Million ICO After Unspecified Technical Issues.

• Susan Collins Says She's A 'Yes' On Tax Reform, Assuring Vote Passage.

• Deadly Train Derailment Likely Caused By Object "Placed On The Tracks": AP.

• The 10 "Grey Swans" Events For 2018.

• Taxphoria Sparks Stock-Buying Panic - Dow Does Something It Has Never Ever Done Before. (graph)

Business Insider: 

• Photos show the moment an Amtrak train in Washington derailed and fell onto a highway.

• Senate Democrats: Al Franken could have waited out an ethics investigation if he wanted.

• Trump reportedly believes Mueller will write a letter publicly exonerating him soon.

Night Trading 

• Asian equity indices are -.25% to +.50% on average.

• Asia Ex-Japan Investment Grade CDS Index 69.25 -1.75 basis points. 

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

• Bloomberg Emerging Markets Currency Index 73.59 -.02%.

• S&P 500 futures +.01%.

• NASDAQ 100 futures +.02%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (CCL)/.51

• (DRI)/.70

• (FDS)/1.97

• (NAV)/.63

• (WOR)/.67

• (FDX)/2.88

• (MU)/2.19

• (RHT)/.70

• (SCS)/.23

Economic Releases

8:30 am EST

• Housing starts for November are estimated to fall to 1249K versus 1290K in October.

• Building Permits for November are estimated to fall to 1273K versus 1297K in October.

• The 3Q Current Account Balance is estimated at -$116.0B versus -$123.1B in 2Q.

Upcoming Splits

• None of note

Other Potential Market Movers

• The Fed's Kashkari speaking, German IFO report, weekly US retail sales reports, (AGCO) analyst meeting and the (LOGM) 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.