Thursday Watch

Evening Headlines

Bloomberg:

• Trump Slams Erdogan Over Syria Attack, Warns of Clash With U.S. President Donald Trump warned Turkey against expanding its military offensive against U.S.-backed Kurdish fighters in northern Syria, telling President Recep Tayyip Erdogan that such action could lead to direct conflict with U.S. forces, the White House said. Trump urged Turkey “to deescalate, limit its military actions, and avoid civilian casualties and increases to displaced persons and refugees,” the White House said Wednesday in a readout of Trump’s call with Erdogan. “He urged Turkey to exercise caution and to avoid any actions that might risk conflict between Turkish and American forces.”

• China's Soaring Property Prices Fuel Inequality. (video)

• Korean Economy Contracts in 4th Quarter as Car Exports Slow.

• ECB Debates If 270 Billion-Euro QE Pledge Will Finally Be Enough.

• Asia Stocks Point Lower as Davos Talk Roils Dollar. Asian shares are set to open lower Thursday after Trump administration official’s rhetoric on trade and the dollar roiled financial markets, sending the U.S. currency to its lowest level in three years and whipsawing stocks that had been buoyed by strong earnings. The S&P 500 closed flat after swinging between gains and losses. The threat of tit-for-tat tariffs weighed on technology stocks and industrial shares also fell. Futures in Australia and Japan point to declines. The yen pushed through 109 per dollar and Treasuries dropped. Commodities surged, with West Texas Intermediate oil climbing above $65 a barrel for the first time in more than three years. The MSCI Asia Pacific Index increased 0.3 percent as of 6:18 a.m. Tokyo time. ASX 200 futures declined 0.3 percent, the biggest drop in more than a week. Nikkei 225 futures in Osaka fell 0.8 percent to the lowest in more than a week. Futures on the S&P 500 Index rose less than 0.05 percent.

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

• Oil Companies to Reopen Their Checkbooks as Brent Surpasses $70. After more than three years of belt-tightening, a resurgence in crude prices has fueled oil-company optimism, and a readiness to reopen the checkbook. More than two-thirds of 813 senior oil executives expect increased capital spending in 2018, double last year’s percentage, according to a survey by Norwegian consultants DNV GL. About a third say research and development budgets will rise, and the same number predict hiring will expand.

• Sam's Club Further Shakes Up Operations After Closing Stores. Sam’s Club is restructuring its product-purchasing team, marking the second big shake-up for the Wal-Mart Stores Inc. unit this month. A spokeswoman said the warehouse club retailer will consolidate what had been six buying roles into three: merchant, senior merchant and divisional merchandise manager. The reshuffle, effective Feb. 3, will not result in a loss of jobs.

Wall Street Journal:

• A Shortage of Trucks Is Forcing Companies to Cut Shipments or Pay Up. Loads far outnumber vehicles as freight volumes near records; ‘like trying to get a cab at LaGuardia’.

• In California, Where Cancer Warnings Abound, Coffee Is Next in Line. Judge is expected to rule whether 1986 state law, meant to warn of potential harms, applies to coffee.

MarketWatch.com

• Individual stocks are getting a much bigger-than-usual jolt out of earnings.

Fox News:

• More than 20 White House aides have been interviewed for Mueller probe, Trump attorney says. (video)

• DOJ official urges Nunes not to release memo on surveillance abuses. (video)

• Fox News Poll: As Trump ends year one, record number rate economy 'excellent'.

CNBC: 

• Often critical of Trump's rhetoric, CEOs in Davos have to admit they like what they see. (video)

• North Korea sends rare announcement to all Koreans, calling for unification.

• Stocks making the biggest moves after hours: WHR, LRCX & more.

• Airline stocks just took a big hit, but some analysts say the long-term picture is positive. (video)

• United Technologies(UTX) CEO: Tax changes will allow us to bring back 3 times as much overseas money this year.

• Morningstar’s top fund managers share investing ideas for 2018. (video)

Zero Hedge: 

• Trump "Looking Forward" To Speaking With Mueller Under Oath, Will Say "No Collusion".

• "Counter-Memo" Drafted By Desperate Dems To Refute Bombshell FISA Report.

• Judicial Watch Sues DOJ For Text Messages Of FBI's Strzok And Page.

• Mexico's Drug Cartels Steal Billions In Oil, Threaten To Collapse Nation's Refineries.

• Thousands Of FBI Phones Hit By Same "Glitch" Blamed For Lost Strzok-Page Texts.

• US Financial Conditions Easiest Since 2000 (Despite 5 Fed Rate Hikes).

• The Mnuchin Massacre: Precious Metals Surge Amid Dollar's Worst Start In 30 Years. (graph)

Business Insider:

• Chinese scientists just cloned two monkeys, moving one step closer to cloning humans.

NY Post:

• Kroger’s(KRO) answer to Amazon(AMZN) Go? Alibaba(BABA).

Night Trading 

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

• Asia Ex-Japan Investment Grade CDS Index 63.5 +.75 basis point. 

• Asia Pacific Sovereign CDS Index 10.5 unch.

• Bloomberg Emerging Markets Currency Index 76.44 +.09%.

• S&P 500 futures -.05%.

• NASDAQ 100 futures +.02%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (MMM)/2.03

• (ALK)/.83

• (AAL)/.92

• (BIIB)/5.45

• (CAT)/1.78

• (CELG)/1.99

• (CLF)/.18

• (FCAU)/.64

• (FCX)/.50

• (JBLU)/.34

• (LLL)/2.28

• (NOC)/2.73

• (NVR)/48.04

• (OSK)/.56

• (PX)/1.48

• (RTN)/2.04

• (SHW)/3.16

• (LUV)/.77

• (UNP)/1.54

• (ETFC)/.61

• (INTC)/.87

• (ISRG)/2.27

• (KLAC)/1.73

• (MXIM)/.65

• (MSTR)/1.21

• (SBUX)/.57

• (WDC)/3.82

Economic Releases

8:30 am EST

• Initial Jobless Claims for last week are estimated to rise to 235K versus 220K the prior week.

• Continuing Claims are estimated to fall to 1925K versus 1952K prior.

10:00 am EST

• New Home Sales for December are estimated to fall to 675K versus 733K in November.

• The Leading Index for December is estimated to rise +.5% versus a +.4% gain in November.
  

11:00 am EST

• The Kansas City Fed Manufacturing Activity Index for January is estimated at 14.0 versus 14.0 in December.
  

Upcoming Splits

• None of note

Other Potential Market Movers

• The German IFO index, Japan inflation data, $28B 7Y T-Note auction, weekly Bloomberg Consumer Confidence Index and the weekly EIA natural gas inventory report could also impact trading today.

BOTTOM LINE:  Asian indices are mostly lower, weighed down by industrial and real estate 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.