Tuesday, January 09, 2018

Wednesday Watch

Evening Headlines
Bloomberg:
  • China’s Factory Inflation Eases to Lowest Since November 2016. China’s factory inflation slid to the lowest level since November 2016 last month amid slowing output and higher year-ago base comparisons. The producer price index rose 4.9 percent in December from a year earlier, versus a projected 4.8 percent rise in a Bloomberg survey and 5.8 percent in November. The consumer price index climbed 1.8 percent, the statistics bureau said Wednesday, compared with a median forecast of 1.9 percent.
  • Asia Stock Rally Fades as Investors Eye Yield Jump. (video) Asia’s stock rally to record highs looked to take a breather on Wednesday as investors consider the impact of a jump in bond yields that spurred the fixed-income veteran Bill Gross to declare a bond bear market. Rising commodity prices, looming U.S. debt sales and prospects for reduced central bank asset purchases support the case for higher bond yields, in a potential test to surging equity valuations. Chinese inflation data Wednesday and U.S. consumer prices Friday offer the latest check on cost pressures in the world’s top two economies. Oil is near its highest since 2014. Japan’s Topix index and Australia’s S&P/ASX 200 Index climbed 0.1 percent. Futures on Hong Kong’s Hang Seng Index added 0.1 percent. The MSCI All-Country World Index is trading near the highest on record, hit Tuesday.
Wall Street Journal:
MarketWatch.com
CNBC:
Business Insider: 
Night Trading 
  • Asian equity indices are -.5% to +.25% on average.
  • Asia Ex-Japan Investment Grade CDS Index 59.75 -1.25 basis points. 
  • Asia Pacific Sovereign CDS Index 9.75 -1.25 basis points.
  • Bloomberg Emerging Markets Currency Index 74.82 +.04%.
  • S&P 500 futures -.07%.
  • NASDAQ 100 futures -.13%.
Morning Preview Links

Earnings of Note
Company/Estimate

  • (LEN)/1.47
  • (SVU)/.51
  • (KBH)/.77
  • (PRGS)/.60
  • (RMAX)/.51
Economic Releases
8:30 am EST
  • The Import Price Index MoM for December is estimated to rise +.4% versus a +.7% gain in November.
  • The Export Price Index MoM for December is estimated to rise +.3% versus a +.5% gain in November.
10:00 am EST
  • Wholesale Sales MoM for November are estimated to rise +.6% versus a +.7% gain in October.
10:30 am EST
  • Bloomberg consensus estimates call for a weekly crude oil inventory decline of -3,441,000 barrels versus a -7,419,000 barrel decline the prior week. Gasoline supplies are estimated to rise by +3,037,500 barrels versus a +4,813,000 barrel gain the prior week. Distillate inventories are estimated to rise by +2,264,100 barrels versus a +8,899,000 barrel gain the prior week. Finally, Refinery Utilization is estimated to fall by -.65% versus a +1.0% gain prior.
Upcoming Splits
  • None of note
Other Potential Market Movers
  • The Fed's Evans speaking, Fed's Kashkari speaking, Fed's Bullard speaking, $20B 10Y T-Note auction, China CPI report, UK Industrial Production report, weekly MBA Mortgage Applications report, CSFB China Tech/Internet Conference and the (DPZ) investor day could also impact trading today.
BOTTOM LINE:  Asian indices are mostly lower, weighed down by technology and financial 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.

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