Tuesday, March 13, 2018

Wednesday Watch

Evening Headlines
Bloomberg:
  • Scandal Threatens to Derail Abe’s Economic Agenda. The Japanese government’s plans for the economy -- an area of stability -- have been thrown into disarray by a cronyism scandal. The controversy stemming from the sale of land to an educational institution with ties to Prime Minister Shinzo Abe threatens to derail March’s crowded policy calendar. Opposition parties are boycotting hearings on the budget for the fiscal year starting April 1, parliament has yet to confirm the Bank of Japan’s new leadership team, and the finance minister’s trip next week to a Group of 20 meeting in Argentina is in doubt.
  • Asia Stocks Drop Amid Trump Team Concerns, Trade. U.S. Treasuries held gains from Tuesday after a report showed U.S. inflation remained contained. Equity indexes in Japan, South Korea and Australia declined after the S&P 500 Index lost 0.6 percent. The sudden firing of U.S. Secretary of State Rex Tillerson took some by surprise less than a week after top economic adviser Gary Cohn resigned from the White House. The dollar was little changed, while West Texas oil was holding above $60. Japan’s Topix index fell 0.4 percent as of 9:56 a.m. in Tokyo. Australia’s S&P/ASX 200 Index declined 0.7 percent. Hang Seng Index futures slipped 0.7 percent. S&P 500 Index futures fell 0.1 percent after the underlying gauge dropped 0.6 percent Tuesday.
Wall Street Journal:
MarketWatch.com:
Night Trading 
  • Asian equity indices are -1.0% to -.25% on average.
  • Asia Ex-Japan Investment Grade CDS Index 65.0 +.5 basis point
  • Asia Pacific Sovereign CDS Index 11.0 unch.
  • Bloomberg Emerging Markets Currency Index 75.45 +.04%.
  • FTSE 100 futures -.27%.
  • S&P 500 futures -.22%.
  • NASDAQ 100 futures -.47%.
Morning Preview Links

Earnings of Note
Company/Estimate

  • (EXPR)/.32
  • (SHLD)/1.16
  • (SIG)/4.20
  • (DDD)/.03
  • (CTRP)/.16
  • (SMTC)/.41
  • (TDW)/-.72
  • (WSM)/1.61
Economic Releases
8:30 am EST
  • Retail Sales Advance MoM for February is estimated to rise +.3% versus a -.3% decline in January. 
  • Retail Sales Ex Autos MoM for February is estimated to rise +.4% versus unch. in January.
  • Retail Sales Ex Autos and Gas for February is estimated to rise +.4% versus a -.2% decline in January.
  • PPI Final Demand MoM for February is estimated to rise +.1% versus a +.4% gain in January.
  • PPI Ex Food and Energy MoM for February is estimated to rise +.2% versus a +.4% gain in January. 
10:00 am EST
  • Business Inventories for January are estimated to rise +.6% versus a +.4% gain in December.
10:30 am EST
  • Bloomberg consensus estimates call for a weekly crude oil inventory gain of +2,231,440 barrels versus a +2,408,000 barrel gain the prior week. Gasoline supplies are estimated to fall by -452,890 barrels versus a -788,000 barrel decline the prior week. Distillate inventories are estimated to fall by -1,558,110 barrels versus a -559,000 barrel decline the prior week. Finally, Refinery Utilization is estimated to fall by -.12% versus a +.2% gain prior.
Upcoming Splits
  • (AFL) 2-for-1
Other Potential Market Movers
  • The China Retail Sales/Industrial Production report, Eurozone Industrial Production/CPI reports and the weekly MBA Mortgage Applications report could also impact trading today.
BOTTOM LINE:  Asian indices are lower, weighed down by technology and industrial shares in the region. I expect US stocks to open modestly lower and to maintain losses into the afternoon.  The Portfolio is 25% net long heading into the day.

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