Thursday, May 17, 2018

Friday Watch

Evening Headlines
  • China Offered Trump $200 Billion Cut in U.S. Trade Deficit, Official Says. (video) China has offered President Donald Trump a $200 billion reduction in its annual trade surplus with the U.S. by increasing imports of American products and other steps, said a Trump administration official. China made the offer during talks in Washington this week as Chinese Vice Premier Liu He visited to try to resolve a trade dispute, the official said, speaking on condition of anonymity. Liu met with Trump Thursday afternoon at the White House. The official didn’t describe the U.S. response. Trump expressed doubt ahead of his meeting with Liu that China and the U.S. would come to an agreement to avoid a damaging trade war.  
  • Asian Stocks Set for Modest Gains; Yields Climb: Markets Wrap. Asian shares are set for a slightly higher open though still on track for a weekly loss as investors take in the implications of a jump in benchmark U.S. 10-year Treasury yields to their highest level since 2011. The dollar remains near its strongest for the year. News that China has offered President Donald Trump a $200 billion reduction in the bilateral trade gap with the U.S. had little immediate reaction as trading got going in Asia Friday. Futures in Japan, Australia and South Korea all pointed to modest gains. The S&P 500 Index closed little changed after a direction-shifting session, though domestically focused U.S. small caps hit a fresh record. Brent crude rose to a level unseen since 2014 amid mounting signs that global stockpiles are shrinking. Nikkei 225 futures were up 0.2 percent in Singapore. S&P/ASX 200 futures were up 0.2 percent. Futures on the S&P 500 Index were little changed after the underlying gauge closed down 0.1 percent. The MSCI Emerging Markets Index was down 1 percent.  
Night Trading 
  • Asian equity indices are unch. to +.25% on average.
  • Asia Ex-Japan Investment Grade CDS Index 75.75 -.25 basis point
  • Asia Pacific Sovereign CDS Index 13.0 unch.
  • Bloomberg Emerging Markets Currency Index 71.36 +.01%.
  • FTSE 100 futures -.11%.
  • S&P 500 futures +.09%.
  • NASDAQ 100 futures +.09%.
Morning Preview Links

Earnings of Note

Before the Open:
  • (AZN)/.61
  • (CPB)/.60
  • (DE)/3.33
After the Close:
  • None of note
Economic Releases
  • None of note
Upcoming Splits
  • None of note
Other Potential Market Movers
  • The Fed's Mester speaking, Fed's Brainard speaking and the Eurozone Trade Balance report could also impact trading today.
BOTTOM LINE:  Asian indices are slightly higher, boosted by technology and commodity shares in the region. I expect US stocks to open mixed and to weaken into the afternoon, finishing modestly lower.  The Portfolio is 50% net long heading into the day.

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