Wednesday, October 10, 2018

Thursday Watch

Evening Headlines
  • Rout Extends to Asia After U.S. Stocks Plunge. Stocks in Asia tumbled after a rout in U.S. equities that deepened late in the day amid concerns the trade war is heating up as financial conditions tighten, dampening the outlook for profits. The yen advanced and Treasuries held gains. Japan’s Topix index plunged more than 3 percent, set for the biggest drop since March, with Hong Kong stocks also seen lower. Shares in Australia and South Korea slid. The S&P 500 Index fell the most since February and the Nasdaq 100 Index tumbled more than 4 percent for its worst day in seven years as equity volatility spiked. Industrial and construction supplies distributor Fastenal Co. added to angst that the trade conflict with China is raising materials costs that will crimp profit margins, while French luxury goods maker LVMH confirmed China is enforcing customs rules more strictly. The dollar dropped as 10-year Treasury yields traded at 3.16 percent. Japan’s Topix index tumbled 3.3 percent as of 9:09 a.m. in Tokyo. Contracts on the FTSE China A50 lost 2.7 percent. Futures on Hong Kong’s Hang Seng slid 1.4 percent. South Korea’s Kospi index plunged 2.3 percent. Australia’s S&P/ASX 200 Index declined 1.8 percent. S&P 500 futures dropped 0.1 percent.  
Wall St. Journal:   
Night Trading 
  • Asian equity indices are -3.25% to -2.0% on average.
  • Asia Ex-Japan Investment Grade CDS Index 86.75 +2.0 basis points. 
  • Asia Pacific Sovereign CDS Index 10.0 unch.
  • Bloomberg Emerging Markets Currency Index 66.07 -.06%.
  • FTSE 100 futures -1.07%.
  • S&P 500 futures -.22%.
  • NASDAQ 100 futures -.33%.
Morning Preview Links

Earnings of Note

Before the Open:
  • (CBSH)/.96
  • (DAL)/1.75
  • (WBA)/1.45
After the Close:
  • None of note
Economic Releases
8:30 am EST
  • The CPI MoM for Sept. is estimated to rise +.2% versus a +.2% gain in August.
  • The CPI Ex Food and Energy MoM for Sept. is estimated to rise +.2% versus a +.1% gain in August.
  • Real Avg. Weekly Earnings YoY for Sept.
  • Initial Jobless Claims for last week are estimated at 207K versus 207K the prior week. 
  • Continuing Claims are estimated to rise to 1660K versus 1650K prior.
Upcoming Splits
  • (SHOO) 3-for-2
Other Potential Market Movers
  • The Australia Consumer Inflation Expectations report, monthly OPEC Oil Market report, Bloomberg Oct. US Economic Survey, weekly Bloomberg Consumer Comfort Index, weekly EIA natural gas inventory report, the WasDe crop report and the (LB) Sept. sales report could also impact trading today.
BOTTOM LINE:  Asian indices are sharply lower, weighed down by technology and industrial shares in the region. I expect US stocks to open lower and to maintain losses into the afternoon.  The Portfolio is 25% net long heading into the day.

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