Tuesday, July 02, 2019

Wednesday Watch

Evening Headlines
  • Asia Stocks Slip; U.S. Yields Hit New 2 1/2-Year Low. Stocks in Asia were mostly lower Wednesday as investors took a breather after four weeks of gains. Ten-year Treasury yields dipped to the lowest since November 2016 following a disappointing run of economic data. Japanese shares slipped with equities in Korea and Hong Kong, while those in Australia edged higher. The yen hit its high for the session after the Bank of Japan made small tweaks to its bond buying program. The rally extended in Treasuries and gold. News on European Central Bank and Federal Reserve leadership appointments underlined the prospect for easier monetary policy, which could offer support for a range of assets. Futures on the S&P 500 Index slid 0.1% as of 10:20 a.m. in Tokyo. The underlying gauge rose 0.3% Tuesday. Japan’s Topix fell 0.8%. Hong Kong’s Hang Seng Index declined 0.3%. Australia’s S&P/ASX 200 Index rose 0.4%. South Korea’s Kospi lost 0.6%.  
Night Trading 
  • Asian equity indices are -.75% to +.25% on average.
  • Asia Ex-Japan Investment Grade CDS Index 62.50 +.5 basis point.
  • China Sovereign CDS 42.25 +.75 basis point.
  • Bloomberg Emerging Markets Currency Index  67.59 -.03%.
  • S&P 500 futures -.13%.
  • NASDAQ 100 futures -.10%.
Morning Preview Links 

Earnings of Note 
Before the Open:
  • (ISCA)/.39
  • (OMN)/.21
After the Close:
  • None of note
Economic Releases
7:30 am EST
  • Challenger Job Cuts YoY for June.
8:15 am EST
  • The ADP Employment Change for June is estimated to rise to 140K versus 27K in May.
8:30 am EST
  • The Trade Balance for May is estimated at -$54.0B versus -$50.8B in April.
  • Initial Jobless Claims for last week are estimated to fall to 223K versus 227K the prior week.
  • Continuing Claims are estimated to fall to 1675K versus 1688K prior.
10:00 am EST
  • Factory Orders for May are estimated to fall -.6% versus a -.8% decline in April.
  • The ISM Non-Manufacturing Index for June is estimated to fall to 56.0 versus 56.9 in May.
10:30 am EST
  • Bloomberg consensus estimates call for a weekly crude oil inventory decline of -2,312,710 barrels versus a -1,278,800 barrel decline the prior week. Gasoline supplies are estimated to fall by -2,703,430 barrels versus a -996,000 barrel decline the prior week. Distillate inventories are estimated to fall by -1,491,290 barrels the prior week. Finally, Refinery Utilization is estimated to fall by -.27% versus a +.3% gain prior.
Upcoming Splits
  • None of note
Other Potential Market Movers
  • The China Services PMI, weekly Bloomberg Consumer Comfort Index, weekly MBA Mortgage Applications report and the (F) conference call could also impact trading today.
BOTTOM LINE: Asian indices are mostly lower, weighed down by industrial and technology shares in the region. I expect US stocks to open mixed and to weaken into the afternoon, finishing modestly lower. The Portfolio is 75% net long heading into the day.

No comments: