Wednesday, August 14, 2019

Thursday Watch

Evening Headlines
Bloomberg:      
  • Stock Sell-Off Deepens in Asia on Recession Fears. A sell-off in global stocks continued in Asia after U.S. equities tumbled as a closely watched part of the Treasury yield curve inverted Wednesday, raising recession fears. Treasuries steadied. Japan’s Topix index opened about 2% lower, less than the nearly 3% tumble seen in the S&P 500 Index Wednesday. Treasuries stabilized after the 10-year rate slid below the two-year for the first time since 2007. Bonds also climbed in Australia and New Zealand, following gains across Europe, with the U.K. yield curve inverting for the first time since the financial crisis and Bund yields sliding to a fresh record low. Crude oil extended losses. Japan’s Topix index fell 1.9% as of 9:16 a.m. in Tokyo. Futures on the S&P 500 Index added 0.2%. The underlying gauge fell 2.9% Wednesday. Australia’s S&P/ASX 200 Index lost 0.8%.  
Night Trading 
  • Asian equity indices are -2.0% to -1.0% on average.
  • Asia Ex-Japan Investment Grade CDS Index 70.0 +1.75 basis points.
  • China Sovereign CDS 55.25 +5.0 basis points.
  • Bloomberg Emerging Markets Currency Index  65.55 +.02%.
  • FTSE 100 futures -.04%.
  • S&P 500 futures +.25%.
  • NASDAQ 100 futures +.18%.
Morning Preview Links 

Earnings of Note 
Company/Estimate

Before the Open:
  • (BABA)/10.46
  • (BGG)/.45
  • (CSIQ)/.35
  • (JCP)/-.31
  • (TPR)/.61
  • (WMT)/1.22
After the Close:
  • (CRMT)/1.74
  • (AMAT)/.70
  • (DDS)/-.72
  • (NVDA)/1.15
Economic Releases
8:30 am EST
  • Empire Manufacturing for August is estimated fall to 2.0 versus 4.3 in July.
  • Preliminary 2Q Non-Farm Productivity is estimated to rise +1.4% versus a +3.4% gain in 1Q.
  • Preliminary 2Q Unit Labor Costs is estimated to rise +2.0% versus a -1.6% decline in 1Q.
  • Philly Fed Business Outlook for August is estimated to fall to 9.5 versus 21.8 in July.
  • Retail Sales Advance MoM for July is estimated to rise +.3% versus a +.4% gain in June.
  • Retail Sales Ex Autos MoM for July is estimated to rise +.4% versus a +.4% gain in June. 
  • Retail Sales Ex Auto and Gas for July is estimated to rise +.5% versus a +.7% gain in June. 
  • Initial Jobless Claims for last week are estimated to rise to 212K versus 209K the prior week.
  • Continuing Claims are estimated to rise to 1685K versus 1684K prior.
9:15 am EST
  • Industrial Production MoM for July is estimated to rise +.1% versus unch. in June.
  • Manufacturing Production for July is estimated to fall -.3% versus a +.4% gain in June.
  • Capacity Utilization for July is estimated to fall to 77.8% versus 77.9% in June.
10:00 am EST
  • The NAHB Housing Market Index for August is estimated at 65 versus 65 in July.
  • Business Inventories for June is estimated to rise +.1% versus a +.3% gain in May.
4:00 pm EST
  • Total Net TIC Flows for June.
Upcoming Splits
  • None of note
Other Potential Market Movers
  • The Japan Industrial Production report, Australia Employment Change report, weekly EIA natural gas inventory report and the (EAT) analyst meeting could also impact trading today.
BOTTOM LINE: Asian indices are lower, weighed down by financial and technology shares in the region. I expect US stocks to open modestly higher and to weaken into the afternoon, finishing modestly lower. The Portfolio is 50% net long heading into the day.

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