Monday, February 03, 2020

Tuesday Watch

Evening Headlines
Bloomberg:  
  • China Erases 2% Drop in Minutes; U.S. Futures Rise. China’s stocks recouped a slide of more than 2% minutes after opening trading on Tuesday, helping stoke U.S. futures and lifting equities across Asia. China earlier set the daily yuan fixing at stronger than 7 per dollar, a sign of support, though it continued to trade weaker than that level offshore. Analysts are anticipating a series of measures to support economic growth as the hit to the country mounts. In the latest tally, China said its total death toll from the virus stood at 425 and cases rose to more than 20,000. “We feel like the world is moving under our feet because the probability of containment, looking at statistics daily, is a little bit of a fool’s errand,” Richard Lacaille, chief investment officer at State Street Global Advisors. Topix index rose 0.4% as of 10:39 a.m. in Tokyo. Australia’s S&P/ASX 200 Index rose 0.4%. South Korea’s Kospi index rose 1.4%. Hong Kong’s Hang Seng Index rose 1.1%. Shanghai Composite Index rose 0.6% after dropping as much as 2.2%. S&P 500 futures rose 0.4%.
Night Trading 
  • Asian equity indices are +.25% to +1.25% on average.
  • Asia Ex-Japan Investment Grade CDS Index 56.0 -2.0 basis points.
  • China Sovereign CDS 39.5  -4.0 basis points.
  • Bloomberg Emerging Markets Currency Index  65.35 +.03%.
  • FTSE 100 futures +.15%.
  • S&P 500 futures +.34%.
  • NASDAQ 100 futures +.38%.
Morning Preview Links

Earnings of Note 
Company/Estimate
Before the Open:
  • (ATI)/.32
  • (BP)/.10
  • (CLX)/1.33
  • (COP)/.81
  • (CMI)/2.46
  • (ETN)/1.40
  • (EMR)/.66
  • (LHX)/2.79
  • (MCK)/3.49
  • (PBI)/.12
  • (RL)/2.45
  • (RCL)/1.43
  • (SPG)/2.97
  • (SNE)/144.51
  • (WAT)/3.01
  • (ZBH)/2.27
After the Close:
  • (AFL)/1.01
  • (ALL)/3.21
  • (BOOT)/.75
  • (CERN)/.74
  • (CMG)/2.75
  • (CB)/2.15
  • (TCS)/.05
  • (ETH)/.26
  • (F)/.17
  • (GILD)/1.67
  • (KLAC)/2.58
  • (MCHP)/1.26
  • (OI)/.48
  • (PRU)/2.05
  • (STX)/1.29
  • (SNAP)/.01
  • (DIS)/1.46
  • (YRCW)/-.45
Economic Releases 
10:00 am EST
  • Factory Orders for Dec. is estimated to rise +1.2% versus a -.7% decline in Nov.
  • Factory Orders Ex Transports for Dec. is estimated to rise +.1% versus a +.3% gain in Nov.
Upcoming Splits
  • None of note
Other Potential Market Movers
  • The State of the Union, UK Construction spending report and the weekly US retail sales reports could also impact trading today.
Market Hours
Normal:
  • 9:30 am - 4:00 pm EST
BOTTOM LINE: Asian indices are modestly higher, boosted by technology and consumer shares in the region. I expect US stocks to open modestly higher and to weaken into the afternoon, finishing mixed. The Portfolio is 50% net long heading into the day.

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