Evening Headlines
Bloomberg:
- U.S., EU Escalate Russia Sanctions as Putin Holds Firm. The
Obama administration, acting in concert with the European Union,
imposed sanctions on Russian banks, energy companies and defense firms
in the latest attempt to punish the country over Ukraine. The U.S. and
EU, which say Russia is supporting the rebels in Ukraine, sought to
squeeze the country’s $2 trillion economy by limiting access to
financing. Among the companies hit by the U.S. penalties were OAO
Rosneft (ROSN), Russia’s largest oil company, natural gas producer OAO
Novatek (NVTK), OAO Gazprombank, the country’s third-largest lender, and
state economic
development lender Vnesheconombank, the U.S. Treasury Department said
today.
- Israel Agrees to Cease-Fire as Troops Prepare for Invasion. Israel
agreed to a United Nations request for a temporary cease-fire on
humanitarian grounds even as it prepared its troops for a possible
ground invasion. The truce will last five hours starting at 10 a.m. local time today to allow civilians to resupply provisions, the army
said in an e-mailed statement late yesterday. Any attacks
launched at Israel during that time will be met “firmly and
decisively,” it said. Hamas and other factions also agreed to a five-hour truce,
Al-Jazeera reported, without saying how it obtained the
information. Al-Jazeera didn’t identify the other factions.
- China Rallying for All Wrong Reasons to Top-Rated Analyst. The
more China does to boost economic growth, the more bearish David Cui
gets on the nation’s stock market. The Bank of America Corp. (BAC)
strategist, ranked No. 1 by Institutional Investor magazine, says the
state spending and monetary stimulus that drove a 14 percent rally in
the Hang Seng China Enterprises Index (HSCEI) from this year’s low in
March are only making equities less appealing as leverage rises and free
cash flow dwindles. He predicts the gauge will drop to 9,600 by year-end, or 8.4 percent below yesterday’s close. Cui’s
pessimistic outlook for the largest emerging market puts him at odds
with bulls at some of the biggest banks and money-management firms,
including Goldman Sachs Group Inc. and BlackRock Inc. He says policy
makers’ unwillingness to endure the “short-term pain” of slower growth,
needed to cut debt and shift the economy toward a consumption-based
model, will prevent a sustainable rally. “Given that growth is
still being driven by the usual factors, it means the core issue is
getting worse as people are building up debt,” Cui said in a phone
interview on July 14. “The issue is whether this growth is good quality
and sustainable. My belief is that it’s not.”
- China Finds Debt Addiction Hard to Break in Growth Quest. China’s
leaders are having trouble breaking their addiction to debt-fueled
investment. Outstanding credit rose to 206.3 percent of gross domestic
product last quarter from 202.1 percent in January-to-March,
according to data compiled by Bloomberg from government releases the
past two days. Investment in fixed assets, a typical outlet for loans,
accelerated in June for the first time since August. President Xi
Jinping’s government is aiming for about 7.5 percent economic expansion
this year, and a deeper slowdown could complicate structural changes
he’s implementing -- such as bringing more private capital into
state-owned enterprises. The central bank has eased constraints on bank
lending in recent months and ceased referring to a November
projection that China might undergo an unwinding of its debt build-up.
“There are reasons to continue wondering how this is going to end,” said
Louis Kuijs, Royal Bank of Scotland Group Plc’s chief Greater China
economist in Hong Kong, who formerly worked at the World Bank.
- Brazil Holds Key Rate at 11% as Economy Risks Stagflation. Brazil
kept borrowing costs unchanged for the second straight meeting, as
slowing growth gives the central bank no leeway to raise rates with
inflation
running above the upper limit of its target. The bank’s board, led by its President Alexandre Tombini,
today held the benchmark Selic at 11 percent, as forecast by all
57 economists surveyed by Bloomberg. The central bank lifted
borrowing costs by 375 basis points in the year through April
before halting May 28.
- Australia Scraps Carbon Price as Abbott Meets Election Vow. Australia’s Senate voted to scrap
the nation’s price on carbon, fulfilling a key election pledge
by Prime Minister Tony Abbott and leaving the nation without an
approved mechanism to tackle emissions. The repeal bill was passed 39 votes to 32 in the 76-member
upper house today, dismantling a law introduced by the previous
Labor government that initially charged polluters A$23 ($21.50)
per ton of greenhouse gases emitted. Repealing the carbon price may put Australia, which is
hosting the Group of 20 nations summit in November, at
loggerheads with President Barack Obama, who is seeking to form
a worldwide agreement to combat climate change.
- Las Vegas(LVS) Sands Profit Misses Estimates as Macau Slows. Las
Vegas Sands Corp. (LVS), the world’s largest casino operator, reported
second-quarter sales and profit that missed analysts’ forecasts, as
gambling slowed industrywide in Macau, the No. 1 market. Sands, with
leadership in the mass market, contended with an industrywide drop in
betting in Macau, the only part of China where casino gambling is legal.
The action was clipped by lower spending from high-rollers known as VIPs, with industry revenue in June
shrinking 3.7 percent to 27.2 billion patacas ($3.4 billion).
- Asian Stocks Advance for a Fourth Day Led by Materials.
Asian stocks rose for a fourth day, with the regional benchmark index
on course for the longest winning streak in more than a month, as
material and industrial shares led the advance. BHP Billiton Ltd. (BHP),
the world’s largest miner, gained 1.5 percent and Fortescue Metals
Group Ltd. climbed 3.5 percent in Sydney as iron-ore prices held near a
seven-week high. Taiwan Semiconductor Manufacturing Co. (2330) slumped
4.6 percent, leading declines on the regional gauge, after the world’s
largest
contract maker of chips said it will face stiffer competition
next year.
The MSCI Asia Pacific Index gained 0.2 percent to 147.47 as
of 9:33 a.m. in Hong Kong.
- Most Base Metals Drop for Second Day on Rising Supplies. Most industrial metals fell as
copper dropped to a two-week low after Goldman Sachs Group Inc.
forecast commodities will drop over the next five years on
increasing supplies. Copper for delivery in three months on the
London Metal
Exchange retreated as much as 0.4 percent to $7,049 a metric ton, the
lowest price since July 2, and was at $7,057.50 by 10:45 a.m. in Tokyo.
The metal has lost 4.1 percent this year,
the most among the six main metals on the bourse.
- Bubble Fears Setting in as S&P 500 Surge Stirs Angst. Two
years of uninterrupted gains in U.S. stocks are sowing anxiety among
financial professionals, with three in five saying the market is on the
verge of a bubble or already in one, the Bloomberg Global Poll found.
Forty-seven percent of those surveyed said the equity market is close to
unsustainable levels while 14 percent already saw a bubble, according
to a quarterly poll of 562 investors, analysts and traders who are
Bloomberg subscribers. Almost a third of respondents called the market
for lower-rated corporate debt overheated and most said stock swings
will increase within six months, the July 15-16 poll showed.
Wall Street Journal:
- Top Justice Official Tells Banks Lawsuits May Be Coming. The Justice Department official leading the high-stakes talks with the
nation’s largest banks over soured mortgage securities suggested
Wednesday that lawsuits could be coming against institutions that don’t
offer to pay large enough settlements and admit past misconduct.
- China Plays a Big Role as U.S. Treasury Yields Fall.
Record Chinese Purchases of Treasury Bonds, Notes Could Help Explain
Falling Yield on U.S.'s 10-Year Note. Investors wrestling with what is
driving the
surprise U.S. bond rally of 2014 got a clue Wednesday fingering a
familiar suspect: China. The world's
most populous nation boosted its official holdings of Treasury debt
maturing in more than a year by $107.21 billion for the first five
months of 2014, according to U.S. data released Wednesday. That is the
biggest first-five-month increase since record keeping began in 1977 and
surpasses the $81 billion bought by China for all of 2013, according to
Ian Lyngen,
senior government-bond strategist at CRT Capital Group LLC.
MarketWatch.com:
CNBC:
Zero Hedge:
Business Insider:
Reuters:
- Supply constraints hits SanDisk's(SNDK) forecast, shares fall. SanDisk Corp gave a
current-quarter revenue forecast that was below Wall Street's
estimate, warning that it would be unable to the meet the
booming demand for solid-state drives and memory chips, and its
shares fell 9 percent in extended trading. The company also reported second-quarter profit and revenue
that barely beat analysts' expectations, disappointing investors
who have seen the company blow past Wall Street's forecasts for
at least the past eight quarters.
- Yum's(YUM) China rebound dimmed by India, Pizza Hut weakness. Yum Brands Inc on Wednesday said
its KFC business bounced back in China, its No. 1 market, but
its stock fell more than 2 percent in extended-hours trading on
disappointing quarterly results from its India, Taco Bell and
Pizza Hut divisions.
Telegraph:
Evening Recommendations
Night Trading
- Asian equity indices are -.50% to +.25% on average.
- Asia Ex-Japan Investment Grade CDS Index 101.0 -1.0 basis point.
- Asia Pacific Sovereign CDS Index 70.50 -1.0 basis point.
- NASDAQ 100 futures -.20%.
Morning Preview Links
Earnings of Note
Company/Estimate
Economic Releases
8:30 am EST
- Housing Starts for June are estimated to rise to 1020K versus 1001K in May.
- Building Permits for June are estimated to rise to 1035K versus 991K in May.
- Initial Jobless Claims are estimated to rise to 310K versus 304K the prior week.
- Continuing Claims are estimated to fall to 2580K versus 2584K prior.
10:00 am EST
- Philly Fed Business Outlook Index for July is estimated to fall to 16.0 versus 17.8 in June.
Upcoming Splits
Other Potential Market Movers
- The
Fed's Bullard speaking, Eurozone inflation data, (GM) CEO testimony to
Congress, Bloomberg Economic Expectations Index for July, weekly
Bloomberg Consumer Comfort Index and the weekly EIA natural gas
inventory report could impact trading today.
BOTTOM LINE: Asian indices are mostly lower, weighed down by financial 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 50% net long heading into the day.
Broad Equity Market Tone:
- Advance/Decline Line: Lower
- Sector Performance: Mixed
- Market Leading Stocks: Underperforming
Equity Investor Angst:
- Volatility(VIX) 11.19 -6.44%
- Euro/Yen Carry Return Index 143.53 -.35%
- Emerging Markets Currency Volatility(VXY) 5.87 -1.51%
- S&P 500 Implied Correlation 48.52 -4.30%
- ISE Sentiment Index 170.0 +78.95%
- Total Put/Call .83 +1.22%
Credit Investor Angst:
- North American Investment Grade CDS Index 56.88 -1.23%
- European Financial Sector CDS Index 68.68 -5.96%
- Western Europe Sovereign Debt CDS Index 35.77 -1.68%
- Asia Pacific Sovereign Debt CDS Index 70.64 -1.15%
- Emerging Market CDS Index 231.96 -.56%
- China Blended Corporate Spread Index 304.68 +.38%
- 2-Year Swap Spread 18.25 unch.
- TED Spread 21.25 -.5 basis point
- 3-Month EUR/USD Cross-Currency Basis Swap -10.75 unch.
Economic Gauges:
- 3-Month T-Bill Yield .02% unch.
- Yield Curve 205.0 -2.0 basis point
- China Import Iron Ore Spot $98.0/Metric Tonne unch.
- Citi US Economic Surprise Index -13.0 +2.7 points
- Citi Emerging Markets Economic Surprise Index -1.60 +2.2 points
- 10-Year TIPS Spread 2.22 -2.0 basis points
Overseas Futures:
- Nikkei Futures: Indicating +86 open in Japan
- DAX Futures: Indicating +3 open in Germany
Portfolio:
- Slightly Higher: On gains in my tech medical sector longs
- Disclosed Trades: Added to my (IWM)/(QQQ) hedges
- Market Exposure: Moved to 50% Net Long
Bloomberg:
- EU Said to Expand Russia Sanctions After Putin Holds Firm. European Union governments are set to impose their broadest
sanctions yet against Russia, punishing President Vladimir Putin for
flouting an ultimatum to end the rebellion in Ukraine, a draft document
showed. EU leaders meeting in Brussels later today may agree to
penalize Russian companies, halt lending for investment projects in
Russia, stop bilateral cooperation programs and further clamp down on
commerce with Crimea, according to the draft statement obtained by
Bloomberg News. Calls on Russia to stop meddling in Ukraine and
supporting separatist rebels “have not been fully met,” EU leaders said
in the draft. The 28-nation bloc “condemns the continuation of illegal
activities by armed militants in eastern Ukraine” and will “proceed with
the expansion of restrictive measures.”
- Israel Renews Gaza Bombing After Hamas Rejects Truce Plan. Israel renewed its air raids on the Gaza Strip after a Palestinian
rocket bombardment left an Egyptian truce proposal the Israelis accepted
in tatters. Hamas, the militant movement that controls Gaza,
said it wasn’t consulted on the Egyptian plan, and its military wing
rejected it. Within six hours, the cease-fire efforts crumbled after
Gaza militants barraged Israel with 50 rockets, according to the Israeli
army’s count. The Palestinian death toll climbed above 200 in the
fighting that followed, while an Israeli man became his country’s first
fatality from fire since Israel ratcheted up its campaign against Gaza
rocket squads last week.
- European Stocks Advance as Portuguese Lenders Lead Rally.
European stocks advanced the most since April as Portuguese banks led a
rally by euro-zone lenders and a report showed China’s economy expanded
at a better-than-expected pace. Banco Espirito Santo SA jumped the most
in at least 21 years after a Portuguese newspaper said the lender may
raise 2 billion euros ($2.7 billion) from new shareholders to strengthen
its capital ratios. Rio Tinto Group added 2.8 percent as the mining
company said quarterly iron-ore production climbed 11 percent. Gtech SpA
gained 4.1 percent after agreeing to buy International Game Technology
for $4.7 billion. The Stoxx Europe 600 Index rose 1.3 percent to 342.97 at the close in London.
- Yellen Says Fed Won’t Rule Out Broker Support in Banking Crisis. Federal Reserve Chair Janet Yellen
said she wouldn’t rule out expanding access to the central
bank’s discount window to broker-dealers and other non-banks
under certain circumstances during a financial crisis. “It depends what the circumstances are,” Yellen said
today in response to questions from the House Financial Services
Committee during her semi-annual testimony. “A broad- based
scheme in a situation of systemic risk is a possibility but it
is something that would have to be very serious to consider.”
CNBC:
ZeroHedge:
Business Insider:
Style Underperformer:
Sector Underperformers:
- 1) Biotech -1.08% 2) Banks -.61% 3) Restaurants -.60%
Stocks Falling on Unusual Volume:
- ININ, FOX, IMAX, FOXA, LCI, HSY, TSM, COV, YHOO, ALB, BBRY, SHPG, LGND, RDN, PNC, MRTN, ROST, ASML, FL, LJPC, MDT, ADMS, TJX, CAB, AKRX, AXDX and YHOO
Stocks With Unusual Put Option Activity:
- 1) YUM 2) SNDK 3) BHI 4) CSX 5) M
Stocks With Most Negative News Mentions:
- 1) MILL 2) ROST 3) POT 4) NSM 5) BGC
Charts:
Style Outperformer:
Sector Outperformers:
- 1) Gold & Silver +1.90% 2) Steel +1.39% 3) Computer Services +1.36%
Stocks Rising on Unusual Volume:
- IGT, TWX, JOY, TSEM, MLNX, HCA, INTC, VIAB, DISCA, UHS, CYH, THC, AIR, CLF, KEYW, CSH, PRAA and IMGN
Stocks With Unusual Call Option Activity:
- 1) PFE 2) HCA 3) FTNT 4) TWX 5) CHRW
Stocks With Most Positive News Mentions:
- 1) INTC 2) HCA 3) IBM 4) CVX 5) KORS
Charts:
Evening Headlines
Bloomberg:
- Saudis on Alert at Iraq Border for Conflict Spillover. Saudi
Arabia is deploying men and high-tech machinery to boost vigilance
along its 800 kilometer (500-mile) northern border with Iraq, where it
faces security threats from both sides in a deepening sectarian conflict. The National Guard and the Ministry of Defense sent an extra 1,000 men each, while border patrols have been increased
and helicopters deployed to the area, General Faleh al-Subaie,
commander of the Saudi Border Guard in the north, said in the
city of Arar. That’s the command post for the Arar crossing
station, about 60 kilometers away, where fences and 7 meter-high
sand berms separate OPEC’s two largest oil producers.
- Iran Nuclear Deal Falters as Contingency Plans Considered. The top diplomats from the U.S. and
Iran said progress in nuclear negotiations may not be enough to
meet a July 20 deadline for clinching a long-term accord. U.S. Secretary of State John Kerry flew back to Washington
after failing to reach a breakthrough with his Iranian
counterpart, Mohammad Javad Zarif. Iran’s foreign minister is
staying on in Vienna in an attempt to bridge the gaps to an
agreement over the next five days.
- EU Leaders Weigh Sanctions Against Russia Over Ukraine. European Union leaders meeting in
Brussels will consider expanded sanctions against Russia over
the Ukraine conflict, as the U.S. urges the bloc to take a tougher stand against Moscow.
German Chancellor Angela Merkel said the question of possibly stronger
penalties against Russia is on the agenda for an EU summit today. “We
haven’t spoken with every member state,” she told
reporters after a meeting in the Croatian city of Dubrovnik
yesterday, adding that she didn’t want to ‘‘pre-empt the
results.’’
- Shadow-Banking Curb Fuels Loan-Backed Debt Spree: China Credit. Chinese banks’ sales of bonds backed
by loans have surged 22-fold this year as the government seeks
to curb shadow banking, while still allowing lenders to make room on their balance sheets for new financing. Banks have issued 78.7 billion yuan ($12.7 billion) of such securities, compared with 3.6 billionyuan in the same period
last year and 15.8 billion yuan for all of 2013, Bloomberg-compiled data show. Such transactions must get approval from
regulators and are more transparent than wealth-management
products and trusts, which have been used by banks to bypass
capital controls.
- BRICS Agree on $50 Billion Bank With Something for Everyone. Leaders
of the five BRICS nations agreed on the structure of a $50 billion
development bank by granting China its headquarters and India its first
rotating presidency. Brazil, Russia and South Africa were also granted posts or units in the new bank.
- Asian Stocks Swing From Gain to Loss.
Asian stocks swung between gains and losses after the Federal Reserve
said some sectors of the U.S. equity market have excessive valuations
and banks reported better-than-estimated earnings. Iluka Resources Ltd.
led materials shares higher, climbing 2.3 percent in Sydney, after the
world’s biggest zircon producer reported production of the mineral
topped estimates. Rio Tinto Group gained 1.3 percent after iron-ore
output surged in the second quarter. Yahoo Japan Corp. slipped 1.8
percent in Tokyo, leading a retreat among technology shares. The MSCI Asia Pacific Index was little changed at 147.08 as of 9:20 a.m. in Tokyo, before markets open in Hong Kong and China.
- Goldman(GS) Sees Lower Commodity Prices Over Five Years on Supplies. Commodities
from iron ore to copper and Brent crude are expected to drop over the
next five years as global supplies increase, according to Goldman Sachs
Group Inc. There will be substantial declines in some metals, energy
and bulk commodities, analysts including Chief Currency Strategist
Robin Brooks wrote in a report. The period of
continued year-on-year price rises for most commodities is over,
they said in the report, which was dated yesterday.
- Rio Says Iron Ore Output Rose 11% on Australia Expansion. Rio
Tinto Group (RIO), the world’s second-largest mining company, said
second-quarter iron-ore production increased 11 percent after expanding
operations in the remote Pilbara region of Western Australia. Output was 57.5 million metric tons in the three months to June 30, from 51.8 million tons a year earlier, London-based Rio
said today in a statement. That’s in line with the 57.7 million-ton median estimate of seven analysts surveyed by Bloomberg. The
company raised its full-year copper guidance.
- Yellen Sees Risk of Bubbles in Leveraged Loan Market. Federal
Reserve Chair Janet Yellen warned she sees signs of asset price bubbles
forming in some markets such as those for leveraged loans and
lower-rated corporate debt, while indicating stocks aren’t overvalued. “We’re seeing a deterioration in lending standards, and we
are attentive to risks that can develop in this environment” of
low interest rates, Yellen said today in semi-annual testimony
to the Senate Banking Committee.
Wall Street Journal:
- Israel Warns Gazans of New Attack After Hamas Rejects Truce. First Israeli Killed by a Rocket From Gaza. Israel threatened to broaden its offensive
against Hamas after the Islamists rejected a truce, and the army warned
tens of thousands of Palestinians in northern Gaza to clear out by
Wednesday morning. Despite the continued
fighting, the White House called a cease-fire proposed by Egypt on
Monday a "live option" and urged Hamas to accept the terms and stop
firing rockets from Gaza into Israel.
- Russia, Ukraine Beef Up Accusations. War of Words Spark Speculation About Military Escalation. Russia and Ukraine moved on Tuesday to bolster accusations against
each other of cross-border attacks, stepping up a war of disputed facts
that has accompanied the bloody separatist conflict in Ukraine's east. Russia's
Ministry of Defense brought 11 foreign military attachés, including one
from the U.S., to a neighborhood on the Russian side of the border
where Moscow accused Kiev's forces of shelling a residential house on...
- Fed's Yellen Hedges Her View on Rates. Easy-Money Policies Appropriate, but Sooner Hike Than Expected Is Possible if Job Market Quickly Improves. Federal Reserve Chairwoman Janet Yellen defended keeping interest
rates low before Congress on Tuesday, but opened the door a crack to
earlier-than-planned rate hikes if the labor market continues its
surprising improvement. "If the labor market continues to improve
more quickly than anticipated by the [Fed]," she told the Senate
Banking Committee, "then increases in the federal-funds rate target
likely would occur...
- Obama Administration Urges Immediate Action on 'Inversions'. Jacob Lew Says Lawmakers Should Enact Legislation to Shut Down 'Abuse'. The Obama administration joined the growing debate over U.S.
companies reincorporating overseas for tax purposes, urging lawmakers to
pass legislation to limit the moves. In a letter to leaders of
the congressional tax-writing committees, Treasury Secretary Jacob Lew
said lawmakers "should enact legislation immediately…to shut down this
abuse of our tax system." The letter was reviewed by The Wall Street
Journal on Tuesday...
Fox News:
CNBC:
- Intel(INTC) earnings beat estimates, shares jump. Intel shares rallied after the firm reported quarterly earnings and
revenue that beat analysts' expectations on Tuesday, citing
stronger-than-expected demand for corporate PCs.
After the earnings announcement, the company's shares rose more than 4 percent in extended-hours trading.
- Yahoo(YHOO) sales guidance misses estimates, shares wobble.
Yahoo posted quarterly earnings and revenue that missed Wall Street
expectations Tuesday and also handed in current-quarter sales guidance
that fell short of estimates. But shares still poked higher in
extended-hours trading after the firm said it won't have to sell as much
of its Alibaba stake. Yahoo shares fell nearly 2 percent in extended hours trading.
Zero Hedge:
Business Insider:
Reuters:
- Chinese property developers at risk as trust funds dry up. China's shadow banking firms
slashed lending to property developers in the first half of this
year, closing off a crucial funding avenue just as the housing
market cools, potentially spelling trouble for the sector and
the broader economy.
Trust companies, which pool money from rich people and
companies to make high-interest loans and are part of the
China's vast and opaque shadow banking system, were a ready
source of cash during the housing boom, particularly for smaller
developers that had trouble borrowing from banks.
- Hershey(HSY) increases prices as costs rise. Hershey Co, the No. 1 candy
producer in the United States, said it would increase prices of
its instant consumable, multi-pack, packaged candy and grocery
lines by 8 percent to tackle rising commodity costs.
- Italy's GTECH to buy gaming company IGT for $6.4 bln including debt.
Italy's GTECH SpA will buy International Game Technology in a
cash-and-stock deal valued at $6.4 billion, including net debt, the
companies said on Wednesday. GTECH will pay $4.7 billion in cash and
stock and the
assumption of $1.7 billion in net debt, the companies said in a
statement.
Telegraph:
- Global equity melt-up in full swing even if investors hate themselves. (graph) So in a sense, the equity rally is a function of the collective acts
of monetary authorities pushing investors into stocks. This of course is
why the BIS is in despair. “Overall, it is hard to avoid the sense of a
puzzling disconnect between the markets’ buoyancy and underlying
economic developments globally,” it said. Just wait until the Fed tightens in earnest.
Yonhap News:
Shanghai Securities News:
- China's Economy Risks Entering Deflation. China's economy risks
entering deflation and liquidity trap and should have relatively loose
monetary policy, Fan Jianjun, a researcher at the Development Research
Center under the State Council, writes.
China Securities Journal:
- China Unlikely to Cut Interest Rates This Year. Possibility isn't
big that China will have interest rate cut this year, citing Lian Ping,
chief economnist of Bank of Communications. China will be relatively
prudent on interest rate adjustment, Lian said.
Evening Recommendations
Night Trading
- Asian equity indices are -.25% to +.25% on average.
- Asia Ex-Japan Investment Grade CDS Index 102.0 unch.
- Asia Pacific Sovereign CDS Index 71.50 +.5 basis point.
- NASDAQ 100 futures +.04%.
Morning Preview Links
Earnings of Note
Company/Estimate
Economic Releases
8:30 am EST
- PPI Final Demand for June is estimated to rise +.2% versus a -.2% decline in May.
- PPI Ex Food and Energy for June is estimated to rise +.2% versus a -.1% decline in May.
9:00 am EST
- Net Long-Term TIC Flows for May are estimated at $25.0B versus -$24.2B in April.
9:15 am EST
- Industrial Production for June is estimated to rise +.3% versus a +.6% gain in May.
- Capacity Utilization for June is estimated to rise to 79.3% versus 79.1% in May.
- Manufacturing Production for June is estimated to rise +.3% versus a +.6% gain in May.
10:00 am EST
- The NAHB Housing Market Index for July is estimated to rise to 50.0 versus 49.0 in June.
10:30 am EST
- Bloomberg
consensus estimates call for a weekly crude oil inventory decline of
-2,100,000 barrels versus a -2,370,000 barrel decline the prior week.
Gasoline supplies are estimated to rise by +610,000 barrels versus a
579,000 barrel gain the prior week. Distillate inventories are estimated
to rise by +1,600,000 barrels versus a +227,000 barrel gain the prior
week. Finally, Refinery Utilization is estimated to rise by +.14% versus
a +.2% gain the prior week.
2:00 pm EST
- Fed's Beige Book release.
Upcoming Splits
Other Potential Market Movers
- The
Fed's Fisher speaking, Fed's Williams speaking, Bank of Canada rate
decision and the weekly MBA mortgage applications report could impact
trading today.
BOTTOM LINE: Asian indices are mostly higher, boosted by consumer and industrial shares in the region. I expect US stocks to open mixed and to rally into the afternoon, finishing modestly higher. The Portfolio is 75% net long heading into the day.
