Friday Watch

Evening Headlines 

Bloomberg:   

• China’s State Sector: Bigger Than Ever. The giant corporations are deemed essential to the party. The poor showing of the SOEs comes as President Xi Jinping is launching his long-awaited state-sector reform. Don’t expect mass shuttering or privatization of China’s more than 100,000 government companies, many of them money losers. Instead, policymakers aim to make “stronger and better” state champions, according to a five-year plan released on Sept. 13 by the State Council and the Communist Party’s Central Committee. 

• Chinese Cyber Spies Fish for Enemies in South China Sea Dispute. In the midst of a weeklong hearing on a South China Sea territorial dispute, the website of the Permanent Court of Arbitration in The Hague went offline. The incident happened in July as the Philippines challenged China’s claim to more than 80 percent of the South China Sea, an assertion that Manila says encroaches on its exclusive economic zone. Based on an analysis of the software and infrastructure used, the site was infected with malware by someone in China, according to ThreatConnect Inc., a U.S. security company. China didn’t take part in the Hague hearing.

• RBA Sees Signs Home Market Slowing, Oversupply in Some Areas. Australia’s over-heated housing market could be starting to slow while rapid home construction in some areas is creating an oversupply, the central bank said in its semiannual assessment of risks to the country’s financial system. “There have been tentative signs of some slowing in the Sydney and Melbourne housing markets,” the Reserve Bank of Australia said Friday in its financial stability review. “While the housing market remains a long way from oversupply nationwide, some geographic areas appear to be reaching that point, particularly the inner-city areas of Melbourne and Brisbane.” 

• Asian Stocks Track U.S. Gains as Tech, Finance Shares Advance. Asian stocks followed U.S. shares higher, with the regional benchmark index heading for a third straight weekly advance, as technology and financial companies led gains. The MSCI Asia Pacific Index added 0.4 percent to 134.53 as of 9:01 a.m. in Tokyo.

• Rio Iron Ore Output Jumps 12% as Ports, Mines Expanded. Rio Tinto Group, the world’s second-largest mining company, reported third-quarter iron ore production rose 12 percent after completing key elements of its infrastructure expansion in Western Australia and boosting mine capacity. Total output expanded to 86.1 million metric tons in the three months to Sept. 30, London-based Rio said Friday in a statement. That compared with 76.8 million tons a year earlier and the 87 million ton median estimate of five analysts surveyed by Bloomberg.

Wall Street Journal:

• Israeli Police Begin to Seal Palestinian Areas in East Jerusalem. Prime Minister Benjamin Netanyahu seeks to restrict movement of potential attackers. The Palestinian neighborhood of Jabel Mukaber in East Jerusalem was surrounded by border police on Thursday, as Israel put into place some of the tightest security measures in years.

• Valeant(VRX) Probe Reprises Federal Focus on Drug Pricing. Drug pricing, a key issue in the federal investigation of Valeant Pharmaceuticals International Inc., has been a frequent focus of federal prosecutions and whistleblower lawsuits in recent years. Pharmaceutical companies have paid more than $3 billion in fines to resolve pricing cases over the past decade, according to Patrick Burns, co-director of Taxpayers Against Fraud, a group that promotes whistleblowing.

• U.S. Pursues Several Paths in Volkswagen Probe. Investigators expand review, evaluating pollution rules, official statements and consumer claims. The U.S. attorney’s office in Detroit and the Justice Department’s Fraud Section joined a sweeping federal probe of Volkswagen AG over emissions-test cheating, according to people familiar with the matter, signaling the government’s intent to cast a broad net and explore numerous paths to a possible criminal case.

• Presidential Candidates Burn Through Cash Quickly, FEC Filings Show. Two Republicans, Sen. Rand Paul and Gov. Chris Christie, are getting low on funds.
  The 2016 presidential candidates in both parties are burning through their cash about 25% faster than in prior elections, despite the expanded role of super PACs that have collectively raised hundreds of millions of dollars to back their campaigns, new disclosures show.

• No Wonder Growth Has Been So Anemic. President Obama thinks more union membership will help the middle class. No, jobs are what’s needed. In his remarks at a White House event last week called the Summit on Worker Voice, President Obama said that people who work hard “should be able to get ahead” but went on to acknowledge that workers are “seeing their wages and their incomes flatlining.” The reason, according to Mr. Obama, is dwindling union membership. “Union membership today is as low as it’s been in about 80 years, since the ’30s,” he said. “And I...

Fox News: 

• Source: FBI probe of Clinton email focused on ‘gross negligence’ provision. (video) Three months after Hillary Clinton’s use of a private email address and server while secretary of state was referred to the FBI, an intelligence source familiar with the investigation tells Fox News that the team is now focused on whether there were violations of an Espionage Act subsection pertaining to "gross negligence" in the safekeeping of national defense information.

Barron's:

• Wynn Resorts(WYNN): Q3 Miss, Stephen Wynn Railed Against Macau On Gaming Tables. Revenue for the third quarter fell 27.3% from a year ago to $996.3 million, 2.9% shy of $1.03 billion expected by the street. Adjusted property earnings before interest, taxes, depreciation and amortization fell 39% year-on-year to $279.9 million, below the street estimate of $305 million.

CNBC:

• Retail wreck is just getting started. How to play it: Trader. (video)

• Hedge funds having worst year since 2011. (video) A miserable September saw hedge funds lose 1.44 percent, thanks to a 2.2 percent decline in equity-based strategies and a 2.5 percent drop in North America strategy, according to numbers Preqin released Thursday.

• Bad news for some Medicare beneficiaries. (video) The year 2016 will send shockwaves to some Medicare beneficiaries — roughly 7 million Americans. They're going to be paying a lot more for their monthly Medicare Part B premium.

Zero Hedge: 

• EM FX Party's Over: Dollar Rallies In Early Asia Trading As China's Bond Bubble Gathers Pace. (graph)

• Sanders And His Followers Are Not Outliers.

• Tomorrow Is OpEx: What Happens Next? (graph)

• The Latest Evidence That Global Trade Has Collapsed: India's Exports/Imports Plunge By 25%. (graph)

• Over 5 Million Non-Existent Jobs: How $1.3 Trillion In Student Debt Broke The "Birth/Death Adjustment" Model.

• BlackRock(BLK) Warns Of "Land Mines"As Benefits Of Lower Yields For Corporate Issuers Fades.

• Russia And Iran Moving To Corner The Mideast Oil Supply.

• Visualizing The Demise Of The Once Mighty Euro.

• Schlumberger(SLB): This Is "The Most Severe Downturn For Decades", "The Recovery Now Appears To Be Delayed". 

• China Says Military Will "Stand Up And Use Force" If US Sends Warships To Islands.

• Dismal Data & FUBAR Fed Spark Stock-Buying-Panic; Banks, Biotechs & Black Gold Bounce. (graph)

Business Insider: 

• STEVE WYNN: 'In my 45 years of experience, I've never seen anything like this before'. "In my 45 years of experience, I've never seen anything like this before," said Wynn Entertainment CEO Steve Wynn. Wynn's "this" is Macau. And what he's seeing is what happens when the Chinese government turns its back on your business.

• The lonely green bar on this chart says it all. (graph)

Reuters:

• Exclusive: Canada railroads cut crude freight rates to lure shipments. Canadian rail companies are slashing rates for shipping crude in their first serious effort to revive an industry rocked by the rout in global oil prices, according to shippers and terminal operators who are seeing discounts of as much as 25 percent. 

• Federal Reserve policymakers downplay divisions on U.S. rate hike. U.S. Federal Reserve policymakers are not as divided as it may appear and are generally operating under the same framework for determining when to raise interest rates, one Fed official said on Thursday, while another said the differences of opinion reflect the countervailing economic data.
  "At the end of the day people are exaggerating" the divisions, Dudley said in response to a question after a panel presentation in Washington on Thursday. "We are all pretty much on the same page."

• Stock, bond funds attract $5.5 bln over weekly period -Lipper. 

• Yum Brands(YUM) cuts 2015 adjusted profit forecast. Yum Brands Inc on Thursday cut its 2015 adjusted profit forecast, saying it expects a strong dollar to further eat into profit. The company said it now expects full-year adjusted profit to be between flat with a year ago and a low-single-digit percentage gain. Earlier this month, the company had said it expected 2015 earnings per share growth to be well below its target of at least 10 percent.

Evening Recommendations 

• None of note

Night Trading

• Asian equity indices are +.25% to +1.0% on average.

• Asia Ex-Japan Investment Grade CDS Index 138.50 -2.5 basis points.

• Asia Pacific Sovereign CDS Index 75.25 -5.75 basis points.

• S&P 500 futures +.05%.

• NASDAQ 100 futures +.10%.

Morning Preview Links

Earnings of Note

Company/Estimate

• (CMA)/.69

• (GE)/.26

• (HON)/1.55

• (KSU)/1.22

• (PGR)/.48

• (STI)/.84

• (GWW)/3.06 

Economic Releases

9:15 am EST

• Industrial Production MoM for September is estimated to fall -.2% versus a -.4% decline in August.

• Capacity Utilization MoM for September is estimated to fall to 77.3% versus 77.6% in August.

• Manufacturing Production for September is estimated to fall -.2% versus a -.5% decline in August.
  

10:00 am EST

• JOLTS Job Openings for August are estimated to fall to 5580 versus 5753 in July. 

• Preliminary Univ. of Mich. Consumer Sentiment for October is estimated to rise to 89.0 versus 87.2 in September.

4:00 pm EST

• Net Long-Term TIC Flows for August.

Upcoming Splits

• None of note

Other Potential Market Movers

• The Eurozone CPI report and (SAFM) investor day could also impact trading today.

BOTTOM LINE: Asian indices are mostly higher, boosted by technology and industrial 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.

Stocks Surging into Final Hour on Central Bank Hopes, Less Emerging Markets Debt Angst, Buyout Speculation, Biotech/Financial Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Higher
  

• Sector Performance: Most Sectors Rising
  

• Volume: Below Average

• Market Leading Stocks: Performing In Line

Equity Investor Angst:

• Volatility(VIX) 16.5 -8.49%

• Euro/Yen Carry Return Index 141.25 -.83%

• Emerging Markets Currency Volatility(VXY) 11.07 -.81%

• S&P 500 Implied Correlation 62.27 -4.26%

• ISE Sentiment Index 52.0 -40.91%

• Total Put/Call 1.05 +9.38%

• NYSE Arms 1.03 +36.35% 

Credit Investor Angst:

• North American Investment Grade CDS Index 82.94 -2.75%

• America Energy Sector High-Yield CDS Index 1,039.0 -.14%

• European Financial Sector CDS Index 79.38 -1.95%

• Western Europe Sovereign Debt CDS Index 21.53 +2.23%

• Asia Pacific Sovereign Debt CDS Index 76.83 -5.21%

• Emerging Market CDS Index 330.20 -3.64%
  

• iBoxx Offshore RMB China Corporates High Yield Index 121.25 +.20%

• 2-Year Swap Spread 11.75 +.25 basis point

• TED Spread 32.5 +.5 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -22.25 -.5 basis point

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 73.60 +.61%
• 3-Month T-Bill Yield .00% +1.0 basis point

• Yield Curve 143.0 unch.

• China Import Iron Ore Spot $53.74/Metric Tonne -2.5%

• Citi US Economic Surprise Index -18.50 +8.2 points

• Citi Eurozone Economic Surprise Index 6.0 unch.

• Citi Emerging Markets Economic Surprise Index -17.10 +.3 point

• 10-Year TIPS Spread 1.51 +1.0 basis point
• # of Months to 1st Fed Rate Hike(Morgan Stanley) 7.57 +1.79

Overseas Futures:

• Nikkei 225 Futures: Indicating +164 open in Japan 
• China A50 Futures: Indicating +148 open in China

• DAX Futures: Indicating +49 open in Germany

Portfolio: 

• Higher: On gains in my retail/biotech/medical/tech sector longs 

• Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges, then added them back

• Market Exposure: 50% Net Long

Bear Radar

Style Underperformer:

• Small-Cap Value +.15%

Sector Underperformers:

• 1) Hospitals -4.51% 2) Computer Hardware -2.12% 3) Disk Drives -1.83%

Stocks Falling on Unusual Volume:

• IMPR, VAC, GRMN, MTW, NUVA, STX, HCA, WMT, LNCE, VRX, DRII, LPNT, CYH, KMG, LNN, THC, JAH, WYN, WDC, KOP, UHS, WGO, DKS, NFLX, EXP, TRIP, LPNT, ATRA, DRII and SRPT

Stocks With Unusual Put Option Activity:

• 1) BV 2) RSX 3) EWC 4) HCA 5) STX
  

Stocks With Most Negative News Mentions:

• 1) GRMN 2) MTW 3) PBR 4) WMT 5) VRX
  

Charts:

• ETFs Falling on Unusual Volume

• Stocks Falling on Unusual Volume

Bull Radar

Style Outperformer:

• Small-Cap Growth +.58%

Sector Outperformers:

• 1) Biotech +2.22% 2) Banks +1.63% 3) Drugs +1.11%
  

Stocks Rising on Unusual Volume:

• FPRX, BOFI, ZFGN, DXCM, RDUS, WBAI, DYAX and TTM

Stocks With Unusual Call Option Activity:

• 1) SLCA 2) CEMP 3) MAT 4) CEMP 5) QRVO
  

Stocks With Most Positive News Mentions:

• 1) DXCM 2) NKE 3) XLNX 4) MU 5) BA
  

Charts:

• ETFs Rising on Unusual Volume 

• Stocks Rising on Unusual Volume

Morning Market Internals

NYSE Composite Index:

• Volume Running -1.0% Below 100-Day Average
• 8 Sectors Rising, 2 Sectors Declining
• 57.4% of Issues Advancing, 39.7% Declining
• 22 New 52-Week Highs, 20 New Lows
• 29.8% of Issues Above 200-day Moving Average
• Average 14-Day RSI 44.0
• Vix 17.5
• Total Put/Call .94
• TRIN/Arms 1.42

Thursday Watch

Evening Headlines 

Bloomberg:   

• Is Xi's Economy More Distorted Than Mao's? Goldman's Ha Says Yes. By one measure, it’s the Greater Leap Forward. China’s economy is more imbalanced than half a century ago when Mao Zedong’s policies led to an economic crash, said Ha Jiming, a China vice chairman at Goldman Sachs Group Inc., at a conference Wednesday in New York. Fixed asset investment last year in the world’s second-biggest economy amounted to an unprecedented 46 percent of gross domestic product. That, according to Ha, is more than in 1958, when Mao initiated the Great Leap Forward movement that among other things urged the Chinese people to melt down utensils, cooking pots and door handles to raise the nation’s steel output. Eventually, it also resulted in a famine that killed millions. “The economy is more distorted and imbalanced than the Great Leap Forward,” said Ha, also the chief investment strategist at Goldman Sachs’s private wealth unit in China, at the event hosted by Caixin Magazine. 

• Insurance Australia Abandons Plan for More Investment in China. Insurance Australia Group Ltd. scrapped plans for further investment in China and will instead seek growth in other Asian markets, in a sign that Australia’s hopes of boosting services exports to the world’s second-largest economy may be difficult to achieve. The insurer took the decision after assessing the possibilities available in China, Chief Executive Officer Mike Wilkins said in a statement. Insurance Australia agreed to buy 20 percent of Tianjin-based Bohai Property Insurance Pty in 2011 for about A$100 million ($73 million). “After completing significant work on assessing the opportunities available, IAG has determined not to pursue further investment in China,” he said.  

• Australian Jobs Unexpectedly Fall in September; Aussie Drops. Australian employers unexpectedly cut jobs in September, signaling record-low interest rates are yet to put the economy on a sustainable footing and offset a slump in mining investment.

• Yen Gain to 100 Seen by Strategist Who Called Two Bond Rallies. Japan’s currency will surge to 100 yen per dollar and benchmark yields will drop to a record by March, according to an analyst who foresaw the bond market’s last two major rallies. Kazuhiko Sano, the chief bond strategist at Tokai Tokyo Securities Co., said 10-year yields will fall past the all-time low of 0.195 percent in the first quarter of 2016 as the Bank of Japan’s unprecedented bond purchases squeeze market supply. Sano, who has been ranked among the top 10 strategists by Nikkei Veritas magazine for at least the past decade, said the BOJ will likely forgo expanding stimulus just as slowing global economic growth forces traders to pare bets on Federal Reserve interest rate increases. 

• Defensive Stocks Not the Safe Bets You Think in Emerging Markets. A word of advice for emerging-market investors looking for refuge as China’s economy sours and U.S. rates are heading up. Don’t just go down the route of defensive stocks, says Joe Gubler, who oversees $2 billion at Causeway Capital Management in Los Angeles. Here’s why: The price-to-earnings ratio of stocks that tend to hold up better in an economic downturn -- such as food and beverage companies as well as health-care providers -- traded at a 91 percent premium to their cyclical peers on the MSCI Emerging Markets Index in September, the biggest gap since 2008. 

• Ringgit Leads Asia Currency Rally as Fed Rate Odds Dip Further. Malaysia’s ringgit led an advance in Asian currencies as odds of a U.S. interest-rate increase this year diminished further, giving a reprieve to emerging-market assets. Asian currencies are rallying in October as futures show just a 33 percent chance of a rate hike by the Federal Reserve, compared with 61 percent at the start of the month. Exchange rates in the region have come under pressure this year as prospects for U.S. monetary tightening fueled concern that demand for local assets would recede.

• Most Asian Stocks Fall as Stronger Yen Weighs on Japanese Shares. Most Asian stocks dropped, tracking declines in U.S. shares, as a stronger yen dragged down Japanese equities. About two shares fell for each that rose on the dollar-denominated MSCI Asia Pacific Index, which added 0.2 percent to 131.73 as of 9:03 a.m. in Tokyo.

• HCA Leads Hospital Stocks Lower on More Uninsured Patients. HCA Holdings Inc. shares dropped in late trading after the biggest U.S. hospital chain reported preliminary third-quarter earnings that missed analysts’ estimates, raising concerns across the industry of an increase in uninsured patients who can’t pay their bills. The company expects to report net income of $1.17 a share for the quarter, Nashville, Tennessee-based HCA said Wednesday in a statement. The average estimate of analysts surveyed by Bloomberg was $1.22 a share. The shares slumped as much as 11 percent, and the stocks of hospital chains Community Health Systems Inc. and Tenet Healthcare Corp. also tumbled. Patients without insurance rose to 8 percent of total visits, from 7.3 percent a year earlier, HCA said. Since HCA’s size makes it a bellwether for the industry, the results suggest an increase in unpaid bills for hospitals across the country, said Ana Gupte, an analyst with Leerink Partners in Boston. Meanwhile, the growth of patient volumes from the expansion of coverage under the Patient Protection and Affordable Care Act appears to be slowing, Gupte said. 

• Boeing(BA) Plunges as Delta Sees `Bubble' of Used Wide-Body Jets. Boeing Co. tumbled the most in almost a year after Delta Air Lines Inc. Chief Executive Officer Richard Anderson said there was a surge of wide-body models coming off lease, creating investor concern that the planemaker faces pressure on pricing for new aircraft. A used-jet glut would pinch Boeing on planes like the twin-aisle 777, one of the company’s biggest sources of profit, said George Ferguson, senior air transport analyst with Bloomberg Industries. Boeing may also find it tougher to generate 777 sales needed to sustain output at 8.3 jets per month as it transitions to an upgraded model known as the 777X, he said.

Wall Street Journal:

• Fed Doubts Grow on 2015 Rate Hike. Weakness in retail sales, inflation data raises concerns about economic outlook. The chances of a Federal Reserve interest-rate increase in 2015 are diminishing amid new signs of anemic economic activity, a disappointing development for central bank officials who have been hoping to move this year after a prolonged period of easy-money policies. Lackluster readings on consumer spending, inflation and jobs have virtually eliminated...

• Democrats Say the Economy Stinks. The candidates agree the middle class is suffering after seven Obama years. The end of a two-term Presidency is typically a time for taking credit, celebrating achievements and promising to continue successful policies. So what happened to the Obama Democrats? At Tuesday night’s Democratic debate, not one of the five candidates even attempted to defend the results of President Obama’s economic policies. Instead their blistering critiques of the status quo showed they all agree on at least one point: Today’s...

Fox News:

• Fox News Poll: Voters say Obama has no Syria plan, Putin 'strong and shrewd'. (video) Most American voters say the Obama administration doesn’t have a clear plan in Syria, and few are buying the president’s assertion that Russia is intervening there out of weakness. The latest Fox News poll also finds that a 61-percent majority now says what happens in Syria is important for U.S. national security.  That’s up from 48 percent who felt that way two years ago.

• Top Cuban general, key forces in Syria to aid Assad, Russia, sources say.

Zero Hedge: 

• Illinois To Delay Pension Payments Amid Budget Woes: "For All Intents And Purposes, We Are Out Of Money Now".

• Whose FX Reserves Suffered The Most During The "China Tantrum"? Goldman Has The Answer.

• World's Largest Leveraged ETF Halts Orders, Citing "Liquidity Constraints".

• Moral Hazard, "Supernormal" VIX Swings, And Why August 2015 Was Just An Appetizer.

• Has The "Opening Pump" Replaced The "330 Ramp"? (graph)

• WTI Crude Plunges Back To $45 Handle After API Reports Biggest Inventory Build In 6 Months. (graph)

• NFLX(NFLX) Plunges After Missing Sales, Subs And Earnings; Cuts Forecast; Burns Quarter Billion Dollars. (graph)

• Bonds & Bullion Jump As Stocks Dump After Post-Payrolls-Pump. (graph)

• A Third Of All Containers Shipped From Long Beach Port Are Empty. (graph)

Business Insider: 

• Actually, voters think Bernie Sanders won last night's debate. (video)

• In a huge reversal, Obama may leave a lot of US troops in Afghanistan. (video)

• One signal of the 'real economy' has sunk to it's worst showing in 5 years. (graph)

• These are the first photos of an underground Iranian missile base. (pic)

Financial Times: 

• Isis Inc: how oil fuels the jihadi terrorists. Jihadis’ oil operation forces even their enemies to trade with them. Oil is the black gold that funds Isis’ black flag — it fuels its war machine, provides electricity and gives the fanatical jihadis critical leverage against their neighbours.

Evening Recommendations 

• None of note

Night Trading

• Asian equity indices are +.25% to +1.0% on average.

• Asia Ex-Japan Investment Grade CDS Index 141.0 -3.25 basis points.

• Asia Pacific Sovereign CDS Index 81.0 -.25 basis point.

• S&P 500 futures +.43%.

• NASDAQ 100 futures +.63%.

Morning Preview Links

Earnings of Note

Company/Estimate

• (BBT)/.69

• (BX)/-.29

• (SCHW)/.26

• (C)/1.28

• (FCS)/.20

• (GS)/3.09

• (KEY)/.27

• (LNN)/.55

• (MTB)/2.00

• (PM)/1.11

• (PPG)/1.60

• (TSM)/2.86

• (USB)/.81

• (UNH)/1.64

• (WGO)/.47

• (AMD)/-.12

• (MAT)/.80

• (SLB)/.77

• (WDFC)/.81

• (WYNN)/.87

Economic Releases

8:30 am EST

• Initial Jobless Claims for last week are estimated to rise to 270K versus 263K the prior week.

• Continuing Claims are estimated to fall to 2200K versus 2204K prior.

• Empire Manufacturing for October is estimated to rise to -8.0 versus -14.67 in September.

• The CPI MoM for September is estimated to fall -.2% versus a -.1% decline in August.

• The CPI Ex Food and Energy MoM for September is estimated to rise +.1% versus a +.1% gain in August.

• Real Avg. Weekly Earnings YoY for September.
  

10:00 am EST

• Philly Fed Business Outlook Index for October is estimated to rise to -2.0 versus -6.0 in September.
  

11:00 am EST

• The Monthly Budget Statement for September is estimated at $95B versus $105.8B in August.

• Bloomberg consensus estimates call for a weekly crude oil inventory build of +2,355,300 barrels versus a +3,073,000 barrel gain the prior week. Gasoline supplies are estimated to fall by -940,000 barrels versus a +1,910,000 barrel gain the prior week. Distillate inventories are estimated to fall by -544,000 barrels versus a -2,458,000 barrel decline the prior week. Finally, Refinery Utilization is estimated to fall by -.48% versus a -2.3% decline prior.

Upcoming Splits

• (SKX) 3-for-1

Other Potential Market Movers

• The Fed's Mester speaking, Fed's Bullard speaking, Fed's Dudley speaking, RBA Financial Stability Review, weekly Bloomberg Consumer Comfort Index, weekly EIA natural gas inventory report, (TD) Retail Investor Day and the (SYT) sales and revenue call could also impact trading today.

BOTTOM LINE: Asian indices are mostly higher, boosted by technology and industrial shares in the region. I expect US stocks to open modestly higher and to maintain gains into the afternoon. The Portfolio is 50% net long heading into the day.