Evening Headlines
Bloomberg:
- The Factory to the World Has a New Export: Inflation. The factory to the world has a new export: inflation. And it’s shipping faster than many thought possible just a few months ago. China’s weakening yuan, stimulus designed to ensure robust growth ahead of a crucial Communist Party Congress next year, and rebounding commodity prices are pushing up factory prices. Having turned positive in September for the first time in more than four years, producer prices rose 1.2 percent in October from a year earlier. That will almost double to 2.3 percent in November, according to analysts surveyed ahead of data due Friday.
- Japan Unexpectedly Cuts Third-Quarter GDP Growth Figure to 1.3%. Japan revised third-quarter economic growth to an annualized 1.3 percent, compared with a preliminary reading that showed 2.2 percent expansion. The revision was driven by drops in capital spending and in private inventories, which both dragged down growth. The official size of Japan’s economy expanded as the nation revamped how it calculates gross domestic product, classifying research and development differently.
- Asian Stocks Take Cue From U.S., Rising With Bonds Ahead of ECB.
Fresh U.S. equity records lit a fire under the Asian market, with
benchmarks from Tokyo to Sydney extending gains as bond yields declined
ahead of policy updates from two of the world’s biggest central banks.
The regional Asian stock index rose to a more than one-month high as
banks drove Australia’s S&P/ASX 200 Index to its highest level since
August and Japanese shares jumped. The euro and the yen maintained
gains with gold ahead of Thursday’s European Central Bank decision, amid
mounting speculation policy makers will prolong the euro-zone’s
asset-buying program. The New Zealand dollar and Korean won
strengthened. Yields on Australian bonds fell to their lowest level this
month amid a debt rally across developed markets. Oil nudged $50 a
barrel after a surge in U.S. stockpiles. The MSCI Asia Pacific Index climbed by .8% as of 10:01 am Tokyo time, rising for a third day as Japan's Topix index gained 1.1%.
- The World's Top Oil Market Is Starting to Lose Its Sheen. One of the biggest engines soaking up the world’s oil is starting to sputter. Growth in crude imports by China, the second largest consumer after the U.S., will probably slow by more than 60 percent in 2017, according to a Bloomberg survey of analysts including FGE and Energy Aspects Ltd. Private refiners that helped boost purchases to record levels are expected to be constrained by tighter licenses and increased scrutiny on their taxes. At the same time, the current space available for stockpiles may run out. While OPEC’s deal to curb output may help erode a glut and lift prices, Chinese imports remain key for any sustained recovery. It’s the biggest buyer in Asia, the world’s top oil market, and its insatiable appetite was a significant driver for crude’s climb to more than $100 a barrel in the past decade.
- Iraq Can’t Count on Kurds or Oil Companies for Help on OPEC Cuts. Iraq can’t count on the self-governed Kurds in the north or international oil companies to help it cut crude production as promised at an OPEC meeting last week. That may leave the country with no option but to slash state-controlled supplies to comply with its quota. Under the deal the Organization of Petroleum Exporting Countries reached last Wednesday, Iraq must reduce crude output by 210,000 barrels a day from October levels. But to achieve that, OPEC’s second-biggest producer may have to rely on the crude it fully controls. International companies including BP Plc and Royal Dutch Shell Plc pump most of Iraq’s oil, and the semi-autonomous Kurds contribute more than half a million barrels a day on top.
- A Century-Old Stock Signal Is Flashing Buy as U.S. Transports Surge. (graph)
- Lululemon(LULU) Surges After Third-Quarter Earnings Top Estimates.
Wall Street Journal:
- Nearing Defeat, Rebels Seek Talks on Fate of Aleppo. Truce appeal still requires approval of Syria regime and its major ally Russia.
- Greece, not Italy, Still Poses Biggest Challenge to Eurozone. A crisis in one country only becomes a crisis for the whole eurozone when a collective European response is required, Simon Nixon writes.
Zero Hedge:
- India Confiscates Gold, Even Jewelry, In Raids On Hidden Money.
- The Collapse Of 'Real' Media Credibility (In 3 Simple Images).
- US Housing Market Reeling After Mortgage Rates Jump To Two Years Highs.
- Will 2017 See Peak Fragility? (graph)
- Just How Overvalued Is The Market? Here Are 20 Metrics To Help You Decide.
- Northwest Braces For "Polar Plunge" As Temps Expected To Fall 35 Degrees Below Average.
- FBI Probes HuffPo Editor After "Destroy Trump Ballots" Tweet.
- Moody's Cuts Italy Ratings Outlook To Negative.
- Trump Picks Pro Wrestling Mogul Linda McMahon To Run Small Business Administration.
- Stocks Melt-Up. (graph)
USA Today:
Telegraph:
Earnings of Note
Company/Estimate
8:30 am EST
Telegraph:
- Italian patriotism will teach foolish markets a lesson. The blistering rally of Italian equities and sovereign bonds is a marvel to behold. Short-covering rallies are always the most glorious, and the most treacherous. The market bounce after Brexit made perfect sense. Half the world immediately loosened policy to cushion an imaginary shock. It even made more sense after the election of Donald Trump. His triple pledge of tax cuts, a building boom, and an imperial navy - if enacted - will flood the US economy with even greater fiscal stimulus than Reaganomics.
- Asian equity indices are +.25% to +1.0% on average.
- Asia Ex-Japan Investment Grade CDS Index 118.25 +.25 basis point.
- Asia Pacific Sovereign CDS Index 37.25 -2.25 basis points.
- Bloomberg Emerging Markets Currency Index 70.37 +.05%.
- S&P 500 futures +.02%.
- NASDAQ 100 futures +.11%.
Earnings of Note
Company/Estimate
- (CIEN)/.46
- (HOV)/.14
- (SHLD)/-4.06
- (VNCE)/.08
- (AVGO)/3.38
- (COO)/2.25
- (FNSR)/.46
- (FRED)/-.19
- (RH)/.16
8:30 am EST
- Initial Jobless Claims for last week are estimated to fall to 255K versus 268K the prior week.
- Continuing Claims are estimated to fall to 2048K versus 2081K prior.
- Household Change in New Worth for 3Q.
- None of note
- The ECB decision/press conference, China inflation data, Bloomberg Dec. US Economic Survey, weekly Bloomberg Consumer Comfort Index, weekly EIA natural gas inventory report, Barclays Tech/Media/Telecom Conference, Goldman Sachs Automotive Conference, (BHI) investor meeting, (EW) investor conference and (LUV) November traffic data could also impact trading today.