Evening Headlines
Bloomberg:
- A Global Convergence of Economic Conditions Is Driving the Market Melt-Up. There’s a simple way to make sense of the tumbling dollar, the Treasury selloff and the emerging-market boom, all springing in lockstep. Investors are intensifying their bets on synchronized global growth, a dynamic that’s crimping demand for safe assets and fueling convergence trades. Consider this: Anchored by a stable business cycle, emerging-market and U.S. debt markets are more correlated than ever, Bloomberg data show. That’s hardly surprising to Gabriel Sterne, chief macro strategist at Oxford Economics Ltd. From growth to inflation to fiscal balances, economies danced to a similar beat in 2017, a rare feat in post war history. That dynamic is now juicing risk appetite this year due to lagged effects.
- Draghi Clears Path for Euro Economy in 2018 as Momentum Builds. Mario Draghi says the euro region is firing on all cylinders, and he’s not about to get in the way. After the IMF raised growth forecasts and the global elite in Davos heaped praise on the economy’s brighter prospects, the European Central Bank president is giving his own vote of support by saying that an interest-rate increase this year is very unlikely. That’s a green light for an expansion that’s entered its fifth year.
- China Industrial Profits Moderated for Third Month in December. Profit growth at Chinese industrial firms moderated for a third month, after factory inflation decelerated to the weakest pace in more than a year. Industrial profits rose 10.8 percent last month from a year earlier, compared with 14.9 percent in November, the statistics bureau said on Friday. That’s the slowest pace of increase in a year. The producer price index fell for a second month in December.
- Facebook(FB) Says ‘Insignificant’ Overlap Between Russia Ads, Trump. Facebook Inc. told a Senate panel that it has detected “only what appears to be insignificant overlap” between targeting of ads and content promoted by a pro-Kremlin Russia group and by the presidential campaign of Donald Trump.
- Trump Rallies Dollar as Stocks Wobble, Crude Falls. President Donald Trump waded into the unusual public debate over currency valuations, roiling markets after he said that he favored a strong greenback just a day after his Treasury secretary endorsed a weak dollar. “The dollar is going to get stronger and stronger and ultimately I want to see a strong dollar,” Trump said during an interview with CNBC from the World Economic Forum in Davos, Switzerland. The MSCI Asia Pacific Index declined 0.3 percent as of 11:21 a.m. Tokyo time. Topix index rose 0.2 percent. Hong Kong’s Hang Seng Index rose 0.6 percent. Kospi index fell less than 0.05 percent. Futures on the S&P 500 Index rose 0.2 percent.
Wall Street Journal:
MarketWatch.com- The Tax Law, Just One Month Old, Is Roaring Through U.S. Companies. From acquisitions and equipment purchases to stock buybacks, firms are rapidly recalibrating their business plans.
- Airlines Reap Benefits of High Travel Demand, Tax Cuts. Despite strong fourth quarter, shares fall as carriers announce plans to boost capacity.
- Wal-Mart(WMT) Has a New Ally in Fight With Amazon: Japan’s Rakuten. Companies in joint venture to sell online groceries in Japan, e-books and audiobooks in the U.S.
- Operation Sabotage the Memo. What are Adam Schiff, the Justice Department and the FBI trying to hide?
Fox News:
CNBC:
Zero Hedge:
IBD:
- Intuitive Surgical(ISRG) Tops Fourth-Quarter Sales, Earnings Views. For its fourth quarter, Intuitive reported adjusted profit of $2.54 per share, rising 25% vs. the year-earlier period and topping views for $2.27 a share. Sales advanced 18% year over year to $892 million, beating the consensus estimate for $864 million.
Night Trading
Earnings of Note
Company/Estimate
- Asian equity indices are -.25% to +.50% on average.
- Asia Ex-Japan Investment Grade CDS Index 63.5 unch.
- Asia Pacific Sovereign CDS Index 10.5 unch.
- Bloomberg Emerging Markets Currency Index 76.53 +.12%.
- S&P 500 futures +.16%.
- NASDAQ 100 futures +.28%.
Earnings of Note
Company/Estimate
- (ABBV)/1.43
- (APD)/1.66
- (CL)/.75
- (GNTX)/.32
- (HON)/1.84
- (LEA)/4.28
- (COL)/1.56
8:30 am EST
- Advance Goods Trade Balance for December is estimated at -$68.9B versus -$70.0B in November.
- Wholesale Inventories MoM for December is estimated to rise +.4% versus a +.8% gain in November.
- Retail Inventories QoQ.
- Advance 4Q GDP is estimated to rise +3.0% versus a +3.2% gain in 3Q.
- Advance 4Q Personal Consumption is estimated to rise +3.7% versus a +2.2% gain in 3Q.
- Advance 4Q GDP Price Index is estimated to rise +2.3% versus a +2.1% gain in 3Q.
- Advance Core PCE QoQ is estimated to rise +1.9% versus a +1.3% gain in 3Q.
- Durable Goods Orders for December are estimated to rise +.8% versus a +1.3% gain in November.
- Durables Ex Transports for December are estimated to rise +.6% versus a -.1% decline in November.
- Cap Goods Orders Non-Defense Ex-Air for December is estimated to rise +.6% versu a -.2% decline in November.
- None of note
Other Potential Market Movers
- The China Industrial Production report, President Trump's speaking at Davos and President Trump's solar panel import decision could also impact trading today.