Evening Headlines
Bloomberg:
- Asia Stocks Rally After Recovery in U.S. Equities. (video) Asian equity markets recovered some of the losses sustained in the global rout after U.S. shares rallied amid a welter of calls to "buy the dip." The dollar and Treasuries were steady. Japan’s benchmarks jumped about 3 percent at the open and stocks also rose in Sydney and Seoul. A topsy-turvy session for the S&P 500 Index ended with technology, materials and consumer shares leading a 1.7 percent advance. The benchmark for U.S. share volatility went through wild gyrations one day after more than doubling, though ended the session down almost 20 percent. Japan’s Topix index advanced 3.2 percent as of 9:10 a.m. in Tokyo and the Nikkei 225 Stock Average jumped 3.1 percent. Australia’s S&P/ASX 200 Index rose 1 percent. The Kospi index in South Korea was up 0.9 percent. Futures on Hong Kong’s Hang Seng Index advanced 0.5 percent. Futures on the S&P 500 fell 0.1 percent.
- Buying the Dip Works Nicely, a 30-Year History of Routs Shows. As the dust settles for now after the turmoil of the last few days, a chorus of buy-the-dip calls from fund managers and strategists is still ringing in equity investors’ ears. History suggests they have a point. An analysis by Schroders Plc of the 10 biggest one-day stock declines in the past 30 years showed the U.S. stock market returned about 25 percent on average in the following 12 months. For the following five-year period, average annual total returns were about 14 percent, according to the calculations.
- Inside Wall Street's $8 Billion VIX Time Bomb. It was the hot trade on Wall Street, a seemingly sure thing that lulled everyone from hedge fund managers to small-time investors. Now newfangled investments linked to volatility in the stock market -- until a few years ago, obscure niche products -- have exploded in spectacular fashion. The shock waves have only just begun.
Wall Street Journal:
- Dow Swings Sharply, Finishes 2.3% Higher. Dow industrials change direction 29 times before finishing 567 points higher.
- Democrats and FBI Abuses. In the 1970s, progressives stood up for civil liberties. Today they’ve reverted to the J. Edgar Hoover era.
- Top Senators Pursue 2-Year Budget Deal. House passes a bill to fund Defense Department through September, rest of the government through March 23.
- White House Says Congress Must Accept Its Terms on Immigration. Chief of Staff John Kelly says he doubts the administration would extend the ‘Dreamers’ program beyond March 5 without a legislative fix.
CNBC:
Zero Hedge:
Night Trading
Earnings of Note
Company/Estimate
- Asian equity indices are +.75% to +2.75% on average.
- Asia Ex-Japan Investment Grade CDS Index 69.25 -3.75 basis points.
- Asia Pacific Sovereign CDS Index 12.75 +1.0 basis point.
- Bloomberg Emerging Markets Currency Index 75.81 +.07%.
- FTSE 100 futures +1.29%.
- S&P 500 futures -.19%.
- NASDAQ 100 futures -.10%.
Earnings of Note
Company/Estimate
- (CTSH)/.96
- (HAIN)/.43
- (HUM)/2.00
- (ICE)/.72
- (JEC)/.74
- (JLL)/4.20
- (KORS)/1.29
- (STE)/1.07
- (FOXA)/.39
- (ALL)/1.53
- (COHR)/3.52
- (FLO)/.14
- (IAC)/.93
- (NTES)/2.33
- (ORLY)/2.78
- (PRU)/2.64
- (RMAX)/.50
- (RGLD)/.41
- (TSLA)/-3.15
- (YELP)/.27
- (TDW)/-.77
- (TTWO)/.99
10:30 am EST
- Bloomberg consensus estimates call for a weekly crude oil inventory build of +3,233,330 barrels versus a +6,776,000 barrel gain the prior week. Gasoline supplies are estimated to rise by +277,780 barrels versus a -1,980,000 barrel decline the prior week. Distillate inventories are estimated to fall by -1,511,110 barrels versus a -1,940,000 barrel decline the prior week. Finally, Refinery Utilization is estimated to fall by -.09% versus a -2.8% decline the prior week.
- Consumer Credit for December is estimated to fall to $20.0B versus $27.951B in November.
- None of note
Other Potential Market Movers
- The Fed's Dudley speaking, Fed's Evans speaking, China Foreign Reserves report, $24B 10Y T-Note auction, weekly MBA Mortgage Applications report, Keefe Bruyette Woods Financial Services Symposium, Cowen Aerospace/Defense/Industrials conference and the (ZUMZ)/(COST) monthly sales reports could also impact trading today.