Evening Headlines
Bloomberg:
- Japan Catches Up With a Rebound in Global Stocks. Shares in Tokyo advanced, as did those in Seoul and Sydney, while Hong Kong futures tipped a firmer open. The Cboe Volatility Index fell as the S&P 500 Index posted its biggest two-day advance in 18 months, but traders were still on edge following the tumultuous moves last week that wiped $2 trillion from U.S. stocks. The 10-year Treasury yield was steady after falling back from touching 2.89 percent, and the dollar remained under pressure. West Texas Intermediate oil remained under $60 a barrel. Japan’s Topix index climbed 0.4 percent as of 9:22 a.m. in Tokyo and the Nikkei 225 Stock Average advanced 0.9 percent. Markets were closed on Monday for National Foundation Day. Australia’s S&P/ASX 200 Index added 0.2 percent. The Kospi index was up 0.7 percent in Seoul. Futures on Hong Kong’s Hang Seng Index gained 0.6 percent. Futures on the S&P 500 rose less than 0.1 percent. The underlying measures rose 1.4 percent, extending Friday’s 1.5 percent gain. The MSCI Asia Pacific Index rose 0.3 percent and the MSCI All-Country World Index edged up after a 1.2 percent rally Monday.
- VIX Manipulation Costs Investors Billions, Whistle-Blower Says. A whistle-blower told U.S. regulators that a scheme to manipulate the VIX, the volatility gauge thrust into the spotlight last week during a wild trading session, costs investors hundreds of millions of dollars a month. A Washington-based lawyer told the Securities and Exchange Commission and Commodity Futures Trading Commission -- the nation’s top markets regulators -- in a letter Monday that his client found a flaw that allows traders “with sophisticated algorithms to move the VIX up or down by simply posting quotes on S&P options and without needing to physically engage in any trading or deploying any capital.” Billions in purportedly ill-gotten profits have been scooped up by “unethical electronic option market makers,” according to the letter.
Wall Street Journal:
- Stock-Market Valuations Look More Appealing After Last Week’s Rout. Despite upbeat outlook for companies’ earnings, share prices were considered expensive by historical standards.
- Trump’s Big Public Works Dig. Permitting and other reforms are a major policy breakthrough.
- Infrastructure Plan Puts Onus on Local Governments. Plan would shift responsibility for funding major new public works from the federal government to cities and states.
- Walgreens(WAG) Has Made Takeover Approach to AmerisourceBergen(ABC). Drugstore giant in early-stage talks to buy portion of Amerisource it doesn’t already own.
- U.S., in Shift, Signals Readiness to Talk With North Korea. Trump administration, in line with South Korea’s approach, indicates it is open to preliminary discussions.
Business Insider:
Night Trading
Earnings of Note
Company/Estimate
Night Trading
- Asian equity indices are +.75% to +1.75% on average.
- Asia Ex-Japan Investment Grade CDS Index 73.5 -2.0 basis points.
- Asia Pacific Sovereign CDS Index 13.5 -.25 basis point.
- Bloomberg Emerging Markets Currency Index 75.13 +.01%.
- FTSE 100 futures +.45%.
- S&P 500 futures +.08%.
- NASDAQ 100 futures +.22%.
Earnings of Note
Company/Estimate
- (AB)/.65
- (DBD)/.35
- (MLM)/1.46
- (PEP)/1.30
- (SINA)/.82
- (UAA)/.00
- (WB)/.58
- (BIDU)/2.08
- (FOSL)/.40
- (MET)/.73
- (OXY)/.41
- (TEX)/.25
- (TRUP)/.01
- (TWLO)/-.06
6:00 am EST
- The NFIB Small Business Optimism Index for January is estimated to rise to 105.3 versus 104.9 in December.
- None of note
Other Potential Market Movers
- The Fed's Mester speaking, Japan GDP report, UK CPI/PPI reports, weekly US retail sales reports, Suntrust Orphan Drug Day, Stifel Transport/Logistics Conference and the Goldman Tech/Internet Conference could also impact trading today.