Thursday, December 08, 2016

Friday Watch

Evening Headlines
  • U.S. Chamber Said to Tell Mexico It Will Defend Nafta Deal. The U.S. Chamber of Commerce told a closed-door gathering of Mexican and American corporate and government leaders that it is aiming to keep Donald Trump from fulfilling his campaign threat to tear up the North American Free Trade Agreement, according to three people with direct knowledge of the matter. Tom Donohue, head of the biggest U.S. business lobbying organization, told members of the U.S.-Mexico CEO Dialogue in Mexico City on Wednesday not to panic and to wait and see what the president-elect proposes once he takes office, said the three people, who spoke about the private event on condition of anonymity. The audience included cabinet officials from President Enrique Pena Nieto’s administration, U.S. Secretary of Commerce Penny Pritzker, and more than 100 business and government leaders.
  • Mexico’s Peso Problems Are a Warning Sign for Global Investors. The world has never been so invested in Mexico, and so Mexico has never posed a bigger potential threat to the world. With a little more than six weeks before Donald Trump takes over with an agenda that could batter Latin America’s second-largest economy, Mexico is already showing signs of strain. Inflation is bouncing back, and traders bet it will only get worse; the peso has plummeted to record lows, and top analysts predict more pain; the government has lowered its growth forecast for four straight years, and Mexico is on the verge of a credit-rating cut just as Agustin Carstens gears up to leave the central bank after seven years at the helm.
  • Rio’s Christ Statue Asking for Alms Amid Recession. It’s survived decades of wind, rain and lightning strikes, but now Brazil’s iconic Christ the Redeemer statue is suffering from the same elemental problem as the rest of the country: a lack of cash.
  • Oil Climbs Above $51 Before Producer Talks as Asian Stocks Swing. Crude oil rose a second day, breaching $51 a barrel in New York before a meeting between OPEC and other major producers on output cuts. Asian stocks fluctuated at the end of their best week since September, while bonds and the Korean won declined. U.S. crude advanced to $51.06 a barrel before talks Saturday in Vienna among the Organization of Petroleum Exporting Countries and 14 other nations. The Asia-Pacific equity benchmark swung as shares in Sydney and Tokyo climbed, while those in South Korea slipped. Bonds from Australia to Japan fell after the European Central Bank pledged to cut bond buying, while at the same time extending quantitative easing until the end of 2017. The won trimmed its biggest weekly advance in two months as the dollar gained ground. About the same number of stocks rose as fell on the MSCI Asia Pacific Index, which was little changed as of 10 a.m. Tokyo time.  
Zero Hedge:
Business Insider:
Night Trading 
  • Asian equity indices are -.25% to +.5% on average.
  • Asia Ex-Japan Investment Grade CDS Index 114.25 -4.0 basis points.
  • Asia Pacific Sovereign CDS Index 36.25 -1.0 basis point.
  • Bloomberg Emerging Markets Currency Index 69.95 -.15%
  • S&P 500 futures +.02%. 
  • NASDAQ 100 futures -.01%.
Morning Preview Links

Earnings of Note

  • (MTN)/-1.56
Economic Releases
10:00 am EST
  • Wholesale Inventories MoM Final for October are estimated to fall -.4% versus a -.4% prior estimate.
  • Wholesale Trade Sales MoM for October are estimated to rise +.7% versus a +.2% gain in September.
  • Preliminary Univ. of Mich. Consumer Sentiment for December is estimated to rise to 94.5 versus 93.8 in November.  
Upcoming Splits 
  • None of note
Other Potential Market Movers
  • The USDA WASDE Report, German Trade Balance report and the (SWFT) Mid-Fourth Quarter Conference Call could also impact trading today.
BOTTOM LINE:  Asian indices are most lower, weighed down by industrial and technology shares in the region. I expect US stocks to open mixed and to weaken into the afternoon, finishing modestly lower. The Portfolio is 50% net long heading into the day.

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