Tuesday, January 10, 2017

Wednesday Watch

Evening Headlines
Bloomberg:
  • William Rhodes: China's Major Concern Is the Economy. (video)
  • Trump Tax Cuts Could Jump-Start Global Economy, World Bank Says. President-elect Donald Trump’s tax cuts and spending plans could deliver a shot in the arm to the U.S. economy, lifting growth around the world, although uncertainty about his trade policies adds to the risks, according to the World Bank. The Trump administration could squander the economic gains of fiscal stimulus if it imposes new trade barriers that provoke retaliation by other countries, the Washington-based development lender said Tuesday in the latest update to its global economic outlook. Overall, it’s too early to assess what the net impact will be of Trump’s economic policies, the World Bank said. Accordingly, it left its forecast for U.S. growth this year and next unchanged, at 2.2 percent and 2.1 percent, respectively. The outlook doesn’t incorporate the expected effect of Trump’s policy proposals, according to the report.
  • Asian Stocks Set for Gains Following Metals Surge: Markets Wrap. Contracts on equity indexes from South Korea to Hong Kong signaled advances after a mixed day for U.S. shares. Stocks in Australia rallied as the country’s 10-year debt eased back. The yen held on to a two-day climb versus the greenback amid anxiety ahead of Donald Trump’s first press conference since July, an event that could provide detail on the U.S. president-elect’s policy outlook. Gold was near its highest price since November after a surge in copper to iron ore on the Chinese data Tuesday. Oil snapped a two-day slide. Miners and technology shares led Australia’s S&P/ASX 200 Index up 0.2 percent as of 8:56 a.m. Tokyo time, as the S&P/NZX 50 Index in Wellington also climbed 0.2 percent in a third day of gains. Nikkei 225 Stock Average futures were bid up 0.1 percent to 19,320 in the Osaka pre-market, with yen-denominated contracts traded in Chicago little changed at 19,350. Futures on the Kospi index in Seoul advanced 0.1 percent in most recent trading, as those on Hong Kong’s Hang Seng and Hang Seng China Enterprises gauges climbed at least 0.3 percent.
Wall Street Journal:
MarketWatch:
  • Vaccine skeptic Robert Kennedy Jr. says Trump asked him to chair commission. Vaccine skeptic Robert F. Kennedy Jr. said Tuesday that President-elect Donald Trump has asked him to chair a commission on vaccine safety and scientific integrity. The son of the late U.S. senator, attorney general and Democratic presidential candidate said after meeting with the president-elect at Trump Tower that “Trump has doubts about current vaccine policy.” “He said his opinion doesn’t matter,” Kennedy said, “but the science does matter, and we ought to be debating it.”
CNBC:
Zero Hedge:
Busines Insider:
Night Trading 
  • Asian equity indices are -.25% to +.50% on average.
  • Asia Ex-Japan Investment Grade CDS Index 116.25 +.5 basis point.
  • Asia Pacific Sovereign CDS Index 34.25 -.25 basis point.
  • Bloomberg Emerging Markets Currency Index 69.58 -.05%
  • S&P 500 futures -.10%. 
  • NASDAQ 100 futures -.08%.
Morning Preview Links

Earnings of Note
Company/Estimate

  • (MSM)/.93
  • (SVU)/.14
  • (KBH)/.44
Economic Releases
10:30 am EST
  • Bloomberg consensus estimates call for a weekly crude oil inventory build of +930,100 barrels versus a -7,051,000 decline the prior week. Gasoline supplies are estimated to rise by +2,061,000 barrels versus a +8,307,000 barrel gain the prior week. Distillate inventories are estimated to rise by +1,469,800 barrels versus a +10,051,000 barrel gain the prior week. Finally, Refinery Utilization is estimated to fall by -.19% versus a +1.0% gain prior.
Upcoming Splits 
  • None of note
Other Potential Market Movers
  • The $20B 10Y T-Note auction, UK Industrial Production report, weekly MBA mortgage applications report and the (SIG) December sales report could also impact trading today.
BOTTOM LINE:  Asian indices are mostly higher, boosted by technology and commodity shares in the region. I expect US stocks to open modestly lower and to rally into the afternoon, finishing mixed. The Portfolio is 50% net long heading into the day.

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