Wednesday, May 10, 2017

Thursday Watch

Evening Headlines
Bloomberg: 
  • Six Canadian Banks Cut by Moody's on Consumers' Debt Burden. Six of Canada’s largest banks had credit ratings downgraded by Moody’s Investors Service on concern that over-indebted consumers and high housing prices have left lenders vulnerable to potential losses on assets. Toronto-Dominion Bank, Bank of Montreal, Bank of Nova Scotia, Canadian Imperial Bank of Commerce, National Bank of Canada and Royal Bank of Canada had their long-term debt and deposit ratings lowered one level, Moody’s said Wednesday in a statement. It also cut its counterparty risk assessment for the firms, excluding Toronto-Dominion.
  • China Metals Bulls Aren't Panicking Just Yet as Rally Fades. China’s metals bulls are taking a pause rather than sounding the retreat. A gauge of six metals on the London Metal Exchange slumped Monday to its lowest in four months amid a collapse in copper and aluminum prices. As industry participants gather in Hong Kong for the LME’s annual Asia event this week, the hope for some is that a market that hit the skids in April is experiencing a blip and not a retreat to its 2016 lows.
  • Asian Stocks Edge Higher, Kiwi Slides on Outlook. Stocks in Asia were mostly higher with global equities remaining near record levels, while oil rebounded. The New Zealand dollar declined after the nation’s central bank said it will keep rates at a record low for an extended period. Shares in Australia, New Zealand and South Korea advanced. Japan’s Topix index was little changed, trading near the highest since December 2015. The S&P 500 Index edged higher to claim a second closing record this week. Gold extended declines to a seventh day. Snap
    Inc. shares tumbled in after-hours trading after the social network added fewer users than forecast. Japan’s Topix index was flat, trading near the highest level since December 2015. South Korea’s Kospi advanced 0.3 percent and New Zealand’s S&P/NZX 50 increased 0.7 percent. Australia’s S&P/ASX 200 Index added 0.6 percent
    .
  • Goldman(GS) to IEA See Oil Bulls Back on Top as Cuts Dent Stockpiles. Oil is trading near $50 again, OPEC seems to be losing its ability to influence prices and a wave of new supply is hitting the market from Texas to Libya. For some, there’s never been a better time to buy. Despite last week’s selloff, the global oil market is rebalancing rapidly, said Jeffrey Currie, head of commodities research at Goldman Sachs Group Inc. If the Organization of Petroleum Exporting Countries extends its cuts into the second half -- as the group has signaled -- demand will significantly exceed production, according to the IEA’s Head of Oil Industry and Markets Neil Atkinson.
  • Your Evening Briefing. (video)
Wall Street Journal:
Zero Hedge:
Night Trading 
  • Asian equity indices are unch. to +.75% on average.
  • Asia Ex-Japan Investment Grade CDS Index 88.5 -1.2 basis points
  • Asia Pacific Sovereign CDS Index 20.5 unch.
  • Bloomberg Emerging Markets Currency Index 72.02 -.02%.
  • S&P 500 futures -.03%. 
  • NASDAQ 100 futures -.03%.
Morning Preview Links

Earnings of Note
Company/Estimate

  • (DDS)/2.02
  • (KSS)/.29
  • (M)/.36
  • (MGA)/1.34
  • (CA)/.49
  • (JWN)/.27
Economic Releases  
8:30 am EST
  • PPI Final Demand MoM for April is estimated to rise +.2% versus a -.1% decline in March.  
  • PPI Ex Food and Energy MoM for April is estimated to rise +.2% versus unch. in March.
  • Initial Jobless Claims for last week are estimated to rise to 245K versus 238K the prior week.
  • Continuing Claims are estimated to rise to 1980K versus 1964K prior.
Upcoming Splits
  • None of note
Other Potential Market Movers
  • The Fed's Dudley speaking, weekly Bloomberg Consumer Comfort Index, weekly EIA natural gas inventory report, $15B 30Y T-Bond auction, (DAL) analyst meeting, (WFC) investor day, (RIG) annual meeting, (ZTS) annual meeting, (WMB) analyst day and the (STM) Capital Markets Day could also impact trading today.
BOTTOM LINE:  Asian indices are mostly higher, boosted by commodity and technology shares in the region. I expect US stocks to open mixed and to rally into the afternoon, finishing modestly higher.  The Portfolio is 100% net long heading into the day.

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