Thursday, September 07, 2017

Friday Watch

Evening Headlines
  • Irma on Collision Course With Miami After Wrecking Caribbean. (video) Hurricane Irma continued on a collision course with Miami after devastating a chain of Caribbean islands, triggering the largest evacuation in Miami-Dade County history and threatening to become the most expensive storm in U.S. history. The life-threatening storm is heading for a direct hit on Florida Sunday, according to the U.S. National Hurricane Center. That prospect has roiled markets for everything from orange juice to insurance and natural gas. Barclays Plc has estimated insured losses in a worst-case scenario from the storm at $130 billion. Irma may reenter the Atlantic and make a second landfall Monday somewhere near Savannah, Georgia, and Charleston, South Carolina.
  • Dollar Tumbles as Yen, Euro Rally on Irma, ECB. The yen extended gains after hitting its strongest since November. Asian equities in Tokyo, Seoul and Sydney opened mixed, with benchmarks fluctuating. The euro climbed overnight after ECB President Mario Draghi cautioned on the common currency’s strength though didn’t expand on any action to address it. Ten-year Treasury yields fell toward 2 percent. Gold headed for a third week of gains ahead of a potential North Korean missile launch.The Topix index fell 0.2 percent as of 9:38 a.m. in Tokyo, while they South Korea’s Kospi index was down 0.2 percent and Australia’s main gauge was 0.1 percent lower. Hang Seng Index futures were up 0.4 percent.
  • Dudley Backs Higher Rates, Says Low Inflation May Be Structural. Federal Reserve Bank of New York President William Dudley, one of the country’s most influential monetary policy makers, reiterated the need to continue raising interest rates while conceding that the U.S. central bank’s inflation model may be in for a rethink soon. “I expect that the U.S. economy will continue to perform quite well, with slightly above-trend growth leading to further gradual tightening of the U.S. labor market," Dudley said Thursday in remarks prepared for a speech in New York. “As this occurs, I would anticipate that wage growth will firm and that price inflation will gradually rise. In response, I expect that we will continue to gradually remove monetary policy accommodation.”
Wall Street Journal:
Zero Hedge:
Business Insider:
Night Trading 
  • Asian equity indices are -.25% to +.5% on average.
  • Asia Ex-Japan Investment Grade CDS Index 78.50 -.5 basis point. 
  • Asia Pacific Sovereign CDS Index 20.25 unch.
  • Bloomberg Emerging Markets Currency Index 75.30 +.03%.
  • S&P 500 futures -.16%.
  • NASDAQ 100 futures -.15%.
Morning Preview Links

Earnings of Note

  • (KR)/.39
Economic Releases 
3:00 pm EST
  • Consumer Credit for July is estimated to rise to $15.0B versus $12.397B in June.
Upcoming Splits
  • None of note
Other Potential Market Movers
  • The Fed's George speaking, China Import/Export data and the Goldman Biotech Symposium could also impact trading today.
BOTTOM LINE:  Asian indices are mostly higher, boosted by technology and pharmaceutical shares in the region. I expect US stocks to open mixed and to rally into the afternoon, finishing modestly higher.  The Portfolio is 75% net long heading into the day.

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