Friday Watch

Evening Headlines

Bloomberg:

• 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.

• Japan GDP Growth Revised Down on Softer Capital Expenditure. Japan’s economy grew less than the government’s preliminary estimate in the second quarter, weighed down by a revision in capital expenditure by companies.

• 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.

• Five Things You Need to Know to Start Your Day.

• 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:

• Back-to-Back Hurricanes to Test Post-Katrina FEMA Reforms. Emergency agency already has 5,000 staff members assisting with Harvey recovery, 370 preparing for arrival of Irma.

MarketWatch.com:

• Equifax(EFX) executives sold stock after data breach, before informing public.

Fox News:

• Florida governor urges people in Irma's path to get out: 'We can't save you'. (video)

CNBC:

• Google(GOOGL) is apparently ready to buy smartphone maker HTC.

• Don't let IBM's blunders in health care blind you to the huge benefits of technology in medicine.

Zero Hedge:

• "Greatest Evacuation In History" - 650,000 Ordered To Leave Florida.

• Millennials Head One-Third Of All Poverty-Stricken U.S. Households (The Rest Live With Mom).

• Not Just Florida: Georgia And South Carolina Face "Catastrophic Storm Surge".

• Massive Data Breach At Equifax: As Many As 143 Million Social Security Numbers Hacked.

• Toronto Home Price Bubble Bursts Into Bear Market.

• Panic Buying Leaves 40% Of Miami Stations Out Of Gas.

• World's Most Powerful Bank Issues As Major Warning.

• White House Denies Cohn Report, Says Considering "At Least Six" For Fed Chair.

• Senate Passes Debt Ceiling/Govt Funding Deal: Here's What Happens Next.

• Dollar & Bond Yields Plunge As Cohn Doubts, A Draghi Dud, & Debt Ceiling Denials Dominate. (graph)

Business Insider:

• Trump signals that more deals with Democrats could come.

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
Company/Estimate

• (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.