Sunday, September 10, 2017

Monday Watch

Today's Headlines
  • North Korea Warns U.S. of Retaliation for Tougher UN Sanctions. North Korea warned of retaliation if the United Nations Security Council approves harsher sanctions proposed by the U.S. for Pyongyang conducting another nuclear test. The isolated nation “is closely following the moves of the U.S. with vigilance,” its state-run Korean Central News Agency said Monday, citing a statement by the Ministry of Foreign Affairs. “In case the U.S. eventually does rig up the illegal and unlawful ‘resolution’ on harsher sanctions, the DPRK shall make absolutely sure that the U.S. pays a due price,” it said, using its formal country name.
  • China Factory Prices Give an Unexpected Lift to Global Inflation. Inflationary pressure emanating from the factory to the world is proving more resilient than economists have anticipated. China’s producer-price inflation accelerated to 6.3 percent in August from a year earlier, exceeding all but one of 38 estimates in Bloomberg’s survey of economists. That data released Saturday followed 5.5 percent readings in the prior three months and was unexpected for analysts, who have been forecasting more moderation in pricing pressures.
  • China Sends One of the West's Most Critical Materials Soaring. The price of one of the most critical materials for the Western world’s economy and defenses is spiking faster than any major commodity. Tungsten, used to harden steel in ballistic missiles and in drill bits, has surged more than 50 percent in the last two months amid growing concern about supply cutbacks in China, where about 80 percent of the metal comes from. The country is clamping down on polluting mines and enforcing production quotas.
  • Asia Stocks Rise, Dollar Bounces as Irma Weakens. (video) Asian stocks rose with U.S equity-index futures and the dollar rebounded from its lowest in more than two years as hurricane Irma’s force waned and as the United Nations prepared to vote on tougher North Korean sanctions. Equities advanced in Tokyo, Seoul and Sydney as Treasuries fell. The dollar rose against major peers as Irma, while devastating, didn’t reach the feared Category 5 storm that some had expected and looks to have spared Miami. Markets in China will come into focus after inflation accelerated in August, exceeding estimates, and the yuan will be watched as China’s central bank is said to have removed a reserve requirement on the trading of foreign-exchange forwards. The Topix index advanced 1.3 percent as of 9:28 a.m. Tokyo time, while South Korea’s Kospi index was up 1 percent. The S&P/ASX 200 Index rose 0.5 percent. Hong Kong Hang Seng Index futures fell 0.1 percent.
  • Bannon Says Legalizing DACA Could Cost Republicans House Control. Donald Trump’s former chief strategist said the president’s request for Congress to legalize some people brought to the U.S. unlawfully as children could cost Republicans their majority in the House of Representatives in the 2018 mid-term elections. “I’m worried about losing the House now because of this -- because of DACA,” Steve Bannon said in a prerecorded interview to be broadcast in full Sunday on CBS’s “60 Minutes,” referring to the Deferred Action for Childhood Arrivals program.
Wall Street Journal:
Zero Hedge:
Night Trading
  • Asian indices are +.25% to +1.0% on average.
  • Asia Ex-Japan Investment Grade CDS Index 77.25 -1.25 basis points.
  • Asia Pacific Sovereign CDS Index 19.5 -.75 basis point.
  • Bloomberg Emerging Markets Currency Index 75.20 -.03%.
  • S&P 500 futures +.49%.
  • NASDAQ 100 futures +.59%.

Earnings of Note
  • None of note
Economic Releases
  • None of note
Upcoming Splits
  • None of note
Other Potential Market Movers
  • The $24B 3Y T-Note auction, KeyBanc Basic Materials/Packaging Conference, Barclays Financial Services Conference, CSFB Steel/Mining Conference, UBS Transport/Travel Conference, Morgan Stanley Healthcare Conference, could also impact trading today.
BOTTOM LINE: Asian indices are higher, boosted by technology and industrial shares in the region. I expect US stocks to open modestly higher and to weaken into the afternoon, finishing mixed. The Portfolio is 75% net long heading into the week.

No comments: