Sunday, September 17, 2017

Monday Watch

Today's Headlines
  • Four US Tourists Attacked With Acid in Marseille, Official Says. Four young female U.S. tourists were attacked with acid Sunday in the French city of Marseille by a woman who has been arrested, the Marseille prosecutor's office said. Two of the tourists were injured in the face in the attack in the city's main Saint Charles train station and one of them has a possible eye injury, a spokeswoman for the Marseille prosecutor's office told The Associated Press in a phone call. She said all four of the tourists, who are in their 20s, have been hospitalized, two of them for shock. She said a 41 -year-old female suspect has been arrested.
  • China Home Prices Rise in Fewer Cities as Property Market Cools. China’s home prices rose in the fewest cities since January, adding to signs of a real estate industry slowdown as officials persist with curbs to limit the risk of bubbles. New-home prices, excluding government-subsidized housing, in August gained in 46 of 70 cities tracked by the government, compared with 56 in July, the National Bureau of Statistics said on Monday. Prices fell in 18 cities from the previous month and were unchanged in six.
  • What the Surging Yuan Means for China's Economy. (video) The yuan’s surge this year is proving a double-edged sword, risking hurting the nation’s exports even while boosting the chances of currency and capital control reforms. The exchange rate’s 6 percent advance this year has crushed depreciation pressures, allowing policy makers the freedom to loosen capital outflow controls that may impact the currency. The People’s Bank of China took a step in that direction on Sept . 11, scrapping a reserve requirement on the trading of foreign-exchange forwards that had made it expensive to short the yuan. Some of the potential lifting of curbs may help companies by making their overseas investment efforts easier. Here’s a look at the implications of the yuan’s strength:
  • Yen Falls as Havens Retreat; Stocks Climb in Asia. (video) The yen declined as havens retreated after the worst-case scenarios for North Korea and hurricanes in the U.S. didn’t eventuate, while stocks inched higher in Asia following a record-breaking Wall Street session. Futures on the S&P 500 Index advanced with equities in Australia, South Korea and Hong Kong. Japan markets are closed for a holiday on Monday. The S&P 500 climbed above 2,500 for the first time on Friday and the Dow Jones Industrial Average chalked another record close as investors shrugged off the latest North Korean missile test. The dollar bounced after declining on Friday when U.S. retail sales raised concerns about the strength of the economy. The Kospi index rose 0.9 percent and Australia’s main gauge was up 0.6 percent. The Hang Seng Index in Hong Kong gained 0.7 percent. Gauges in China were slightly higher. The MSCI Asia Pacific Index advanced 0.4 percent.
  • IEA Sees Risk of Volatile Oil Prices on Weak Upstream Investment. A dearth of new investment in oil production is stoking a risk of tighter crude supply and unstable prices, even as demand growth is expected to slow over the next five years, according to a senior International Energy Agency official. The worldwide cushion of spare production capacity will shrink without further investment in exploration and output, Neil Atkinson, the head of the IEA’s oil markets and industry division, said Sunday at a conference in Manama, Bahrain. “There are still not enough signs of investment beginning to return, and that raises the risk of tightening of the market in the next five years and a risk to the stability of oil prices,” he said. “There is at least a possibility of going back to the situation we had 10 years ago where oil prices were very, very high at a time when demand was growing.”
Wall Street Journal:
Night Trading
  • Asian indices are unch. to +1.0% on average.
  • Asia Ex-Japan Investment Grade CDS Index 72.75 -1.25 basis points.
  • Asia Pacific Sovereign CDS Index 18.25 -.25 basis point.
  • Bloomberg Emerging Markets Currency Index 74.82 +.06%.
  • S&P 500 futures +.22%.
  • NASDAQ 100 futures +.20%.

Earnings of Note
  • (SCS)/.23
Economic Releases 
10:00 am EST
  • The NAHB Housing Market Index for September is estimated to fall to 67.0 versus 68.0 in August. 
4:00 pm EST
  • Net Long-Term TIC Flows for July.
Upcoming Splits
  • None of note
Other Potential Market Movers
  • The Eurozone CPI report, Australia Bank Minutes, Stephens Bank Forum and the DA Davidson Engineering/Construction 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 mixed and to rally into the afternoon, finishing modestly higher.  The Portfolio is 100% net long heading into the week.

No comments: