Monday, September 25, 2017

Tuesday Watch

Evening Headlines
  • U.S. Sees ‘Four or Five’ Ways to Resolve North Korean Crisis. (video) The U.S. has gamed out four or five different scenarios for how the crisis with North Korea will be resolved, and “some are uglier than others,” National Security Adviser H.R. McMaster said as tensions remain high between the two countries. While McMaster said the threat from Pyongyang is “much further advanced” than anticipated and the Pentagon said the president has a “deep arsenal” to draw upon if needed, U.S. officials dismissed North Korean Foreign Minister Ri Yong Ho’s comment that President Donald Trump’s warnings to Pyongyang at the United Nations amounted to a declaration of war.
  • China's Curbs, Debt Woes Bring Developers Crashing Back to Earth. The world’s most extreme stock rally is getting a reality check. After share price gains at Chinese property developers accelerated at a breathtaking pace in the past month, led by a 87 percent surge in Sunac China Holdings Ltd., the momentum has started to turn as authorities have taken a harder line on reining in financial risks. Six of the 10 best performers on the MSCI All-Country World Index in the one month through Sept. 21 were Chinese real estate firms. Since then, they’re among the worst performers.
  • Stocks in Asia Dip as Haven Rally Subsides. (video) Financial markets showed signs of stabilizing after a fresh trigger from North Korea had sent money into haven assets, with focus returning to comments from central bank policy makers. Equities in Asia began Tuesday mixed as gains in gold and the yen petered out. North Korea had injected a note of caution to markets on Monday after its foreign minister declared that the nation can shoot down U.S. warplanes. Focus remains on Chinese property developers, as one of the world’s most extreme stock rallies gets a reality check. Japan’s Topix index was slightly lower as of 9:21 a.m. in Tokyo. South Korea’s Kospi index fell 0.3 percent and Australia’s S&P/ASX 200 Index added 0.1 percent. Hong Kong’s Hang Seng Index futures were down 0.4 percent.
  • Five Things You Need to Know to Start Your Day. (video)
  • This Is Chaos’: Day 5 in Storm-Ravaged, Blacked-Out Puerto Rico. (video)
Wall Street Journal:
Business Insider:
Night Trading 
  • Asian equity indices are -.5% to unch. on average.
  • Asia Ex-Japan Investment Grade CDS Index 82.25 +1.75 basis points
  • Asia Pacific Sovereign CDS Index 16.50 +.5 basis point.
  • Bloomberg Emerging Markets Currency Index 74.17 unch.
  • S&P 500 futures -.08%.
  • NASDAQ 100 futures -.09%.
Morning Preview Links

Earnings of Note

  • (CCL)/2.20
  • (DRI)/.99
  • (FDS)/1.89
  • (CTAS)/1.31
  • (MU)/1.84
  • (NKE)/.48
Economic Releases 
9:00 am EST
  • The July S&P CoreLogic CS 20-City MoM is estimated to rise +.2% versus a +.11% gain in June.
10:00 am EST
  • New Home Sales for August are estimated to rise to 585K versus 571K in July.
  • The Conference Board Consumer Confidence Index is estimated to fal to 120.0 versus 122.9 in August. 
  • The Richmond Fed Manufacturing Index for September is estimated to fall to 13.0 versus 14.0 in August.
Upcoming Splits
  • None of note
Other Potential Market Movers
  • The Yellen speaking, Fed's Mester speaking, Fed's Brainard speaking, Fed's Bostic speaking, $26B 2Y T-Note auction, France CPI report, US weekly retail sales reports, BofA Merrill Banking/Insurance Conference and the Ladenburg Thalmann Healthcare Conference could also impact trading today.
BOTTOM LINE:  Asian indices are mostly lower, weighed down by industrial and technology shares in the region. I expect US stocks to open modestly lower and to rally into the afternoon, finishing mixed.  The Portfolio is 75% net long heading into the day.

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