Tuesday, September 12, 2017

Wednesday Watch

Evening Headlines
  • Stock Rally Extends in Asia as U.S. Hits New Highs. Equities in Asia extended gains seen around the world and Treasuries held on to declines on bets economic growth is strong enough to withstand heightened geopolitical tensions. Benchmarks advanced in Tokyo and Sydney after the S&P 500 Index, the Dow Jones Industrial Average and the Nasdaq Composite Index all closed at fresh record highs on Tuesday. The dollar held onto gains ahead of U.S. inflation data later this week that could impact the timing of the next Federal Reserve interest-rate hike. Oil rose as OPEC and its allies are discussing an extension of output curbs. The Topix index rose 0.5 percent of 9:16 a.m. Tokyo time. Australia’s S&P/ASX 200 Index added 0.4 percent and the Kospi index in Seoul was little changed. Futures on Hong Kong’s Hang Seng Index rose 0.1 percent.
  • Bond Market's Hot Trade Is Betting a 2017 Fed Hike Still in Play. Bets on another Federal Reserve rate hike this year are gaining favor after being all but abandoned a few days ago. Eurodollar futures, among the most sensitive financial instruments to Fed speculation, show some traders have concluded that wagers on additional tightening in 2017 are too cheap to pass up. Last week, the market-implied odds of another rate increase by year-end plunged below 25 percent, and at one point fed funds futures didn’t fully price in another hike until 2019.
Wall Street Journal:
Zero Hedge: 
  • Calls To Imprison "Climate Change Deniers" Grow In The Wake Of Hurricane IrmaWhen retired Georgia Tech professor Judith Curry penned a blog post on her "Climate Etc." website suggesting that it was scientifically irresponsible to tie the intensity of Hurricanes Harvey and Irma directly to climate change, she probably didn't expect that she might trigger 1,000's of progressives to call for her immediate imprisonment. Unfortunately, for both Curry and society at large, that is exactly what happened
Business Insider:
Night Trading 
  • Asian equity indices are unch. to +.5% on average.
  • Asia Ex-Japan Investment Grade CDS Index 74.50 -.5 basis point. 
  • Asia Pacific Sovereign CDS Index 18.0 -.5 basis point.
  • Bloomberg Emerging Markets Currency Index 74.91 +.02%.
  • S&P 500 futures -.02%.
  • NASDAQ 100 futures -.01%.
Morning Preview Links

Earnings of Note

  • (CBRL)/2.19
  • (UNFI)/.70
Economic Releases 
8:30 am EST
  • PPI Final Demand MoM for August is estimated to rise +.3% versus a -.1% decline in July.
  • PPI Ex Food and Energy MoM for August is estimated to rise +.2% versus a -.1% decline in July.
10:30 am EST
  • Bloomberg consensus estimates call for a weekly crude oil inventory gain of +4,392,100 barrels versus a +4,580,000 barrel gain the prior week. Gasoline supplies are estimated to fall by -1,941,700 barrels versus a -3,199,000 barrel decline the prior week. Distillate inventories are estimated to fall by -1,499,2000 barrels versus a -1,396,000 barrel decline the prior week. Finally, Refinery Utilization is estimated to rise by +3.1% versus a -16.9% decline prior.
2:00 pm EST
  • The Monthly Budget Statement for August is estimated at -$119.0B versus -$107.1B in July.
Upcoming Splits
  • None of note
Other Potential Market Movers
  • The German CPI report, $12B 30Y T-Bond Auction, weekly MBA Mortgage Applications report, RBC Industrials Conference, BofA Merrill Healthcare Conference and the (EFX) investor meeting could also impact trading today.
BOTTOM LINE:  Asian indices are mostly higher, boosted by commodity and industrial shares in the region. I expect US stocks to open modestly lower and to rally into the afternoon, finishing modestly mixed.  The Portfolio is 75% net long heading into the day.

No comments: