Tuesday, September 26, 2017

Wednesday Watch

Evening Headlines
  • Trump's Tax Overhaul Will Slash Rates for Companies, Individuals. President Donald Trump and Republican leaders will announce their long-awaited tax overhaul plan Wednesday, cutting rates for corporations and pass-through business. They’ll also propose a top individual rate of 35 percent but leave to Congress the decision of whether to create a higher bracket for top earners. The rate on corporations would be set at 20 percent, down from the current 35 percent rate, and businesses would be allowed to immediately write off their capital expenditures for at least five years, three people familiar with the plan told Bloomberg News.
  • Chinese Economy Has 'Darker Story' Ahead, China Beige Book Says. The world’s second-largest economy may be faring well this year but 2018 is shaping up to be less positive, with progress on reducing debt and industrial capacity proving elusive, according to the China Beige Book. Although this year still looks “far better” than the past two years, faltering demand signaled by a reversal of the five-quarter commodity rally may be in store for 2018, according to the private survey released Wednesday by CBB International, which collects anecdotal accounts from more than 3,000 firms in a format similar to the Federal Reserve Beige Book.
  • Stocks Slip in Asia as Consolidation Continues. The Bloomberg dollar index headed for a third day of advances after Yellen said raising borrowing costs gradually is the appropriate policy stance amid uncertainty surrounding inflation. The greenback was also supported by Donald Trump’s much-anticipated framework to cut taxes. That pushed down the yen, though didn’t stop Tokyo equities sinking, with the MSCI Asia Pacific Index lower for a fifth day. Japan’s Topix Index slid 0.7 percent as of 9:19 a.m. in Tokyo. Australia’s S&P/ASX 200 Index was little changed, as was South Korea’s Kospi index. Futures on Hong Kong’s Hang Seng Index slipped 0.2 percent.
Wall Street Journal:
Zero Hedge:
Night Trading 
  • Asian equity indices are -.25% to +.25% on average.
  • Asia Ex-Japan Investment Grade CDS Index 82.0 -.25 basis point
  • Asia Pacific Sovereign CDS Index 16.50 unch.
  • Bloomberg Emerging Markets Currency Index 73.91 -.03%.
  • S&P 500 futures -.01%.
  • NASDAQ 100 futures -.02%.
Morning Preview Links

Earnings of Note

  • (ATU)/.22
  • (WOR)/.82
  • (CMTL)/.29
  • (FUL)/.67
  • (JBL)/.62
  • (PIR)/-.06
  • (PRGS)/.48
  • (THO)/1.95
Economic Releases 
8:30 am EST
  • Preliminary Durable Goods Orders for August are estimated to rise +1.0% versus a -6.8% decline in July.
  • Preliminary Cap Goods Orders Non-Defense Ex-Air for August is estimated to rise +.3% versus a +1.0% gain in July.
10:00 am EST
  • Pending Home Sales MoM for August are estimated to fall -.5% versus a -.8% decline in July.
10:30 am EST
  • Bloomberg consensus estimates call for a weekly crude oil inventory gain of +2,522,750 barrels versus a +4,591,00 barrel gain the prior week. Gasoline supplies are estimated to fall by -1,093,380 barrels versus a -2,125,000 barrel decline the prior week. Distillate inventories are estimated to fall by -2,299,380 barrels versus a -5,693,000 barrel decline the prior week. Finally, Refinery Utilization is estimated to rise by +2.89% versus a +5.5% gain prior.
Upcoming Splits
  • None of note
Other Potential Market Movers
  • The Fed's Rosengren speaking, Fed's Bullard speaking, Fed's Kashkari speaking, $34B 5Y T-Note auction, weekly MBA Mortgage Applications report, Deutsche Bank Energy Summit, Leerlink Rare Disease/Immuno-Oncology Conference, (FLO) investor briefing, (DLPH) investor update, (PANW) investor day and the (AMAT) analyst day could also impact trading today.
BOTTOM LINE:  Asian indices are mostly higher, boosted by consumer and technology 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.

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