Monday, December 11, 2017

Tuesday Watch

Evening Headlines
  • Choking on Beijing's Clean Air Costs. The Asian Infrastructure Investment Bank, conceived as China's answer to the World Bank, approved a $250 million loan to Beijing Gas Group Co., to reduce coal use by connecting more than 200,000 rural households to the natural gas distribution network. It's the AIIB's first investment within China. The bank had better keep its checkbook handy: This new environmental protection drive could cost the Chinese government and its financing vehicles as much as 381 billion yuan ($57.6 billion) in subsidies. Authorities have realized that persuading villagers to stop burning coal is a more effective way of improving air quality in northern China than shutting coal-powered plants, a step that inevitably hurts economic growth.
  • Asia Stocks Mixed Ahead of Central Bank Meetings. Benchmarks in Tokyo sat on recent gains, while Korean shares slipped, after U.S. stock indexes hit fresh highs overnight. Most major American gauges advanced, led by more than 1 percent increases in media, telephone and technology-hardware shares. Investors shrugged off a non-fatal explosion in New York in what was called a terrorist attack. Volumes remain lackluster ahead of the year’s final Federal Reserve and European Central Bank meetings. The Topix index and the Nikkei 225 Stock Average were little changed as of 9:26 a.m. in Tokyo. Australia’s S&P/ASX 200 Index rose 0.2 percent and the Kospi index fell 0.5 percent. Futures on Hong Kong’s Hang Seng Index added 0.1 percent. The MSCI Asia Pacific Index was little changed.
  • Five Things You Need to Know to Start Your Day. (video)
Wall Street Journal: 
Business Insider:
Night Trading 
  • Asian equity indices are -.25% to +.25% on average.
  • Asia Ex-Japan Investment Grade CDS Index 71.75 -.75 basis point
  • Asia Pacific Sovereign CDS Index 14.0 -.25 basis point
  • Bloomberg Emerging Markets Currency Index 73.0 -.02%.
  • S&P 500 futures +.08%.
  • NASDAQ 100 futures +.11%.
Morning Preview Links

Earnings of Note

  • (PAY)/.43
Economic Releases
6:00 am EST:
  • The NFIB Small Business Optimism Index for November is estimated to rise to 104.0 versus 103.8 in October.
8:30 am EST
  • PPI Final Demand MoM for November is estimated to rise +.3% versus a +.4% gain in October.
  • PPI Ex Food and Energy MoM for November is estimated to rise +.2% versus a +.4% gain in October.
2:00 pm EST
  • The Monthly Budget Statement for November is estimated at -$135.0B versus -$136.7B in October.
Upcoming Splits
  • (NSP) 2-for-1
Other Potential Market Movers
  • The Eurozone ZEW Survey, UK CPI report, Wasde Crop report, $12B 30Y Bond auction, weekly US retail sales reports, Cowen Tech/Media/Telecom conference, (CVS) analyst day, (GE) investor meeting, (MMM) Outlook Meeting, (HI) investor day and the (KMT) investor day could also impact trading today.
BOTTOM LINE:  Asian indices are mostly lower, weighed down by consumer 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 day.

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