Tuesday, December 19, 2017

Wednesday Watch

Evening Headlines
  • Asia Stocks Mixed as Tax Vote Awaits. (video) Equity benchmarks in Tokyo were mixed, and those in Sydney, Seoul, Shanghai and Hong Kong little changed. The S&P 500 Index slipped from a record Tuesday. Longer-dated U.S. Treasury yields jumped to the highest since October overnight, with little immediate news trigger. European yields also climbed as the European Central Bank prepares to slow its asset purchases next month. The dollar held within recent ranges. Oil climbed after news of a surprise drop in U.S. crude stockpiles. Most fund managers see U.S. tax cuts boosting bond yields, along with stocks, next year, a Bank of America Merrill Lynch monthly survey showed. A net 83 percent of respondents viewed bond markets as overvalued. Japan’s Topix index was up 0.2 percent as of the Tokyo lunch break, while the Nikkei 225 Stock Average slipped 0.1 percent. Hong Kong’s Hang Seng Index was flat and the Shanghai Composite Index fell 0.1 percent. Futures on the S&P 500 Index rose 0.2 percent after the underlying gauge declined 0.3 percent Tuesday. Australia’s S&P/ASX 200 was little changed. 
Wall Street Journal:
Business Insider:
Night Trading 
  • Asian equity indices are -.25% to +.5% on average.
  • Asia Ex-Japan Investment Grade CDS Index 68.5 -.75 basis point
  • Asia Pacific Sovereign CDS Index 13.25 -.25 basis point.
  • Bloomberg Emerging Markets Currency Index 73.67 -.01%.
  • S&P 500 futures +.25%.
  • NASDAQ 100 futures +.28%.
Morning Preview Links

Earnings of Note

  • (ATU)/.17
  • (BB)/.00
  • (GIS)/.82
  • (WGO)/.47
  • (BBBY)/.37
  • (MLHR)/.57
  • (RMAX)/.51
Economic Releases
10:00 am EST
  • Existing Home Sales for November are estimated to rise to 5.53M versus 5.48M in October.
10:30 am EST
  • Bloomberg consensus estimates call for a weekly crude oil inventory decline of -3,483,700 barrels versus a -5,117,000 barrel decline the prior week. Gasoline supplies are estimated to rise by +1,732,800 barrels versus a +5,664,000 barrel gain the prior week. Distillate inventories are estimated to fall by -145,600 barrels versus a -1,370,000 barrel decline the prior week. Finally, Refinery Utilization is estimated to rise by +.11% versus a -.4% decline prior.
Upcoming Splits
  • None of note
Other Potential Market Movers
  • The German PPI report and the weekly MBA Mortgage Applications report could also impact trading today.
BOTTOM LINE:  Asian indices are mostly higher, boosted by industrial 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 100% net long heading into the day.

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