Tuesday, December 18, 2018

Wednesday Watch

Evening Headlines
  • Asian Stocks Mixed After Choppy U.S. Session. Asian stocks traded mixed Wednesday following a volatile U.S. session that saw stocks end the day flat and crude oil slump more than 7 percent. Treasuries extended gains and the yen climbed. Stocks in Japan fared worst as telecom giant SoftBank Corp. fell as much as 10 percent in its IPO debut. Shares in Australia also slipped while those in South Korea outperformed. Earlier, the S&P 500 Index ended virtually unchanged as investors braced for Wednesday’s Federal Reserve policy decision against the backdrop of recent turmoil in global markets that’s put equities on course for the worst year since 2008. Earnings after hours from FedEx stoked doubts about the strength of global trade, with the shares dropping almost 5 percent after a lower profit forecast -- just three months after raising it. Japan’s Topix index fell 0.7 percent as of 9:35 a.m. Tokyo time. South Korea’s Kospi rose 0.4 percent. Australia’s S&P/ASX 200 Index fell 0.3 percent. Hong Kong’s Hang Seng Index futures added 0.4 percent. S&P 500 futures rose 0.2 percent.  
Wall St. Journal:
Zero Hedge:
Night Trading 
  • Asian equity indices are unch. to +.5% on average.
  • Asia Ex-Japan Investment Grade CDS Index 91.0 -.5 basis point
  • Asia Pacific Sovereign CDS Index 9.5 +.25 basis point.
  • Bloomberg Emerging Markets Currency Index 66.94 +.1%.
  • FTSE 100 futures -.29%.
  • S&P 500 futures +.36%.
  • NASDAQ 100 futures +.34%.
Morning Preview Links

Earnings of Note

Before the Open:
  • (GIS)/.81
  • (NCS)/.53
  • (PAYX)/.63
  • (WGO)/.67
After the Close:
  • (MLHR)/.72
  • (PIR)/-.01
  • (RAD)/-.01
Economic Releases
8:30 am EST
  • The 3Q Current Account Balance is estimated at -$125.0B versus -$101.5B in 2Q.
10:00 am EST
  • Existing Home Sales for November are estimated to fall to 5.2M versus 5.22M in October.
10:30 am EST
  • Bloomberg consensus estimates call for a weekly crude oil inventory decline of -3,155,560 barrels versus a -1,208,000 barrel decline the prior week. Gasoline supplies are estimated to rise by +1,166,670 barrels versus a +2,087,000 barrel gain the prior week. Distillate inventories are estimated to fall by -33,330 barrels versus a -1,475,000 barrel decline the prior week. Finally, Refinery Utilization is estimated to rise by +.24% versus a -.4% decline the prior week.
2:00 pm EST
  • The FOMC is expected to raise the benchmark Fed Funds rate 25.0 basis points to 2.25-2.5%.
Upcoming Splits
  • None of note
Other Potential Market Movers
  • The German/UK PPI reports, FOMC Economic Projections/Press Conference, weekly MBA Mortgage Applications report and the (LLY) investor update could also impact trading today.
BOTTOM LINE:  Asian indices are mostly higher, boosted by technology 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 50% net long heading into the day.

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