Wednesday, November 01, 2017

Thursday Watch

Evening Headlines
Bloomberg:
  • Asia Stocks Face Mixed Start as Dollar Holds Gains. Asian stocks look set to consolidate around 10-year highs as investors digest news that President Donald Trump will pick Jerome Powell to lead the Federal Reserve. The dollar held gains and oil prices hovered near their peak for the year. Powell, a governor on the Fed board who’s never differed with Chair Janet Yellen on policy decisions, will be nominated by Trump to succeed her, according to three people familiar with the decision. The succession question overshadowed the Fed’s policy statement Wednesday, where it subtly upgraded its assessment of the economy and reinforced expectations of a December interest-rate hike. Contracts on Japan’s Nikkei 225 Stock Average added 0.4 percent in most recent trading in Singapore. Australia’s S&P/ASX 200 Index was flat. Futures contracts on Hong Kong’s Hang Seng Index were little changed.
  • Corporate Tax Cut to Be Phased Out After a Decade. House tax writers are planning on phasing out the proposed corporate rate of 20 percent after a decade, according to a Republican lawmaker familiar with the negotiations. Cutting the corporate tax rate to 20 percent from 35 percent is a key provision of the tax legislation that Republican congressional leaders plan to unveil on Thursday. But there have been conflicting reports about when the rate cut would take effect -- or how long it would last. Making the rate-cut temporary would limit its ability to spur economic growth -- a key selling point cited by President Donald Trump and others.
Wall Street Journal: 
CNBC: 
Zero Hedge:
Telegraph:
Night Trading 
  • Asian equity indices are -.25% to +.25% on average.
  • Asia Ex-Japan Investment Grade CDS Index 74.25 -.5 basis point. 
  • Asia Pacific Sovereign CDS Index 15.25 -.5 basis point.
  • Bloomberg Emerging Markets Currency Index 72.64 +.11%.
  • S&P 500 futures -.25%.
  • NASDAQ 100 futures -.39%.
Morning Preview Links

Earnings of Note
Company/Estimate

  • (BABA)/1.03
  • (ABC)/1.32
  • (APA)/.00
  • (AVP)/.07
  • (BDX)/2.37
  • (CI)/2.36
  • (DLPH)/1.57
  • (DISCA)/1.54
  • (FSS)/.21
  • (GCI)/.11
  • (IT)/.52
  • (HCP)/.46
  • (H)/.17
  • (ICE)/.70
  • (ITT)/.61
  • (MLM)/2.51
  • (RL)/1.88
  • (RDS/A)/.45
  • (SFM)/.18
  • (TK)/-.45
  • (VMC)/1.06
  • (YUM)/.67
  • (ZTS)/.63
  • (ATVI)/.49
  • (AIG)/-.79
  • (AAPL)/1.87
  • (ANET)/1.19
  • (CBS)/1.07
  • (FLR)/.60
  • (SBUX)/.55
  • (TRUP)/-.01
  • (OLED)/.11
  • (YRCW)/.34
Economic Releases 
7:30 am EST
  • The Challenger Job Cuts YoY report for October.
8:30 am EST
  • Initial Jobless Claims for last week are estimated to rise to 235K versus 233K the prior week.
  • Continuing Claims are estimated to rise to 1894K versus 1893K prior.
  • Preliminary 3Q Non-Farm Productivity is estimated to rise +2.6% versus a +1.5% gain in 2Q.
  • Preliminary 3Q Unit Labor Costs are estimated to rise +.4% versus a +.2% gain in 2Q.
Upcoming Splits
  • None of note
Other Potential Market Movers
  • The President's Fed Chair decision, Full Tax Bill release by Congress, Fed's Raphael Bostic speaking, Fed's Dudley speaking, Eurozone Manufacturing PMI report, Eurozone Unemployment Rate report, Bloomberg weekly Consumer Comfort Index, weekly EIA natural gas inventory report, (LB)/(CATO)/(BKE) monthly sales reports, (LB) investor meeting and the (MO) investor day could also impact trading today.
BOTTOM LINE:  Asian indices are mostly higher, boosted by metals/mining and technology shares in the region. I expect US stocks to open modestly lower and to rally into the afternoon, finishing mixed.  The Portfolio is 75% net long heading into the day.

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