In Asian Equity Markets Japan’s Nikkei index edged down on Tuesday morning in choppy trade, as construction stocks extended a punishing sell-off on growing concerns some of the firms may have breached antitrust regulations. The Nikkei was flat at 22,905.40 in midmorning trade, after opening up 0.3 percent. The broader Topix shed 0.1 percent to 1,815.86. MSCI’s broadest index of Asia-Pacific stocks outside Japan rose 0.3 percent. Australian stocks added 0.6 percent, Hong Kong’s Hang Seng rose 0.7 percent and Shanghai climbed 0.4 percent. South Korea’s KOSPI lost 0.2 percent.

 

In Currency Markets the dollar remained mired in its recent ranges in subdued trade on Tuesday, as optimism that the U.S. tax reform bill would pass dueled with doubts about its ultimate effect on the economy. The dollar edged up 0.1 percent to 112.63 yen, drifting in a range between its high of 113.750 hit a week ago and Friday’s low of 112.035. The euro edged up slightly to $1.1789. The Australian dollar edged up 0.1 percent to $0.7666, within sight of six-week highs touched last week, as the country’s central bank expressed greater confidence about the economic outlook. The dollar index, which tracks the U.S. currency against a basket of six major rivals, was steady on the day at 93.673.

 

In Commodities Markets  oil markets edged up on Tuesday as the Forties pipeline outage in the North Sea and voluntary production restraint led by OPEC supported crude, although rising output in the United States put a cap on gains.  U.S. West Texas Intermediate crude futures were at $57.30 a barrel, up 14 cents from their last settlement. Brent crude futures were at $63.49 a barrel, up 8 cents. Some upward pressure was taken off Brent after a nationwide oil worker strike was called off in Nigeria, traders said. Spot gold was little changed at $1,260.92 per ounce after climbing 0.5 percent the previous day on the sagging dollar.

 

In US Equity Markets stocks  hit record closing highs on Monday as optimism increased about the likelihood of lower corporate tax rates as the Republican tax bill moved closer to passage. The Dow Jones Industrial Average rose 0.57 percent, to 24,792.2, the S&P 500 gained 0.54 percent, to 2,690.17 and the Nasdaq Composite added 0.84 percent, to 6,994.76. The materials index gained 1.5 percent, the most among the major 11 S&P sectors.  Shares of Amplify Snack rose 71.6 percent after Hershey said it would buy the SkinnyPop popcorn maker in a $1.6 billion deal. Hershey rose 0.1 percent. Twitter jumped 11 percent after JPMorgan said it expects the company to post double-digit daily average user growth in 2018.

 

In Bond Markets   the yield curve in Germany, the euro zone’s biggest economy and its benchmark bond issuer, was its flattest in almost six months. The gap between German 30 and 2-year bond yields shrank to 178 basis points, its tightest since late June. 2-year German bond yields were up around 2.5 bps at -0.73 percent, while 10-year and 30-year equivalents were flat on the day.

 

 

Economic Calendar

• 14:30 GMT+0 US Building Permits

 

US Equity Upgrades

• Akamai (AKAM) upgraded to Outperform from Neutral at Credit Suisse
• Alexion (ALXN) upgraded to Outperform from Neutral at Baird
• AMD (AMD) upgraded to Neutral from Underperform at Macquarie
• Boston Beer (SAM) upgraded to Hold from Sell at Berenberg
• Capital One (COF) upgraded to Buy from Neutral at BofA/Merrill
• Capital One (COF) upgraded to Neutral from Underweight at Piper Jaffray
• CMS Energy (CMS) upgraded to Outperform from Market Perform at Wells Fargo
• Costco (COST) upgraded to Outperform from Market Perform at BMO Capital
• Discover (DFS) upgraded to Buy from Neutral at BofA/Merrill
• Fairmount Santrol (FMSA) upgraded to Buy from Neutral at Guggenheim
• General Mills (GIS) upgraded to Outperform from Market Perform at Wells Fargo
• Golar LNG Partners (GMLP) upgraded to Buy from Hold at Stifel
• Independent Bank (INDB) upgraded to Buy from Neutral at Compass Point
• KLA-Tencor (KLAC) upgraded to Overweight from Sector Weight at KeyBanc
• LyondellBasell (LYB) upgraded to Buy from Neutral at Citi
• Netgear (NTGR) upgraded to Outperform from Market Perform at Raymond James
• Phillips 66 Partners (PSXP) upgraded to Buy from Neutral at Goldman Sachs
• Sunoco (SUN) upgraded to Neutral from Sell at Goldman Sachs
• Synchrony (SYF) upgraded to Buy from Neutral at BofA/Merrill
• TopBuild (BLD) upgraded to Buy from Neutral at Nomura Instinet
• Twitter (TWTR) upgraded to Overweight from Neutral at JPMorgan
• Vipshop (VIPS) upgraded to Buy from Hold at Daiwa
• VMware (VMW) upgraded to Overweight from Sector Weight at KeyBanc
• Washington Trust (WASH) upgraded to Buy from Neutral at Compass Point
• Sanmina (SANM) upgraded to Buy from Hold at Craig-Hallum

 

US Equity Downgrades

• 21st Century Fox (FOXA) downgraded to Market Perform from Outperform at BMO Capital
• Alliant Energy (LNT) downgraded to Market Perform from Outperform at Wells Fargo
• American States Water (AWR) downgraded to Underperform at Wells Fargo
• CSX (CSX) downgraded to Hold from Hold at TD Securities
• Euronet (EEFT) downgraded to Market Perform from Outperform at William Blair
• Holly Energy (HEP) downgraded to Sell from Neutral at Goldman Sachs
• MPLX (MPLX) downgraded to Neutral from Buy at Guggenheim
• Northwest Natural (NWN) downgraded to Underperform from Market Perform at Wells Fargo
• Oclaro (OCLR) downgraded to Hold from Buy at Needham
• PG&E (PCG) downgraded to Market Perform from Outperform at Wells Fargo
• Quanex (NX) downgraded to Neutral from Outperform at Wedbush
• Snyder’s-Lance (LNCE) downgraded to Market Perform from Outperform at BMO Capital

 

US Equity Initiations

• Aegean Marine (ANW) assumed with a Buy at Jefferies
• Ardmore Shipping (ASC) assumed with a Buy at Jefferies
• Attunity (ATTU) initiated with an Outperform at William Blair
• Capital Product (CPLP) assumed with a Buy at Jefferies
• Danaos (DAC) assumed with a Hold at Jefferies
• Delphi Technologies (DLPH) initiated with a Buy at Jefferies
• DHT Holdings (DHT) assumed with a Buy at Jefferies
• Diana Shipping (DSX) assumed with a Hold at Jefferies
• Domino’s Pizza (DPZ) initiated with a Buy at Deutsche Bank
• Dynagas LNG (DLNG) assumed with a Buy at Jefferies
• Fate Therapeutics (FATE) initiated with an Overweight at Piper Jaffray
• GasLog (GLOG) assumed with a Buy at Jefferies
• GasLog Partners (GLOP) assumed with a Buy at Jefferies
• Genco Shipping (GNK) assumed with a Buy at Jefferies
• Gener8 Maritime (GNRT) assumed with a Buy at Jefferies
• Golar LNG (GLNG) assumed with a Buy at Jefferies
• Golar LNG Partners (GMLP) assumed with a Buy at Jefferies
• Kirby (KEX) assumed with a Buy at Jefferies
• Navigator Holdings (NVGS) assumed with a Buy at Jefferies
• Navios Maritime Partners (NMM) assumed with a Buy at Jefferies
• Nordic American Tankers (NAT) assumed with a Hold at Jefferies
• Pacira (PCRX) initiated with a Neutral at JPMorgan
• Papa John’s (PZZA) initiated with a Hold at Deutsche Bank
• Planet Fitness (PLNT) assumed with an Overweight at Piper Jaffray
• PPDAI Group (PPDF) initiated with a Market Perform at Keefe Bruyette
• Safe Bulkers (SB) assumed with a Hold at Jefferies
• Scorpio Bulkers (SALT) assumed with a Buy at Jefferies
• Scorpio Tankers (STNG) assumed with a Buy at Jefferies
• Seaspan (SSW) assumed with a Buy at Jefferies
• Ship Finance (SFL) assumed with a Hold at Jefferies
• Star Bulk Carriers (SBLK) assumed with a Buy at Jefferies
• StealthGas (GASS) assumed with a Buy at Jefferies
• Teekay Corp. (TK) assumed with a Hold at Jefferies
• Teekay LNG (TGP) assumed with a Hold at Jefferies
• TEN, Ltd. (TNP) assumed with a Buy at Jefferies
• Tiffany (TIF) initiated with a Neutral at JPMorgan
• Twitter (TWTR) initiated with a Buy at Summit Redstone
• Unitil (UTL) initiated with a Neutral at BofA/Merrill
• Wingstop (WING) initiated with a Hold at Deutsche Bank