In Asian Equity Markets Japan’s Nikkei average fell slightly on Tuesday morning as tech shares and Apple suppliers declined, tracking their U.S. counterparts overnight, while concerns over North Korea sapped risk appetite. The Nikkei was effectively flat, down 0.1 percent at 20,377.29 by the midday break, moving away from a two-year high of 20,481.27 hit last week. Meantime, the broader Topix edged up 0.1 percent to 1,673.99.  MSCI’s broadest index of Asia-Pacific stocks outside Japan was down 0.3 percent, following tech-focused losses on Wall Street. Australian stocks were down 0.1 percent, while South Korean stocks slid 0.3 percent.

 

In Currency Markets the yen stood tall on Tuesday after tensions on the Korean peninsula flared-up anew amid an escalating war of words between North Korea and the United States, while the euro struggled near a four-week low versus the dollar. The dollar was 0.15 percent lower at 111.550 yen after coming off a high of 112.530 the previous day. The euro was steady at 132.340 yen after falling more than 1 percent overnight. The euro was 0.1 percent higher at $1.1857 but in close reach of $1.1832, its lowest level since Aug. 31 plumbed the previous day when it sank nearly 1 percent. The Swiss franc stood at 0.9662 franc per dollar after gaining about 0.3 percent overnight. The New Zealand dollar extended the previous day’s slide and was last down 0.2 percent at $0.7249

 

In Commodities Markets oil prices extended gains on Tuesday, with Brent crude hitting a 26-month high, supported by Turkey’s threat to cut crude flows from Iraq’s Kurdistan region to the outside world. London Brent crude for November delivery was up 46 cents at $59.48 a barrel after settling up 3.8 percent on Monday. U.S. crude for November delivery was up 15 cents at $52.37, after hitting $52.43, a five-month high. Spot gold was nearly unchanged at $1,310.61 per ounce, not far from Monday’s high of $1,311.50. Silver was up 0.1 percent at $17.19 per ounce. Platinum gained 0.1 percent to $939.50 per ounce and palladium rose 0.5 percent to $914.70 per ounce.

 

In US Equity Markets stocks fell on Monday, as a selloff in technology shares weighed heavily on the Nasdaq, while the most recent statement from North Korea’s to Washington added to a cautious tone. The Dow Jones Industrial Average fell 0.24 percent, to 22,295.75, the S&P 500 lost 0.22 percent, to 2,496.66 and the Nasdaq Composite was down 0.88 percent, to 6,370.59.  The S&P technology index slid 1.42 percent, its worst daily performance in five weeks. Tech names such as Facebook, off 4.5 percent, Microsoft, down 1.55 percent, and Apple off 0.88 percent, were among the biggest drags on the benchmark S&P 500 index. Allergan was up 3.40 percent after the drugmaker authorized a $2 billion buyback of its shares.

 

In Bond Markets Japanese government bonds were on solid footing on Tuesday, as futures edged up on the back of renewed tensions over the Korean peninsula amid an escalating war of words between North Korea and Washington. December 10-year JGB futures rose 0.07 point to 150.91. The benchmark 10-year JGB yield was unchanged at 0.020 percent. The U.S. benchmark 10-year Treasury yield was down 4 basis points at 2.222 percent.

 

 

Economic Calendar

• 15:00 GMT+1 US CB Consumer Confidence
• 17:45 GMT+1 US Fed Chair Yellen Speaks

 

US Equity Upgrades

• ABN AMRO (ABMRF) UPGRADED TO BUY FROM HOLD AT DEUTSCHE BANK
• ALSEA (ALSSF) UPGRADED TO OVERWEIGHT FROM EQUAL WEIGHT AT BARCLAYS
• AMERICAN OUTDOOR BRANDS (AOBC) UPGRADED TO OUTPERFORM FROM NEUTRAL AT WEDBUSH
• AVALONBAY (AVB) UPGRADED TO OUTPERFORM FROM IN LINE AT EVERCORE ISI
• BOX (BOX) UPGRADED TO OUTPERFORM FROM MARKET PERFORM AT RAYMOND JAMES
• BUENAVENTURA (BVN) UPGRADED TO OVERWEIGHT FROM EQUAL WEIGHT AT MORGAN STANLEY
• COLGATE-PALMOLIVE (CL) UPGRADED TO OVERWEIGHT FROM EQUAL WEIGHT AT MORGAN STANLEY
• COMPASS MINERALS (CMP) UPGRADED TO OVERWEIGHT FROM NEUTRAL AT JPMORGAN
• CORPORATE OFFICE PROPERTIES (OFC) UPGRADED TO BUY FROM HOLD AT JEFFERIES
• DIAMOND OFFSHORE (DO) UPGRADED TO BUY FROM NEUTRAL AT UBS
• ELDORADO GOLD (EGO) UPGRADED TO NEUTRAL FROM UNDERPERFORM AT CREDIT SUISSE
• ENSCO (ESV) UPGRADED TO BUY FROM NEUTRAL AT UBS
• ESSEX PROPERTY TRUST (ESS) UPGRADED TO IN LINE FROM UNDERPERFORM AT EVERCORE ISI
• GENERAL MOTORS (GM) UPGRADED TO BUY FROM HOLD AT DEUTSCHE BANK
• HCP (HCP) UPGRADED TO IN LINE FROM UNDERPERFORM AT EVERCORE ISI
• NEW ORIENTAL EDUCATION (EDU) UPGRADED TO BUY FROM NEUTRAL AT BOFA/MERRILL
• NOBLE CORP. (NE) UPGRADED TO BUY FROM NEUTRAL AT UBS
• PSEG (PEG) UPGRADED TO OUTPERFORM FROM IN LINE AT EVERCORE ISI
• ROSS STORES (ROST) UPGRADED TO OVERWEIGHT FROM NEUTRAL AT JPMORGAN
• ROWAN COMPANIES (RDC) UPGRADED TO BUY FROM NEUTRAL AT UBS
• STAAR SURGICAL (STAA) UPGRADED TO BUY FROM HOLD AT CANACCORD
• TRANSOCEAN (RIG) UPGRADED TO BUY FROM NEUTRAL AT UBS
• UNDER ARMOUR (UAA) UPGRADED TO OVERWEIGHT FROM SECTOR WEIGHT AT KEYBANC

 

US Equity Downgrades

• ABBVIE (ABBV) DOWNGRADED TO NEUTRAL FROM BUY AT UBS
• ALBEMARLE (ALB) DOWNGRADED TO NEUTRAL FROM OUTPERFORM AT BAIRD
• ANGLO AMERICAN (NGLOY) DOWNGRADED TO SELL FROM HOLD AT DEUTSCHE BANK
• BUTTERFIELD (NTB) DOWNGRADED TO NEUTRAL FROM BUY AT CITI
• CARMAX (KMX) DOWNGRADED TO NEUTRAL FROM BUY AT GOLDMAN SACHS
• CONSUMER DISCRETIONARY SECTOR (XLY) DOWNGRADED TO UNDERWEIGHT AT MORGAN STANLEY
• FRANCO-NEVADA (FNV) DOWNGRADED TO NEUTRAL FROM OUTPERFORM AT CREDIT SUISSE
• LIFE STORAGE (LSI) DOWNGRADED TO UNDERPERFORM FROM NEUTRAL AT BOFA/MERRILL
• PROLOGIS (PLD) DOWNGRADED TO IN LINE FROM OUTPERFORM AT EVERCORE ISI
• QUEST DIAGNOSTICS (DGX) DOWNGRADED TO MARKET PERFORM FROM OUTPERFORM AT RAYMOND JAMES
• UNDER ARMOUR (UAA) DOWNGRADED TO NEUTRAL FROM BUY AT GUGGENHEIM
• VERSARTIS (VSAR) DOWNGRADED TO NEUTRAL FROM BUY AT CITI
• VF CORP. (VFC) DOWNGRADED TO SECTOR WEIGHT FROM OVERWEIGHT AT KEYBANC

 

US Equity Initiations

• AMERISAFE (AMSF) INITIATED WITH A NEUTRAL AT BOENNING & SCATTERGOOD
• BAKER HUGHES (BHGE) INITIATED WITH AN UNDERPERFORM AT BOFA/MERRILL
• BIG LOTS (BIG) INITIATED WITH AN OVERWEIGHT AT MORGAN STANLEY
• BLUE APRON (APRN) INITIATED WITH A BUY AT GUGGENHEIM
• CORESITE REALTY (COR) INITIATED WITH A NEUTRAL AT JPMORGAN
• CHROMADEX (CDXC) INITIATED WITH A BUY AT LADENBURG
• EAGLE POINT CREDIT (ECC) INITIATED WITH A BUY AT LADENBURG
• ELDORADO RESORTS (ERI) INITIATED WITH A BUY AT DEUTSCHE BANK
• EMERGE ENERGY (EMES) INITIATED WITH A NEUTRAL AT PIPER JAFFRAY
• ESCALADE (ESCA) INITIATED WITH A BUY AT AEGIS
• GRUBHUB (GRUB) ASSUMED WITH A BUY AT CRAIG-HALLUM
• HI-CRUSH PARTNERS (HCLP) INITIATED WITH AN OVERWEIGHT AT PIPER JAFFRAY
• HOSTESS BRANDS (TWNK) INITIATED WITH AN EQUAL WEIGHT AT MORGAN STANLEY
• JANUS HENDERSON GROUP (JHG) INITIATED WITH A MARKET PERFORM AT WELLS FAR
• JOHNSON & JOHNSON (JNJ) INITIATED WITH A NEUTRAL AT CITI
• KCAP (KCAP) FINANCIAL INITIATED WITH A NEUTRAL AT LADENBURG
• LEXINGTON REALTY (LXP) INITIATED WITH A NEUTRAL AT DA DAVIDSON
• OLLIE’S BARGAIN OUTLET (OLLI) INITIATED WITH AN EQUAL WEIGHT AT MORGAN STANLEY
• ONE LIBERTY PROPERTIES (OLP) INITIATED WITH A NEUTRAL AT DA DAVIDSON
• STELLUS CAPITAL (SCM) INITIATED WITH A BUY AT LADENBURG
• WABCO (WBC) INITIATED WITH A BUY AT BERENBERG
• ZILLOW (ZG) INITIATED WITH A NEUTRAL AT MACQUARIE