Friday Watch

Evening Headlines 
Bloomberg:

• When Will Greece Run Out of Cash? (video) 
• The Chinese Can’t Kick Their Savings Habit. Some bank as much as half of their income, suppressing spending.
• South Korean Exports Drop for Fourth Month as Won Strengthens. South Korea’s exports declined the most in more than two years in April, amid concern that the won’s strength is undermining the competitiveness of sales abroad. Overseas shipments fell 8.1 percent in April from a year earlier, the fourth straight monthly decline, the Ministry of Trade, Industry and Energy said on Friday. The median of 18 estimates in a Bloomberg survey was for a 6.6 percent drop. 
• Japan Stocks Slip on Kuroda as Yen Falls. Japanese stocks fell, with the Topix index poised for its worst weekly drop this year, after the central bank governor said no further policy easing was needed for now. The euro headed for its longest run of gains against the yen in almost six months and U.S. equity-index futures advanced. The Topix fell a second day, losing 0.7 percent by 11:14 a.m. in Tokyo following a fourth straight monthly gain. Markets from China to South Korea are closed Friday.
• Oil Producers’ Sale of Future Output Puts a Lid on Price Gains. Oil producers are taking advantage of the biggest monthly price increase since 2009 to sell more of their future output, threatening to slow the rally. New York-traded crude for next-month delivery gained 25 percent in April on signs a record drop in drilling rigs is starting to reduce production, easing the biggest U.S. oil glut in 85 years. December 2016 contracts were up just 8.7 percent in that period.  
• SEC Lacks Accounting Controls It Seeks in Others, GAO Says. The U.S. Securities and Exchange Commission, which polices public companies’ financial reports, lacks internal controls over its own accounting, a government watchdog said Thursday. The SEC in fiscal 2014 didn’t have proper systems in place to account for money the regulator had seized from fraudsters or its inventory of property and equipment, James R. Dalkin, director of the GAO’s office of financial management and assurance, said in a letter to SEC Chair Mary Jo White discussing the findings of an audit.
• The 7 Biggest Questions Ahead of Tesla's(TSLA) Battery Announcement.

Wall Street Journal:

• U.S. Navy Starts to Accompany Ships in Strait Where Iran Seized Cargo Carrier. Warships join American-flagged ships in Hormuz, marking a vigorous response to Tehran.
• Big Banks Use Loophole to Avoid Ban. Loophole allows banks to avoid asking the SEC for a waiver. Big banks are using a little-known loophole to avoid triggering a Securities and Exchange Commission ban on selling certain lucrative products to clients in the wake of enforcement actions.
• The Threat to Melt the Electric Grid. An electromagnetic-pulse attack from North Korea or another U.S. enemy would cause staggering devastation. The Pentagon is moving the headquarters for the North American Aerospace Defense Command (Norad) back into Cheyenne Mountain near Colorado Springs, Colo., a decade after having largely vacated the site.

Fox News:

• Photos show purported ISIS training camp in Afghanistan. (video) New photos purport to show ISIS fighters training at a terrorist camp in Afghanistan, near the Pakistani border, in what may be yet another sign of the black-clad jihadist army's expanding reach. The pictures, obtained by a Pakistani journalist earlier this month and published by the military blog The Long War Journal, show apparent ISIS radicals training, marching in formation and brandishing heavy artillery.

Zero Hedge:

• 16 Signs That The Economy Has Stalled Out And The Next Economic Downturn Is Here.
• Guess Who Predicted The Failure Of QE.
• Well That Hasn't Happened Before - Exhibit 5. (graph)
• No More Greater Fools: Retail Traders Are "Pretty Fully Invested" In Stocks, TD CEO Says.
• LInkedIn Crashes 25% After Missing Revenues, Cutting Outlook. (graph)
• Dollar-nado Sparks Market Turmoil In April. (graph)
• The "Scariest Spreadsheet In Fed Possession" Just Revealed A Very Scary Number For Q2 GDP. (graph)
• Kathamandu: Before And After The Devastation. (pics)

Business Insider:

• Apple(AAPL) is down 6% since blowing out earnings on Monday.
• Dozens of countries are banning US poultry because of a huge bird flu outbreak.
• GRANTHAM WARNS: The Fed is determined to inflate a 'fully-fledged bubble'.

Reuters: 

• Visa(V) forecasts current-quarter profit below Street. Visa Inc, the world's largest credit and debit card company, forecast profit below Wall Street expectations for the current quarter, hurt by continued pressure from lower crude prices and a strong dollar. 
• CME Group(CME) suspends two gold futures traders for allegedly spoofing. CME Group Inc on Thursday suspended two traders from its markets for allegedly colluding to enter orders repeatedly with no intention of trading, a strategy that has been fingered as a key contributor to the 2010 Wall Street flash crash.
• Bubble risk grows as China's stock boom defies gravity. What do a ketchup maker, a precious metal distributor and a medical device company have in common? They are the new poster kids of a boom in China's equity market - and a potential headache for policymakers, as valuations defy fundamentals. Fuelled in part by cheap credit and a crackdown on shadow banking, mom and pop buyers - who make up about 60 percent of the Chinese equities investor base - have been snapping up shares in a rally that has seen the benchmark Shanghai stock index double in six months.

Telegraph:

• ECB too confident QE rescue plan has already worked, economists warn. Central bankers have been too quick to pat themselves on the back.

Evening Recommendations 

• None of note

Night Trading

• Asian equity indices are -.25% to +.25% on average.

• Asia Ex-Japan Investment Grade CDS Index 107.50 n/a.

• Asia Pacific Sovereign CDS Index 60.75 +.25 basis point.

• S&P 500 futures +.17%.

• NASDAQ 100 futures +.08%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (AXL)/.57
• (AON)/1.28
• (CVX)/.81
• (CLX)/1.10
• (CVS)/1.08
• (DUK)/1.14
• (FE)/.52
• (ITT)/.53
• (LM)/.99
• (LPNT)/.99
• (MCO)/1.03
• (ZEUS)/-.33
• (VFC)/.67
• (WY)/.25
• (BRK.B)/2374.70

Economic Releases
9:45 AM EST

• Final Markit US Manufacturing PMI for April is estimated at 54.2 versus a prior estimate of 54.2.

10:00 am EST

• Construction Spending for March is estimated to rise +.5% versus a -.1% decline in February.
• ISM Manufacturing for April is estimated to rise to 52.0 versus 51.5 in March.
• ISM Prices Paid for April is estimated to rise to 42.0 versus 39.0 in March.
• Final Univ. of Michigan Consumer Sentiment for April is estimated at 96.0 versus a prior estimate of 95.9.

Afternoon

• Total Vehicle Sales for April are estimated to fall to 16.9M versus 17.05M in March.

Upcoming Splits

• (GIII) 2-for-1

Other Potential Market Movers

• The Fed's Mester speaking, Fed's Williams speaking and the (BSX) investor day could also impact trading today.

BOTTOM LINE: Asian indices are mostly lower, weighed down by technology and industrial shares in the region. I expect US stocks to open mixed and to weaken into the afternoon, finishing modestly lower. The Portfolio is 25% net long heading into the day.