Tuesday Watch

Evening Headlines 
Bloomberg:  

• Russia Pushing Greece Gas-Pipeline Accord Before Turkey Signs On. When Greek Prime Minister Alexis Tsipras meets the head of Russia’s OAO Gazprom on Tuesday, they’ll probably sign an agreement to have a natural-gas link to Europe cross Greece, analysts from UBS Group AG and Alfa-Bank said. For now, the accord will be just a political step on the road to building the link, which depends on the backing of Turkey and the European Union, Maxim Moshkov from UBS and Alexander Kornilov from Alfa-Bank said. “The project has been supported in Russia at the highest level, so Gazprom is acting fast,” said Moshkov, an oil and gas analyst for UBS in Moscow.
• Greece Poses Political Threat to Euro Area: Lebovitz. (video)
• China Auto Sales to Rise Less Than 7% Forecast, Association Says. China’s vehicle sales will expand less in 2015 than the 7 percent forecast at the start of the year, as the economy slows and more cities impose restrictions on vehicle registrations, according to the state-backed auto association. “Even though we don’t like it, it will become a new norm that more cities will start limiting vehicle purchases every year,” Dong Yang, secretary general of the China Association of Automobile Manufacturers, said at a conference in Shanghai. He said the group will give a revised forecast later this year. China’s auto sales will grow by an average of about 5 percent to 10 percent a year, a “new normal” of slower expansion after increasing by an average of 24 percent from 2001 to 2010, he said.   
• Is China Getting Desperate for Growth? (video)
• Asian Stocks Rise as U.S. Shares Rebound, Japanese Yen Weakens. Asian stocks rose, following a rebound in U.S. shares, as the yen’s first drop in seven days buoyed Japanese exporters. Materials and health-care shares led gains. The MSCI Asia Pacific Index added 0.2 percent to 152.57 as of 9:01 a.m. in Tokyo. The measure retreated 0.9 percent yesterday, the most in almost a month, as China’s curbs on speculative trading outweighed the central bank’s biggest cut to reserve requirements since 2008.
• Steel demand in China forecast to decline through 2016. Steel demand in China will shrink this year and next to extend the first annual contraction since 1995 as economic growth in the world's biggest producer slows, according to the World Steel Association. China's steel use will drop 0.5 per cent to 707.2 million metric tons in 2015 and fall to 703.7 million tons next year, the group said in a statement. In 2014, demand declined 3.3 per cent to 710.8 million tons, according to the Brussels-based body, whose members account for 85 per cent of global output.

Wall Street Journal: 

• Bird Flu Hits Iowa Chickens in Escalation of Virus Outbreak. Farm with about 5.3 million chickens is biggest operation to be affected by outbreak.
• Israel Alone. Previous quarrels between Washington and Jerusalem were about differing Mideast perceptions. Now the issue is how the U.S. perceives itself.

Fox News:

• Top diplomat sorry for FBI director's remarks on Poland, Holocaust. FBI Director James Comey wasn't wrong when he said some in Poland were accomplices in the Holocaust, but his remarks -- which angered Poles and resulted in an apology Sunday night from America's top diplomat in Warsaw -- hit a raw nerve in a nation that suffered greatly at the hands of the Nazis, according to experts on the last century's darkest chapter

MarketWatch.com:

• Blue Bell recalls all its products in all markets.
• Lumber and gold send a warning to stock market bulls.

Zero Hedge: 

• Stunned Greeks React To Initial Capital Controls And The "Decree To Confiscate Reserves", And They Are Not Happy.
• "Too Many Zeros": China's Stock Bubble Proves Too Much For Computers. (graph)
• Steen Jakobsen: Get Ready For The Biggest Margin Call In History.
• Chinese Economic Outlook "Skewed Heavily To The Downside," BNP Says. (graph)
• Secretary Of State For Hire: Hillary Clinton Made Millions From Foreign Donors In Exchange For "Favors".
• The Crowning Glory Of Keynesianism.
• Builders Beggar Belief As Lumber Liquidation Looms. (graph)
• Bank Of England Exposes US Cronyism: Questions Why Buffett's Berkshire Hathaway(BRK/A) Is Not Too Big To Fail.
• David Einhorn Is "Adding More Shorts", Has A Question For Mario Draghi.
• IBM(IBM) Reports Worst Sales Since 2002; EPS Beats On Aggressive Buybacks, Cut In Tax Rate.
• Just Another Manic Panic-Buying Monday In Stocks. (graph)
• Stop The Presses: Nobel-Prize Winning Economist Slams QE.
• China's Day Trading Hordes Unmasked.

Business Insider:

• The chilling thing Blackstone(BX) said about the oil bust.
• David Einhorn really ripped into GE(GE) in his fund's quarterly letter.

Boersen Zeitung:

• Bundenbank's Dombret Warns of Risk to Financial Markets. Risks to financial stability have increased recently and the chances of a setback in such situations exists, citing Bundesbank board member Andreas Dombret saying in an interview. Increased risks to the financial system was dominant topic of discussion at the spring International Monetary Fund meeting and that of the G20 finance ministers and central bank governors in Washington. A growing cause of danger is unprecedented loose monetary policy, although there was strong support for this course by central banks to support growth. Liquidity has decreased significantly in some market segments, raising a question over what will happen in the event of a shock and certainly poses a danger.

Evening Recommendations 

• None of note

Night Trading

• Asian equity indices are -.25% to +1.0% on average.

• Asia Ex-Japan Investment Grade CDS Index 107.0 -2.5 basis points.

• Asia Pacific Sovereign CDS Index 60.5 -1.25 basis points.

• S&P 500 futures +.22%.

• NASDAQ 100 futures +.23%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (ATI)/.08
• (ACI)-.50
• (ARMH)/.07
• (BHI)/.44
• (EAT)/.93
• (CP)/2.20
• (CS)/.67
• (DD)/1.31
• (GPC)/1.05
• (HOG)/1.24
• (ITW)/1.17
• (KMB)/1.33
• (LMT)/2.49
• (MAN)/.79
• (NVR)/9.72
• (OMC)/.82
• (RF)/.18
• (SAP)/.63
• (AMTD)/.35
• (UA)/.05
• (UTX)/1.46
• (VZ)/.95
• (AMGN)/2.11
• (BRCM)/.60
• (CMG)/3.64
• (CREE)/.23
• (FWRD)/.40
• (ILMN)/.72
• (ISRG)/3.88
• (NBR)/.02
• (SYK)/1.09
• (VMW)/.84
• (YHOO)/.18
• (YUM)/.72

Economic Releases

• None of note

Upcoming Splits

• None of note

Other Potential Market Movers

• The German ZEW index and US weekly retail sales reports could also impact trading today.

BOTTOM LINE: Asian indices are mostly higher, boosted by financial and consumer shares in the region. I expect US stocks to open modestly higher and to weaken into the afternoon, finishing mixed. The Portfolio is 50% net long heading into the day.