Tuesday Watch

Evening Headlines
Bloomberg: 

• China Shares Fall on Economic Worry. (video)
• Aussie Near Four-Week High Before RBA as Fed Rate Rise Odds Drop. Australia’s dollar held near a four-week high versus its U.S. peer amid signs central banks in both country’s won’t rush to change policy. Swaps indicate only about 7 percent odds that the Reserve Bank of Australia will lower interest rates at its meeting Tuesday, following a cut last month. The Aussie rallied the most in three months against the dollar last week. 
• Asian Stocks Advance as Yen Lifts Topix, Commodity Shares Rally. Asian stocks rose as the weaker yen boosted Japanese exporters and commodity shares rallied after Federal Reserve Chair Janet Yellen signaled the U.S. economy is strengthening enough to withstand gradual increases in borrowing costs. The MSCI Asia Pacific Index climbed for a third day to extend a five-week high, advancing 0.4 percent to 130.45 as of 9:16 a.m. in Tokyo.
• Senators Probe Five Drugmakers on Price of Overdose Antidote. U.S. senators want five drugmakers to account for increases in the price of a drug that’s used to reverse the effects of prescription and illegal opioids, as the number of Americans overdosing on painkillers and heroin has skyrocketed in recent years.

Wall Street Journal:

• Goldman(GS) Probed Over Malaysia Fund 1MDB. Focus is on whether bank didn’t alert authorities to unusual funds movement. U.S. investigators are trying to determine whether Goldman Sachs Group Inc. broke the law when it didn’t sound an alarm about a suspicious transaction in Malaysia, people familiar with the investigation said.

Fox News:

• Former US attorney: Clinton aides' legal strategy is 'red flag'. (video) Four central figures in the FBI’s criminal investigation of Hillary Clinton’s email practices are all using the same lawyer, a move described as a “red flag” by a former U.S. attorney who now runs a government watchdog group.

MarketWatch:

• Hillary Clinton gave inequality speech in a $12,000 Armani jacket. Hillary Clinton’s New York primary victory speech in April focused on topics including income inequality, job creation and helping people secure their retirement. It was a clear attempt to position herself as an everywoman.

CNBC:

• Chinese luxury real estate investments leaving the 'golden age,' broker says. (video) As the Chinese economy is in the midst of a transition, so too, is America's luxury real estate market, a top broker told CNBC. Chinese investors in U.S. real estate have shifted away from "golden-age" trophy properties and toward "silver" level properties near good school systems, Jacky Teplitzky of Douglas Elliman told CNBC's "Power Lunch."

Zero Hedge:

• China's Real Unemployment Rate Is Three Times Higher Than The Offical Number.
• Peak Facebook(FB)? New Study Finds Social Media App Usage Tumbles Across The Globe.
• China Capital Outflow Crackdown: "Surprisingly Plump" Man Busted With $74,000 Strapped To His Waist.
• An Angry Bernie Sanders Responds To Hillary's Nomination.
• "Do I Have A Problem With That, Ya I Do" - Sanders Slams Hillary's Clinton Foundation Conflict Of Interest. (video)
• It Takes A Village To Maintain A Dangerous Financial System.
• "You Are Here".
• Introducing Europe's Frightening New Tax Directive.
• BofA Credit Analyst Loses It: "Central Banks Created A Fantasy Land".
• Yellen-nado Sends Stocks Soaring To 2016 Highs. (graph)

Business Insider:

• Here's why you should freak out about the stock market.

WWD:

• Ralph Lauren Said to Plan to Cut Up to 10% of Jobs. Cuts said planned throughout the co., some stores to be closed, citing industry sources. Could affect up to 10% of workforce.

Night Trading 

• Asian equity indices are unch. to +1.0% on average.
• Asia Ex-Japan Investment Grade CDS Index 139.0 -2.5 basis points. 
• Asia Pacific Sovereign CDS Index 51.75 -1.0 basis point.
• Bloomberg Emerging Markets Currency Index 71.89 -.04%. 
• S&P 500 futures unch. 
• NASDAQ 100 futures +.04%.

Morning Preview Links

Earnings of Note
Company/Estimate 

• (HDS)/.47
• (MIK)/.35
• (NAV)/-.15
• (VRX)/1.38
• (VNCE)/-.11
• (PAY)/.52
• (PLAY)/.59

Economic Releases 
8:30 am EST

• Final 1Q Non-farm Productivity is estimated to fall -.6% versus a prior estimate of a -1.0% decline.
• Final 1Q Unit Labor Costs are estimated to rise +4.0% versus a prior estimate of a +4.1% decline. 

10:00 am EST

• IBD/TIPP Economic Optimism for June is estimated to fall to 48.3 versus 48.7 in May.
  

3:00 pm EST

• Consumer Credit for April is estimated to fall to $18.0B versus.
  

Upcoming Splits 

• None of note

Other Potential Market Movers

• The China Trade balance report, RBA meeting, US weekly retail sales reports, Goldman Healthcare Conference, Jefferies Healthcare conference, Stifel Tech/Internet/Media conference, (RL) investor day, (SWFT) Mid-Quarter conference call and the (QSII) analyst day could also impact trading today.

BOTTOM LINE:  Asian indices are mostly higher, boosted by technology and commodity shares in the region. I expect US stocks to open mixed and to strengthen into the afternoon, finishing modestly higher. The Portfolio is 75% net long heading into the day.