Monday Watch

Today's Headlines

Bloomberg: 

• Putin’s Saber Rattling Against Kiev Exposes Risks to Bond Rally. A resurgence in tensions in Crimea has brought political risk back to the table for holders of Russian debt. The cost of buying default insurance on the government’s bonds has increased 21 basis points to 231, the most worldwide, since President Vladimir Putin promised on Aug. 10 to respond to what he called Ukraine’s “terror” tactics in Crimea. Amundi Asset Management and Aberdeen Asset Management are ready to sell Russian bonds if the conflict intensifies or leads to a widening of sanctions.
• Japan’s Economic Growth Slows as Business Spending Slumps. Japan’s economy grew less than forecast in the three months through June 30 as business spending contracted for a second-straight quarter and exporters struggled with the resurgent yen. 
• Singaporeans Are Gloomiest Since 2009 on Jobs, Pay: Chart.
• Asian Stocks Decline as Japanese Shares Retreat After GDP Report. Asian stocks fell, retreating from a one-year high, after U.S. shares pulled back from records and as a report showed Japan’s economy expanded at a slower pace than forecast. The MSCI Asia Pacific Index dropped 0.4 percent to 139.40 as of 9:07 a.m. in Tokyo.
• Mid-America Nears $4 Billion Post Properties(PPS) Deal, WSJ Says. Mid-America Apartment Communities Inc., a real-estate investment trust, is close to a deal to buy Post Properties Inc. for about $4 billion as demand for rental properties booms, The Wall Street Journal reported.

Wall Street Journal:

• Economic Slump Sends Big Ships to Scrap Heap. Cargo-vessel recycling surges amid overcapacity and tumbling freight rates.
• Hillary Clinton’s Free College-Tuition Plan Coming Up Short on Specifics. Details on Democratic presidential candidate’s proposal, put forth during negotiations with party rival Bernie Sanders, hard to come by.
• Clinton Abandons the Middle on Education. Most rank-and-file Democrats disagree with the party platform.
• California’s Cow Police. Progressives find a new climate-change villain to regulate. First they came after the oil producers, then manufacturers, and now they’re coming for the cows. Having mandated emissions reductions from fossil fuels, California’s relentless progressives are seeking to curb the natural gas emanating from dairy farms.

Fox News:

• Milwaukee officials plead for calm after police shooting sparks violence. (video) Wisconsin Gov. Scott Walker activated the National Guard on Sunday afternoon, hours after a gas station was set on fire and other businesses were torched by demonstrators protesting a controversial shooting by police. Walker said he took the step after receiving a request from Milwaukee County Sheriff David Clarke and talking with Mayor Tom Barrett and the Guard's leader. The Guard will be in position to help "upon request," according to Walker's announcement. Walker also praised citizens who showed up Sunday to clean up the north-side neighborhood where the violence took place. He called for "continued peace and prayer." The clashes and rioting erupted after a Milwaukee police officer shot and killed an armed suspect Saturday night during a foot chase on the city’s north side.
• Pence urges federal probe into whether Clinton granted political favors to foundation donors. (video) Republican vice-presidential nominee Gov. Mike Pence on Sunday suggested a federal investigation into whether Hillary Clinton, during her tenure as secretary of state, provided political favors to foreign donors to her family’s Clinton Foundation, saying “the American people have a right to know.” The Indiana governor argued that emails made public last week suggested such a connection between State Department officials and major foreign donors to the foundation but acknowledged that Clinton’s involvement remains unclear.
• Congress could get record of FBI's Clinton interview over emails by this week. (video) Some of the FBI files on the agency’s investigation into Hillary Clinton’s use of a private server system while secretary of state could be given to a House oversight committee as early as this week, a congressional source confirmed with Fox News on Sunday.

CNBC: 

• Tim Cook addresses Apple's(AAPL) US taxes, says no repatriation without 'fair rate'.

Zero Hedge: 

• George Soros Hacked, Over 2,500 Internal Docs Released Online.
• Dumb & Dumber: The Economist vs. The WEF On "Biggest Threats" To The Global Economy. 
• Head Of "World's Most Bearish Hedge Fund" Explains Why The VIX Is Now Broken. (graph)
• How Long Can Economic Reality Be Ignored?
• The Bank of Japan Will Be The Top Shareholder Of 55 Companies By The End Of 2017.
• Fact Or Fiction? Obama Clears 2,000 Square Miles Of U.S. Airspace For New Free-Range Drone Preserve.
• Captured ISIS Terrorist Confirms He Has "Jihadist Brothers" In Mexico; Obama Administration Denies It.
• How Global Elites Forsake Their Countrymen (Or Why 'The Top' Believes 'The Bottom' Needs Managing).
• Chicago Records Deadliest Day In 13 Years As City Spirals Out Of Control.
• Shocking Report Finds U.S. Military Consistently "Distorted, Suppressed, Or Substantially Altered" ISIS-Related Intel.
• Here's Why Wages Have Stagnated (And Will Continue To Stagnate). (graph)
• Currency Wars Escalate As Fed Treasuries In Custody Tumble To 2012 Lows. (graph)
• Obama's Job Recovery Is Not Only Slower Than Past Recessions, It's Completely Nonexistent. (graph)
• US Olympic Gold Medalist Ryan Lochte Reportedly Held At Gunpoint At Rio Party.
• As Everyone Now Sees "Bubbles In Credit", Debt Investors Quietly Exit Stage Left. (graph)
• Something's Gotta Give: From TTID To TINA To TNSTH. (graph)
• Violent Protesters Riot, Burn Cars, Loot Buildings In Milwaukee After Police Kill Armed Suspect. (video)

Business Insider:

• Democrats are running an experimental campaign to turn a deep red state blue.
• There's something that could crush OPEC's output freeze plans.
• US police officer killed in Georgia responding to emergency call.
• Major US renting markets are starting to crumble.
• Scott Walker activates National Guard to help if needed after riots rock Milwaukee.

Night Trading

• Asian indices are -.25% to unch. on average.
• Asia Ex-Japan Investment Grade CDS Index 115.0 +.25 basis point.
• Asia Pacific Sovereign CDS Index 43.75 +.5 basis point.
• Bloomberg Emerging Markets Currency Index 73.37 -.05%.
• S&P 500 futures +.08%.
• NASDAQ 100 futures +.05%.

Morning Preview Links

Earnings of Note

Company/Estimate

• (SYY)/.61 

Economic Releases

8:30 am EST

• Empire Manufacturing for August is estimated to rise to 2.0 versus .55 in July.

10:00 am EST

• The NAHB Housing Market Index for August is estimated to rise to 60 versus 59 in July.

4:00 pm EST

• Net Long-Term TIC Flows for June.   

Upcoming Splits

• None of note

Other Potential Market Movers

• The Reserve Bank of Australia minutes could also impact trading today.

BOTTOM LINE: Asian indices are slightly lower, weighed down by industrial and technology 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 week.