Friday Watch

Evening Headlines

Bloomberg:

• Merkel's Praise Sets Tone for Macron Debut Among European Peers. Angela Merkel said she’ll present detailed plans for expanded German-French cooperation within three months with Emmanuel Macron, whom she credited with giving Europe a jolt of “creativity” and renewed purpose. Five weeks into his French presidency, the German chancellor gave Macron an effusive reception on Thursday at his first summit with fellow European Union leaders in Brussels. Having backed 39-year-old Macron over anti-EU candidate Marine Le Pen, Merkel is cheering his arrival as a chance for the EU to move forward after the U.K. voted to leave and U.S. President Donald Trump questioned the bloc’s reason to exist.

• Chinese Big Five Tech Companies Gain on U.S. Counterparts. (graph)

• Asian Stocks Mixed While Oil Halts Losing Streak. Asian equities are ending the week on a tepid note, with oil remaining below $43 a barrel, after a series of Federal Reserve speakers did little to alter projections for the path of U.S. interest-rate increases. Japanese shares were little changed while Australian and South Korean equities nudged higher. Chinese equities are in the limelight as the nation’s banking watchdog raises scrutiny on some of the biggest dealmakers. Crude halted a losing streak after tumbling into a bear market, but concerns of a supply glut persisted, helping gold to continue climbing back from a one-month low. Japan’s Topix was little changed as of 9:28 a.m. in Tokyo. Australia’s S&P/ASX 200 Index and South Korea’s Kospi index each climbed 0.2 percent.

• OPEC Has Few Escape Routes From Another Bear Market in Oil. (video) Oil’s back in a bear market and investors remain unmoved by last month’s agreement to prolong supply cuts, leaving OPEC and its allies with few remaining tools to boost prices.

• Bull or Bear, Four Gold Charts That Offer Something for Everyone. 

• Get Ready for a Friday Trading Frenzy. The FTSE Russell’s rebalancing of stock indexes reliably boosts trading. At the same time, it rarely triggers big price swings in the market. Last year’s adjustment, which coincided with the Brexit vote, helped fuel a jump in volume to more than 15 billion shares, the highest total of the year. In four of the last five years, reconstitution day ranked in the 10 busiest trading sessions, data compiled by Bloomberg show.

• The Biotech Rally Might Have Legs.

• Amazon(AMZN) Vision of Deliveries by Drone Gets Boost in FAA Measure. (video)

Wall Street Journal:

• Fed’s Stress Tests Bolster Case for Easing Bank Rules. Results give ammunition to Trump administration for scaling back postcrisis rules.

• American Airlines(AAL) CEO ‘Not Happy’ About Qatar Airways Plan to Buy 10% Stake. Gulf airline intends to buy shares on the open market—an approach American Airlines CEO calls ‘puzzling and strange’.

• Where Bezos Leads, Amazon Shareholders Blindly Follow. Investors unperturbed by lack of details in Whole Foods bid.

• Senate GOP Health Bill Would End ACA Penalties, Cut Taxes on High Incomes. Legislation would cap states’ Medicaid funding, phase out program’s expansion.

• America Shouts While Europe Shrugs. The U.S. capitalize on division. Meantime, Parisians hardly notice a terror attack.

Fox News: 

• Gregg Jarrett: Will Mueller & Comey use a false case of obstruction to trigger impeachment? (video)

CNBC: 

• YouTube claims 1.5 billion monthly users as it races to boost video-ad business.

• Trump says he is 'very supportive' of Senate healthcare bill.

• Why this could be a sweet Friday for crude oil. (video)

Zero Hedge: 

• Americans Are Dying With An Average Of $61,500 In Debt. (graph)

• James Comey Visits The New York Times.

• How Central Banks Intend To Fight CryptoCurrencies.

• Visualizing The Jeff Bezos Empire In One Giant Chart.

• Fed "Stress Test" Results Are Out: Everyone Passes Even As VIX Hits 70.

• Obama Lashes Out At GOP Healthcare Plan: "This Bill Will Do You Harm".

• Bonds Bid, Banks Skid But Healthcare Hope Saves Stocks. (graph)

Business Insider: 

• The Canadian government is warning that household debt will shatter records.

• Oracle's(ORCL) blow-out earnings caused over 20 Wall Street analysts to raise price targets.

• How excessive debt can cause financial crises.

Telegraph:

• Chinese banking watchdog probes 'systemic risks' of debt-fuelled empire builders.

Night Trading 

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

• Asia Ex-Japan Investment Grade CDS Index 88.50 +1.5 basis points. 

• Asia Pacific Sovereign CDS Index 19.25 +.75 basis point.

• Bloomberg Emerging Markets Currency Index 72.49 -.03%.

• S&P 500 futures +.08%.

• NASDAQ 100 futures +.09%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (BBRY)/0.00

• (FINL)/.23

Economic Releases 
9:45 am EST

• Prelimnary Markit US Manufacturing PMI for June is estimated to rise to 53.0 versus 52.7 in May.

• Preliminary Markit US Services PMI for June is estimated fall to 53.5 versus 53.6 in May.

10:00 am EST

• New Home Sales for May is estimated to rise to 590K versus 569K in April.
  

Upcoming Splits

• None of note

Other Potential Market Movers

• The Fed's Bullard speaking, Fed's Mester speaking, Fed's Powell speaking, Eurozone Manufacturing/Services PMI reports and the FTSE Russell Reconstitution Final Determinations could also impact trading today.

BOTTOM LINE:  Asian indices are mostly lower, weighed down by financial and industrial shares in the region. I expect US stocks to open mixed and to rally into the afternoon, finishing modestly higher.  The Portfolio is 75% net long heading into the day.