Thursday Watch

Evening Headlines

Bloomberg:

• Asia Set to Stem Equity Losses; Kiwi Dollar Rises. Asian stocks were poised to halt the slide triggered by an escalation in tensions between the U.S. and North Korea as American officials tried to ease concerns that sparked a flight to safe-haven assets. Treasuries pared gains and U.S. stocks recouped declines in the final hour of trading as U.S. Secretary of State Rex Tillerson signaled military confrontation was not imminent. He was one of several officials in the Trump administration who sought to fine-tune the message on how it will address North Korean threats. The kiwi dollar climbed as New Zealand’s central bank reinforced its expectation to maintain a record-low interest rate. Futures on Japan’s Nikkei 225 Stock Average were 0.2 percent higher than the Tokyo cash-market close. Futures on Australia’s S&P/ASX 200 Index added 0.1 percent, while contracts on South Korea’s Kospi index and Hong Kong’s Hang Seng Index slipped 0.1 percent.

• Five Things You Need to Know to Start Your Day.

• Facebook(FB) Introduces `Watch' Video Product for Short Series.

• Fox(FOX/A) Benefits as Politics Chatter Fuels Growth for Cable News. (video)

Wall Street Journal:

• Trump Boasts U.S. Nuclear Arsenal Is ‘More Powerful Than Ever’. President’s twitter comments follow North Korea’s threat that it was considering firing missiles at Guam.

• Trump Criticizes McConnell for Failure to Advance Health-Law Reform. Remarks were after the Senate leader critiqued the ‘artificial deadlines’ set by the president.

Fox News:

• North Korea responds to US threats with Guam attack plan: 'Only absolute force' can work on Trump. (video)

CNBC:

• The alt-right finds a new enemy in Silicon Valley.

• Hedge funds score big win on obscure trade as North Korea nuclear risk is raised. Hedge funds bought South Korea's five-year credit default swap, sending the cost of protection against the country's inability to pay back loans up 8.63 percent to 62.74, its highest since June 2016. 

• Tesla's(TSLA) electric semi is reportedly autonomous and can move in 'platoons'. (video)

• Activist hedge funds target bigger and bigger US companies in year of the 'super campaign'. (video)

• The markets don't care about Trump's threats of 'fire and fury,' experts say. (video)

• Retired Army colonel: I don't think 'we're going to war over Korea'.

Zero Hedge:

• "Under Any Analysis, It’s Insanity": What War With North Korea Could Look Like.

• Death Spiral: 6.5 Million People Choose To Pay Tax Rather Than Buy Obamacare.

• Is Bitcoin Money?

• Streaming Killed The Cable Bundle: Record 941,000 Pay-TV Customers Ditch Cable In Q2.

• LAPD Prepares To Unleash Drones Amid Public Outcry.

• Mattis Warns Kim: "You Will Lose, Your People Will Be Destroyed".

• Fired Coder Speaks Out On Google's "Potentially Illegal Practices", "Recorded Meetings" And "Science Denial".

• Watchdog Files Complaint Against DNC For Colluding With Ukraine During The Election.

• Gold Spikes To 2-Month Highs As Equity 'Traders' Buy-The-Fire-And-Fury-Dip. (graph)

Business Insider:

• Fox News host Eric Bolling is suing a reporter for $50 million over story about sexual harassment allegations.

• Graham Capital, a $14 billion hedge fund, has lost money in almost all of its strategies this year.

• The enormous debt burden in the US will cause a recession.

Night Trading 

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

• Asia Ex-Japan Investment Grade CDS Index 82.0 -1.75 basis points. 

• Asia Pacific Sovereign CDS Index 20.75 +1.5 basis points.

• Bloomberg Emerging Markets Currency Index 73.55 -.02%.

• S&P 500 futures -.04%.

• NASDAQ 100 futures -.04%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (EAT)/1.04

• (GOOS)/-.19

• (DDS)/.20

• (KSS)/1.19

• (M)/.46

• (NWSA)/.10

• (NDLS)/.02

• (JWN)/.65

• (NVDA)/.82

• (PCTY)/.01

• (SNAP)/-.14

Economic Releases 
8:30 am EST

• Initial Jobless Claims for last week are estimated at 240K versus 240K the prior week.

• Continuing Claims are estimated to fall to 1960K versus 1968K prior.

• PPI Final Demand MoM for July is estimated to rise +.1% versus a +.1% gain in June.

• PPI Ex Food and Energy MoM for July is estimated to rise +.2% versus a +.1% gain in June.

2:00 pm EST

• The Monthly Budget Deficit for July is estimated at -$52.0B versus -$90.2B in June.

Upcoming Splits

• None of note

Other Potential Market Movers

• The Fed's Dudley speaking, UK industrial production report, weekly EIA natural gas inventory report, $15B 30Y T-Note auction, WASDE Crop report, weekly Bloomberg Consumer Comfort Index, Goldman Power/Utilities/MLPs/Pipeline Conference and the (RL) annual meeting could also impact trading today.

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