Thursday Watch

Evening Headlines

Bloomberg:

• U.K. to Plan ‘Unprecedented Alignment’ With EU Over Data Sharing. The U.K. government is set to reveal plans that show it will adhere to European data-sharing rules, to minimize disruption for U.K.-based companies conducting business with the bloc. The paper, to be released Thursday, will outline how data will be protected and exchanged with the EU, and which “reflects the unprecedented alignment between British and European law,” according to the Department for Exiting the European Union.

• The No. 1 China Equities Fund Bought Only Three Stocks This Year. In a market where swings are notoriously large and gains can be dominated by a handful of companies, it helps to double down on your picks and sit tight. Two of Cederberg’s new investments this year were Tencent Holdings Ltd. and Alibaba Group Holding Ltd., which have both treated the fund well, jumping more than 70 percent.

• Midea's Bold Plan for Beer-Pouring Robots, People-Less Factories. China’s Midea Group Co. has a vision to put consumer robots in homes globally -- and it’s doubling down in Silicon Valley to get there. The world’s biggest consumer appliance maker sees its 3.7 billion-euro ($4.4 billion) purchase of German robot maker Kuka AG as the linchpin to its expansion plans, from making robots capable of pouring beer to installing droids in factories without a single worker. Increasing the number of research engineers in the U.S. and adding a Kuka factory in China is just the start, Midea Vice President Hu Ziqiang said in an interview.

• This Robot Ship Experiment Could Disrupt the Global Shipping Industry. Japan’s largest container line plans to test a remote-controlled vessel across the Pacific Ocean in 2019 as it pursues fully autonomous technology that could disrupt the global shipping industry.

• Trump Shutdown Talk Weighs on Asia Stocks, Yields. (video) Benchmarks fell in Tokyo and Sydney, and rose in South Korea in a mixed start to trading as U.S. equity-index futures declined. All major American equity benchmarks retreated and the 10-year Treasury yield hit the lowest since June after Donald Trump’s threat to shut down the U.S. government triggered concerns Congress won’t easily raise the debt ceiling and deliver on tax reform. That prompted Fitch Ratings to warn the country risks a review of its sovereign rating. The dollar held onto losses following July data on U.S. home sales that highlighted patchy U.S. growth. Japan’s Topix index fell 0.1 percent and Korea’s Kospi index rose 0.2 percent. Australia’s S&P/ASX 200 Index was down 0.3 percent. Hong Kong reopens after Wednesday’s trading session was canceled as Typhoon Hato slammed into the city.

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

Wall Street Journal:

• U.S. Gets Easier Path to Insider-Trading Convictions. Judges reject former SAC Capital Advisors manager Mathew Martoma’s request for new trial.

• Apparel Retailers Pushing Discounts to Win Customers. Express, American Eagle Outfitters, Guess and PVH all beat profit and revenue expectations.

• Test Scores Don’t Lie: Charter Schools Are Transformative. Our black and Hispanic students in Central Harlem outperform the city’s white pupils by double digits.

MarketWatch.com:

• Gundlach’s favored gauge says the 10-year Treasury yield is due for a breakout.

CNBC:

• Storm springs back to life in the Gulf, now threatens one-third of U.S. refining capacity.

• Financial experts shrug off Trump's 'red meat' threat to shut down the government. (video)

• Google(GOOGL) throws lifeline to desperate retail industry besieged by Amazon(AMZN).

• "Activists Seek Peace Through Violence": CNN Quickly Scrubs Title Of Antifa Puff Peace.

• Guess(GES) shares soar after earnings beat.

• Here's a taste of how much smarter your iPhone will be in September. (video)

• A government shutdown wouldn't be a huge market or economic event: Analyst. (video)

• US becoming a 'swing producer' after oil crash woke 'sleeping giant,' says Pioneer CEO. (video)

Zero Hedge:

• CNN Gets Steamrolled By Their Own Charlottesville Panel: "The Media Is Not Being Honest". (video)

• McConnell Responds To NYT "Trump Feud" Article: "We Are Working To Prevent A U.S. Default".

• Japanese Bond Market Volume Collapses To Record Low. (graph)

• Autos Expose Economy's Fragility As Credit-Compelled Car Sales Continue To Collapse.

• Shutdown Shivers Sink Stocks But Bonds, Bullion, & Black Gold Bounce. (graph)

Business Insider:

• Hedge funds can't stop betting on the stock market's secret weapon.

• Uber's sales more than doubled to $1.75 billion in the second quarter, despite all its drama.

Night Trading 

• Asian equity indices are unch. to +.5% on average.

• Asia Ex-Japan Investment Grade CDS Index 81.75 +.75 basis point. 

• Asia Pacific Sovereign CDS Index 21.0 unch.

• Bloomberg Emerging Markets Currency Index 74.04 +.03%.

• S&P 500 futures -.11%.

• NASDAQ 100 futures -.13%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (ANF)/-.33

• (DLTR)/.87

• (HRL)/.37

• (SJM)/1.63

• (MIK)/.16

• (PDCO)/.44

• (SAFM)/3.89

• (SHLD)/-2.48

• (SIG)/1.09

• (SPLS)/.12

• (TIF)/.86

• (TUES)/-.29

• (ADSK)/-.16

• (AVGO)/4.03

• (GME)/.16

• (MRVL)/.28

• (SPLK)/.06

• (ULTA)/1.78

• (VMW)/1.15

Economic Releases 
8:30 am EST

• Initial Jobless Claims for last week are estimated to rise to 238K versus 232K the prior week.

• Continuing Claims are estimated to fall to 1950K versus 1953K prior.

10:00 am EST

• 2Q MBA Mortgage Foreclosures/Delinquencies.

• Existing Home Sales MoM for July are estimated to rise +.5% versus a -1.8% decline in June.
  

Upcoming Splits

• None of note

Other Potential Market Movers

• The Jackson Hole Fed Conference, Japan CPI report, UK GDP report, weekly Bloomberg Consumer Comfort Index and the weekly EIA natural gas inventory report could also impact trading today.

BOTTOM LINE:  Asian indices are slightly 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 modestly higher.  The Portfolio is 75% net long heading into the day.