Monday Watch

Today's Headlines

Bloomberg:

• Japan’s Manufacturing Confidence Touches a Decade High. Confidence among Japan’s big manufacturers has improved to the highest level in a decade, underscoring Prime Minister Shinzo Abe’s run of success on the economy as he heads into an election later this month.

• Spanish Police Storm Polling Stations to Block Catalan Vote. Spanish police in riot gear smashed in the doors of polling stations and dragged protesters away by the hair, beating some with batons and firing rubber bullets at others on Sunday as they tried to shut down an illegal referendum on independence in Catalonia. Despite the police brutality against largely peaceful demonstrations, voting began in many locations across northeast Spain at 9 a.m. The Catalan government said 73 percent of polling stations were open. Spain’s representative in the region, Enric Millo, said the vote had been “dismantled.”

• The Latest on Catalonia's Independence Referendum.

• Stocks Rise as China Readies Targeted Credit Boost. Stocks are set to open higher in the Asia Pacific region as investors contemplate prospects for stimulus in the world’s two largest economies, with the Trump administration taking steps towards tax cuts and China unveiling a targeted boost to the availability of credit. Futures on the U.S. S&P 500 index headed higher after the underlying gauge closed at a record high on Friday. The dollar held gains from last week, when it put in its best performance of the year on optimism that the Trump administration is finally moving forward with tax reforms that could boost U.S. growth. Over the weekend, China reported an unexpectedly strong purchasing manager index for manufacturing and announced plans for a reduction in the amount of cash banks must hold as reserves for certain types of lending. Australia’s S&P/ASX 200 Index was up 0.5 percent in early trading. Contracts on the Nikkei 225 Stock Average were up 0.3 percent and futures on Hong Kong’s Hang Seng Index saw futures gain 0.2 percent.

• CRH Is Said to Near Acquisition of U.S. Cement Maker Suwannee. Global construction materials maker CRH Plc is nearing an agreement to acquire Florida-based cement company Suwannee American Cement LLC from Votorantim Cimentos SA and Anderson Columbia Co. to drive further growth in the U.S., according to people familiar with the matter. The companies could announce an agreement as early as this week, said the people, who asked not to be identified because talks are private. The deal may value Suwannee at about $750 million, two of the people said. While talks are advanced, they could still be delayed or fall apart and the valuation could change, they said.

Wall Street Journal:

• Catalans Defy Riot Police to Vote in Independence Referendum. Spanish police forcibly remove people from polling stations, had fired rubber bullets; Catalonian officials say hundreds are injured.

• In Puerto Rico, a Beachside Town Suffers in Solitude. Humacao is mostly on its own in Maria’s wake; ‘Nothing is left here’. 

• Why the Shadow of the 2015 Migration Crisis Still Hangs Over Europe. French President Macron’s speech and success of anti-immigration party in German elections show security is priority for EU.

• Why Food CEOs Are Rushing for the Exits. Packaged food companies are in trouble, squeezed by changing consumer preferences, more aggressive supermarkets and stagnant prices. More mergers may be on the way.

• J.P. Morgan’s Record High Crowns Bank-Stock Rebound. S&P financials closed the quarter at a post-financial-crisis high, but fell short of the S&P 500’s gain of 12.5%.

• Oil Prices Bounce Back in Third Quarter. Strong crude demand and signs of ebbing U.S. production led oil back into a bull market.

• Hedge Funds Ain’t Dead Yet. With an improved environment for stock picking, the average hedge fund is up an average 5.4% through August.

MarketWatch.com:

• In the near future, your hotel room will know exactly how you like to sleep.

• This is why the bull market can keep running for years even if investors dump stocks.

Fox News: 

• Trump: Talking to NK's Kim a waste, 'will do what needs to be done'. (video)

• NFL's Week 4 sees dozens of players kneel, sit, raise fists during national anthem. (pic)

CNBC:

• Kudlow: Trump has an incentive-packed tax plan like JFK and Reagan.

• Edmonton hit by 'acts of terror' after police officer gets stabbed and 4 pedestrians are hit by a truck.

• Marseille 'terrorist' attack: Two stabbed to death, attacker killed by French soldiers.

• Taking on critics, Britain's May vows to deliver policies and Brexit.

• How the Trump tax plan will make 'most people better off','Tax Foundation president says. (video)

• Trump plans a pivot to deregulation, pushing roll back of Obama-era red-tape.

Zero Hedge: 

• The Results Are In: 89% Of Catalans Vote For Independence.

• Spanish PM Rajoy Blasts Catalans' "Mockery Of Democracy", Says Spain "Responded With Firmness, Calm" Injuring 761 People.

• "This Is Fascism": Shocking Footage Of Spanish Police Firing Rubber Bullets, Brutally Beating Peaceful Voters.

• Robert Gore: "The US Has Become An Infantile Nation".

• "We're With You" - Hillary Clinton Backs San Juan Mayor As Trump Trashes "Politically Motivated Ingrates".

• Blowback? NFL Ticket Sales Crash 17.9% As Owners Lose Control Of Players.

• What Housing Bubble? Most Australians Couldn't Afford $100 Mortgage-Payment Hike.

• "The Bombs Are Still Falling" - MSNBC Urges Government Censorship Of Social Media "To Protect Democracy".

Business Insider:

• Puerto Rico's governor says the island is on a 'steady path to improvement' after Hurricane Maria.

• Thousands in Hong Kong participate in 'anti-authoritarian rule' march against China,

• Cam Newton raised a fist in the air after scoring a touchdown as political tensions engulf the NFL.

• Spain is flirting with another Civil War.

Night Trading

• Asian indices are +.25% to +.75% on average.

• Asia Ex-Japan Investment Grade CDS Index 81.75 -1.5 basis points.

• Asia Pacific Sovereign CDS Index 19.0 +1.25 basis points.

• Bloomberg Emerging Markets Currency Index 73.62 -.09%.

• S&P 500 futures +.12%.

• NASDAQ 100 futures +.14%.

Morning Preview Links

Earnings of Note

Company/Estimate

• (CALM)/-.22

Economic Releases 
10:00 am EST

• ISM Manufacturing for September is estimated to fall to 58.0 versus 58.8 in August.

• ISM Prices Paid for September is estimated to rise to 63.5 versus 62.0 in August.

• Construction Spending for August is estimated to rise +.4% versus a -.6% decline in July.

Upcoming Splits

• (ISRG) 3-for-1
  

Other Potential Market Movers

• The President's address on regulation, Fed's Kaplan speaking, Eurozone Unemployment Rate, Eurozone PMI report and the Deutche Bank Leveraged Finance Conference could also impact trading today.

BOTTOM LINE: Asian indices are higher, boosted by technology 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 100% net long heading into the week.