Friday Watch

Evening Headlines

Bloomberg:   

• China Offered Trump $200 Billion Cut in U.S. Trade Deficit, Official Says. (video) China has offered President Donald Trump a $200 billion reduction in its annual trade surplus with the U.S. by increasing imports of American products and other steps, said a Trump administration official. China made the offer during talks in Washington this week as Chinese Vice Premier Liu He visited to try to resolve a trade dispute, the official said, speaking on condition of anonymity. Liu met with Trump Thursday afternoon at the White House. The official didn’t describe the U.S. response. Trump expressed doubt ahead of his meeting with Liu that China and the U.S. would come to an agreement to avoid a damaging trade war.  

• Nafta Countries ‘Nowhere Near Close to a Deal,’ Trump’s Negotiator Says.      

• Japan’s Inflation Slows Amid Rising Calls for Delay in BOJ Exit.  

• Reasons Why Global Growth Is Speeding Up, Not Slowing Down.

• Asian Stocks Set for Modest Gains; Yields Climb: Markets Wrap. Asian shares are set for a slightly higher open though still on track for a weekly loss as investors take in the implications of a jump in benchmark U.S. 10-year Treasury yields to their highest level since 2011. The dollar remains near its strongest for the year. News that China has offered President Donald Trump a $200 billion reduction in the bilateral trade gap with the U.S. had little immediate reaction as trading got going in Asia Friday. Futures in Japan, Australia and South Korea all pointed to modest gains. The S&P 500 Index closed little changed after a direction-shifting session, though domestically focused U.S. small caps hit a fresh record. Brent crude rose to a level unseen since 2014 amid mounting signs that global stockpiles are shrinking. Nikkei 225 futures were up 0.2 percent in Singapore. S&P/ASX 200 futures were up 0.2 percent. Futures on the S&P 500 Index were little changed after the underlying gauge closed down 0.1 percent. The MSCI Emerging Markets Index was down 1 percent.  

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

• Amgen(AMGN) Says Just-Approved Migraine Drug Will Cost $6,900 a Year.

Wall Street Journal:

• Oil Is Above $70, but Frackers Still Struggle to Make Money.

• Buyer Beware: Hundreds of New Cryptocurrencies Show Hallmarks of Fraud.

• What Happened When Schools Cut Back on Suspensions.

• North Korea Doubles Down on Criticism of Seoul, U.S.

• Legislation to Curb Chinese Deals Moves Through Congress.

• Kroger Makes Bold Push to Boost Online Shopping.

MarketWatch.com:

• Bitcoin may fall below $8,000 as crypto confab fails to stoke buying, analyst says. 

• Here are the 20 stocks that the biggest hedge funds love most.

• This breakout in stocks means the bull market isn’t about to end.

Fox News:

• Manafort judge who ripped Special Counsel Mueller’s team obtains ‘scope’ memo.

CNBC:     

• After-hours buzz: PYPL, JWN, AMAT & more.

• The last two times Walmart shares did this the stock saw a huge rally.

• Trump: I 'doubt' China trade negotiations will succeed.

• PayPal(PYPL) is buying payments start-up iZettle for $2.2 billion ahead of IPO.

• The number of 401(k) plan millionaires hits a new high.

• Activision(ATVI) announces ‘Call of Duty’ battle-royale game to compete with ‘Fortnite’.  
  

• Bear markets don't start when Russell 2000 hits new high: NYSE governor.

• YouTube's music head sees 'great opportunity' in streaming, touts 'world's biggest catalog'.

Zero Hedge:         

• China Reportedly Offers $200BN Trade Deficit Reduction.

• Mueller Files Unredacted Memo Revealing Scope Of Russia Probe, There Is Just One Problem...

• Tesla Will Need Over $10 BIllion In New Capital By 2020: Goldman.

• Wells Fargo Caught Altering Information on Business Customers Documents .

• Trump Slams Obama FBI 'Spying' Report As "Bigger Than Watergate".

• PIIGS Credit Risk Jumps Amid Italy's Five Star-League 'Agreement' Confusion .

• Bonds Battered, Submerging Markets Slump, & Small Caps Hit Record High.

Night Trading 

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

• Asia Ex-Japan Investment Grade CDS Index 75.75 -.25 basis point. 

• Asia Pacific Sovereign CDS Index 13.0 unch.

• Bloomberg Emerging Markets Currency Index 71.36 +.01%.

• FTSE 100 futures -.11%.

• S&P 500 futures +.09%.

• NASDAQ 100 futures +.09%.

Morning Preview Links

Earnings of Note
Company/Estimate
Before the Open:

• (AZN)/.61

• (CPB)/.60

• (DE)/3.33

After the Close:

• None of note

Economic Releases

• None of note

Upcoming Splits

• None of note

Other Potential Market Movers

• The Fed's Mester speaking, Fed's Brainard speaking and the Eurozone Trade Balance report could also impact trading today.

BOTTOM LINE:  Asian indices are slightly higher, boosted by technology and commodity shares in the region. I expect US stocks to open mixed and to weaken into the afternoon, finishing modestly lower.  The Portfolio is 50% net long heading into the day.