Thursday Watch

Evening Headlines

Bloomberg:

• China Vows Not to Fire the First Shot in Trade War.  

• China Hints at Pullback From Debt Crackdown as Markets Slide.

• China Property Flashes Fresh Warning With Bad-Loan Jump Forecast.

• Equity Bulls Are Abandoning Hong Kong as China Turmoil Mounts.  

• The China-U.S. Power Struggle Is Just Beginning.

• Merkel Pledges to Get `Back to Work' After Coalition Rift Eases.  

• Asia Stocks to Start Mixed; Euro Erases Decline. Stocks headed for a muted start in Asia, with closures to U.S. equity and bond markets meaning there were few leads for traders. The euro erased losses as bets on the timing for an interest rate hike by the European Central Bank were brought forward. Futures signaled small gains for equities in Hong Kong and Australia, while Japanese contracts were little changed. European stocks ended fractionally higher and the pound rose on positive data from the U.K.’s services sector. The euro got a lift and market pricing for a September 2019 rate hike jumped as some ECB policy makers were said to be uneasy that investors aren’t betting on an interest-rate hike until December next year. The start of trading in China will grab attention again amid signs that some stability is returning to the yuan after its sharpest decline since policy makers devalued the currency in 2015. Futures on Japan’s Nikkei 225 slid less than 0.1 percent in Chicago. Futures on Australia’s S&P/ASX 200 Index rose 0.2 percent. Futures on the Hang Seng added 0.2 percent.  

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

• Trump Ups Pressure on OPEC to Boost Supply.

• Money Managers Want to Bypass Banks.

• Rife With Anxiety, Markets Are Churning at the Fastest Rate Since 2008.

Wall Street Journal:

• China Pulls Back From Striking First in U.S. Trade Fight.

• For Supreme Court Nominee, Trump Weighs Personal Chemistry, Record.

• Trade Slowdown Investors Fear Has Already Arrived.

• In This Economy, Quitters Are Winning.

• Platinum Sinks to Near-Decade Low After Threat of Auto Tariffs.

• ‘This Is Unbelievable’: A Hedge-Fund Star Dims, and Investors Flee.

MarketWatch.com:

• Netflix(NFLX) is trouncing the competition and it should stay on top—younger viewers love it

• Americans are taking more vacation time—why that’s a good sign for the economy.

Fox News:

• Court tosses suit claiming Trump campaign conspired with Russia in hack.

• British government reportedly tells Trump he cannot meet with Brexit architect during visit this month.

CNBC:

• The EU is reportedly considering international talks to cut car tariffs.

• Poor wage growth down to ‘superstar’ tech firms, OECD says.

• Trump’s right on trade — Europe has been ‘free-riding for too long,’ fund manager says.

• India's massive state banks are in trouble. That's great news for some.

• Alibaba’s new A.I. tool can produce thousands of ads a second but it says it won’t replace humans.

• China's big bond experiment is about to go through a rough patch. 

• Germany’s massive trade surplus ‘is becoming toxic,’ economist says.

Zero Hedge:

• US Futures Rebound Even As Chinese Stocks Resume Slump.

• UK Police Confirm 2nd Critically Ill Couple Poisoned With Novichok Nerve Agent.

• Europe Turns Down Chinese Offer For Grand Alliance Against The US.

• Trump To OPEC 'Allies': "Reduce Oil Prices Now" Or Lose US Defense Shield.

• Mall Vacancies Hits 6-Year High.

• Charles Hugh Smith: We Desperately Need Shared Values, Connection, & Positive Social Roles.

• EURUSD Spikes After Report ECB Members "Uneasy" With Market's Dovish View On Rate-Hikes.

• Merkel's "Common Goal" Hypocrisy Exposed: Deal With CSU Still Not Final.

• Chairman Of Chinese Conglomerate HNA Dies In Accident In France.

• Graduating "With Honors" Becomes Meaningless As Colleges Hand Them Out Like Candy.

• The Institutions Americans Trust Most And Least.

• Meet Hadrian, The Brick Laying Robot That Will Make Construction Workers Obsolete.

• Trump Reverses Obama-Era Policies On Affirmative Action.

• Imran Awan Gets Sweetheart Plea Deal; DOJ Won't Prosecute Alleged Spy Ring, Cybercrimes.

• Step Aside Millennials: Here Comes Generation Z.

• DNC Chair Tom Perez Declares Socialist Ocasio-Cortez "The Future Of Our Party".

• Tesla(TSLA) Compared To Theranos After Musk Halted Critical Brake Test To Boost Output.

Business Insider:

• The EU is reportedly plotting a major international effort to defuse Trump's trade war — but the US isn't buying it.

• Google says it's not reading your Gmail, except when it is...

• Photos show how Americans across the country are celebrating the Fourth of July.

• JPMorgan's ultimate guide to markets and the economy.

Night Trading 

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

• Asia Ex-Japan Investment Grade CDS Index 92.5 -1.5 basis points. 

• Asia Pacific Sovereign CDS Index 15.0 -.5 basis point.

• Bloomberg Emerging Markets Currency Index 69.41 -.02%.

• FTSE 100 futures +.20%.

• S&P 500 futures +.29%.

• NASDAQ 100 futures +.26%.

Morning Preview Links

Earnings of Note
Company/Estimate
Before the Open:

• (ISCA)/.36

After the Close:

• (PSMT)/.60
  

Economic Releases
7:30 am EST

• Challenger Job Cuts YoY for June.
  

8:15 am EST

• The ADP Employment Change for June is estimated to rise to 190K versus 178K in May.
  

8:30 am EST

• Initial Jobless Claims for last week are estimated to fall to 225K versus 227K the prior week.

• Continuing Claims are estimated to rise to 1718K versus 1705K prior.
  

10:00 am EST

• The ISM Non-Manufacturing Composite for June is estimated to fall to 58.3 versus 58.6 in May.
  

2:00 pm EST

• FOMC Meeting Minutes for June 13.
  

Upcoming Splits

• None of note

Other Potential Market Movers

• The German Factory Orders report, weekly Bloomberg Consumer Comfort Index and the weekly EIA Natural Gas Inventory report could also impact trading today.

BOTTOM LINE:  Asian indices are mostly higher, boosted by commodity and technology shares in the region. I expect US stocks to open modestly higher and to maintain gains into the close.  The Portfolio is 75% net long heading into the day.