Monday Watch

Today's Headlines

Bloomberg:              

• Trump Weighs Action Against Saudis as Khashoggi Denials Continue.    

• Saudi Stocks Sink as Tension With U.S. Escalates Over Khashoggi.

• Brexit Talks Put on Hold as Stalemate Deepens. Japan, U.S. Stock Futures Slide; Pound Declines. Futures on Japanese and U.S. stocks dropped ahead of the market open in Asia Monday, suggesting Friday’s rebound in global equities may struggle to gain traction. The pound slipped as a Brexit deal hung in the balance with just days to go until a critical deadline. Contracts on Japan’s Nikkei 225 Stock Average fell, along with those on the S&P 500, following a weekend of warnings on global economic fragility from finance chiefs meeting at an annual IMF gathering. China’s ambassador to the U.S., in a rare appearance on American Sunday television, said his nation didn’t want a trade war but will respond. Oil climbed amid rising tensions between the U.S. and Saudi Arabia over a missing journalist. IMF Managing Director Christine Lagarde said policy makers should be ready for more market volatility, speaking after the worst sell-off in global stocks since February. Futures on Japan’s Nikkei 225 slipped 0.3 percent in most recent trading. Futures on the FTSE China A50 Index earlier rose 0.5 percent. Futures on Hong Kong’s Hang Seng Index fell 0.5 percent. Futures on Australia’s S&P/ASX 200 Index slid 0.9 percent. Futures on the S&P 500 dipped 0.3 percent after the benchmark tumbled 4.1 percent last week.  

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

• Global Economy Tremors, BOJ Exit Signs, PBOC Interview: Eco Day.

• A Decade From Crisis, Banks Face Risks From Italy to Trade Wars.

• Top 3% of U.S. Taxpayers Paid Majority of Income Taxes in 2016.

Wall Street Journal:

• Sears Set to File for Bankruptcy, With Its Survival in Question.

• Marsha Blackburn’s Tennessee Turnaround. 
  

• A Sexual-Assault Accusation in New Jersey Exposes a National Dilemma.

• Harris(HRS), L3 Technologies(LLL) Announce Merger Plan.

• The Bad Trade-Offs Emerging Markets Face.

• ‘You Just Realize It’s All Gone’: Hurricane Michael’s Heavy Toll.

MarketWatch.com:

• Forget the Wall Street carnage: To gauge the economy, look at how much Americans eat out.

Fox News:

• Hillary Clinton claims Bill's relationship with Lewinsky 'absolutely not' abuse of power.

CNBC:

• China's central bank still has plenty of tools to counter detrimental trade war effect: Governor.

• Riyadh says it would fight sanctions linked to missing journalist as Saudi stocks plunge.

• BOJ's Kuroda warns of darkening global prospects as trade tensions weigh.

• Here's why the market's 'Octoberphobia' selling could soon give way to a new rally.

• Not everyone is ready to ride as autonomous vehicles take to the road in ever-increasing numbers.

• Why it's never a good idea to sell when the market goes down quickly.

• Here's why one analyst thinks the sell-off could be saved by earnings.

Zero Hedge:              

• Violence, Public Anger Erupts In China As Home Prices Slide.

• Cables SLides After UK, EU 'Pause' Brexit Deal Negotiations, Blowing Monday Deadline.

• Why Used-Car Prices Are Plunging.

• Oil Jumps After Saudi Official Floats "Trial Balloon" Op-Ed Envisioning "Oil Weapon" Devastation.

• "This Is An Earthquake For Bavaria": CSU Suffers Stunning Defeat, Loses Absolute Majority In Worst Result Since 1950.

• "Someone Is Not Telling The Truth": Fusion GPS Founder "In Real Legal Jeopardy" According To GOP Lawmaker.

• Will China's "Debt Diplomacy" Backfire?

• Nervous Democrats Fear Midterm Disaster; GOP Pollster Says Trump Voters "Reengaged".

• Saudi Stocks Crash Most Since 2016 As Riyadh Threatens Retaliation Against US.

• Brexit Negotiators Poised To Miss Deal Deadline As UK Hardliners Rebel.

• The New 'Disappeared'.

Business Insider:

• Trump says Mattis is 'sort of a Democrat' and that the defense secretary 'may leave' the administration.

Night Trading

• Asian indices are -1.0% to unch. on average.

• Asia Ex-Japan Investment Grade CDS Index 87.0 -.25 basis point.

• Asia Pacific Sovereign CDS Index 9.75 -.5 basis point.

• Bloomberg Emerging Markets Currency Index 66.17 -.06%.

• FTSE 100 futures -.05%

• S&P 500 futures -.31%.

• NASDAQ 100 futures -.41%.

Morning Preview Links

Earnings of Note

Company/Estimate
Before the Open:

• (BAC)/.62

• (SCHW)/.65

After the Close:

• (JBHT)/1.41

• (KMG)/.98

Economic Releases
8:30 am EST

• Empire Manufacturing for October is estimated to rise to 20.5 versus 19.0 in September.

• Retail Sales Advance MoM for September is estimated to rise +.7% versus a +.1% gain in August.

• Retail Sales Ex Auto MoM for September is estimated to rise +.4% versus a +.3% gain in August. 

• Retail Sales Ex Autos and Gas for September are estimated to rise +.4% versus a +.1% gain in August.
  

10:00 am EST

• Business Inventories for August is estimated to rise +.5% versus a +.6% gain in July.
  

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Japan Industrial Production report, (ADBE) financial analyst meeting and the (RIO) sales/revenue update could also impact trading today.

BOTTOM LINE: Asian indices are mostly lower, weighed down by industrial and technology shares in the region. I expect US stocks to open lower and to rally into the afternoon, finishing mixed.  The Portfolio is 50% net long heading into the week.