Monday Watch

Today's Headlines

Bloomberg:             

• Default Risks Rise in $355 Billion China Property Bond Market.  

• Hong Kong Housing May Be Headed for a Correction.   

• Euro-Area Finance Chiefs to Talk Italy as Sanctions Threat Looms.

• Asian Stocks Set for Lower Open; Pound Jumps. Asian stocks looked set for a weak start after a reversal in U.S. equities on Friday, amid concern over whether trade tensions with China can be mended. The pound jumped on news of further progress in Brexit negotiations. Futures pointed to losses in Japanese and Chinese shares. Australian shares opened lower and U.S equity-index futures slid. The dollar gained Friday, particularly against the yen, while 10-year U.S. Treasury yields rose to 3.21 percent on the strong jobs report. The pound strengthened after the Times reported Theresa May has secured concessions from Brussels that’ll allow her to keep all of Britain in a customs union with the EU and avoid a hard border in Northern Ireland. Futures on the Nikkei 225 Stock Average fell about 1 percent in Osaka. Australia’s S&P/ASX 200 fell 0.2 percent. Futures on the FTSE China A50 dropped 1.5 percent. Futures on the Hang Seng Index fell 2.4 percent. S&P 500 Index futures lost 0.3 percent.  

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

• Trump-Xi Trade Deal, China Expo, Australia Housing Woes: Eco Day.

• Bond Traders Prepare for Week Full of Risk by Dumping Treasuries.  

• Goldman to Name Smallest Class of New Partners in 20 Years.

Wall Street Journal:

• Trump’s Health-Care Progress.

• Apple: Still a Hardware Company.

• How Angela Merkel Foiled a Backroom Coup in One Late Display of Clout.

• What the Midterms Mean for Business.

Fox News:

• GOP push to flip seats in certain states could offer narrow path to hold House, deny Pelosi gavel.

• Gubernatorial candidate launches probe into party’s ‘possible cyber crimes’. 

• Migrant caravans swell to more than 10,000, get some help along the way.

CNBC: 

• Amazon is packing more stuff into warehouses: Here's why it matters.

Zero Hedge:       

• Georgia Investigating Democrats For Allegedly Hacking Voting System.
• VIX Positioning Flips Net Long; Seasonality Signals Dotcom Repeat.
• Here's China's Massive Plan To Retool The Web.
• Morgan Stanley: "The Pain Was Greater Than Many Investors Could Have Imagined".
• Theresa May Reveals "Secret" Brexit Deal After Winning Major Concession From EU.
• CNN Refuses To Play "Racist" Trump Ad Featuring Illegal Alien Cop Killer.
• Recent Brexit Trade Drama Shows that Europe Doesn't Really Want Free Trade.
• Partisanship Rules At The Midterms.
• 33 Trillion Reasons Why The New York Times Is Wrong About Russiagate.
• A Gun Capable Of Fitting Into A Wallet Is Being Sold By An American Arms Company.
• California Hit By 39 Quakes In 24 Hours As Scientists Warn Of "Movement Along The San Andreas Fault".

Night Trading

• Asian indices are -1.25% to -.25% on average.

• Asia Ex-Japan Investment Grade CDS Index 87.5 -3.0 basis points.

• Asia Pacific Sovereign CDS Index 10.25 unch.

• Bloomberg Emerging Markets Currency Index 67.02 +.01%.

• FTSE 100 futures -.01%.

• S&P 500 futures -.26%.

• NASDAQ 100 futures -.27%.

Morning Preview Links

Earnings of Note

Company/Estimate
Before the Open:

• (DO)/-.35

• (L)/.97

• (SOHU)/-1.61

• (SYY)/.92

After the Close:

• (ANDE)/.15

• (CAR)/3.54

• (MTW)/.12

• (MAR)/1.31

• (MOS)/.65

• (MYL)/1.19

• (NBIX)/.49

• (OXY)/1.53

• (RCII)/.28

• (THC)/.12

Economic Releases
10:00 am EST

• The ISM Non-Manufacturing Index for October is estimated to fall to 59.0 versus 61.6 in September.
  

Upcoming Splits

• (TJX) 2-for-1
  

Other Potential Market Movers

• The China Services PMI report, CSFB China Investment Conference, Oil sanctions against Iran, $37B 3Y T-Note auction, BofA Merrill Future of Financials Conference and the (MDR) analyst meeting could also impact trading today.

BOTTOM LINE: Asian indices are lower, weighed down by industrial and technology shares in the region. I expect US stocks to open modestly lower and to rally into the afternoon, finishing mixed.  The Portfolio is 25% net long heading into the week.