Tuesday Watch

Evening Headlines

Bloomberg:         

• China's Government Has More Room to Leverage Up as Growth Slows.

• Asia Stocks Slide After U.S. Sell-off; Yields Drop. Asian stocks tumbled at the open on Tuesday, with Japanese benchmarks sliding more than 3 percent, following a tech-led slump on Wall Street overnight thanks to a deteriorating outlook for iPhone sales. Treasury yields dropped and the yen headed higher. Key indexes slid from Tokyo and Seoul to Sydney, and futures in Hong Kong pointed to a significant drop. Apple Inc. suppliers are under pressure after the iPhone maker faltered on signs of a deteriorating sales outlook. S&P 500 Index futures dipped. The Nasdaq 100 Index dropped for a third day and the Russell 2000 small-cap benchmark erased its gains for the year. Oil fell for a record 12th straight day. The dollar traded at 18-month highs. Japan’s Topix index slumped 3 percent as of 9:23 a.m. in Tokyo. Australia’s S&P/ASX 200 Index dropped 1.7 percent. South Korea’s Kospi index fell 2 percent. Hong Kong Hang Seng Index futures lost 1.1 percent. S&P 500 futures rose 0.1 percent.  

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

• Trump Car Tariffs, New FOMC Voter, Japan GDP Disasters: Eco Day.

• WTI Slides for 11th Straight Day.  

• Sell-Off Becomes Roughest Since 2011 on Third Leg of Nasdaq Drop.

• Funds Keep Dumping Blocks of GE Shares at an Exceedingly Rapid Pace.  

• Robots Are Coming for Europe’s Jobs.  

• Hedge Funds Turn Short on Nasdaq Futures While ETFs See Outflows.

• Coal Demand Bounced Back in 2017 After Two Years of Decline: IEA.

Wall St. Journal:

• Broward’s Ballots.

• Vatican Bars U.S. Bishops’ Action on Sex Abuse.

• Record Biotech IPO May Be Worth the $7 Billion.

• U.S., China Resume Talks to Cool Trade Tensions.

MarketWatch.com:

• These S&P 500 companies increased quarterly sales the most while expanding margins. 

• One stat reveals the absurdity of San Francisco’s pricey housing market.

Fox News:   

• Dozens of Dems mulling White House campaigns, as wide-open 2020 contest ramps up.

CNBC:        

• There's something behind this market sell-off that no one is talking about: The strong dollar.

• Kellogg exploring sale of Keebler, Famous Amos and fruit snacks business.

• Facebook(FB) shares close at lowest price since April 2017 as tech stocks plunge.

• Mnuchin and top Chinese official are reportedly talking trade ahead of Trump-Xi meeting. 

• Trump to meet with White House trade team to discuss tariffs on European automakers: Report.

• Goldman shares drop the most in 7 years as Malaysia seeks refunds on doomed deal.

• Trump warns OPEC against cutting oil production: 'Prices should be much lower based on supply'.  

• Stocks making the biggest moves after hours: PG&E, Eventbrite and more.

• Tariffs are having a negative impact for only about 9 percent of companies, earnings calls show.

Zero Hedge:

• Here Is How Walmart Plans To Seize Further Control Of Your Community.

• Foreign Investors Reduce Chinese Bond Holdings For The First Time Since Feb 2017: Why This Matters.

• Provisional Ballot Boxes Discovered Inside AVIS Rental Car At Ft. Lauderdale Airport.

• Auto Stocks Slide On Reports US Car-Import Probe Is Advancing.

• The Economic Consequences Of Debt. 

• North Korea Expands "Secret" Missile Bases As Peace Talks Stall.

• Nomura: This Was "Death By Papercuts" Mixed With Hedge Fund Redemption Panic.

• Facebook(FB) Fired Oculus Founder For His Political Beliefs And Pro-Trump Donations.

• Dollar Jumps, Stocks Dump As Crude Carnage Continues.

Telegraph:

• Comment: China’s government talks about reform – while it tightens its grip.

• France calls for EU 'empire' and warns of euro break-up in next crisis.

Night Trading 

• Asian equity indices are -2.0% to -1.0% on average.

• Asia Ex-Japan Investment Grade CDS Index 88.50 +2.25 basis points. 

• Asia Pacific Sovereign CDS Index 9.75 +.25 basis point.

• Bloomberg Emerging Markets Currency Index 66.37 unch.

• FTSE 100 futures -.26%.

• S&P 500 futures -.04%.

• NASDAQ 100 futures -.18%.

Morning Preview Links

Earnings of Note
Company/Estimate
Before the Open:

• (AAP)/1.76

• (BZH)/.97

• (HD)/2.27

• (TSN)/1.38

After the Close:

• (CWK)/.18

• (HI)/.67

• (PETQ)/.27

• (TLRY)/-.12

Economic Releases

6:00 am EST

• The NFIB Small Business Optimism Index for October is estimated to rise to 108.0 versus 107.9 in September.
  

2:00 pm EST

• The Monthly Budget Statement for October is estimated at -$100.0B versus -$63.2B in September.
  

Upcoming Splits

• None of note

Other Potential Market Movers

• The Japan GDP report, Germany ZEW Index, monthly OPEC oil market report, weekly US retail sales reports, Morgan Stanley Chem/Ag Conference, RBC Midstream Conference, Stifel Healthcare Conference, Morgan Stanley Consumer/Retail Conference, Needham Networking/Communications/Security Conference, Scotiabank Transport/Industrials Conference, (SFLY) analyst meeting, (ZEN) analyst briefing and the (OSTK) analysts day could also impact trading today.

BOTTOM LINE:  Asian indices are lower, weighed down by technology and industrial 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 day.