Friday Watch

Evening Headlines

Bloomberg:         

• China Is Hunting for Foreign Buyers for Its Sovereign Debt.  

• China’s Debate Over a Shrinking Birth Rate Highlights Growth Concerns.  

• How China’s Spies Became Key Players in the Trade War.

• India’s Path to Become World’s Fifth-Biggest Economy Won’t Be Easy.  

• Property Markets From Hong Kong to Sydney Join Global Slump.  

• Three Theories on the FX Flash Crash: Robots, Apple, Yen Shorts.

• Asia Stocks to Track U.S. Losses on Growth Worries. Asian stocks are set to open lower after data that added to anxiety about global growth and Apple Inc.’s sales outlook cut sunk U.S. stocks. Treasuries and the yen rallied. All eyes will be on Japan, where futures point to shares falling when they trade for the first time in 2019 after an extended new-year break. Australian stocks opened lower and Chinese and Korean futures fell. The S&P 500 Index tumbled 2.5 percent for the steepest sell-off since Christmas Eve. Apple plunged the most since 2013 after citing an unforeseen slowdown in China for its woes. Ten-year Treasury yields sank to an 11-month low as a measure of U.S. manufacturing plunged the most since October 2008. In currency markets, the yen was steady after extending an advance after being whipsawed during a bout of sharp gyrations Thursday amplified by algorithmic programs amid thin liquidity during the Japanese holiday. Bloomberg’s dollar index fell. Oil maintained an advance. Futures on the Nikkei 225 Stock Average fell 2 percent in Chicago. Australia’s S&P/ASX 200 Index fell 0.8 percent. FTSE China A50 futures were down 0.5 percent. Hong Kong’s Hang Seng Index futures rose 0.2 percent. S&P 500 futures rose 0.3 percent.  

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

• U.S. Growth Worries, Jobs Preview, China's Birth Rate: Eco Day.

• Market Earnings Angst Goes Beyond Apple(AAPL).  

• Aggressive Change in Market’s Fed Outlook Drives Inversions in Yield Curve.

Wall St. Journal: 

• AI Helps Auto-Loan Company Handle Industry’s Trickiest Turn.

• Charts: Pressure on China’s Consumers.

• Chinese Consumers Curb Spending, Likely Deepening Slowdown.

• iPhone Loses Ground to China’s Rivals.

• Marijuana Is More Dangerous Than You Think.

• Five Things to Watch in the December Jobs Report.

Fox News:

• Meth, cocaine overdoses rise as cartels sidestep anti-opioid crackdown.

• Trump makes unexpected stop at White House briefing room, touts border wall support.

• Millennials offended over jokes about 'Soup Nazi,' same-sex relationships.

CNBC:

• Apple’s(AAPL) woes show US and China are taking hits in trade war — and that could push them to make deal.

• Square(SQ) hires Amrita Ahuja as its new CFO.

• JP Morgan’s(JPM) market guru says he got it wrong last year, but there’s a big buy signal now.

• Apple(AAPL) needs to overcome a core challenge, and it’s not China, says top analyst Toni Sacconaghi.

• Another hedge fund all star struggled last year with Dan Loeb down 11%.

• Banks are cutting back on credit-card rewards programs, WSJ reports.After-hours buzz: SQ, ATVI & more.

Zero Hedge:    

• Bloodbath: Stocks Crater As Perfect Storm Of Apple And Recession Fear Strikes. 

• Reporter Quits NBC Citing Network’s Support For Endless War.

• Trump Learns Markets Don't Like Uncertainty.

• IRS Won't Issue Refunds During Shutdown: That Could Be A Problem.

• More Troops To Be Deployed To Southern US Border; Will Build 160 Miles Of Fencing.

• Berkshire Shares Suffer Second Biggest Plunge In 7 Years.

• 2, 3 and 5-Year Treasury Yields All Drop Below The Effective Fed Funds Rate.

Telegraph:

• Happy birthday to the euro, destined to stagger on and condemn Europe to further disaster.

Night Trading 

• Asian equity indices are -1.5% to -.5% on average.

• Asia Ex-Japan Investment Grade CDS Index 100.0 unch. 

• Asia Pacific Sovereign CDS Index n/a.

• Bloomberg Emerging Markets Currency Index 66.96 +.02%.

• FTSE 100 futures -.39%.

• S&P 500 futures +.01%.

• NASDAQ 100 futures +.03%.

Morning Preview Links

Earnings of Note
Company/Estimate
Before the Open:

• (ANGO)/.21

• (CALM)/.43

After the Close:

• None of note

Economic Releases
8:30 am EST

• The Change in Non-Farm Payrolls for Dec. is estimated to rise to 180K versus 155K Nov.

• The Unemployment Rate for Dec. is estimated at 3.7% versus 3.7% in Nov.

• Average Hourly Earnings MoM for Dec. is estimated to rise +.3% versus a +.2% gain in Nov.

Upcoming Splits

• None of note

Other Potential Market Movers

• The Fed's Powell speaking, Fed's Bostic speaking, Fed's Barkin speaking and the Eurozone Services PMI report 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 mixed and to weaken into the afternoon, finishing modestly lower.  The Portfolio is 25% net long heading into the day.