Monday Watch

Today's Headlines

Bloomberg:  

• Parliament to Challenge May for Brexit Power in Crucial Votes.

• Here Are Three Scenarios for U.S.-China Trade Talks This Week.  

• How Low Can China Bond Yields Go? 10-Year Rate Flirts With 3%.

• Emerging Bonds on Cusp of Rally Now at Mercy of Fed, Trade Talks.    

• Italy's Salvini Notches Win With Macron Taking the Populist Bait.

• A Split Venezuela Fights for the Military’s Loyalty.

• Six Charts on the Vital Signs Behind Hong Kong Stocks' Rebound. 

• ECB's Knot Says Recession Concerns Somewhat Premature.

• The World Economy Faces Some Pivotal Health Checkups This Week.  

• Japan's Abe Regains Footing With Voters Ahead of Sales Tax Fight. 

• Asia Stocks Start Week Mixed, Yen Creeps Higher. Asian stocks were mixed early Monday at the start of a crucial week for global trade and a policy meeting of the Federal Reserve. Japanese shares posted modest losses while Korean equities were little changed. Australian stocks were closed for a holiday. U.S. futures slipped, after shares finished the week higher Friday on corporate earnings and as lawmakers agreed to re-open the government on an interim basis. Treasury yields edged lower and the dollar steadied. The yen pushed higher. In an event-filled week, while Chinese Vice Premier Liu He travels to Washington for trade talks and Fed Chairman Jerome Powell gets a fresh chance to communicate to markets at a press briefing, the U.K. Parliament votes on amendments to Brexit legislation. Investors are also bracing for a flurry of U.S. economic figures including GDP and employment data, the release of which had been delayed thanks to the government shutdown. Japan’s Topix falls 0.2 percent at 9:10 a.m. Tokyo time. Kospi little changed. S&P 500 futures fall 0.2 percent. The S&P 500 Index rose 0.9 percent Friday, while the Nasdaq Composite Index gained 1.3 percent.

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

• Presidential Run by Starbucks’ Howard Schultz Could Boost Trump, Democrats Fear.

• Deep Freeze Grips Midwest With Record-Breaking Low Temperatures.

Wall Street Journal:

• Immigration Debate In Focus as Threat of Shutdown Looms.

• Manufacturers Take Sales Hit in China.

• Stocks Start Off 2019 With a Bang.

• Pfizer Pivots to Cancer Drugs for Growth.

• Brazilian Town Devastated by Dam Burst Faces Threat From Second Dam. 

• New Job for Robots: Taking Stock for Retailers.

Fox News:

• Democrat Kamala Harris kicks off WH run slamming border wall, pushing 'Medicare for all'.

CNBC:

• U.S. lifts sanctions on Rusal, other firms linked to Russia’s Deripaska.

Zero Hedge:

• Pelosi To Block Trump's SOTU Address Despite Government Reopening.

• Willie Brown Admits He Boosted Kamala Harris's Career During Extramarital Affair.

• Fired BuzzFeed Employees Demand Payouts For Vested Vacation Time.

• 'Life-Threatening' Arctic Blast To Freeze Nearly 200 Million As Polar Vortex Slams Midwest.

• Mulvaney: Trump Will Build The Wall "With Or Without Congress".

• Prins: The Three Concerns Hanging Over The Davos Elite.

• This Week Is Peak "Buyback Blackout" Window, And Then Comes The Avalanche.

• Americans Are Fleeing Illinois And Moving To...Idaho?

• Europe Demands Free Elections In Venezuela As Pressure On Maduro Mounts.

Business Insider:

• Drones are no longer a cool novelty only a handful of companies are testing — they're infiltrating a slew of industries and applications.

Night Trading

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

• Asia Ex-Japan Investment Grade CDS Index 83.5 -1.5 basis points.

• China Sovereign CDS 57.75 -1.25 basis points.

• Bloomberg Emerging Markets Currency Index 68.23 +.10%.

• FTSE 100 futures -.39%.

• S&P 500 futures -.31%.

• NASDAQ 100 futures -.35%.

Morning Preview Links

Earnings of Note

Company/Estimate
Before the Open:

• (AMG)/3.53

• (CAT)/2.99

After the Close:

• (AKS)/.11

• (BRO)/.27

• (CE)/2.40

• (CR)/1.53

• (ETH)/.46

• (SANM)/.70

• (WHR)/4.25

Economic Releases
8:30 am EST

• The Chicago Fed National Activity Index for Dec.

10:30 am EST

• The Dallas Fed Manufacturing Activity Index for Jan. is estimated to rise to -2.1 versus -5.1 in Dec.
  

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The China Industrial Profits report could also impact trading today.

BOTTOM LINE: Asian indices are slightly higher, boosted by technology and consumer shares in the region. I expect US stocks to open modestly lower and to rally into the afternoon, finishing mixed.  The Portfolio is 75% net long heading into the week.