Tuesday Watch

Today's Headlines

Bloomberg:

• Ireland Rules Out Time-Limited Backstop: Brexit Update.

• May Won't Rule Out Brexit Delay as U.K. Parliament Takes Control.

• U.S.-China Trade Talks Falling Short on Make-Or-Break IP Issues. 

• China's Xi Warns Party of `Serious Dangers' as Risks Mount.

• China's Softer Slowdown Is No Respite for Global Growth Worries.   

• Italy's Growth Outlook Is Cut by IMF in Warning to Government.

• Asian Stocks See a Muted Start; U.S. Futures Drop. Asian stocks saw muted trading early Tuesday as investors weighed the latest batch of headlines on global growth and trade, without any direction offered from American markets that were shut for a holiday Monday. Shares were flat in Japan and dipped in Australia after stocks in Europe slipped on Monday. Contracts on the S&P 500 Index declined. The dollar steadied and bonds in Europe were mixed. News that the IMF was cutting its global growth forecast to the weakest in three years merely cemented an already downbeat mood. The offshore yuan was steady after President Xi Jinping stressed the need to maintain political stability in an unusual meeting that suggested fresh concerns about the implications of the slowing economy. Japan’s Topix Index was little changed at 9:19 a.m. in Tokyo. S&P/ASX 200 fell 0.2 percent. Futures on the S&P 500 Index sank 0.4 percent.  

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

• China Yet to Bottom, Davos Warning, Trade Talks Debate: Eco Day.

• Oil Steadies Near Two-Month High as U.S. Drilling Slows Down.  

• Confident Oil Industry Set to Ratchet Up Spending in 2019.

• Trump, Democrats Inch Closer to a Compromise.  

• Poor Earnings Season May Not Stop a Market Rally, JPMorgan Says.  

• IMF, CEOs Warn of Slowing World Economy on Eve of Davos Summit.

Wall Street Journal:

• Israel Hits Iranian Targets in Syria After Golan Attack.

• Arctic Blast Brings Cold Snap Across Northeast.

• For Sanity’s Sake, Delete Your Account.

• Trump, Key European Leaders Skip Davos Amid Turmoil at Home.

• Overseas Investment Seen Gaining as U.S. Firms Repatriate Less Profit.

• Insurgents Attack Intelligence-Agency Base in Afghanistan, Killing Dozens.

MarketWatch.com:

• Asian markets rise despite slower economic growth in China.

Fox News:

• Giuliani says his team, Mueller’s team talked, agreed much of article false.

• House Judiciary Democrat: Kavanaugh 'likely' will be investigated for perjury.

• Ex-top FBI lawyer personally involved in Trump aide FISA warrant, other probe irregularities.

CNBC:

• IMF says the global economic expansion is losing momentum as it cuts growth forecasts.

• Defense and tech stocks are the big winners of Trump’s first 2 years in office.

• The number of births in China hit its lowest level since 1961.

• Here’s some of the technology that’s set to make a ‘quantum leap’ in 2019.

Zero Hedge: 

• The 'Gilets Jaunes' Are Unstoppable: "Now, The Elites Are Afraid".

• Blain: "China Is Juggling Half A Dozen Flaming Hand Grenades While Walking On A High Wire".

• Native American "Harassed" By MAGA Kids Exposed As Outrage-Culture Grifter.

• Iran Ready To "Eliminate Israel From The Earth"; IDF Trolls Tehran Over Twitter.

• Satellite Images Reveal China Is Building Secret War Bunkers Near Indian Border.

• Skripal Story Just Got Weirder; First Responder Revealed As Chief Army Nurse; Steele "Link" Blamed On Russia.

• Feds Prepare To Bail Out "Vast Majority" Of 90,000 Sears Pensions.

• Arctic Blast Brings Dangerously Cold Wind Chills To Northeast .

• Gundlach To Delete Twitter Account Due To "Suspicious Activity".

• May Rules Out Changes To Good Friday Agreement, Offers Parliament More Control Over Trade Negotiations.

• MAGA Hat Teen Speaks Out Amid Death Threats; Denounces "Outright Lies" About Tribal Elder Staredown.

• Writing Professor: Grading Based On Quality Is Racist.

• Kamala Harris Is Running For President.

• 'Why Can't They Take The Bus?' - Davos Locals Furious As Limos Clog Streets.

• "The Goal Is To Automate Us" - Welcome To The Age Of Surveillance Capitalism.

• Israel Announces Sustained Strikes On Damascus; Syria Fires Back In Major Escalation.

• Why "Democratic Vote Harvesting" Will Be The Biggest Topic Of 2020.

• Illinois' Lethal Combination: Rising Property Taxes & Stagnant Incomes.

• China 2018 GDP Growth Slows To Weakest In 28 Years.  

• More Fake News Exposed As Media Lies About Catholic Kids, Native American Debacle.

• MSM Begs For Trust After Buzzfeed Debacle.

Business Insider:

• Experts say this is what everyone will be wearing in 2019.

• A data point known as a canary in the coal mine for the global economy just fell off a cliff, and it's a troubling sign of how bad things are in China. 

• Apple(AAPL) should give the iPhone XS and iPhone XR a permanent price cut.

• The world's biggest YouTube stars told us they're burning out because of the unrelenting pressure to post new videos.

Telegraph:

• Comment: The 10 questions Remainers need to answer before stopping a no-deal Brexit.

• 'Big Short' guru says Corbyn bigger risk than a no-deal Brexit.

Night Trading

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

• Asia Ex-Japan Investment Grade CDS Index 85.75 -1.25 basis points.

• China Sovereign CDS 58.75 -1.25 basis points.

• Bloomberg Emerging Markets Currency Index 67.89 -.03%.

• FTSE 100 futures +.15%.

• S&P 500 futures -.41%.

• NASDAQ 100 futures -.50%.

Morning Preview Links

Earnings of Note

Company/Estimate
Before the Open:

• (ATI)/.34

• (FITB)/.67

• (HAL)/.37

• (JNJ)/1.95

• (LOGI)/.54

• (PETS)/.48

• (SWK)/2.10

• (STLD)/1.24

• (TRV)/2.40

After the Close:

• (COF)/2.39

• (IBM)/4.83

• (LRN)/.56

• (AMTD)/1.01

• (WYNN)/1.29

• (ZION)/1.06

Economic Releases
10:00 am EST

• Existing Home Sales MoM for Dec. is estimated to fall -.9% versus a +1.9% gain in Nov.

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The German ZEW Index and Davos 2019 could also impact trading today.

BOTTOM LINE: Asian indices are slightly lower, weighed down by financial 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.