Tuesday Watch

Today's Headlines

Bloomberg: 

• U.S. ‘Not Ready’ to Make a Trade Deal With China, Trump Says. 

• China's April Industrial Profits Fall as Trade Standoff Worsens.

• No-Deal Brexit Looks More Likely, But Could a Tory Leader Pull It Off?  

• President Trump Eyes August for a U.S.-Japan Deal on Trade.

• Italy Risks $4 Billion EU Penalty Over Failure to Rein In Debt.

• Europe Stocks Advance With Bonds After EU Election: Markets Wrap. 

• Asia Stocks Set for Muted Open; Dollar Edges Up. Asia stocks were set for a muted open as investors mulled comments from President Donald Trump that the U.S. was “not ready” to reach a trade deal with China. The dollar edged higher. Futures on Japanese and Australian equities were steady, with those in Hong Kong modestly lower. U.S. contracts were little changed in early Asian trading with markets shut Monday for Memorial Day. Earlier, European stocks advanced with bonds after EU elections. A holiday in the U.K. kept volumes low. Futures on the Nikkei 225 were little changed in Singapore. Contracts on Australia’s S&P/ASX 200 Index were flat. Hong Kong’s Hang Seng Index futures fell 0.3% earlier.

• Bitcoin Jumps Toward $9,000 in Best-Performing Month Since 2017.

Wall Street Journal:

• Amid Tensions, Iran’s Crude Buyers Jump Ship.

• Drug Giant Tries New Tactic to Fight Cancer.

• U.S. Is Learning That China Likes Its Own Model.

• European Elections Deepen Divisions in National Capitals.

• Risky Municipal Bonds Are on a Hot Streak.

• A Europe Still Divided.

• Trade Tensions Further Hurt Tractor Makers.

Fox News:

• Trump seizes on NYU professor's false tweet about him to push change of libel laws.

• DANIEL TURNER: Stealth AOC 'Green New Deal' now the law in this state.

CNBC:

• China is indicating it’ll never give in to US demands to change its state-run economy.

• Trump says he hopes to announce a trade deal with Japan soon.

• Blue-state House members try to reclaim higher SALT deductions that were cut in Trump’s tax overhaul.

• US and China aren’t facing ‘enough pain’ right now for them to strike a quick trade deal: UBS.

Zero Hedge:      

• Italian Bond Yields Spike After EU Threatens Huge Fine Over Excessive Debt.

• "A Big Wake Up Call": Chinese Bond Market Roiled By First Ever Bank Failure.

• Some Tesla Superchargers Now Limit Your Car's Charge To 80%.

• "The Most Destructive Breach In History": Hackers Use NSA Code To Grind Baltimore To A Halt.

• "Pig Ebola" Epidemic Threatens To Unleash Stagflation Across China.

• The Worst 2020 Election Interference Will Be Perfectly Legal.

• "This Is A Major Move For China": Beijing Prepares Cyberscurity Rule In Retaliation Against US.

• Most Americans Want Congress To Drop 'Witch Hunt' In Favor Of 'More Serious Issues': CBS Survey.

• California Is Shaken By More Than 80 Tremors, Chile Struck By Largest Quake In 12 Years.

• Navy Pilots Describe Stunning UFO Sightings; Hypersonic Speeds, No Exhaust Plume.

• PBOC Panics: Threatens Yuan Shorts With "Huge Loss".

• Auto Shares Surge As Fiat, Renault Confirm Merger Talks.

• Futures Fade After Trump Says "Not Ready For Deal With China", Autos Jump On Fiat Deal.

• Macron Suffers Huge Blow With Defeat To Le Pen.

• The ECB's Monetary Trap.

• Which U.S. States Have The Worst Roads?

Night Trading

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

• Asia Ex-Japan Investment Grade CDS Index 74.25 -.25 basis point.

• China Sovereign CDS 52.5 unch.

• Bloomberg Emerging Markets Currency Index 65.81 unch.

• FTSE 100 futures unch.

• S&P 500 futures +.05%.

• NASDAQ 100 futures +.12%.

Morning Preview Links

Earnings of Note

Company/Estimate

Before the Open:

• (AMWD)/1.89

• (BAH)/.62

• (MOMO)/.54

After the Close:

• (WDAY)/.41

• (YY)/.36

Economic Releases
9:00 am EST

• The House Price Purchase Index for 1Q.

• The S&P CoreLogic CS 20-City MoM for March is estimated to rise +.2% versus a +.3% gain in February.

10:00 am EST

• The Conference Board Consumer Confidence report for May is estimated to rise to 130.0 versus 129.2 in April.
  

10:30 am EST

• The Dallas Fed Manufacturing Activity Index for May is estimated to rise to 6.6 versus a reading of 2.0 in April.
  

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The China Industrial Profits report, Eurozone Industrial Production report, Eurozone Consumer Confidence report, Deutsche Bank Financial Services Conference and the KeyBanc Industrials/Basic Materials Conference could also impact trading today.

BOTTOM LINE: Asian indices are mostly higher, boosted by technology and commodity shares in the region. I expect US stocks to open mixed and to weaken into the afternoon, finishing modestly lower.  The Portfolio is 50% net long heading into the week.