Tuesday Watch

Evening Headlines
Bloomberg:

• European Chipmakers to Keep on Supplying Huawei After Trump Ban.    

• Singapore's Economy Gains 3.8% as Construction Rebounds.

• Defiant Macron Won't Give Up Plans for Greater European Unity.  

• Sniffer Drones Will Start Patrolling the World's Busiest Shipping Ports.

• Asia Stocks Drop as U.S.-China Tech Tensions Rise. Asian stocks opened to modest losses Tuesday as investors digested moves by the U.S. against Huawei Technologies Co. that sank U.S. technology shares overnight. The yuan continued to trade near a six-month low. Stocks dipped in Tokyo and Sydney, and were little changed in early trading in Seoul. Futures pointed to losses in Hong Kong and China. Companies crucial to the global supply chain will be closely watched after the White House blacklisted China’s top telecom company. S&P 500 Index futures edged up after the benchmark dropped Monday, with semiconductor stocks among the biggest laggards. Ten-year Treasury yields rose before a slew of U.S. data and minutes on the Federal Reserve’s most recent policy meeting in coming days. Japan’s Topix index fell 0.5% as of 9:14 a.m. in Tokyo. Australia’s S&P/ASX 200 Index fell 0.4%. South Korea’s Kospi index added 0.2%. FTSE China A50 futures dropped 0.8% earlier. Hong Kong’s Hang Seng Index futures lost 0.6% overnight. S&P 500 futures rose 0.2%.  

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

• Fed on Interest Rates, U.S. Jobs Market, Israel Window: Eco Day.

• Tesla(TSLA) in ‘Code Red Situation’ as Sell-Off Exceeds 20%.

Wall Street Journal:

• T-Mobile, Sprint Get Key FCC Backing, but Hurdles Remain.

• Negative Rates Have Become an Addiction.

• Ford to Cut Salaried Jobs by 10% Amid Global Restructuring.

• U.S. Fines Billions for Wall Street Fraud. Nearly Half the Time It Doesn’t Collect.

• Barr Says He Is Fighting for the Presidency, Not Trump.

Fox News:

• Trump slams Scranton-born Joe at raucous Penn. rally: ‘He left you folks. He left you for another state’.

MarketWatch.com:

• Trump’s Huawei ban is hurting tech stocks — here’s what money flows are showing.

CNBC:

• Good food is bringing people to the mall. And they’re spending more money when they get there.

• Hedge funds bet the sell-off is over: ‘Correction has run its course’.

• Stocks making the biggest moves after hours: GM, Snap, Merck and more.

• Iran ramps up uranium production, throwing ‘a brick on the accelerator’ to nuclear threshold.

• Jim Cramer: ‘Your portfolio should have as little exposure to China as possible’.

Zero Hedge:

• Fed Chair Powell Flags Financial Stability Risks: Record Debt, High Valuations, Leverage, & CLO Liquidity.

• "The Markets Implications Are Enormous": Trade War With China Is Not About Trade But About Geopolitics.

• NYC Schools Chief Accused Of Creating Environment "Hostile" To White People.

• New York Bank Stocks Under Pressure From New Democrat-Backed Rent Legislation.

• Tech Wrecks, Semis Slammed As Trump's Trade Turmoil Hammers Huawei.

Night Trading 

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

• Asia Ex-Japan Investment Grade CDS Index 71.50 +.5 basis point.

• China Sovereign CDS 49.25 unch.

• Bloomberg Emerging Markets Currency Index 65.74 -.02%.

• S&P 500 futures +.28%.

• NASDAQ 100 futures +.44%.

Morning Preview Links 

Earnings of Note 
Company/Estimate

Before the Open:

• (AZO)/15.09

• (CBRL)/2.10

• (EV)/.76

• (HD)/2.19

• (JCP)/-.39

• (KSS)/.67

• (TJX)/.55

• (MNRO)/.51

After the Close:

• (CRMT)/1.82

• (JWN)/.43

• (TOL)/.75

• (URBN)/.25

Economic Releases
10:00 am EST

• Existing Home Sales for April are estimated to rise to 5.35M versus 5.21M in March.
  

Upcoming Splits

• (FAST) 2-for-1

Other Potential Market Movers

• The Eurozone Consumer Confidence report, Japan Trade Balance report, weekly US retail sales reports, RBC Healthcare Conference, Suntrust Robinson Humphrey Internet/Digital Media Conference, Credit Suisse Mortgage REIT Conference, Suntrust Robinson Humphrey Financial Services Conference, Wolfe Research Transport Conference and the Needham Emerging Tech Conference could also impact trading today.

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