Friday Watch

Evening Headlines

Bloomberg:

• Trump Says U.S. Warship Downed Iran Drone Near Strait of Hormuz.  

• Japan Inflation Hits 2-Year Low as BOJ Faces Pressure to Act. 

• Dollar Gains With Yields as Fed Cuts Pondered. The dollar edged up with Treasury yields, giving back some earlier losses, after the New York Federal Reserve said its President, John Williams, wasn’t sending a specific policy signal with earlier commentary that fueled bets on a half-point interest rate cut this month. Asia stocks tracked an advance in U.S. shares. Japanese and Korean stocks rose, with modest gains in Australia. The S&P 500 earlier climbed and Microsoft Corp. rallied in after-hours trading after sales topped estimates. Fed Vice Chairman Richard Clarida and New York Fed chief John Williams stressed the need to act quickly if the U.S. economy looked likely to stumble during the U.S. session. Then a spokesman for Williams said he did not intend to suggest the central bank might make a large interest rate cut at the end of this month. Futures on the S&P 500 rose 0.1% as of 9:05 a.m. in Tokyo. The underlying gauge rose 0.4% Thursday. Japan’s Topix index added 0.5%. South Korea’s Kospi advanced 0.7%. Australia’s S&P/ASX 200 Index advanced 0.1%.

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

• Trump Says He’s Looking ‘Very Seriously’ at Pentagon Cloud Deal.  

• Top Fed Officials See Prudence of Acting Early to Sustain Growth. 

• Wall Street’s Trading Desks Endure Worst First Half in a Decade.

• U.S. Job Growth Looks Set to Power Record Back-to-School Spending.

Wall Street Journal:

• We Tested 5G Across America. It’s Crazy Fast—and a Hot Mess.

• The Democrats’ War Has Only Begun.

• What Lagarde Brings to the ECB: Flexibility.

• Epstein Scandal Brings Legal Titans to Blows.

• Gannett Closes In on Deal to Combine With GateHouse Media.

• WeWork Co-Founder Cashed Out at Least $700 Million Via Sales, Loans.

• Global Easing Cycle Gains Momentum as Central Banks Cut Rates.

Fox News:

• US warship destroys Iranian drone with tensions high, President Trump says.

MarketWatch.com:

• Snap, Chipotle, and 11 more stocks that look ready to rally in the second half.

CNBC:

• Boeing(BA) to take $4.9 billion hit in second quarter on 737 Max grounding.

• Now the market thinks the Fed could make an even deeper cut to rates later this month.

• Average salaries by major, and why it matters.

• CrowdStrike(CRWD) stock jumps after beating expectations in its first earnings report.

• Stocks making the biggest moves after hours: Microsoft, Skechers, Chewy and more.

• Chewy(CHWY) stock rises after release of its first results since IPO, loss narrows in line with forecast.

Zero Hedge:   

• Iran Releases Dramatic Footage Showing IRGC Seizing Foreign Oil Tanker.

• 4 Ways Employers Respond To Minimum Wage Laws (Besides Laying Off Workers).

• Beijing Lets One Slip: Obscure Data Suggests China Housing Bubble Has Burst.

• Viral 'FaceApp' Aging App Gives Russia-Based Firm "Perpetual, Irrevocable" Rights To Personal Content.

• US Drug Overdose Deaths Down For First Time In 30 Years.

• Most Americans Still See American Dream As Achievable.

• Duterte 'Will Not Answer' To White People Amid UN Human Rights Investigation.

• 'Gendered' Terms Like "Manhole", "Policemen", & "Chairmen" To Be Banned In Berkeley, CA.

• The Precog Fed: Vice Chair Clarida Says Fed Shouldn't Wait For Economy To Turn Down To Cut Rates.

• Fed Hints At Rapid Return To ZIRP, Sends Everything Soaring As Dollar Plunges.

Business Insider: 

• Microsoft(MSFT) blew away Wall Street estimates in its most recent quarter and grew its revenue by 12% from last year.

• Instagram is starting to cut off its most addictive feature, and it could have huge consequences for teens' mental health.

• AOC's policy adviser wants to tax high incomes at 99%. A tax attorney says it would be 'naive' not to expect high-earners to change their habits in response. 

• Here's the fastest way to delete your data from FaceApp, the viral app that's stirring controversy about privacy and data collection. 

• The US government is cautioning Americans that if they visit Peru they could be at risk of violent crime and 'organized criminal groups'.

• Apple(AAPL is expected to launch 3 new iPhones this year — here's everything we know so far.

Night Trading 

• Asian equity indices are +.50% to +1.0% on average.

• Asia Ex-Japan Investment Grade CDS Index 64.25 -1.0 basis point.

• China Sovereign CDS 42.75 -.75 basis point.

• Bloomberg Emerging Markets Currency Index  67.96 -.02%.

• S&P 500 futures +.28%.

• NASDAQ 100 futures +.37%.

Morning Preview Links 

Earnings of Note 
Company/Estimate

Before the Open:

• (AXP)/2.02

• (ALV)/1.44

• (BLK)/6.59

• (CLF)/.52

• (GNTX)/.40

• (KSU)/1.61

• (MAN)/2.00

• (NVR)/44.87

• (RF)/.39

• (SLB)/.35

• (STT)/1.40

After the Close:

• None of note

Economic Releases
10:00 am EST

• Preliminary Univ. of Mich. Consumer Sentiment for July is estimated to rise to 98.8 versus 98.2 in June.
  

Upcoming Splits

• None of note

Other Potential Market Movers

• The Fed's Rosengren speaking, Fed's Bullard speaking and the Eurozone CPI report could also impact trading today.

BOTTOM LINE: Asian indices are higher, boosted by industrial and technology shares in the region. I expect US stocks to open modestly higher and to maintain gains into the afternoon. The Portfolio is 100% net long heading into the day.