Sunday, August 25, 2019

Monday Watch

Today's Headlines
  • U.S. Stock Futures Tumble, Yen Gains on Trade War. U.S. equity futures tumbled while the yen and Treasury contracts climbed after the latest escalation in the Sino-American trade war. The yuan weakened and stocks looked headed for steep losses in Asia. Futures were more than 2% lower in Tokyo and Hong Kong. S&P 500 contracts fell more than 1% after sliding Friday, when President Donald Trump announced additional levies on Chinese imports and called for American companies to pull out of Asia’s largest economy after China said it would impose retaliatory tariffs on U.S. goods. Trump acknowledged having second thoughts on escalating the trade war, only for aides to clarify he meant he regretted not raising tariffs even more. The yen touched a fresh 2019 high against the greenback, while the Aussie and kiwi dipped. Futures on the S&P 500 retreated 1.3% as of 7:31 a.m. in Tokyo. The underlying index sank 2.6% on Friday. Futures on Japan’s Nikkei 225 fell 2.6%. Hang Seng futures declined 2.4%. Futures on Australia’s S&P/ASX 200 Index lost 1.3%.
Zero Hedge:   
Night Trading
  • Asian indices are -2.5% to -1.5% on average.
  • Asia Ex-Japan Investment Grade CDS Index 64.5 +.25 basis point.
  • China Sovereign CDS 50.25 +4.0 basis points.
  • Bloomberg Emerging Markets Currency Index 65.15 -.25%.
  • FTSE 100 futures n/a.
  • S&P 500 futures -1.16%.
  • NASDAQ 100 futures -1.37%.

Earnings of Note

Before the Open:
  • (OSIS)/1.06
After the Close:
  • None of note
Economic Releases
8:30 am EST
  • The Chicago Fed National Activity Index for July.
  • Preliminary Durable Goods Orders for July is estimated to rise +1.1% versus a +1.9% gain in June.
  • Preliminary Durables Ex Transports for July is estimated unch. versus a +1.0% gain in June.
  • Preliminary Cap Goods Orders Non-Defense Ex-Air for July is estimated unch. versus a +1.5% gain in June. 
10:30 am EST
  • The Dallas Fed Manufacturing Activity Index for August is estimated to rise to -1.0 versus -6.3 in July.
Upcoming Splits
  • None of note
Other Potential Market Movers
  • The Germany IFO Business Climate Index and the Jefferies Semi/IT Hardware/Communications Infrastructure Conference  could also impact trading today.
BOTTOM LINE: Asian indices are lower, weighed down by technology and industrial shares in the region. I expect US stocks to open lower and to maintain losses into the afternoon.  The Portfolio is 25% net long heading into the week.

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