Friday Watch

Evening Headlines

Bloomberg:     

• U.K. Consumers Are ‘Treading Water’ as Brexit Approaches Climax.  

• Trade War Hasn’t Stopped Wall Street’s $9 Billion China Rush.

• Saudi Arabia Drops Dress Code for Foreign Women in Tourism Push.

• Asia Stocks Start Mixed; Treasuries Hold Gains. Stocks in Asia opened mixed after a dip in U.S. equities, with investors assessing the latest on trade and American politics. Treasuries held gains. Shares in Tokyo and Seoul fell, while Australian equities gained. The S&P 500 ended modestly lower after the release of a whistle-blower complaint central to the latest political drama and reports that the U.S. is unlikely to extend a waiver allowing American firms to supply China’s Huawei Technologies. Ten-year Treasury yields traded just under 1.7%. Meantime, in a surprise move, FTSE Russell opted not to add Chinese bonds into its flagship World Government Bond Index. Futures on the S&P 500 Index were flat. The underlying gauge lost 0.2% Thursday. Japan’s Topix index lost 0.8% as of 9:13 a.m. in Tokyo. South Korea’s Kospi slid 0.6%. Australia’s S&P/ASX 200 Index rose 0.5%.  

• Oil Set for Weekly Decline as Saudis Restoring Lost Production.

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

• Peloton, Endeavor Duds Give IPO Bankers Another Black Eye.

• Two WeWork Executives Close to Neumann Said to Depart.

Wall Street Journal:

• Big Banks Loom Over Fed Repos.

• Syria Conducted Chlorine Attack in May, U.S. Says.

• Instagram’s Content Factories Are Huge—And That’s a Problem for Facebook.

• Taking Out Joe Biden.

• Pelosi Ducks an Impeachment Vote.

• France Unveils Billions in Tax Cuts to Reset Pro-Business Plan.

• Vaping-Related Illnesses Rise 52%.

Fox News:

• Republicans race to identify whistleblower's WH sources as apparent inconsistencies emerge.

• KARL ROVE: Nancy Pelosi was forced to pursue impeachment inquiry.

MarketWatch.com:   

• Trump campaign capitalizes on impeachment threat, raising millions from supporters this week.

CNBC:

• China trade talks set to resume Oct. 10.

• Peloton’s future depends on whether investors think it’s a hardware company or a fitness platform.

• Wall Street Democrats warn the party: We’ll sit out, or back Trump, if you nominate Elizabeth Warren.

• Delta is buying 20% of LATAM, Latin America’s largest airline.

• Endeavor pulls plug on IPO day before debut.

• Stocks making the biggest moves after hours: LATAM, Micron, Las Vegas Sands and more.

Zero Hedge:

• NYTimes 'Outs' Ukraine-Call "Whistleblower" As CIA Officer.

• 5 Million DoorDash Customers Had Data Stolen In Hack Attack.

• "A Looming Wall Of Dollar Debt:" 2020 Could Be A Disastrous Year For China's Domestic Bond Market.

• What's Wrong With Chinese GDP Data?

• Illinois Cities Getting Crushed By Pension Costs - Just Look At Peoria!

• US To Deploy 200 Troops, Patriot Missile System To Saudi Arabia; Oil Jumps.

• If The World's Ending In 12 Years, Why Even Go To College?

• S&P Downgrades WeWork To 'B-' Due To "Liquidity Strains".

• Stocks Burst Into The Green On Chinese Foreign Minister Trade Talk Optimism.

• Peloton Pounded, Crypto Crushed, Bonds Bid, Stocks Skid.

Telegraph:

• Greta Thunberg is wrong: economic growth is friend to the environment, not foe.

Night Trading 

• Asian equity indices are -.5% to +.25% on average.

• Asia Ex-Japan Investment Grade CDS Index 76.25 +.5 basis point.

• China Sovereign CDS 47.75 +.5 basis point.

• Bloomberg Emerging Markets Currency Index  65.30 -.03%.

• FTSE 100 futures +.14%.

• S&P 500 futures -.18%.

• NASDAQ 100 futures -.28%.

Morning Preview Links 

Earnings of Note 
Company/Estimate

Before the Open:

• None of note

After the Close:

• None of note

Economic Releases
8:30 am EST

• Personal Income for August is estimated to rise +.4% versus a +.1% gain in July.

• Personal Spending for August is estimated to rise +.3% versus a +.6% gain in July.

• The PCE Core MoM for August is estimated to rise +.2% versus a +.2% gain in July.

• Durable Goods Orders for Aug. are estimated to fall -1.1% versus a +2.0% gain in July.

• Durables Ex Transports for Aug. are estimated to rise +.2% versus a -.4% decline in July.

• Cap Goods Orders Non-Defense Ex-Air for August are estimated to rise +.3% versus a -.6% decline in July.

Upcoming Splits

• None of note

Other Potential Market Movers

• The Fed's Vice Chair for Supervision Randal Quarles speaking and the Eurozone Business Confidence Index could also impact trading today.

BOTTOM LINE: Asian indices are mostly lower, weighed down by technology 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 day.