Tuesday Watch

Today's Headlines

Bloomberg:

• Johnson Threatens Oct. 14 Election Over No-Deal: Brexit Update.

• China, U.S. Struggle to Set Meeting as Tariffs Erode Trust.  

• Top Chinese Developers Shrink Workforce in Sign of Tough Times.

• Asian Stocks Mixed on Trade Doubts; Treasuries Dip. Asian stocks were mixed in thin trading as Chinese and American officials struggled to schedule a planned meeting this month to continue trade talks. Treasury yields ticked higher. Shares were little changed in Tokyo, Sydney and Seoul. U.S. futures dropped as Bloomberg reported the difficulties the two countries were having in arranging the talks, following Washington’s rejection of Beijing’s request to delay tariffs that took effect over the weekend. Cash markets for both U.S. stocks and bonds were closed for the Labor Day holiday. The dollar was steady near its highest in more than two years. The pound held losses with the U.K. facing a showdown in Parliament over delaying Brexit again. Japan’s Topix index dipped 0.1% as of 9:06 a.m. in Tokyo. Australia’s S&P/ASX 200 Index was little changed. South Korea’s Kospi index slipped 0.1%. Hong Kong’s Hang Seng Index contracts lost 0.6%. Futures on the S&P 500 Index declined 0.7%.

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

• Oil Extends Slide as Trade War, Hurricane Dorian Hit Confidence.   

• JPMorgan Says It’s Finally Time to Buy Stocks Despite Trade Woes.

Wall Street Journal:

• U.K.’s Johnson Brandishes Election in Bid to Stop Parliament From Foiling Brexit.

• Mobile Sports Betting Is the Moneymaker as More States Legalize.

• The Market Forces That Propelled a Massive Rally in Long Bonds.

• Cost of Infrastructure Fixes Is Going Up.

• Iran Curbs U.N. Probe Into Tehran Nuclear Site.

• Argentina’s Pro-Business President Pulls a U-Turn, Imposes Capital Controls.

MarketWatch.com:

• New delays could keep Boeing 737 MAX grounded into holiday travel season.

• ECB official calls Facebook’s Libra ‘treacherous’.

Fox News:

• Hurricane Dorian kills least 5 in Bahamas as powerful storm hinders emergency response.

CNBC:

• British Prime Minister Boris Johnson says Brexit deal chances are rising.

• Here’s a list of recession signals that are flashing red.

• Hurricane Dorian could cost insurers $25 billion, UBS says.

• Beyond Meat uses climate change to market fake meat substitutes. Scientists are cautious.

Zero Hedge: 

• Bahamian Official Filmed Cat-5 Dorian As It Swallowed His Home.

• 34 Reported Dead In Ventura County Dive-Boat Fire.

• "Please, Somebody Help Us!": Eye Of Slow-Moving Dorian Reaches Grand Bahama; Storm Recorded Gusts As High As 220 MPH.

• Why Has The U.S. CEO-To-Worker Pay Ratio Increased So Much?

• HK Security Chief Says Police Battling "Elements Of Terror" - For First Time Echoing Mainland.

• 'Anguished' Hong Kong Leader Wants To Quit - Says Ability To Resolve Crisis 'Very Limited'.

• Rebel MPs Reportedly Attempting To Force Another Brexit Delay.

• Investors Panic-Sell Emerging Market Funds, On Pace For Worst-Ever Outflow.

• These Were The Best And Worst Performing Assets In Rollercoaster August.

Night Trading

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

• Asia Ex-Japan Investment Grade CDS Index 64.5 unch.

• China Sovereign CDS 47.0 +1.0 basis point.

• Bloomberg Emerging Markets Currency Index 64.78 -.07%.

• FTSE 100 futures -.04%.

• S&P 500 futures -.62%.

• NASDAQ 100 futures -.72%.

Morning Preview Links

Earnings of Note

Company/Estimate

Before the Open:

• (CONN)/.51

After the Close:

• (COUP)/-.11

• (HQY)/.35

Economic Releases

10:00 am EST

• ISM Manufacturing for August is estimated at 51.2 versus 51.2 in July.

• ISM Prices Paid for August is estimated to rise to 46.8 versus 45.1 in July.

• Construction Spending MoM for July is estimated to rise +.3% versus a -1.3% decline in June.
  

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Eurozone PPI report, Australia Retail Sales report, UBS Chemicals Conference, Barclays Consumer Staples Conference and the Barclays Energy/Power 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 lower and to maintain losses into the afternoon.  The Portfolio is 50% net long heading into the week.