Tuesday Watch

Evening Headlines

Bloomberg: 

• Trump Says U.S., Japan Reach Initial Agreement on Tariffs.

• Asia Stocks Set for Muted Open; Treasuries Climb. Asian stocks look set for a muted open Tuesday as investors assessed heightened geopolitical risks in the aftermath of the strike on Saudi Arabia’s crude production that sent oil prices soaring. Treasuries advanced. Futures pointed to modest losses in Australia and Hong Kong, while traders in Japan return after a holiday Monday. U.S. stocks slipped. Oil pulled back slightly in early Asian trading after a 15% jump the previous session. The dollar maintained gains against peers. Saudi Aramco now faces weeks or months before the majority of output is restored at the giant Abqaiq processing plant. Futures on Australia’s S&P/ASX 200 Index dipped 0.2%. Hong Kong’s Hang Seng Index futures were down 0.2%. Futures on the S&P 500 ticked higher 0.1% as of 7:53 a.m. in Tokyo. The S&P 500 Index fell 0.3%.  

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

• Chevron Can Resume Saudi-Kuwait Oil Field Quickly If Needed: CEO.

• Wall Street May Get $40 Billion Reprieve From Trump Regulators.

• Disrepair of U.S. Oil Reserve May Hamper Its Value in a Crisis.

Wall Street Journal:   

• U.S. Tells Saudi Arabia Iran Launched Oil Attacks .

• Amazon Changed Search Algorithm in Ways That Boost Its Own Products.

• UAW Strike Could Cost GM $100 Million a Day.

• The Assault on the Supreme Court.

• Antitrust Enforcers Signal Discord Over Probes of Big Tech.

• China’s Economy Aches All Over as Beijing Seeks Trade Fix With the U.S.

Fox News:

• Kavanaugh attacks see top Republicans lash out; McConnell claims 'this is not normal'.

• California adds this state to 'travel ban' over refusal to fund gender transitions.

CNBC:

• Trump says he’s in no rush to respond to the attacks on Saudi oil facilities

• Expectations suddenly are rising that the Fed might not cut interest rates this week.

• Investigation finds illegal synthetic marijuana in vape and edible products sold as CBD.

• Jim Cramer explains how the market was able to virtually shrug off a major oil shock.

Zero Hedge:

• Something Just Snapped: Chaos Hits Repo Market As "Dollar Funding Storm" Makes Thunderous Landfall.

• Explosion Hits Russia's Largest Virus Lab Which Houses Plague, Smallpox, Ebola And Other Deadly Viruses.

• WeWork IPO To Be Delayed Until October "At Earliest" As Roadshow Halted.

• DOJ Sued For Docs On FBI/CIA Informant Who Spearheaded Trump Tower Moscow Scheme.

• What Does The Threat Of Middle East War Mean For The Fed's Decision.

• Deescalation: Trump Doesn't Want "War With Anyone", Wants "Definitive Proof" Iran Behind Attacks.

• Oilmageddon: Surveying The Aftermath.

Business Insider: 

• College is more expensive than ever, but 'almost no one' is paying sticker price.

Night Trading 

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

• Asia Ex-Japan Investment Grade CDS Index 56.0 +.5 basis point.

• China Sovereign CDS 38.75 +1.0 basis point.

• Bloomberg Emerging Markets Currency Index  65.92 +.01%.

• FTSE 100 futures n/a.

• S&P 500 futures +.13%.

• NASDAQ 100 futures +.14%.

Morning Preview Links 

Earnings of Note 
Company/Estimate

Before the Open:

• (APOG)/.65

• (CBRL)/2.49

After the Close:

• (ADBE)/1.97

• (CHWY)/-.10

• (FDX)/3.17

Economic Releases
9:15 am EST

• Industrial Production MoM for August is estimated to rise +.2% versus a -.2% decline in July.

• Manufacturing Production MoM for August is estimated to rise +.2% versus a -.4% decline in July.

• Capacity Utilization is estimated to rise to 77.6% versus 77.5% in July.

10:00 am EST

• The NAHB Housing Market Index for Sept. is estimated at 66.0 versus 66.0 in August.
  

4:00 pm EST

• Net Long-Term TIC Flows for July.
  

Upcoming Splits

• None of note

Other Potential Market Movers

• The German ZEW index, weekly US retail sales reports, BofA Merrill Healthcare Conference, Goldman Sachs Communacopia Conference, BMO Real Estate Conference, (CACI) investor day, (MAS) investor day, (BRKS) Investor Day, (VMC) Aggregates Day and the (KLAC) investor day could also impact trading today.

BOTTOM LINE: Asian indices are modestly higher, boosted by energy 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 75% net long heading into the day.