Monday Watch

Today's Headlines

Bloomberg:

• Pompeo Says Any Actions by Trump in Iran Will Be ‘Lawful’.

• Iraq PM Says Withdrawal of Foreign Troops Is Best Way Forward.

• Iran’s Cyber Attack on Billionaire Adelson Provides Lesson on Strategy.   

• Saudi Default Risk Jumps as U.S.-Iran Tensions Flare: Chart.  

• PBOC Pledges Financial Support for Small Firms in 2020.

• Yen Rises, Stock Futures Drop on Mideast Tensions. Stock futures declined and the yen and gold advanced in the wake of escalating Middle East tensions as Asian financial markets return to full strength following New Year holidays. Japan’s currency matched a three-month high in the wake of fallout from the U.S. killing of a top Iranian military commander in Iraq. Gold surged to the highest in more than six years. U.S. and Japanese equity futures slid, while Australian shares opened lower. The S&P 500 Index posted its biggest loss in a month Friday in the wake of the killing, which threatened to spur escalating violence across the Middle East. Nikkei 225 futures fell 0.2% in Singapore. Australia’s S&P/ASX 200 Index fell 0.9%. Hong Kong’s Hang Seng Index fell 0.1% earlier. S&P 500 futures fell 0.6%. The S&P 500 Index fell 0.7% Friday.

• Five Things You Need to Know to Start Your Day   

• Oil Hits $70 as Iran Exits Nuclear Deal, Tensions Intensify.

• Gold Climbs to Highest Level Since 2013 on Iran-U.S. Tension.

• Low Rates Could Get Even Lower, Senior Central Bankers Warn.

• Weinstein on Trial: A #MeToo Reckoning Two Years in the Making.

Wall Street Journal:

• The Bloody Legacy of Qasem Soleimani.

• Boris and Britain After Brexit.

• U.K. Examines if Cyberattack Triggered London Stock Exchange Outage.

• Bets on 2020 Rebound in Global Growth Face First Test.

• Beijing Shakes Up Hong Kong Office, Signaling Tougher Tack on Protests.

• Fed Has Many Tools to Deter Recession, Former Chairman Bernanke Says.

• Iran Lacks Allies in Confronting the U.S. 

• The Democrats and Iran.

• Tech Will Rule These ’20s, Too.

• U.S. Regulators Mull Ordering Extra Training for Boeing 737 MAX Pilots.

• McDonald’s Looks to Move Beyond Party Culture.

• Antibiotic Makers Struggle, Hurting War on Superbugs.

Fox News:

• Iran issues warning to US, politicians chant ‘death to America,’ as Trump puts country on notice.

• US servicemember, contractors dead after terror attack at military base in Kenya.

CNBC:

• Here’s what typically happens to the financial markets after major Middle East crisis events.

• Trump threatens to slap sanctions on Iraq ‘like they’ve never seen before’.

Zero Hedge:       

• Trump Says "US Will Not Leave" Iraq Unless Billions For Air Base Are Repaid.

• Trump Derangement Syndrome Skyrockets Over Soleimani.

• Bernanke Hints At Negative Rates, "Purchases Of Private Securities" To Fight Next Recession.

• Gulf Stocks Plunge On War Threat, Aramco Hits Lowest Since IPO

• Mourners Chant "Death To America!" As Multi-Day Funeral Procession For Soleimani Begins

• Baltimore County Homicides Jump 85% To Record High Amid Spillover In City Murder Crisis.

• AFRICOM Confirms Terrorist Attack On US Base In Kenya.

• China Just Escalated Their Brutal Persecution Of Christians To An Entirely New Level.

• Colin Kaepernick Slams Trump's Racist "Terrorist Attack On Brown People" In Iran, Twitter Users Respond.

• Iranian State TV Announces $80 Million Bounty For President Trump's Head.

• It Would Have Been 'Utterly Irrational' For Trump To Notify Democrats Of Soleimani Strike: Dobbs. 

Business Insider:

• Central bank chiefs in Dallas, Minneapolis, Philadelphia and Cleveland will help determine interest rates in 2020. Here's where they stand ahead of the next Fed meeting.

Night Trading

• Asian indices are -1.0% to -.5% on average.

• Asia Ex-Japan Investment Grade CDS Index 56.95 +3.75 basis points.

• China Sovereign CDS 34.25 +3.5 basis points.

• Bloomberg Emerging Markets Currency Index 66.58 -.06%.

• FTSE 100 futures -.48%.

• S&P 500 futures -.47%.

• NASDAQ 100 futures -.52%.

Morning Preview Links

Earnings of Note

Company/Estimate
Before the Open:

• (CALM)/.09

• (CMC)/.54

After the Close:

• None of note

Economic Releases

• None of note

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Eurozone PMI report and CES 2020 could also impact trading today.

Market Hours
Normal:

• 9:30 am - 4:00 pm EST

BOTTOM LINE: Asian indices are lower, weighed down by industrial and technology shares in the region. I expect US stocks to open modestly lower and to maintain losses into  the afternoon.  The Portfolio is 75% net long heading into the week.