Tuesday Watch

Today's Headlines

Bloomberg:

• China’s Fiscal Coffers Are Depleted Just as Virus Spurs Spending.
• China, Asia Bulk Up Economy Defenses Against Virus Ahead of G-20.     
• Most Economists See Virus Pushing Japan Into Recession: Survey.
• Rare Release of Xi’s Speech on Virus Puzzles Top China Watchers.  
• Pelosi Warns Europe That Huawei Represents Chinese State Police.
• Wuhan Sharply Tightens Quarantines on Residents: Virus Update. 
• U.S. Evacuates Infected Citizens; Deaths Hit 1,775: Virus Update.
• Japan’s Economy Contracts Most Since 2014 on Tax Hike. Stocks, Bond Yields Decline After Apple Warning. Asian stocks fell with U.S. futures and bond yields after Apple Inc. said quarterly sales would miss forecasts, illustrating the blow to corporate earnings and economic growth from the deadly coronavirus. Equity benchmarks in Tokyo, Seoul and Hong Kong saw declines of over 1%. Sydney and Shanghai saw more modest drops. Apple suppliers including TDK Corp. and Tokyo Electron Ltd. slumped after the iPhone maker warned on both production and sales disruptions due to the epidemic. Ten-year Treasury yields slumped as trading restarted following a U.S. holiday Monday. Australia’s dollar dropped after the central bank said it had discussed cutting interest rates two weeks ago. Nasdaq 100 futures were down 0.6% compared with Friday’s close, as of 11:52 a.m. Tokyo time. Futures on the S&P 500 Index were down 0.3%. Topix index fell 1.2%. Australia’s S&P/ASX 200 Index fell 0.3%. Kospi index fell 1.4%. Shanghai Composite Index dropped 0.4%. Hang Seng Index fell 1.3%.
• Five Things You Need to Know to Start Your Day.    
• China Policy Pace, Bundesbank Warning, Sweden Challenge: Eco Day.
• Oil Snaps Five-Day Rally While Investors Assess Virus Measures.

Wall Street Journal:

• TikTok Wants to Grow Up, but Finds It Tough to Keep Kids Out.

• Japan’s VAT Blunder.

• New Help for Dementia Patients, Delivered Via Games and Puzzles.

• Biden’s Black Support Shows Signs of Strain.

MarketWatch.com:

• Mark Zuckerberg again calls for Big Tech to be regulated, even if it’s bad for business.

• Here are vulnerable parts of the U.S. economy that coronavirus may infect.

• Here’s the segment of the economy that may benefit from fears of coronavirus, analysts say.

Fox News:

• NYC subway thief thanks Democrats after his 139th arrest, release.

• Trump campaign fires back after Obama claims credit for economic boom.

CNBC:

• Pier 1 files for Ch. 11 bankruptcy as talks with potential buyers continue.

• Stocks expected to rise even as virus creates volatility: ‘The market thinks the worst is over’.

• Singapore’s economy grew 1% in the fourth quarter — better than estimates.

• Japan’s economy shrinks at fastest pace in 6 years, as coronavirus outbreak clouds outlook.

• Dairy Farmers of America agrees to buy Dean Foods, America’s biggest milk producer, for $425 million.

• Coronavirus live updates: Macao casinos set to reopen, but Tokyo closes its marathon.

• Apple(AAPL) cuts revenue guidance due to iPhone delays in China caused by coronavirus.

Zero Hedge: 

• Senator Cotton: China Refusing To Hand Over Evidence About Wuhan BioLab.

• "More Than A Disgrace" - The WHO's "Industrially-Necessary" Doctor Tedros Should Go!

• Wuhan Hospital Boss Dies, Beijing Finally Accepts American Infectious-Disease Experts.

• "The Situation Is Evolving" - AAPL Cuts Guidance Due To Virus Disruptions.

• Rabobank: China's Stimulus Will Struggle In The Face Of What Is Needed To Contain The Spread Of The Virus.

• Cable Sinks To Session Lows As UK Slams "Absurd" EU Trade Rules, Expects "Open & Fair" Competition.

• China's Latest Data Fabrication: Home Prices "Increased" Even As Largest Home Developer Offers 25% Discounts.

• This Is What Hedge Funds Bought And Sold In Q4: Complete 13F Summary.

• Democratic Senators Secretly Met Iranian Top Diplomat: Report.

• Blain: Evidence Of Cracking Global Supply Chains Is Fast Emerging.

• Jeff Bezos Launches $10 Billion "Bezos Earth Fund" To Fight Climate Change.

• China Stocks Surge, S&P Futs Hit All Time High On Latest Chinese Monetary Stimulus.

• US Firms In China Suffering "Severe Shortages Of Workers," Warn Virus Impact Hitting Supply Chains.

• China Central Bank Orders Lenders To "Tolerate" Higher Bad Debt Levels To Avoid Financial Cataclysm.

• Virginia Governor's 'Assault Weapons' Ban Fails After Democrats Balk.

• The Death Of Free Speech: Zuckerberg Asks Governments For Instructions On "What Discourse Should Be Allowed".

• White House Plans To Cut Off Sales Of American Chip Technology To China.
• China Adopts 'Cultural Revolution-Style' Social Controls To Crush Outbreak As Death Toll Nears 2,000.

• 24 Killed In Brutal Terror Attack On Burkina Faso Church; Local Pastor Targeted.

• Q4 Earnings Shocker: Excluding The FAAMGs, Net Income Is Down 7.5%.

• Beijing Crashes The Party: Chinese Media Warns Austerity Is Coming After FinMin Says "Proactive Fiscal Policy" No Longer Feasible.

• Record Highs And Raging Risks - The Mother Of All Head-Scratchers,

• President Xi Insists He Gave Orders To Contain Coronavirus Outbreak Weeks Before It Went Global,

• Hedge Fund CIO: Guys Text Me All Day, The Dumbest Of The Dumb Are Making Hundreds Of Thousands Daytrading Tesla Right Now.

• China's Coronavirus Numbers Don't Add Up, And The White House Doesn't Believe Them.

• Bye, Bye, Buybacks!

• Hedge Funds Have Never Been More Levered Or More Invested In The Same Handful Of Stocks,

• Watch Klobuchar & Steyer Get Stumped When Simply Asked To Name Mexico's President,

• Smoking Gun? Chinese Scientist Finds "Killer Coronavirus Probably Originated From A Laboratory In Wuhan".

Business Insider:

• China will start destroying cash collected in areas with high exposure to the coronavirus.

• Warren Buffett sold more than $800 million worth of Apple stock last quarter .

• Take a look at what technologies retailers are introducing to revamp the in-store experience.

John Hopkins University:

• Coronavirus Global Cases. (map)

Night Trading

• Asian indices are -1.25% to -.25% on average.

• Asia Ex-Japan Investment Grade CDS Index 48.5 -1.0 basis point.

• China Sovereign CDS 34.25 +1.0 basis point.

• Bloomberg Emerging Markets Currency Index 64.96 -.11%.

• FTSE 100 futures -.57%.

• S&P 500 futures -.31%.

• NASDAQ 100 futures -.58%.

Morning Preview Links

Earnings of Note

Company/Estimate

Before the Open:

• (AAP)/1.35

• (BLMN)/.35

• (EXPD)/.80

• (FLR)/.23

• (LDOS)/1.35

• (MDT)/1.38

• (VMC)/1.17

• (WMT)/1.44

After the Close:

• (A)/.81

• (AMED)/.93

• (CXO)/.80

• (HLF)/.64

• (LZB)/.64

• (SGMS)/.25

• (VNO)/1.57

Economic Releases
8:30 am EST

• Empire Manufacturing for Feb. is estimated to rise to 5.0 versus 4.8 in Jan.

10:00 am EST

• The NAHB Housing Market Index for Feb. is estimated at 75.0 versus 75.0 in Jan.

4:00 pm EST

• Net Long-Term TIC Flows for Dec.
  

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Eurozone ZEW Index, Japan Trade Balance report and the (WMT) community meeting could also impact trading today.

Market Hours
Normal:

• 9:30 am - 4:00 pm EST

BOTTOM LINE: Asian indices are lower, weighed down by technology and commodity shares in the region. I expect US stocks to open mixed and to weaken into the afternoon, finishing modestly lower.  The Portfolio is 50% net long heading into the week.