Monday Watch

Today's Headlines

Bloomberg:   

• China’s Security Law Sends Hong Kong Residents Dashing for Exit.  

• China’s Factory Outlook Slips in May Amid Slow Recovery.  

• Australia House Prices Fall as Shutdowns Hit Property Market.  

• EU Floats Taxing 70,000 Companies for Market Access, FT Reports.  

• U.S. Stock Futures Slip as Protests Spread; Yen Up: Markets Wrap. U.S. stock futures retreated, while Asian equities were largely mixed in early Monday trading, as investors weighed the violent protests in some American cities that have stoked concerns about a reacceleration in infection rates and a damper on the economic recovery. The yen and gold edged up. S&P 500 futures retreated and shares in Japan and Sydney opened flat. With Amazon scaling back deliveries and Apple closing some stores Sunday, investors are gauging how violence over the weekend will affect the reopening of the world’s largest economy. Crude oil fell. China’s markets will be taking in President Donald Trump’s latest barrage of China criticism, which stopped short of tough sanctions over Hong Kong. Futures on the S&P 500 Index declined 0.5% as of 9:01 a.m. in Tokyo. The index climbed 0.5% on Friday. Japan’s Topix index dipped 0.1%. South Korea’s Kospi index rose 0.4%. Australia’s S&P/ASX 200 Index slid 0.2%. 

• Oil Edges Lower With U.S. Riots Offset by Report on OPEC+ Cuts.

• President Plans Expanded Fall G-7 Meeting With Russia, Others. 

• Protests Hammer U.S. Cities Still Recovering From Lockdown.

• U.S. Cities Wracked by Another Night of Protests: Video.

• Amazon Calls Delivery Drivers Back, Closes Hubs Near Protests.

• Nocera: Riots Breed Chaos, Violence and Most Likely Covid-19.    

• Japan to Ease Entry Bans; Brazil Gets U.S. Drugs: Virus Update.

• Protests May Spark Outbreaks; Russia Approves Drug: Virus Update.   

• Chicago Mulls Delay Amid Protests; U.S. Cases Slow: Virus Update.

• Great Depression-Like Jobless Rate Seen for U.S.

• U.S. Government Is Selling Property in Exclusive Hong Kong Area.  

• Trump Leads Biden in the States He Won in 2016: Campaign Update.  

• Texas Is Showing the World How to Reopen Cautiously.  

• Bitcoin’s Bounce Back Over $9,000 Masks a Potential Downtrend.

Wall Street Journal:

• Cities Racked by Another Night of Violent Protests.

• Cities’ Next Dilemma: Cut Essential Services or Take On More Debt.

• Retailers and Restaurants Grapple With Damage, Just as Many Were Starting to Reopen.

• The Overlooked Disparity: Coronavirus Kills Mostly Men.

• The State Pension Crisis Goes Beyond the Big Blue States.

• Democrats Stick With Tax-Rise Policies, Eyeing 2021.

• U.S. Businesses Brace for Damage as Tensions Grow Over Hong Kong.

• Is It Safe to Reopen Schools? These Countries Say Yes.

• Meat Plants Reopen, But Burgers Stay Pricey.

• New York City Property Taxes Rise as Values Decline.

• American Stocks Are Outpacing the Rest of the World.

• Riots Invite Crime, Not Justice.

• Justice and Disorder.

• Will Canada Send Oil and Gas Packing?

• SpaceX Craft Docks With Space Station, Ushering in New Era.

• Plexiglass Is the New Hot Commodity as Businesses Try to Reopen.

• Chip Industry Seeks Billions to Expand U.S. Manufacturing.

Fox News:

• Big-city Dems who had imposed strict lockdowns now let George Floyd rioters flout rules.

• US cities face toll of violent protests that have left 3 dead, dozens injured, stores burned.

• JIM HANSON: Trump’s right about who’s behind these riots.

CNBC:   

• Amazon, Target and Apple scale back business in cities hit hard by protests. 

• Investors are dangerously downplaying coronavirus and China trade risks, top strategist warns.

• Live updates: Police and protesters clash in another night of violence after killing of George Floyd.

• After flocking downtown to woo millennials, offices might be moving back to the suburbs.

• Coronavirus live updates: As global infections top 6 million, LA suspends testing after riots rock city.

• Five charts that track the U.S. economy as states reopen.

Zero Hedge:

• Looters Overwhelm Police In Santa Monica, Tanker Barrels Into Minneapolis Crowd, As 3rd Night Of Chaos Begins.

• China's Foreign Ministry Tweets "I Can't Breathe!" As America's Rivals Troll US Over Unrest.

• LA Reports Record Jump In COVID-19 Cases As City Distracted By Unrest: Live Updates.

• This Is How Systems Collapse.

• Schlichter: This Election Is Republicans Versus China.

• Here Is The Stunning Chart That Blows Up All Of Modern Central Banking.

• Citi Warns "Markets Are Way Ahead Of Reality", Urges Clients To Raise As Much Money As They Can Before The Next Crash.

• There Is Nothing Normal About The US Savings Rate.

• Are Market Bulls Too Optimistic?

• America Wakes Up After A Night Of Chaos And Destruction: 1,700 Rioters Arrested In Three Days.

• City Leaders To Protesters: 'Coming COVID-19 Second Wave Is Your Fault'.

• "It's A Setup": Mysterious Brick Piles Appear Throughout Major Protest Cities.

• Watch: The Purge 'Message' Blasts Over Loudspeakers As Rioters Torch Cars.

• Trump Designates Antifa "A Terrorist Organization".

• Female Athletes Fight To Keep Biological Men Out Of Their Sports.

• "It's Too Dangerous" - Amazon Orders Delivery Drivers To "Turn Back" Amid Riots As Company Prepares To Cut Hazard Pay.

• "A W-Shaped Epidemic Is Now Emerging As Our Expected Case Forecast".

• Watch Live: Riots Erupt From Coast To Coast; Curfews Imposed; Stores Looted; D.C. Activates National Guard.

• Mapping The The State Of Press Freedom Around The World.

• The Road To Recovery: Which Economies Are Reopening?

• Here Are All The NYC Restaurants That Have Permanently Closed During The Coronavirus Crisis.

• Trump Blasts "Outdated Group Of G7 Countries" - Postpones Summit After Merkel Rebuff, Will Invite Russia Back In.

MarketWatch.com:

• SpaceX successfully launches U.S. astronauts into space. 

• From hashtags to donations, Google, Netflix and other tech companies voice support for protesters.

Business Insider:

• Congress' response to the 2008 financial crisis sparked a decade of inequality and resentment. The US is now repeating that mistake.

• The dangers — and benefits — of a post-pandemic work-from-home revolution.

• Chain restaurants have permanently closed over 500 locations so far in 2020. Here's the full list. 

• Retailers are bracing themselves for a 'huge surge' of returns that could make their massive piles of unsold inventory even bigger.

The Epoch Times:

• US Investors Have Increasing Exposure to Chinese Banks, Bad Loans

• Beijing and Hong Kong Government Dismiss Trump’s Imminent Sanctions Over Security Law.

John Hopkins University:

• Coronavirus Global Cases. (map)

BNO News:

• Tracking coronavirus: Map, data and timeline.

KFF:

• State Data(Tests/Hospitalizations).

Night Trading

• Asian indices are +.75% to +1.25% on average.

• Asia Ex-Japan Investment Grade CDS Index 100.25 unch.

• China Sovereign CDS 52.75 +1.0 basis point.

• Bloomberg Emerging Markets Currency Index 60.25 +.18%.

• FTSE 100 futures +1.1%.

• S&P 500 futures +.05%.

• NASDAQ 100 futures +.04%.

Morning Preview Links

Earnings of Note

Company/Estimate

Before the Open:

• (ATHM)/.75

After the Close:

• (ENS)/1.19

• (NGL)/.08

Economic Releases

10:00 am EST

• Construction Spending MoM for April is estimated to fall -7.0% versus a +.9% gain in March.

• ISM Manufacturing for May is estimated to rise to 43.5 versus 41.5 in April.

• ISM Prices Paid for May is estimated to rise to 40.0 versus 35.3 in April.
  

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The China Manufacturing PMI report, Eurozone PMI report, (RJF) investor day, Morgan Stanley Could Winners Virtual Conference, (REGN) oncology portfolio update and the Goldman Sachs Travel/Leisure Conference could also impact trading today.

Market Hours
Normal:

• 9:30 am - 4:00 pm EST

BOTTOM LINE: Asian indices are modestly higher, boosted by financial and industrial shares in the region. I expect US stocks to open modestly higher and to weaken into the afternoon, finishing modestly lower.  The Portfolio is 50% net long heading into the week.

Weekly Outlook

• Wall St. Week Ahead by Reuters.
• Global Economy Week by Bloomberg. 
• The Week Ahead by Yahoo. (video)
• Stocks to Watch Next Week by Seeking Alpha.
• Weekly Economic Calendar by Briefing.com.

BOTTOM LINE: I expect US stocks to finish the week mixed as disappointing global economy re-opening data, oil weakness and US social unrest offset global stimulus hopes, coronavirus vaccine optimism and short-covering. My intermediate-term trading indicators are giving bearish signals and the Portfolio is 50% net long heading into the week.

Today's Headlines

Bloomberg: 

• China Says U.S. Action on Hong Kong ‘Doomed to Fail’.   

• China, Hong Kong Push Back Against Trump’s Latest Trade Threats.

• Trump Vows to Stop ‘Mob Violence’ Protesting Floyd Death.

• National Guard Summoned to Aid Cities Amid Police Clashes.

• President Praises Secret Service, Slams White House Protesters.    

• Brazil Overtakes France, Is Now 4th in Global Covid-19 Deaths.

• India to Ease Limits; EU Urges U.S. Reverse on WTO: Virus Update.   

• Brazil Tops France in Deaths; U.K. Scientists Wary: Virus Update.  

• U.S. Cases Rise; Trump G-7 May Draw Fewer Leaders: Virus Update.

• Trump Says U.S. Will End Ties With WHO Over China’s Influence.  

• Trump Plans to Delay G-7 Meeting Until Autumn, Invite Russia.

• Investors Pin Hopes on ECB Doing More to Prop Up European Assets.

• Divided Supreme Court Rejects Churches on Covid Restrictions.  

• A Progressive City Takes a Hard Look in the Mirror.  

• Cheaper Cities Stand to Gain in Work-From-Home Shuffle.

• Einhorn’s Greenlight Hedge Funds Rebound With 7.4% Gain in May.

Wall Street Journal:   

• Minnesota Tries to Restore Order as Protests Spread.

• Twin Cities Cops Stand and Watch as Buildings Burn.

• U.S. Moves to Punish China for Tightening Grip on Hong Kong.

• Photos: Protesters Clash With Police Over Death of George Floyd.

• Twin Cities Cops Stand and Watch as Buildings Burn.

• Shoppers Were Pampered at Wegmans. Now They Are the Grocer’s Biggest Risk.

• Beyond Hong Kong, an Emboldened Xi Jinping Pushes the Boundaries.

• Coronavirus Hits Small-Town Summer: No Riverfront Days, No Little League World Series.

• Remote Work Could Spark Housing Boom in Suburbs, Smaller Cities.

• U.S. Approves Sale of Scrutinized Chinese App.

• SpaceX Launches NASA Astronauts Into Orbit.

• In New Jersey, Fight Brews Over Pace of Reopening.

CNBC:

• U.S.-China tensions are expected to rise and increasingly weigh on the technology sector.

• China says U.S. action on Hong Kong ‘doomed to fail’.

• Short-term rental market consolidating as start-ups and small landlords bail out.

• Wall Street begins high stakes summer with market at critical levels as economy reopens.

• Russia’s daily death toll falls; Spain to reopen island leisure spots.

• Nike releases ‘Don’t Do It’ ad addressing racism in America.

IG:

• Weekend Markets Trading Live.

Barron's:

• Had bullish commentary on (DAL), (LUV), (SAVE), (STAY), (LIND), (MPC), (CQP), (CTRE), (CB), (HIG) and (LVS)

• Had bearish commentary on (M).

Fox News:

• Mayor says 'white supremacists,' 'out of state instigators' behind protests; records show otherwise.

• Minnesota gov mobilizes full National Guard, says violence no longer about George Floyd.

• TUCKER CARLSON: Our leaders have sided with agents of chaos.

• China, Iran mock America amid ongoing George Floyd protests, tweeting this.

Zero Hedge:

• America Descends Into Chaos Amid Nationwide Attacks "Designed To Destabilize Civil Society".

• Less Than Half Of Americans Plan To Get COVID Vaccine: AP Poll.

• Chinese Cheating Rampant In US College Applications, And In Classrooms.

• "Far-Left Or Anarchists" - Intelligence Reports ID Rioting Protesters; Mostly Locals Arrested.

• Pew: Democrats Represent 41 Of 44 Districts With Highest COVID-19 Death Tolls.

• Keep An Eye On The Yuan & Corporate Spreads.

• Meet One Hedge Fund Manager Who Is Up 100% This Year, Despite The Pandemic.

• How The Federal Reserve Unilaterally, De-Facto Amended The US Constitution.

• India Extends Lockdown For 4th Time As New Cases, Deaths Surge; 5 Upstate New York Regions Enter "Phase 2": Virus Updates.

• Secret Service Member Injured In Clash With DC "Protesters" Outside White House.

• Nationwide Chaos: NYPD Precinct Attacked, CNN Vandalized, Treasury Breached As Mayors Beg For Calm.

• "Bet You Stay Home Now!!" Arsonist Burns Down Lockdown-Rule-Breaking Church.

• Merkel Rebuffs Trump Invite To 'Normal' In-Person G7 Summit, Citing Pandemic Fears.

• Two Federal Officers Shot, One Killed, As Violence Spreads To Oakland.

• China's 1st Home-Built Carrier Tests Weapons At Sea Amid 'No Off Ramp' Ratcheting US Tensions.

• Hong Kongers Scramble To Swap Their Currency For US Dollars As 'Special Status' Threatened.

• 33 Examples Of Twitter's Anti-Conservative Bias.

• "It Felt Like An Earthquake": SpaceX Prototype Starship Blows Up In Massive Explosion Day Ahead Of Manned Launch.

• Baby Boomers Panic Hoard "Covid Campers" To Escape Big Cities As Second Wave Threats Emerge.

• Snyder: A Society On The Brink Of Complete And Utter Chaos.

• 'Nothing Improper, And FBI Knew It': Flynn Transcripts Released.

• As Minneapolis Burns, Armed Citizens Deter Rioters & Looters Without Firing A Shot.

• Minneapolis Transit Shuts Down As Bus Drivers Refuse To Help Police.

• The "Smart Money" Continues To Sell Stocks And Buy Gold, As Retail Investors Go Berserk.

• Over 9 Million US Families Fear They Can't Afford Food Next Month: Census Survey.

• "We Have The Right To Fight Back" Kaepernick Defends Minneapolis Rioters.

• How Do You Like Democratic Socialism So Far?

• Citi Says Bear Market Rally Since March "Driven By Short Covering"

• CNN's Van Jones Says Secretly Racist 'White Liberal Hillary Clinton Supporters' Are The Real Threat To Black America.

• Stocks & Silver Soar In May As Oil Surges To Best Month Ever.

Business Insider:

• SCOTT GALLOWAY: Top US colleges' insistence on keeping tuition costs high and offering fall classes in-person shows that they care only about money, not the public good.

• Kylie Jenner is reportedly no longer a billionaire, and Forbes says she likely showed it fake tax returns: 'It's clear that Kylie's camp has been lying'.

• Singapore's financial centre will emerge as big winner of a draconian Chinese law.

• These are the 8 mega-billionaires who have gotten the biggest boost to their net worth this year as the world has grappled with coronavirus. 

• Markets expect bank dividends to plummet 40% by next year, Goldman Sachs says.

• BANK OF AMERICA: Funds are falling out of love with financial stocks at a blinding pace.

The Epoch Times:

• Trump Targets Academic Espionage, US-Listed Chinese Companies, in Toughening Stance Toward Beijing.

• Emily Lau: Hong Kong Dealt ‘Fatal Blow’ by Communist China’s National Security Law.

• TikTok Is an ‘Attractive Database’ on ‘Young Australians’ for the Chinese Regime: Aussie MP.

• China’s Premier Admits to Serious Economic Crisis, With 600 Million People Earning $140 a Month.

John Hopkins University:

• Coronavirus Global Cases. (map)

BNO News:

• Tracking Coronavirus: Map, data and timeline. 

KFF:

• State Data(Tests/Hospitalizations).