Friday Watch

Evening Headlines

Bloomberg:       

• Trump Says He’ll Announce China Moves in Friday News Conference.

• U.S.-China Tension Only Set to Get Worse: ‘There Is No Off Ramp’.    

• Capital Flight Fears Grow Alongside Hong Kong Political Turmoil.

• Britons Stick to the Lockdown and Fear Health Risks When It Ends.

• A $2 Trillion Debt Deluge Is Set to Flatten Japan’s Yield Curve.  

• Japan Bankruptcies Seen Rising to Seven-Year High on Virus Hit.

• India’s Key Growth Engine Grinds to Halt in Sign of Deep Slump.   

• Decade-High Spreads on Longer India Company Bonds Flash Concerns.

• India Death Toll Tops China; Brazil Cases Surge: Virus Update.  

• U.K. Business Confidence Worst Since 2008 Even as Lockdown Eases.

• Asian Stock Futures Mixed; U.S. Rally Fizzles: Markets Wrap.  Asian stocks opened modestly lower after a rally in U.S. equities fizzled on fresh U.S.-China tensions. The dollar held losses. Sentiment is being tested as global equities round out a second month of gains, with President Donald Trump saying he’ll announce new U.S. steps on China on Friday, after it passed a national security law curbing freedoms in Hong Kong. Japanese shares dipped modestly along with those in Seoul and Sydney. U.S. contracts slid after the gauge gave up a gain of more than 1%, with the announcement stoking concern Sino-American tensions will disrupt the economic reopening narrative that’s propelled markets. Treasuries were steady. S&P 500 futures fell 0.4% as of 9:05 a.m. in Tokyo. The S&P 500 fell 0.2% Thursday. Japan’s Topix index fell 0.6%. South Korea’s Kospi declined 0.4%. Australia’s S&P/ASX 200 Index slid 0.3%.

• Oil Set for Record Monthly Gain on Brightening Demand Picture.   

• One Trader Is Behind 32 Million Barrels of Venezuelan Oil Deals

• Global Green Shoots, Hong Kong Capital Fears, Deflation: Eco Day.  

• GM Plans to Ramp Up Plants With Dealers Running Low on Pickups

• New Jersey May Have to Fire 200,000 Public Workers, Murphy Says.  

• The Greatest Corporate Debt Binge Ever Breaks Record in 149 Days.  

• This Is How Deeply the Coronavirus Changed Our Behavior.  

• Masks Can Limit Household Spread Before Virus Symptoms Appear.

• JPMorgan’s Kolanovic Dials Back Bullish Stance on Equities.

Wall Street Journal:

• Behind the Fall of China’s Luckin Coffee: a Network of Fake Buyers and a Fictitious Employee.

• Governor Orders National Guard to Minneapolis Amid Continued Upheaval.

• The Covid Political Earthquake.

• The Twitter Fairness Doctrine.

• Most Countries Fail to Capture Extent of Covid-19 Deaths.

• Covid-19 Antibody Tests Pose More Questions Than Answers.

• Churches Weigh Virus Danger Against the Need to Worship.

Fox News:

• As Minnesota faces protests, riots over George Floyd killing, feds keep quiet on charges against officers.

• What's in Trump's executive order on social media?

CNBC.com:

• Costco saw sales bounce from pandemic, but stay-at-home orders limited bigger gains.

• Jim Cramer: Wall Street is still in for a ‘rough ride’.

• Coronavirus live updates: San Francisco releases reopening timeline, Boston Marathon canceled.

• Stocks making the biggest moves after hours: Williams-Sonoma, Dell, VMware and more.

• Nordstrom sales fall 40%, but retailer says it has ‘sufficient liquidity’ to weather pandemic.

• Dollar Tree CEO wonders how long a sales surge from customers spending coronavirus checks can last.

MarketWatch.com:         

• Tesla’s Elon Musk gets performance-based payday worth nearly $800 million. Salesforce shares dip 4% on light revenue, earnings guidance.  

• Millionaires are hesitant to buy stocks amid gloomy market outlook.

Zero Hedge:   

• Trump Signs Executive Order Stripping Social Media Companies Of "Liability Shield".

• Here's How 'Rare' Trend Of Pay Cuts For Employed Nationwide Spells Doom For Rapid Recovery.

• Rioting In Minneapolis Is So Bad, The Fires Show Up On Air Quality Maps.

• Global Ad Spending Plunges As Hopes For V-shaped Recovery Fade.

• Boston Marathon Cancelled, Global Coronavirus Cases Near 6 Million: Live Updates.

• Watch Live: Minnesota National Guard Activated In Response To Social Unrest.

• The Last Time Albert Edwards Saw "Nonsense" Like This Was 2008: This Is How It Ended.

• Quantifying The Economy's Current Hole And How The Government's Measures To Fill It (Don't) Add Up.

• Japanese Farmers Lose $3.7 Billion In US CLOs, Are Done Investing In Crazy Products.

• The Hydroxychloroquine Controversy Is A Reminder That Prescription Laws Are A Government Racket.

• DraftKings Shares Soared 300% As COVID Killed Sporting Events.

• China Proposes A Law Allowing Citizens To Sue US For Starting Coronavirus Pandemic.

• Dollar Slumps, Small Caps Dump, Oil Pumped.

The Epoch Times:

• US, UK Lambast Beijing After Passage of Hong Kong Law, Promise to Defend ‘Bastion of Freedom’.

• Epoch News: CCP Claims Real Estate Market Revival, Reality Proves Otherwise.

John Hopkins University:

• Coronavirus Global Cases. (map)

BNO News:

• Tracking Coronavirus: Map, data and timeline.

KFF:

• State Data(Tests/Hospitalizations).

Night Trading 

• Asian equity indices are -.75% to -.25% on average.

• Asia Ex-Japan Investment Grade CDS Index 100.25 -.25 basis point.

• China Sovereign CDS 51.75 -.75 basis point.

• Bloomberg Emerging Markets Currency Index 59.98 +.01%.

• FTSE 100 futures -.81%

• S&P 500 futures -.37%.

• NASDAQ 100 futures -.42%.

Morning Preview Links

Earnings of Note 
Company/Estimate

Before the Open:

• (BIG)/.40

• (CGC)/-.44

After the Close:

• None of note

Economic Releases
8:30 am EST

• The Advance Goods Trade Balance for April is estimated at -$65.0B versus -$64.4B in March.

• Wholesale Inventories MoM for April is estimated to fall -.7% versus a -.8% decline in March.

• Personal Income for April is estimated to fall -6.0% versus a -2.0% decline in March.

• Personal Spending for April is estimated to fall -12.8% versus a -7.5% decline in March.

• The PCE Core for April is estimated to fall -.3% versus a -.1% decline in March.

9:45 am EST

• The MNI Chicago PMI for May is estimated to rise to 40.0 versus 35.4 in April.

Upcoming Splits

• None of note

Other Potential Market Movers

• The Fed's Powell speaking, Italian GDP report, ASCO virtual scientific program and the (AMGN) investor 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 financial 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 day.