Tuesday Watch

Today's Headlines

Bloomberg:       

• Global Trade Volumes Fall the Most in More Than a Decade.  
• China’s ‘Bat Woman’ Warns Coronavirus Is Just Tip of the Iceberg.  
• China Strongly Condemns U.S. Blacklisting Dozens of Its Firms. 

• Johnson Says U.K. Shops Will Be Able to Re-Open From June 15.  

• Mexico City Deaths Rise 4 Times Official Virus Count, Study Says.  

• South Korea’s Consumer Confidence Rebounds From an 11-Year Low.  

• Brazil Toughens Rules to Avoid U.S.-Style Disruptions.

• Stocks Climb With U.S. Futures; Dollar Steady: Markets Wrap. Stocks in Europe and Asia gained along with American equity-index futures as investors weighed more signs of economies reopening around the world against the rise in U.S.-China tensions. The dollar was steady, and crude oil added to last week’s strong advance. Construction and industrial-goods shares led a broad advance in the Euro Stoxx Index. Bayer AG leaped almost 8% after Bloomberg reported it reached agreements to resolve some cancer lawsuits over its Roundup weedkiller. Contracts on all three major U.S. gauges rose more than 1%. In Asia, Hong Kong shares inched higher after Friday’s slump, following police clashes at the weekend with protesters marching against China’s move to crack down on dissent. Benchmarks in Tokyo and Sydney led advances in the region’s stocks. The Euro Stoxx Index gained 2.3%. Futures on the S&P 500 rose 1.2% as of 5:32 p.m. in New York. The MSCI Asia-Pacific Index climbed 0.9%. Japan’s Topix index advanced 1.7%. Hong Kong’s Hang Seng rose 0.1%.  

• Oil Gains on Hopes for Demand Rebound as Virus Lockdowns Ease.

• U.S. Cases Inch Up; California Sets Church Limits: Virus Update.

• Branson’s Virgin Orbit Fails in Attempted Rocket Launch From 747.

• Novavax Starts Covid-19 Study and Targets First Results in July.  

• Only a Few Hedge Funds Made Money in March and April. Here’s How.

Wall Street Journal:

• Mortgage Credit Tightens, Creating Drag on Any Economic Recovery.

• Poor Countries Weigh Easing Lockdowns as Virus Cases Rise.

• The ‘Liberal Leaning’ Media Has Passed Its Tipping Point.

• Bosses Begin Testing Workers for Covid-19.

• How Schools Will Reopen in Fall.

• U.S. Flying Through Fog in $16 Billion Broadband Push.

• China’s Xi Moves to Tighten Grip on Hong Kong With New Laws.

• Germany, Lufthansa Agree on $9.8 Billion Bailout.

Fox News:

• Memorial Day beach crowds lead to mixed messages from major officials.

• China tells US to ‘give up’ wishful thinking or face Cold War.

• Trump slams NC gov over coronavirus lockdown rules, says GOP may need new convention site.

CNBC:

• As summer kicks off, a new way to get your kids off devices and enjoying the outdoors.

• This may be a bigger risk to stocks than coronavirus.

• Doctors face pay cuts, furloughs and supply shortages as coronavirus pushes primary care to the brink.

• Oil is on track for its best month ever after rebound, but traders say it’s ‘not out of the woods’.

Zero Hedge: 

• Virginia Reports Record Jump In New Cases Two Weeks After Reopening: Live Updates.

• "Like It Was Designed To Infect Humans": COVID-19 'Cell Culture' Theory Gains Steam.

• "The US Is Bluffing": China Claims Trump Too "Weakened" By Pandemic To Intervene In Hong Kong.

• Hedge Fund CIO: "We Have Reached The Point Where The Entirety Of Future Prosperity Has Been Pulled To The Present".

• Goldman: The Default Cycle Has Started.

• The Bank of Japan Was The Biggest Buyer Of Japanese Corporate Bonds In April.

• Employee Health Screening Apps Are Coming - Proceed With Caution.

• TINA's Orgy: Anything Goes, Winners Take All.

• Only 40% Of Americans Plan To Grill This Memorial Day; Will Host Smaller Crowds, Less Food.

• Rabobank: "Quite A Market Disconnect Has Formed: We May Be Just Weeks Away From The Levee Breaking".

• "Only A Matter Of Time Before Developing-Market Stocks Unravel In An Unruly Manner".

• The Arrival Of The "Unavoidable Pension Crisis".

• Wayback Machine Latest Victim Of Big Tech Consolidation And Censorship.

• Media Exposes 100s Of Uncounted COVID-19 Fatalities As Japan Lifts State Of Emergency; US Death Toll Just 700 Shy Of 100k: Live Updates.

• The Fed Is Now The Proud Owner Of Bankrupt Hertz Bonds.

• Mexican Exports Plunge Most On Record Despite Historic Peso Rout.

MarketWatch.com:

• Costco, Salesforce, Dollar General and other stocks to watch this week.

• German economy enters recession as GDP falls 2.2%.

• China asserts ‘strong dissatisfaction’ after U.S. expands tech blacklist for human rights abuses.

Business Insider:

• Beijing says it will unilaterally impose national laws in Hong Kong 'without delay' as thousands take to the streets in protest.

• A robot barista that takes orders, makes coffee, and delivers drinks to customers is being used in South Korea to help with social distancing.

The Epoch Times:

• Beijing Threatens Retaliation If US Pursues Sanctions Over Hong Kong Security Law.

• Rural Migrants Suffer Most Amid China’s Unemployment Misery.

• Chinese Authorities in Northeastern Jilin Province Underreporting CCP Virus Infections: Leaked Documents.

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 +.25% to +.75% on average.

• Asia Ex-Japan Investment Grade CDS Index 107.25 +.75 basis point.

• China Sovereign CDS 51.75 +4.25 basis points.

• Bloomberg Emerging Markets Currency Index 59.48 -.01%.

• FTSE 100 futures n/a.

• S&P 500 futures +.95%.

• NASDAQ 100 futures +.99%.

Morning Preview Links

Earnings of Note

Company/Estimate

Before the Open:

• (AMWD)/1.51

• (PLAN)/-.14

• (ATHM)/.75

• (AZO)/12.90

• (BAH)/.71

• (HIBB)/.69

After the Close:

• (HEI)/.39

• (KEYS)/1.04

• (VSAT)/.23

Economic Releases
8:30 am EST

• The Chicago Fed National Activity Index for April.
  

9:00 am EST

• The House Price Purchase Index for 1Q.

• The FHFA House Price Index MoM for March is estimated to rise +.6% versus a +.7% gain in Feb.

• The S&P CoreLogic CS 20-City MoM for March is estimated to rise +.3% versus a +.45% gain in Feb.
  

10:00 am EST

• The Conference Board Consumer Confidence Index for May is estimated to rise to 87.3 versus 86.9 in April.

• New Home Sales for April is estimated to fall to 493K versus 627K in March.

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The German GFK Consumer Confidence Index, Deutsche Bank Financial Services Conference, KeyBanc Industrials/Basic Materials Conference and the Cowen Tech/Media/Telecom 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 commodity and technology shares in the region. I expect US stocks to open modestly higher and to weaken into the afternoon, finishing mixed.  The Portfolio is 50% net long heading into the week.