Wednesday Watch

Evening Headlines

Bloomberg:   

• Trump Aides Weigh Proposals to Undermine Hong Kong’s Dollar Peg.

• Trump Says He’s Considering a Ban on TikTok in the U.S.   

• U.S. Sets Visa Restrictions on China Officials Over Tibet Policy.  

• Johnson Tells Merkel U.K. Is Ready to Go Without an EU Trade Deal.

• Brazil President Infected; U.S. Starts WHO Exit: Virus Update.

• Asia Stocks Set for Mixed Open After U.S. Declines: Markets Wrap. Asian stocks looked set for a mixed start Wednesday after their U.S. peers declined on renewed concerns over the epidemic’s economic impact. The dollar climbed and Treasuries gained. Futures dipped in Japan and Australia, and rose in Hong Kong. Contracts on the S&P 500 were steady after the gauge closed about 1% lower, with almost six shares falling for every one that gained. The tech-heavy Nasdaq dropped from a record intraday high, while airlines and hotels were particularly hard hit. Benchmark Treasury yields fell and gold climbed to the highest since 2011. Oil slipped. Brazil’s currency and stocks slumped as President Jair Bolsonaro said he had tested positive for Covid-19. Futures on the S&P 500 Index were little changed as of 7:07 a.m. in Tokyo. The index fell 1.1% on Tuesday. Futures on Japan’s Nikkei 225 slid 0.5%. Hang Seng futures rose 0.4%. Futures on Australia’s S&P/ASX 200 Index slid 0.5%.  

• Oil-Sands Explorers Restore Some 20% of Shut-in Crude Production.  

• Oil Stuck Below $41 as Surging Virus Cases Dim Demand Outlook.  

• Top U.S. Home Mortgage Lender Quicken Loans Files to Go Public.

Wall Street Journal:

• Banks Could Get $24 Billion in Fees From PPP Loans.

• The Coronavirus Redraws the Car Market’s World Map.

• Defend America’s History—and Retake Its Institutions.

• Coronavirus Mars a Family Tradition, the College Drop-Off.

Fox News:

• Writers, activists and others implore liberals to end 'cancel culture'.

• 'Squad' members push bill to defund police and ICE, shut prisons and more.

• Chinese theft from US among 'largest transfers of wealth' in history, says FBI.

CNBC.com:

• Facebook meeting with civil rights groups ‘a disappointment,’ ad boycott organizers say.

• Trump vows to pressure governors to reopen schools in the fall.

• Stocks making the biggest moves after hours: Levi Strauss, AMC, Disney and more.

• Levi’s sales fall 62% in second quarter, to cut 15% of corporate workforce.

• Real estate CEO expects ‘exodus’ of central business districts to last the next two years.

• Fed’s Mester says economic growth ‘leveling off,’ sees more help needed.

• Tilman Fertitta calls for federal virus rules, says it’s ‘ridiculous’ to open and re-close businesses.

MarketWatch.com:  

•  Opinion: Tesla’s stock is forming a bubble and new buyers should buckle-up for a crash.

Zero Hedge:     

• The Madness Of Political Correctness.

• DoJ, FTC Investigating TikTok Over Child Privacy Violations.

• Interactive Map Of All The PPP Mega Loans Over $1 Million Made To U.S. "Small" Businesses.

• 43 Florida ICUs Hit Capacity As Texas Reports Record Jump In Deaths: Live Updates.

• Driver Using "Autopilot"-Technology Criminally-Charged After Collision.

• Ghislaine Maxwell Goes From Posh Hideout To COVID-Stricken 'Third World Country' NY Jail.

• "There's No Price-Discovery Mechanism" - Gundlach Warns Fed "Desperation" Has Removed All Signals From Markets.

• California Faculty Demands "Free Tuition For All Black, Native, & Indigenous Students".

• Another SEC Embarrassment: Elon Musk Actually Made $57 Million From His 2018 "Funding Secured" Settlement.

• WTI Steady After Surprise Crude Inventory Build.

• Gold Spikes To 9-Year High, Bonds Bid As Stocks Skid.

Business Insider:

• Association representing Target, Home Depot, and other major retailers is demanding that governors start requiring masks in public.

• Black shoppers are being called not to spend money anywhere but Black-owned businesses as part of 'Blackout Day' economic protest.

• Chain restaurants including Dunkin' and Starbucks are permanently closing over 1300 total locations during the pandemic. Here's the full list of chains.

• More than two-thirds of people collecting unemployment earn more than they did at their old jobs.

The Epoch Times:

• FBI Director: One New China-Related Investigation Is Opened Every 10 Hours.

• Source of Latest Virus Outbreak in Beijing Remains a Mystery as Authorities Scramble to Contain Spread.

Digital Blackboard:

• Daily New Cases by Region.

Worldometer:

• New Cases/Deaths by state.

Rt Covid-19:

• How fast virus is growing by state.

KFF:

• State Data(Tests/Hospitalizations).

Night Trading 

• Asian equity indices are -.5%  to +.25% on average.

• Asia Ex-Japan Investment Grade CDS Index 80.75 +1.75 basis points.

• China Sovereign CDS 45.25 +1.0 basis point.

• Bloomberg Emerging Markets Currency Index 60.47 +.04%.

• FTSE 100 futures -.51%.

• S&P 500 futures +.17%.

• NASDAQ 100 futures +.21%.

Morning Preview Links

Earnings of Note 
Company/Estimate

Before the Open:

• (SMPL)/.16

After the Close:

• (BBBY)/-1.30

Economic Releases
10:30 am EST

• Bloomberg consensus estimates call for a weekly crude oil inventory decline of -3,188,600 barrels versus a -7,195,00 barrel decline the prior week. Gasoline supplies are estimated to fall by -218,100 barrels versus a 1,199,000 barrel decline the prior week. Distillate inventories are estimated to fall by -127,000 barrels versus a -593,000 barrel decline the prior week. Finally, Refinery Utilization is estimated to rise by +.62% versus a +.9% gain prior.
  

3:00 pm EST

• Consumer Credit for May is estimated at -$15.0B versus -$68.77B in April.
  

Upcoming Splits

• None of note

Other Potential Market Movers

• The China inflation data report, $29B 10Y T-Note auction, weekly MBA Mortgage Applications report and the (COST) June sales results could also impact trading today.

Market Hours
Normal:

• 9:30 am - 4:00 pm EST
  

BOTTOM LINE: Asian indices are mostly lower, weighed down by commodity and financial 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.