Monday Watch

Today's Headlines

Bloomberg:

• Trump's Trade War Arrives in the Data as China Awaits Tariffs.

• Car Companies, Parts Makers Urge U.S. to Abandon Tariff Plan.

• Curve-Flattening Juggernaut Faces Risk From Fed Concern on Trade. 

• Live: Mexico Votes in Presidential Election.

• Asian Stocks Face Mixed Start to Week; Oil Drops. Stocks in Asia looked set to kick off the second half of 2018 in a mixed fashion, while oil declined and the euro came under pressure over German political concerns. Investors will be focused again on Chinese assets after the biggest weekly drop in the yuan since the 2015 devaluation stoked concerns about the currency’s use as a tool in the trade spat. Equity futures in Japan were little changed ahead of the quarterly Tankan survey of business confidence. Australian futures rose. Hong Kong is closed for a holiday. Oil slid below $74 a barrel in New York after U.S. President Donald Trump called for higher production. Crude surged more than 8 percent last week. Futures on the S&P 500 rose less than 0.1 percent as of 7:05 a.m. in Tokyo. The gauge closed up 0.1 percent on Friday. Futures on Japan’s Nikkei 225 Stock Average were little changed. Futures on Australia’s S&P/ASX 200 Index added 0.4 percent.

Wall Street Journal:

• Businesses Blast California’s New Data-Privacy Law.

• Mexicans Say They Will Vote for Change.

• How to Teach Legal Rights to Migrant Children: Games and Coloring.

• Amazon’s(AMZN) PillPack Deal Gives It Access to Sensitive Health Data.

• Facebook(FB) Gave Firms Special Access to Users’ Personal Data.

• Skip the Seasickness: How Boats Are Getting Tech-Savvy.

• Merkel’s Coalition in Jeopardy Over EU Migration.

• Taiwan’s Technology Secrets Come Under Assault From China.

• Dollar Rally Ripples Globally, Leading Investors to Reverse Course.

MarketWatch.com:

• Investors look to the second half of 2018 expecting growth—amid rising uncertainties.

Fox News:

• Top Democrat bucks far left’s calls to abolish agency, demands policy changes instead.

CNBC:

• Iran urges OPEC members to refrain from unilateral actions.

• Retaliation for US tariffs begins with Canada on Sunday--and take aim at ketchup, whiskey and soup.

• Why RBC's top strategist thinks there's 'no way around' tighter oil supply with even higher prices. 

• Trump 'not happy' with NAFTA, says he wants to wait until after the midterms to sign a new deal.

• Dell to acquire tracking stock, leave VMware alone for the time being, sources say.

• A robot cooks and assembles burgers in 5 minutes at this new San Francisco restaurant.

Zero Hedge:     

• Germany's Interior Minister Seehofer To Resign After Clash With Merkel Over Migrants.

• Last-Minute New Jersey Budget Compromise Reached Thanks To More Tax Hikes For The Rich.

• The "Doom Loop" Makes A Thunderous Return: Guess Who Just Bought A Record Amount Of Italian Bonds.

• Goldman Closes Out "Top Trade" To Short Treasuries.

• Italy's Salvini Vows To Create Pan-European Association Of Nationalist Parties

• Trump Talks Trade, Borders, SCOTUS, And Warns Enemies "They Better Just Take It Easy".

• TechCrunch: Over 1000 Crypto Projects Are Considered 'Dead' Now.

• Riot Breaks Out In Portland As Antifa Activists Clash With Conservative Marchers.

• The Venus Flytrap Of Western Civilization: Entitlements.

• "It's Real, It's Coming, It's A Matter Of Time" - US General Warns Of Hypersonic Attack.

• White House, Saudi Arabia Pour Cold Water On Trump's "Saudi Deal".

• "2018 Is Looking Increasingly Like 2015": Why JPMorgan Expects Even More Pain From China.

• In San Francisco, Families Making $117,000 Qualify For Low-Income Housing.

Business Insider:

• Here's what the typical American worker earns at every age. 

• Tesla(TSLA) reportedly hit its Model 3 manufacturing milestone, hours after the deadline.

• How various industries are taking advantage of drones to increase efficiency and cut costs.

Night Trading

• Asian indices are -.25% to +.245% on average.

• Asia Ex-Japan Investment Grade CDS Index 94.0 -1.5 basis points.

• Asia Pacific Sovereign CDS Index 15.0 +.25 basis point.

• Bloomberg Emerging Markets Currency Index 69.51 +.04%.

• FTSE 100 futures -.55%

• S&P 500 futures -.04%.

• NASDAQ 100 futures -.03%.

Morning Preview Links

Earnings of Note

Company/Estimate
Before the Open:

• None of note

After the Close:

• (MLHR)/.58 

Economic Releases

10:00 am EST

• Construction Spending MoM for May is estimated to rise +.5% versus a +1.8% gain in April.

• ISM Manufacturing for June is estimated to fall to 58.2 versus 58.7 in May.

• ISM Prices Paid for June is estimated to fall to 74.3 versus 79.5 in May..

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The China Manufacturing PMI report, Eurozone PMI report and the Eurozone PPI report could also impact trading today.

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

Weekly Outlook

• Wall St. Week Ahead by Reuters. 

• Week Ahead by TheStreet.

• 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 stable long-term rates, US economic optimism and yen weakness offsets trade war fears, European/Emerging Markets debt angst and technical selling. My intermediate-term trading indicators are giving neutral signals and the Portfolio is 50% net long heading into the week.

Today's Headlines

Bloomberg:    

• Bulls Count Blessings After U.S. Stocks Eke Out Gain in First Half.

• Trump Wants Better WTO Treatment, Adviser Hits Back at Critics.

• Trump Says Saudis Persuaded to Act to Help Lower Oil Prices.

• China Factory Gauge Slips in June as Trade War Dampens Outlook.

• Strategists See a Blowout Second Half, But Investors Aren't Buying It.

• Einhorn Deepens Slide as Greenlight Plunges 19% in First Half.

Wall Street Journal:

• Europe Moves in Parallel to U.S. to Manage Immigration.

• Thousands Protest Trump’s Immigration Policy.

• President Narrows List of Supreme Court Candidates to Five.

• Inflation Gauge Hits Fed Target After Six-Year Run of Soft Prices.

Barron's:

• Had bullish commentary on  (COST), (EA), (MA), (GGG), (DNKN), (VC), (BLK), (FB), (VZ), (MNST) and (UTX).

MarketWatch.com:

•   Bitcoin’s plunge means one thing: calls for rallies to $25,000 by year-end are fading—fast.

Fox News:

• Trump calls US immigration laws 'the dumbest in the world' as thousands nationwide protest border policy.

CNBC: 

• Investors are yanking money out of global stocks at levels not seen since the financial crisis.

• How a surprise deal to boost oil supply could 'stir the pot' in the Mid East, and test Saudi Arabia.

• Expect a ‘choppy’ July before an end-of-year blowout, Blackstone's Zidle says.

• Chinese stocks tumble into bear market, with Shanghai index on pace for worst year since 2011.

• Emerging markets are in a death cross, and a technical analyst sees another big drop ahead. 

Zero Hedge: 

• "Girl From The Bronx" Ocasio-Cortez Called Out In Fact Check; Actually Grew Up In Wealthy Enclave.

• "They're Trying To Deceive Us" - North Korea Adding To Nuclear Stockpiles, Satellite Photos Reveal.

• "This Isn't Fake, This Is Real": Millennials Resort To Cyberbegging To Finance Down Payment.

• These Are The Cheapest "Market Shock" Hedges Right Now.

• Iran Furious After Trump Calls Saudi King, Demands 2MM Barrel Production Boost.

• Trump Considering 2 Women For Supreme Court; Hillary Re-emerges With Glass Ceiling.

• "Truly An Embarrassment": Ex-CNN Producer Calls Out Jim Acosta For Heckling Trump During Annapolis Eulogy.

• The CNY Conundrum - Has The PBOC Deliberately Weakened Yuan As Part Of The Trade War?

• California Passes "Strongest" Data-Privacy Bill Yet, Could Become "Law Of The Land".

• Global Stocks Lost Over $10 Trillion In H1, Just Wait For The Second Half.

• Weekend Reading: #MAMI – Make America More Indebted.

• Trump Says He Is Working On "Phase 2" Of Tax Plan.

• Canada Retaliates Over "Absolutely Absurd" Trump Tariffs, Says "Will Not Back Down".

• "These Guys Are Like Diamonds" - America's Trucker-Shortage Hits A Crisis Point.

• As Socialist Support Soars In America, The Price Of A Cup Of Venezuelan Coffee Reaches Historic Threshold.

• US Charges Over 600 "Despicable, Greedy People" In Multi-Billion Dollar Healthcare Fraud.

Business Insider:

• A consultancy that has been spot-on about how far crypto markets would tank expects bitcoin to tank even further.

• BMW threatens to cut jobs and move production out of the USA if Trump puts tariffs on European cars.

• The evidence is mounting: Apple's next big moneymaker will be a media bundle with music, video, and news. 

• Amazon(AMZN) beat out Walmart(WMT) in a deal for a small pharmacy startup — and it shows just how intense the rivalry’s gotten.

Weekly Scoreboard*

S&P 500 2,736.71 -.61%

The Weekly Wrap by Briefing.com.

 
Indices

• DJIA 24,387.20 -.68%

• NASDAQ 7,539.49 -1.92%

• Russell 2000 1,649.83 -2.10%

• S&P 500 High Beta 43.30 -2.10%

• Goldman 50 Most Shorted 161.74 -3.51%

• Wilshire 5000 28,452.15 -.96%

• Russell 1000 Growth 1,450.76 -1.07%

• Russell 1000 Value 1,196.47 -.34%

• S&P 500 Consumer Staples 531.43 +.22%

• Vanda Cyclicals-Defensives 1.5937 -4.29%
  

• NYSE Technology 1,899.98 -2.10%

• Transports 10,408.20 -3.36%

• Utilities 713.60 +2.44%

• Bloomberg European Bank/Financial Services 87.43 -1.71%

• MSCI Emerging Markets 43.39 -1.66%

• HFRX Equity Hedge 1,268.58 -1.09%

• HFRX Equity Market Neutral 1,007.87 +.07%

Sentiment/Internals

• NYSE Cumulative A/D Line 322,557 -.29%

• Bloomberg New Highs-Lows Index -580 -514

• Bloomberg Crude Oil % Bulls 52.0 +92.38%

• CFTC Oil Net Speculative Position 580,947 -2.41%

• CFTC Oil Total Open Interest 2,458,404 -2.62%

• Total Put/Call 1.18 +37.7%

• OEX Put/Call 2.13 +352.50%

• ISE Sentiment 98.0 -17.8%

• NYSE Arms 1.29 -23.89%

• Volatility(VIX) 15.25 +10.4%

• S&P 500 Implied Correlation 37.50 +13.39%

• G7 Currency Volatility (VXY) 7.47 unch. 

• Emerging Markets Currency Volatility (EM-VXY) 9.81 +.82%

• Smart Money Flow Index 15,705.18 -1.73%

• ICI Money Mkt Mutual Fund Assets $2.825 Trillion +.81%

• ICI Domestic Equity Mutual Fund/ETFs Weekly Flows -$3.865 Billion

• AAII % Bulls 28.5 -26.5%

• AAII % Bears 40.8 +55.8%

Futures Spot Prices

• CRB Index 200.68 +1.55%

• Crude Oil 74.23 +7.06%

• Reformulated Gasoline 217.40 +4.90%

• Natural Gas 2.93 -.44%

• Heating Oil 220.75 +3.76%

• Gold 1,254.90 -1.26%

• Bloomberg Base Metals Index 202.86 -1.35%

• Copper 295.25 -2.49%

• US No. 1 Heavy Melt Scrap Steel 333.33 USD/Metric Tonne -1.56%

• China Iron Ore Spot 64.40 USD/Metric Tonne -.33%

• Lumber 567.0 +1.38%

• UBS-Bloomberg Agriculture 961.38 -.97%

Economy

• Atlanta Fed GDPNow Forecast +3.8% -90.0 basis points

• ECRI Weekly Leading Economic Index Growth Rate 2.8% -20.0 basis points
  

• Philly Fed ADS Real-Time Business Conditions Index .0134 -18.79% 

• US Economic Policy Uncertainty Index 88.80 +.84%

• S&P 500 Blended Forward 12 Months Mean EPS Estimate 167.70 +.28%

• Citi US Economic Surprise Index -4.90 -8.1 points

• Citi Eurozone Economic Surprise Index -61.0 +7.1 points

• Citi Emerging Markets Economic Surprise Index -11.70 +6.6 points

• Fed Fund Futures imply 79.3% chance of no change, 20.7% chance of 25 basis point hike on 8/1

• US Dollar Index 94.61 +.06%

• MSCI Emerging Markets Currency Index 1,622.93 -.83%

• Bitcoin/USD 5,882.85 -3.0%

• Euro/Yen Carry Return Index 134.68 +.95%

• Yield Curve 30.75 -5.5 basis points
  

• 10-Year US Treasury Yield 2.83% -8.0 basis points

• Federal Reserve's Balance Sheet $4.266 Trillion -.26%

• U.S. Sovereign Debt Credit Default Swap 20.75 +3.1%

• Illinois Municipal Debt Credit Default Swap 205.45 -1.16%

• Italian/German 10Y Yld Spread 237.75 +2.0 basis points

• Asia Pacific Sovereign Debt Credit Default Swap Index 14.97 +9.1%
  

• Emerging Markets Sovereign Debt CDS Index 79.11 +3.2%
  

• Israel Sovereign Debt Credit Default Swap 68.41 +.02%

• South Korea Sovereign Debt Credit Default Swap 48.95 +7.87%

• Russia Sovereign Debt Credit Default Swap 141.66 +2.30%

• iBoxx Offshore RMB China Corporate High Yield Index 147.79 -1.19%

• 10-Year TIPS Spread 2.12% -1.0 basis point

• TED Spread 42.25 +.25 basis point

• 2-Year Swap Spread 26.25 -.25 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -6.5 -1.5 basis points

• N. America Investment Grade Credit Default Swap Index 66.27 +3.38%

• America Energy Sector High-Yield Credit Default Swap Index 398.0 -2.08%

• European Financial Sector Credit Default Swap Index 89.96 +9.43%
  

• Emerging Markets Credit Default Swap Index 190.74 +5.28%
  

• CMBS AAA Super Senior 10-Year Treasury Spread to Swaps 180.0 unch.
  

• M1 Money Supply $3.642 Trillion -.54%

• Commercial Paper Outstanding 1,085.1 -1.6%

• 4-Week Moving Average of Jobless Claims 222,000 +1,000

• Continuing Claims Unemployment Rate 1.2% unch.
  

• Average 30-Year Mortgage Rate 4.55% -2.0 basis points

• Weekly Mortgage Applications 365.30 -4.89%

• Bloomberg Consumer Comfort 57.30 +.8 point

• Weekly Retail Sales +4.0% -50.0 basis points

• Nationwide Gas $2.85/gallon -.01/gallon

• Baltic Dry Index 1,329.0 -.90%

• China (Export) Containerized Freight Index 815.89 +.46%

• Oil Tanker Rate(Arabian Gulf to U.S. Gulf Coast) 22.50 unch.

• Rail Freight Carloads 288,876 +.18%

Best Performing Style

• Large-Cap Value -.2%

Worst Performing Style

• Small-Cap Growth -2.6%

Leading Sectors

• Utilities +2.6%

• Oil Service +1.6%

• Energy +1.3%

• Homebuilders +.9%

• REITs +.8%

Lagging Sectors

• Shipping -3.2% 

• Semis -3.6%

• Restaurants -4.0%

• I-Banks -4.0%

• Airlines -4.4%

Weekly High-Volume Stock Gainers (8)

• INNT, SEP, EEP, EEQ, PBYI, AVAV, EGAN and BCEI

Weekly High-Volume Stock Losers (4)

• ELF, THC, TUSK and SNX

Weekly Charts

ETFs

• High-Volume Gainers

• High-Volume Losers

Stocks

• High-Volume Gainers

• High-Volume Losers

*5-Day Change