Monday Watch

Today's Headlines

Bloomberg:          

• President Trump's Nafta Deal With Canada Is Close.

• Canadian Dollar Rises to Four-Month High Before Deadline.

• China’s Manufacturers Slow in September as Trade War Worsens.  

• Australia's Property Downturn Chalks Up One-Year Anniversary.

• Li Ka-shing’s Husky Goes Hostile in Chinese Battle for Canada’s Oil Sands.

• Asian Stocks See a Muted Start; Oil Ticks Higher. Stocks in Asia kicked off the final quarter in muted fashion, in a holiday-affected start to the week. Volumes are likely to be thin Monday, with Labor Day in Australia, Hong Kong’s market shut and China’s closed through Oct. 7. Japan’s two main equity benchmarks opened mixed, while holiday-hit Australian stocks started with small losses, and Korea’s benchmark was up. S&P 500 Index futures climbed after the benchmark saw the best quarter since 2013. Oil extended gains on concern of an impending supply crunch. U.S. 10-year Treasury yields ticked higher, to 3.07 percent. The Canadian dollar rose as the U.S. and Canada engaged in last-minute negotiations to update Nafta by Sunday’s deadline. Nikkei 225 rose 0.1 percent and Topix Index fell 0.3 percent. Kospi gained 0.3 percent. S&P 500 Index futures gained 0.3 percent with the benchmark closing flat on Friday.

• Oil Is One More Headache For Emerging Asia's Tightening Plans.

Wall Street Journal:   

• U.S., Canada Near a Deal on Nafta as Midnight Deadline Looms. 

• This Is No Mere ‘Job Interview’. 

• Theresa May, Facing Hard Deadline, Struggles to Navigate Treacherous Brexit Politics.

• U.S. Stocks Open Fourth Quarter Near Record Highs.

MarketWatch.com:

• Facebook(FB) may face $1.63 billion EU fine for breach.

Fox News:

• Liberal sen. doesn't answer when asked whether Dems leaked Ford's letter.

• GINGRICH: Liberal cash from California and New York flooding gov's race.

CNBC:

• California governor signs law mandating women on corporate boards of publicly-traded companies.

• The Fed could be hiking the US into a recession, investor Peter Boockvar warns.

• Trump uses Kavanaugh delay as rallying cry for midterm elections.

• China factory sector hurt in September as trade frictions bite.

Zero Hedge:        

• Canada PM Trudeau Calls 10PM Cabinet Meeting With Nafta Deal Announcement Imminent.

• Grassley Refers Potential False Kavanaugh Accuser To FBI/DOJ For Criminal Investigation.

• Still No Motive On Anniversary Of Las Vegas Massacre; Strip Goes Dark In Commemoration.

• Kanye West Booed During Pro-Trump Political Speech On SNL.

• Trump Blasts "Obstruct & Delay" Democrats As White House Denies "Micromanaging" Kavanaugh Probe.

• WSJ Can't Corroborate Kavanaugh Accuser's "Gang Bang" Account After "Dozens" Contacted.

• "Mass Burials", Looting Begins As Death Toll From Indonesia Quake And Tsunami Hits 832.

•  CNN Founder Ted Turner: Network "Sticking With Politics A Little Too Much".

Business Insider:

• Kellyanne Conway reveals that she is a victim of sexual assault in emotional CNN interview.

• Here's what legal experts are saying about the SEC's settlement with Elon Musk.

Night Trading

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

• Asia Ex-Japan Investment Grade CDS Index 80.25 -.5 basis point.

• Asia Pacific Sovereign CDS Index 9.0 -.25 basis point.

• Bloomberg Emerging Markets Currency Index 66.89 unch.

• FTSE 100 futures -.25%

• S&P 500 futures +.37%.

• NASDAQ 100 futures +.47%.

Morning Preview Links

Earnings of Note

Company/Estimate
Before the Open:

• (CALM)/.45

After the Close:

• (SFIX)/.04

Economic Releases

10:00 am EST

• Construction Spending MoM for August is estimated to rise +.5% versus a +.1% gain in July. 

• ISM Manufacturing for September is estimated to fall to 60.0 versus 61.3 in August.

• ISM Prices Paid for September is estimated to fall to 71.4 versus 72.1 in August.

Afternoon

• Wards Total Vehicle Sales for Sept. are estimated to rise to 16.9M versus 16.6M in August.

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Fed's Rosengren speaking, Fed's Bostic speaking, Eurozone PMI report, Eurozone Unemployment Rate report, Cantor Fitzgerald Healthcare Conference and the (BABA) analyst day could also impact trading today.

BOTTOM LINE: Asian indices are mostly higher, boosted by industrial and technology shares in the region. I expect US stocks to open modestly higher and to maintain gains into the afternoon.  The Portfolio is 100% net long heading into the week.

Weekly Outlook

• Wall St. Week Ahead by Reuters. 

• Weekly Market Outlook 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 modestly higher on technical buying, diminishing trade war fears, less emerging markets currency/debt angst, stable long-term rates, yen weakness and oil gains. My intermediate-term trading indicators are giving neutral signals and the Portfolio is 100% net long heading into the week.

Today's Headlines

Bloomberg:     

• U.S. and Canada Are Close to Reaching Nafta Deal This Weekend.

• Record Quarter for Stocks Saw FAANGs Take Back Seat to Health.  

• China to Keep Prudent, Neutral Monetary Policy, PBOC Says.

• 'No Way' North Korea Disarms Without U.S. Trust, Diplomat Says.

• ECB Rate-Hike Momentum Could Be Hampered by Fear of Euro Gains.

• Einhorn's Worst Year Ever: Greenlight Losses Swell to 26%.

• After Another Quarter of Losses, Is Worst Over for Commodities?   

• Emerging-Market Currencies Ride Out Fed Hike, Trade-Row Escalation.  

Wall Street Journal:   

• Canadian Officials Locked in Nafta Talks With U.S.

• Criminals With Dirty Money Find Ally in Crypto Startups.

• Lower-Income Americans Drive Up Consumer Sentiment in September.

• Real Estate Developers Rush to Capitalize on Tax Incentive.

• Europe Is Left in the Dust as U.S. Stocks Roar.

• Investors Say They Were Harmed by Manipulation in Volatility Products.

• Another Kavanaugh Flakeout.

Barron's:

• Had bullish commentary on (HAS), (ILMN), (CERN), (XRAY), (BDX), (DHR), (TMO), (URI), (VMC), (JEC) and (COWN).

• Had bearish commentary on (TRUP).

MarketWatch.com:  

• The key to record highs in U.S. stocks: earnings.

Fox News:

• Graham says McCain's anger at Kavanaugh hearing 'would have made me look like a choir boy'.

• Jeff Flake defends controversial move to call for Kavanaugh delay, FBI probe.

CNBC:  

• 72-year-old Fidelity bets on the future with blockchain, virtual reality and AI.

• S&P 500 posts best quarter since 2013.

• Death toll jumps to 384 after tsunami, quake in Indonesia.

• SEC fraud charges aren't the only legal woes Tesla CEO Elon Musk is facing.

• Tesla(TSLA) shares are in freefall — Here's what experts are saying about the stock.

• Cramer: People in Silicon Valley tell me Facebook is a hated company that broke their trust.

Zero Hedge:

• Did Maxine Waters' Office Doxx GOP Senators During Kavanaugh Testimony?

• Kavanaugh Vote Delayed One Week As Trump Orders New FBI Investigation.

• Bill Maher Makes Homophobic Joke About Lindsey Graham And "Dead Boyfriend" John McCain.

• Hedge Funds Suffer First Quarterly Outflows Since 2016.

• US Evacuating Consulate In Iraq, Citing Threats From Iran.

• Kavanaugh, The Disgust Circuit, And The Limits Of "Nuts & Sluts".

• 1 In 4 Baltimore Hospital Admissions Are Babies Addicted To Opioids.

• Upside Down World: Junk Bonds Set For Record Winning Streak As High Grade Suffers Worst Year Since 2008.

• Former Employer Sued Third Kavanaugh Accuser For Sexual Harassment Allegations.

• EU, UK, Russia, & China Join Together To Dodge US Sanctions On Iran.

• NJ Pension Fund Could Dump $44 Million Nike(NKE) Stake Over Kaepernick Ads.

• You Gave Facebook(FB) Your Number For Security. They Used It For Ads.

• Weekend Reading: Fiscal Irresponsibility.

• Trade Tantrums & Trump Turmoil Spark Best Quarter For US Stocks In 5 Years.

Business Insider:

• The FDA just approved a new treatment for a common form of skin cancer.

• Canadian troops can now grow beards and smoke weed.

• The Facebook hack affecting 50 million people also let the attackers access users' Tinder, Spotify, and Instagram accounts.

Weekly Scoreboard*

S&P 500 2,913.98 -.54%

The Weekly Wrap by Briefing.com.

 
Indices

• DJIA 26,458.30 -1.07%

• NASDAQ 8,046.35 +.74%

• Russell 2000 1,696.57 -.92%

• S&P 500 High Beta 44.95 -1.60%

• Goldman 50 Most Shorted 171.11 -1.18%

• Wilshire 5000 30,189.60 -.58%

• Russell 1000 Growth 1,568.32 +.64%

• Russell 1000 Value 1,247.47 -1.73%

• S&P 500 Consumer Staples 554.55 -2.16%

• Vanda Cyclicals-Defensives 1.7162 +2.36%
  

• NYSE Technology 1,911.84 +.78%

• Transports 11,377.30 -1.47%

• Utilities 719.86 -1.37%

• Bloomberg European Bank/Financial Services 85.45 -3.15%

• MSCI Emerging Markets 42.99 -.23%

• HFRX Equity Hedge 1,260.90 -.75%

• HFRX Equity Market Neutral 999.62 +.16%

Sentiment/Internals

• NYSE Cumulative A/D Line 331,692 -.57%

• Bloomberg New Highs-Lows Index -101 -265

• Bloomberg Crude Oil % Bulls 58.82 +17.6%

• CFTC Oil Net Speculative Position 530,366 -2.48%

• CFTC Oil Total Open Interest 2,228,937 -2.32%

• Total Put/Call 1.04 +4.08%

• OEX Put/Call 10.28 +43.58%

• ISE Sentiment 142.0 +72.5%

• NYSE Arms 1.46 +60.71%

• Volatility(VIX) 12.66 +6.76%

• S&P 500 Implied Correlation 35.22 +4.52%

• G7 Currency Volatility (VXY) 7.56 -2.86% 

• Emerging Markets Currency Volatility (EM-VXY) 10.44 -7.43%

• Smart Money Flow Index 16,198.64 -1.67%

• ICI Money Mkt Mutual Fund Assets $2.883 Trillion +.63%

• ICI Domestic Equity Mutual Fund/ETFs Weekly Flows +$10.545 Billion

• AAII % Bulls 36.2 +13.1%

• AAII % Bears 31.1 -2.9%

Futures Spot Prices

• CRB Index 195.16 +.78%

• Crude Oil 73.29 +3.61%

• Reformulated Gasoline 210.12 +4.96%

• Natural Gas 3.01 +.70%

• Heating Oil 235.18 +5.81%

• Gold 1,191.50 -.83%

• Bloomberg Base Metals Index 184.20 -.16%

• Copper 280.40 -1.55%

• US No. 1 Heavy Melt Scrap Steel 300.0 USD/Metric Tonne -.99%

• China Iron Ore Spot 67.65 USD/Metric Tonne -1.9%

• Lumber 344.40 +1.11%

• UBS-Bloomberg Agriculture 895.74 -1.37%

Economy

• Atlanta Fed GDPNow Forecast +3.63% -82.0 basis points

• ECRI Weekly Leading Economic Index Growth Rate 0.4% +20.0 basis points
• Bloomberg US Recession Probability Next 12 Months 15.0% unch.

• Philly Fed ADS Real-Time Business Conditions Index .1382 -7.87%

• US Economic Policy Uncertainty Index 75.12 -39.93%

• S&P 500 Blended Forward 12 Months Mean EPS Estimate 173.28 -.04%

• Citi US Economic Surprise Index -5.20 -2.4 points

• Citi Eurozone Economic Surprise Index -31.90 -5.4 points

• Citi Emerging Markets Economic Surprise Index -7.60 +2.2 points

• Fed Fund Futures imply 100.0% chance of no change, 0.0% chance of 25 basis point hike on 11/8

• US Dollar Index 95.11 +.86%

• MSCI Emerging Markets Currency Index 1,602.29 +.20%

• Bitcoin/USD 6,637.89 -.82%

• Euro/Yen Carry Return Index 137.17 -.27%

• Yield Curve 23.75 -2.5 basis points
  

• 10-Year US Treasury Yield 3.05% -2.0 basis points

• Federal Reserve's Balance Sheet $4.153 Trillion -.37%

• U.S. Sovereign Debt Credit Default Swap 20.78 +3.92%

• Illinois Municipal Debt Credit Default Swap 191.99 -3.96%

• Italian/German 10Y Yld Spread 267.75 +31.0 basis points

• Asia Pacific Sovereign Debt Credit Default Swap Index 8.92 -4.39%
  

• Emerging Markets Sovereign Debt CDS Index 81.41 -13.46%
  

• Israel Sovereign Debt Credit Default Swap 70.09 -.41%

• South Korea Sovereign Debt Credit Default Swap 37.32 -4.45%

• Russia Sovereign Debt Credit Default Swap 143.38 -8.09%

• iBoxx Offshore RMB China Corporate High Yield Index 150.65 +.20%

• 10-Year TIPS Spread 2.14% -1.0 basis point

• TED Spread 19.75 -.25 basis point

• 2-Year Swap Spread 16.75 -.5 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -41.75 -28.25 basis points

• N. America Investment Grade Credit Default Swap Index 59.56 -3.04%

• America Energy Sector High-Yield Credit Default Swap Index 386.0 -3.83%

• European Financial Sector Credit Default Swap Index 83.73 +7.13%
  

• Emerging Markets Credit Default Swap Index 192.89 -3.92%
  

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

• M1 Money Supply $3.707 Trillion -1.13%

• Commercial Paper Outstanding 1,082.30 +.70%

• 4-Week Moving Average of Jobless Claims 206,000 +250

• Continuing Claims Unemployment Rate 1.2% unch.
  

• Average 30-Year Mortgage Rate 4.72% +7.0 basis points

• Weekly Mortgage Applications 352.50 +2.86%

• Bloomberg Consumer Comfort 61.2 +1.0 points

• Weekly Retail Sales +5.80% -10.0 basis points

• Nationwide Gas $2.88/gallon +.03/gallon

• Baltic Dry Index 1,524.0 +7.86%

• China (Export) Containerized Freight Index 853.61 +.24%

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

• Rail Freight Carloads 294,463 +3.54%

Best Performing Style

• Mid-Cap Growth unch.

Worst Performing Style

• Mid-Cap Value -1.8%

Leading Sectors

• Energy +3.2%

• Biotech +2.8%

• Oil Service +2.7%

• Medical Equipment +2.4%

• Internet +1.4%

Lagging Sectors

• Tobacco -3.5% 

• Alt Energy -3.8%

• Papers -4.0%

• Banks -4.5%

• Coal -8.8%

Weekly High-Volume Stock Gainers (9)

• BCOR, LGF/A, NVDA, HIIQ, FATE, AIR, COHU, BEAT and VST

Weekly High-Volume Stock Losers (9)

• SPGI, MRTX, MTN, AVLR, RARE, DOVA, LASR, BTU and AAOI

Weekly Charts

ETFs

• High-Volume Gainers

• High-Volume Losers

Stocks

• High-Volume Gainers

• High-Volume Losers

*5-Day Change