Friday Watch

Evening Headlines

Bloomberg:         

• Rescuing State-Owned Firms Adds to Emerging Market Debt Crisis.  
• India’s Credit Market Has Been Stung by Bankruptcy Suspension.
• Tokyo Lifts Alert; Mnuchin Says Economy Can’t Shut: Virus Update.    
• FX Faces Risk of a Virus Shake-Up Even as Fed Anchor Remains.
• Asia Stocks Tumble after U.S. Rout; Dollar Down: Markets Wrap. Asian stocks slumped on Friday after a rout on Wall Street triggered by concerns the epic rally since March was excessive given the emergence of a second wave of infections in some locations. Korean shares opened down over 4% and Japanese ones fell about 2%. U.S. futures suggested some stabilization, rising after the S&P 500 sank almost 6% Thursday, the most in 12 weeks, with only one company in the index finishing higher. Airlines, cruise and travel shares that soared in recent weeks bore the brunt of the selling. The KBW Bank Index of financial heavyweights slid 9%, and energy producers joined a rout in oil. Treasuries and the dollar held gains, and crude oil slid. Futures on the S&P 500 rose 0.6% as of 9:04 a.m. in Tokyo. The index sank 5.9% Thursday. Japan’s Topix Index dropped 2.4%. Australia’s S&P/ASX 200 Index retreated 1.8%. Kospi Index fell 4.2%. Hang Seng futures lost 2.1% earlier.
• Oil Dives the Most in Six Weeks, Exposing Fragile Recovery.    
• No Renewed Lockdown, Recovery Reprise, Negative on BOJ: Eco Day.  
• Adobe Rises on Durable Demand for Creative, Document Apps.
• Snap CEO Says Exercising Free Speech Rights by Limiting Trump.
• The Stocks-Only-Go-Up Strategy Falls Into a $2 Trillion Ditch.
• Trump Touts Economy as Racial-Justice Fix, Snubs Police Overhaul.
• Dissecting Florida’s Covid-19 Resurgence in Four Charts.  
• PE-Owned Hospitals Paid Owners Millions and Got Low Care Ratings.

Wall Street Journal:

• Coronavirus Takes Financial Toll on New York City’s ‘Safety-Net’ Hospitals.    
• China’s Trillion-Dollar Campaign Fuels a Tech Race With the U.S.
• Get Ready for the Second Coronavirus Wave.
• Jobless Claims Show a Slowly Mending Labor Market.
• Bank Stocks Fall After Fed Projects No Rate Increases. 
• Covid-19 Hospitalizations Surge in Some States.
• How New York’s Coronavirus Response Made the Pandemic Worse.
• After Years of Debate, Confederate Symbols Disappear Quickly.

Fox News:

• As anti-cop faction extends standoff, police chief says leaving precinct not her call.
• League promises eye-popping amount of cash 'to combat systemic racism'.

CNBC.com:

• Stocks suffer their worst day since March, with the Dow plunging more than 1,800 points.
• Arizona coronavirus cases nearly double since Memorial Day as state nears hospital capacity.
• What today’s stock sell-off has to do with Robinhood traders: CNBC After Hours.
• Top stocks on Robinhood brokerage get crushed as market violently reverses.
• Cramer on stock market plunge: There’s been a ‘happiness trade’ out of sync with ‘everything’.
• Stocks making the biggest moves after hours: PVH, Adobe, Lululemon and more.
• Lululemon sales fall 17% as retailer takes hit from stores being closed, shares drop.
• Mortgage rates set new record low, falling below 3% as concerns rise about coronavirus second wave.

MarketWatch.com:    

• No, the pandemic isn’t over — that’s one big reason debt markets are following the downward spiral in stocks .
• These U.S. stocks paced the market’s brutal decline Thursday.
• Beware of these popular stocks when the crisis ‘gradually, then suddenly’ emerges, fund manager warns.

Zero Hedge:

• "The Most Absurd Moment In The History Of Capital Markets": Hertz Plans To Sell Up To $1 Billion In New Bankrupt Stock.
• Houston "On The Precipice Of Disaster" As Officials Weigh Reimposing Stay At Home Order Amid Spike In Cases: Live Updates.
• Zoom Disables Accounts Of Exiled Chinese Dissidents During Tiananmen Square Memorial.
• Is Unarmed National Guard Emboldening Seattle Mob?
• Mayor Apologizes As Chicago Cops Caught Lounging In Congressman's Office Instead Of Arresting Looters.
• Seattle "Autonomous Zone" Now Has A "Heavily-Armed" Warlord As Crime Spikes 300%.
• El-Erian Warns "Bad Things Happen" When Markets Front-Run The Economy.
• "All About Money, Not Human Rights": Hong Kong Activists Slam LeBron James' BLM Hypocrisy.
• BMO The Second Wave Has Arrived, And Attention Will Undoubtedly Return To The Daily Stats.
• NYC Detectives' Union To Sue Floyd Rioters Who Attack Officers.
• 'Academics' Nationwide Urge #ShutDownSTEM Because Science Is "Weaponized Against Black People".
• Biden Beats Trump, Dems Retake Senate According To Latest PredictIt Odds.
• Activist Crushed By Falling Confederate Statue After Frenzied Mob Toppled It.
• "It's A Rout" - Re-Open Rally Ruined But Bonds & Bullion Bid.

The Epoch Times:

• Countering China Supply Chains, US Bill Seeks to Boost Domestic Production of Electronic Chips.
• China Insider: Internal WHO Documents Reveal the CCP’s Delay Worsened the Pandemic by 200 Times.

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 -3.25% to -2.75% on average.

• Asia Ex-Japan Investment Grade CDS Index 91.75 +5.75 basis points.

• China Sovereign CDS 52.75 +5.5 points.

• Bloomberg Emerging Markets Currency Index 60.93 -.13%.
• FTSE 100 futures -1.2%

• S&P 500 futures +.59%.

• NASDAQ 100 futures +.54%.

Morning Preview Links

Earnings of Note 
Company/Estimate

Before the Open:

• None of note

After the Close:

• None of note

Economic Releases 
8:30 am EST

• The Import Price Index MoM for May is estimated to rise +.7% versus a -2.6% decline in April.
• The Export Price Index MoM for May is estimated to rise +.7% versus a -3.3% gain in April.
  

10:00 am EST

• Preliminary Univ. of Mich. Consumer Sentiment for June is estimated to rise to 75.0 versus 72.3 in May.
  

12:00 pm EST

• Household Change in Net Worth for 1Q.
  

Upcoming Splits

• None of note

Other Potential Market Movers

• The China New Loan data, Bloomberg US Economic Survey for June and the (CNC) investor day could also impact trading today.

Market Hours
Normal:

• 9:30 am - 4:00 pm EST
  

BOTTOM LINE: Asian indices are sharply lower, weighed down by technology and commodity shares in the region. I expect US stocks to open modestly higher and to weaken into the afternoon, finishing modestly lower. The Portfolio is 50% net long heading into the day.

Stocks Plunging into Final Hour on Global Recession Fears, Coronavirus 2nd Wave Worries, Biden Poll Surge Concerns, Energy/Financial Sector Weakness

Overseas Futures:

• Nikkei 225 Futures: Indicating -753 open in Japan 
• China A50 Futures: Indicating -235 open in China

• DAX Futures: Indicating -113 open in Germany

Portfolio:

• Slightly Higher: On gains in my emerging market shorts and index hedges

• Disclosed Trades: None

• Market Exposure: 25% Net Long

Bear Radar

Style Underperformer:

• Small-Cap Value -6.1%

Sector Underperformers:

• 1) Coal -20.0% 2) Airlines -11.0% 3) Banks -6.6%

Stocks Falling on Unusual Volume: 

• CRF, CLGX, COLL, CCXI, GAIN, CLM, MDB, DKNG, CCH, GLW, HHC, CDNA, LVGO, UTG, EB, PDI, CTLT, REAL, TDC, JWN, AKCA, SIX, CNNE, JBLU, KRMD, BA, FMCI, DAL, DDS, ALK, CIT, SPG, WOR, PLAY, EPRT, UAL, AAL, CUK, SAVE, USAC, NCLH, BV, MYGN and GRPN

Stocks With Unusual Put Option Activity:

• 1) RSP 2) JETS 3) PVH 4) EMB 5) GUSH

Stocks With Most Negative News Mentions:

• 1) CCL 2) GRPN 3) KBH 4) F  5) WFC

Charts:

• ETFs Falling on Unusual Volume
• Stocks Falling on Unusual Volume

Bull Radar

Style Outperformer:

• Large-Cap Growth -2.1%

Sector Outperformers:

• 1) Video Gaming -1.1% 2) Biotech -2.0% 3) Pharma -2.2%

Stocks Rising on Unusual Volume:

• ZYXI, RETA, SERV, SONO, ARCT, GRUB, CHWY, SGMO and MRNA

Stocks With Unusual Call Option Activity:

• 1) SGMO 2) GNUS 3) RUN 4) CG 5) TDC

Stocks With Most Positive News Mentions:

• 1) TGT 2) CSII 3) ABBV 4) AAPL 5) INTC

Charts:

• ETFs Rising on Unusual Volume
• Stocks Rising on Unusual Volume

Morning Market Internals

NYSE Composite Index:

• Volume Running +54.6% Above 100-Day Average

• 0 Sectors Rising, 11 Sectors Declining

• 4.6% of Issues Advancing, 94.5% Declining

• 2 New 52-Week Highs, 4 New Lows

• 29.4% of Issues Above 200-day Moving Average

• Average 14-Day RSI 57.1%

• Vix 30.5 +10.5%

• Total Put/Call .76 +10.1%

• TRIN/Arms 1.25 -43.2%

Thursday Watch

Evening Headlines

Bloomberg:    

• Second U.S. Virus Wave Emerges With Texas Hitting Record.

• Asia Stocks to Slip; Dollar Declines on Powell. Stocks in Asia looked set to drop as investors assessed the Federal Reserve’s forecast of a long road to recovery for the economy and loose monetary policy. Treasuries rose and the dollar extended this month’s slide. Futures were lower in Japan, Hong Kong and Australia. Contracts on the S&P 500 opened flat following a volatile session earlier, which saw the index close lower as Fed Chairman Jerome Powell suggested the pandemic could inflict longer-lasting damage on the economy even as the Fed signaled it would keep rates near zero possibly for years to come. The central bank also said it will at least maintain the current rate of bond purchases. Treasury 10-year yields sank to as low as 0.72%, while the dollar extended its June slide to 2.5%. The Nasdaq 100 climbed to a record high as Tesla Inc. topped $1,000. Gold rose. Futures on the S&P 500 were little changed as of 7:08 a.m. in Tokyo. The index dipped 0.5% Wednesday. Futures on Japan’s Nikkei 225 fell 1.2%. Hang Seng Index futures retreated 0.3%. Futures on Australia’s S&P/ASX 200 Index lost 1.1%.

• Dovish Powell Sees Fed Keeping Foot on Gas Until Jobs Come Back.

• Treasuries Bulls Energized After Fed Sees Years of Easy Policy.

• Trump Says He’ll Resume Rallies in Tulsa, Oklahoma on June 19.

• U.S. Jobs Focus Shifts Back to Losses After May’s Surprise Gain.

• Caterpillar Extending Plant Closures With Virus Sapping Demand.

• Risky Munis Shrug Off Recession in Biggest Rally Since 2009.

Wall Street Journal:

• Simon Property Ends Taubman Deal as Coronavirus Hits Retail.

• Fed Officials Project No Rate Increases Through 2022.

• Trump Considers Ways to Address Police Abuse.

• Tested Positive for Coronavirus Antibodies? Stay Vigilant.

• Lawmakers Propose Spending Billions to Strengthen U.S. Chip Industry.

• States Sue Drug Companies, Executives Over Alleged Price Fixing.

Fox News:

• Powerful law-enforcement union vows to sue rioters, looters who attack police.

• NYC's first lady says city without police would be ideal, but…

CNBC.com:

• Grubhub to merge with European food delivery company Just Eat Takeaway.com following failed Uber talks.

• Stocks making the biggest moves after hours: GrubHub, Tailored Brands, Delta and more.

• Market gone wild: Penny stocks are up nearly 80% on average in the last week.

• Texas reports a third straight day of record coronavirus hospitalization.

MarketWatch.com:        

• Here are the biggest stock-market bets among institutional and retail investors, ranked.

• Opinion: ‘You should be nervous!’—legendary money manager slashes stock market exposure from 55% to 25%.

• Barstool Sports founder believes he’s a better investor than Warren Buffett and has determined day trading is ‘the easiest game’ there is.

Zero Hedge:

• Minneapolis Manufacturing Company Torched In Riots To Leave City.

• Texas Reports Record 2,500 New COVID-19 Infections In Latest Sign Of Nascent 'Second Wave': Live Updates.

• Total US Debt Increases By $1 Trillion In One Month.

• UCLA Prof Suspended, Under Police Protection After Refusing To Exempt Black Students From Final Exam.

• "Defund The Police" Doesn't Mean "Defund The Police", We're Supposed To Believe.

• Trump 'Will Not Even Consider' Renaming Military Bases Amid Racial Tensions.

• Christopher Columbus Statue Beheaded In Boston; Another Toppled & Torched In Richmond.

• "I Will Not Endorse Any Unlawful Acts" - Oregon Mayor Faces Down Radical Leftist Rage Mob.

• Saks Fifth Avenue Shields NYC Store With Barbed Wire, Attack Dogs To Deter Looters.

• Harvard Prof Indicted For Lying About China Ties.

• Seattle Protesters Storm City Hall After Running Cops Out Of Precinct, Establishing "Autonomous Zone".

• Amazon Halts Use Of 'Racist' Facial Recognition Software By Police.

• NASCAR Bans Confederate Flag After Black Driver Demands Action.

• Google Searches For "Day Trading" And "Call Options" Explode To Record Highs.

• "Chaos Is Coming" - Bullion, Bonds, & Big-Tech Bid As Dollar & Dow Dumped.

The Epoch Times:

• US Ramps Up Tough Actions Against Beijing.

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 -1.25% to -.75% on average.

• Asia Ex-Japan Investment Grade CDS Index 86.0 +1.75 basis points.

• China Sovereign CDS 47.25 -1.5 points.

• Bloomberg Emerging Markets Currency Index 61.83 -.03%.

• FTSE 100 futures -.89%

• S&P 500 futures -.57%.

• NASDAQ 100 futures -.36%.

Morning Preview Links

Earnings of Note 
Company/Estimate

Before the Open:

• (JW/A)/.43

• (PLCE)/-2.26

After the Close:

• (WUBA)/.00

• (ADBE)/2.32

• (PLAY)/-.85

• (LULU)/.27

• (PVH)/-1.60

Economic Releases 
8:30 am EST

• PPI Final Demand MoM for May is estimated to rise +.1% versus a -1.3% decline in April.

• PPI Ex Food and Energy MoM for May is estimated to fall -.1% versus a -.3% decline in April.

• Initial Jobless Claims are estimated to fall to 1550K versus 1877K the prior week. 

• Continuing Claims are estimated to fall to 20000K versus 21487K prior.
  

Upcoming Splits

• None of note

Other Potential Market Movers

• The Italy Industrial Production report, weekly Bloomberg Consumer Comfort Index, weekly EIA natural gas inventory report and the RBC Fin Tech Virtual Conference 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 25% net long heading into the day.