Today's Headlines

Bloomberg:

• U.S. Warns Its Citizens in China They Risk ‘Arbitrary’ Arrest.  
• China’s Banking Watchdog Warns of Sharp Rebound in Bad Loans.  
• These Are the French Brands Targeted in U.S. Tariff Tussle.  
• Iran to Boost Oil-Output Capacity as It Bides Time on Sanctions.  
• Florida, Arizona Deaths Increase; U.S. Bases Hit: Virus Update.
• Americans’ Aversion to Mask-Wearing Is Holding Back the Economy.
• Promising Covid Immunity Shot Stalled, LA Times Reports.  
• Wall Street Forges a New Deal With Data in Coronavirus Age.  
• Novogratz Says Stock Bubble Spurring ‘Dangerous Valuations’.  
• Treasuries Rally Reflects Visions of a Rockier Path to Recovery.  
• Five Real-Time Charts Show Signs U.S. Economic Recovery Is Faltering.

Wall Street Journal:

• Will Democrats Accept Another Trump Victory?
• Covid-19 Cases Jump in Sun Belt Nursing Homes.
• Pardon Michael Flynn.
• A Challenger of the Woke ‘Company Policy’.
• Bankruptcy Is Better Option for Small Businesses With New Law.
• This Is What It Looks Like When a Texas Oil Boom Busts.
• Pandemic Crushes Garment Industry, the Developing World’s Path Out of Poverty.
• SEC Plan Would Slash Funds’ Quarterly Filings.
• ‘Buy Now Pay Later’ Is Having a Moment as Pandemic Changes Shopping Habits.

CNBC:

• 5G is accelerating factory automation that could add trillions to the global economy.
• The biggest media and technology companies are having an identity crisis.
• Election officials fear voting changes will confuse voters in November.
• Home buying and selling went virtual during the pandemic. Can it stay that way?
• Trump says U.S.-China relationship is ‘severely damaged,’ phase 2 trade deal not a priority.

IG:

• Weekend Markets Trading Live.

MarketWatch.com:

• S&P 500 earnings set to plunge as the coronavirus batters all sectors — with Wall Street counting on a bounce that may not come.
• The Biden-Sanders climate-change policy pact: 8 key features.

Fox News:

• EXCLUSIVE: Chinese virologist accuses Beijing of COVID cover-up after escape.
• The left turns on their own in growing battle over free speech.
• NEWT GINGRICH: Anti-Trump Republicans proof Deep State alive.

Zero Hedge:

• Phoenix Mayor Lied About Morgues Bringing In 'Refrigerator Trucks' To Store Overflow COVID Bodies.
• Cops Raid Mansion Of St. Louis Couple Who Defended Home From Protesters, Confiscate AR-15.
• Ex-Jewel Thief Claims Epstein And Ghislaine Maxwell "Forced Him To Watch Pedo Videos Involving US Politicians".
• Global Outrage As Erdogan Orders Historic Hagia Sophia Church To Reopen As Mosque.
• "This Is Nuts...Again" - Reducing Risk As Tech Goes 'Full 1999'.
• Florida Suffers Record Single-Day Jump In COVID-19 Deaths: Live Updates.
• Welcome To The "Blinders On" Stock Market.
• Used Vehicle Prices Spike By Record 9% YoY As Worried Consumers Abandon Mass Transit.
• "Defund The Police" Just Means "I'm Rich & White".
• Major Tax Increases Are About To Slam America As Cities & States Want You To Pay For COVID Fallout.
• The Threats To The Bullish Thesis Have Grown.
• Seattle Officials Back Defunding Police By 50%, Mull 911 Overhaul.
• West Vancouver Police: Driver Carried Out "Gesture Of Hate" For Skidding On Pride Crosswalk.
• China Passenger Car Sales Slump 6.5% In June After Dead Cat Bounce In May.
• FBI Man At The Heart Of Surveillance Abuses Is A Professor Of Spying Ethics.
• Atlanta Mayor Set To Reimpose Lockdown As Cases Surge, Defying Gov Kemp, Trump: Live Updates.
• Reddit Bans Forum Dedicated To Exposing Hate Crime Hoaxes.
• JPMorgan Is Now Bearish, Bullish And Neutral On Stocks All At The Same Time (Oh And... Buy Gold).
• Colin Powell Stuns MSNBC Host: Rips "Almost Hysterical" Coverage Of Fake Russia Bounty Story.
• One Bank Admits The Markets Have Never Been More Broken, So Here's What Happens Next.
• Real-Time Data Shows That After Peaking In Late June, Consumer Spending Is Now Declining.
• Humans Are Better But Tyson Turns To Robots.
• Ghislaine Maxwell Hires Elite Legal Team To Face US Prosecutors.
• As Long As Mass Media Propaganda Exists, Democracy Is A Sham.
• Big-Tech Bid, Small-Caps Skid As Gold Hits 9 Year Highs.

The Epoch Times:

• Beijing Weaponizes Facebook to Push Anti-Taiwan Agenda, Leaked Documents Show
• Trump Says Not Thinking About ‘Phase 2’ Trade Deal with China, Citing ‘Severely Damaged’ Relationship.

John Hopkins University:

• Coronavirus Global Cases. (map)

BNO News:

• Tracking Coronavirus: Map, data and timeline. 

KFF:

• State Data(Tests/Hospitalizations).

Stocks Higher into Final Hour on Oil Gain, Sector Rotation, Short-Covering, Financial/Transport Sector Strength

 Broad Equity Market Tone:

• Advance/Decline Line: Modestly Higher
  

• Sector Performance: Mixed
  

• Volume: Below Average

• Market Leading Stocks: Performing In Line

Equity Investor Angst:

• Volatility(VIX) 27.6 -5.6%

• Euro/Yen Carry Return Index 125.30 -.13%

• Emerging Markets Currency Volatility(VXY) 9.87 -.60%

• S&P 500 Implied Correlation 58.70 -5.4%

• ISE Sentiment Index 124.0 -9.0 points

• Total Put/Call .79 +2.6%

• NYSE Arms .65 -.50%

Credit Investor Angst:

• North American Investment Grade CDS Index 75.14 +.73%
  

• US Energy High-Yield OAS 977.15.0 +.33%

• European Financial Sector CDS Index 76.83 +1.80%

• Italian/German 10Y Yld Spread 169.0 +3.25 basis points
  

• Asia Ex-Japan Investment Grade CDS Index  80.51 +1.4%
  

• Emerging Market CDS Index 195.03 +1.43%
  

• iBoxx Offshore RMB China Corporate High Yield Index 174.22 +.28%

• 2-Year Swap Spread 6.25 unch.

• TED Spread 14.5 +.75 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -10.0 -1.25 basis points
• MBS  5/10 Treasury Spread  94.0 -1.0 basis point
• IHS Markit CMBX BBB- 6 68.0 -1.0 basis point

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 60.75 +.03%
• 3-Month T-Bill Yield .12% -1.0 basis point

• Yield Curve 46.0 -3.75 basis points

• China Iron Ore Spot 103.0 USD/Metric Tonne +.04%

• Citi US Economic Surprise Index 225.9 +1.8 points

• Citi Eurozone Economic Surprise Index -38.80 +11.1 points

• Citi Emerging Markets Economic Surprise Index -23.20 -4.7 points

• 10-Year TIPS Spread 1.39 +1.0 basis point
• 100.0% chance of no change at Sept. 16 meeting, 100.0% chance of no change at Nov. 5th meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating +280 open in Japan 
• China A50 Futures: Indicating -82 open in China

• DAX Futures: Indicating +19 open in Germany

Portfolio:

• Slightly Higher: On gains in my industrial/consumer staple sector longs and emerging market shorts

• Disclosed Trades: None

• Market Exposure: 50% Net Long

Friday Watch

Evening Headlines

Bloomberg:     

• China’s ‘Too Fast, Too Sudden’ Bond Rout at Mercy of Stock Rally.

• World’s Leading Economies Remain Fragile After Rebound.

• Asia Stocks to Track U.S. Drop: Treasuries Jump: Markets Wrap. Asian stocks were on course to follow their U.S. peers with modest declines amid concern that a resurgence in coronavirus cases could slow the global economic recovery. Treasuries jumped. Equity futures pointed lower in Japan, Hong Kong and Australia. Contracts on the S&P 500 Index were flat after the gauge fell 0.6% on Thursday, with financial firms among the worst performers as Wells Fargo & Co. prepared to cut thousands of jobs because of the pandemic. Still, the tech-heavy Nasdaq advanced to a fresh record high. Longer-dated Treasuries rose following an auction for 30-year securities that showed strong demand. The start of Chinese trading will be in focus Friday as the Shanghai Composite makes a bid for a ninth day of gains amid signals of official support and strong demand from retail traders. Futures on the S&P 500 Index added 0.1% as of 7:14 a.m. in Tokyo. The index fell 0.6% on Thursday. Futures on Japan’s Nikkei 225 declined 0.5%. Hang Seng futures slipped 0.8%. Futures on Australia’s S&P/ASX 200 Index dropped 0.4%.

• Oil Tumbles With Corporate Layoffs, Virus Clouding Recovery.

• U.S. Daily Cases Top 60,000; Record Texas Deaths: Virus Update. Bleak Message of Economic Pain Underlies Tech’s Market Dominance.

• Covid-19 Is Bankrupting American Companies at a Relentless Pace.  

• Wells Fargo Readying Thousands of Job Cuts to Start in 2020.  

• Manager Who Timed March Bottom Cuts Risk With ‘Alarm’ Sounding.  

• Citadel Securities Says Retail Is 25% of the Market During Peaks.

• China-Connected Researcher Charged With Grant Fraud in U.S.

Wall Street Journal:

• Supreme Court Paves Way for Prosecutor to View Trump Taxes.

• A Bad Day for the Presidency.

• Supreme Loser: Pelosi’s House.

• Tyson Turns to Robot Butchers, Spurred by Coronavirus.

• Behind New Covid-19 Outbreaks: America’s Patchwork of Policies.

• Companies Raised Record Amounts Selling Stock During Crisis.

• Arrests at U.S. Border With Mexico Jumped 40% in June.

Fox News:

• Pelosi faces questions after failing to condemn statue vandals, saying 'People will do what they do'.

• Police confirm death of Black man found hanging from tree was suicide.

• Ex-secy. of state rips media coverage of alleged Russian bounties on US troops.

CNBC.com:

• Biden says investors ‘don’t need me,’ calls for end of ‘era of shareholder capitalism’.

• Stocks making the biggest moves after hours: Virgin Galactic, Redfin, Carnival and more.

• Airborne transmission of coronavirus in restaurants, gyms can’t be ruled out, WHO says.

• Pentagon leaders say they’re evaluating whether to remove Confederate symbols from military bases.

• Revolving credit debt drops to $996 billion—the lowest since the great recession.

MarketWatch.com:    

• Soaring demand for federal jobless benefits points to fresh fissures in the U.S. economy.

Zero Hedge:     

• Stocks Slide As Biden Vows To "End Shareholder Capitalism", Raise Corporate Tax Rate To 28%.

• Chinese Banks Preparing For "Worst Case" Scenario: Being Cut Off From SWIFT, Hong Kong Bank Runs.

• US Reports Another Record Single-Day Jump In COVID-19 Infections: Live Updates.

• The Fragility Of The Woke.

• Supreme Court: Nearly Half Of Oklahoma Is Indian Reservation.

• University Of Delaware Sued Over Biden's Hidden Senate Records.

• Federal Reserve Unhinged.

• "There's No Way I Can Lose": Invincible Chinese Daytraders Going All-In.

• "Political Prosecution!": Trump Rages After Supreme Court Tax Ruling.

• Another Hate Crime Hoax: Oregon Politician Admits To Mailing Himself Racist Letter.

• The Strangest Recession In History.

• Dip-Buyers Rescue Big-Tech From Dreaded Down-Day As Bond Yields Plunge.

The Epoch Times:

• Miles of Unsold New Cars Seen at Wuhan’s Dongfeng Motor Group.

• Beijing Authorities Covered Up New Virus Cases in Local Neighborhood: Resident.

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 79.25 -.5 basis point.

• China Sovereign CDS 47.25 +2.25 basis points.

• Bloomberg Emerging Markets Currency Index 60.71 -.03%.

• FTSE 100 futures +.68%.

• S&P 500 futures +.29%.

• NASDAQ 100 futures +.26%.

Morning Preview Links

Earnings of Note 
Company/Estimate

Before the Open:

• (CCL)/-1.76

• (GBX)/.14

After the Close:

• (SJR)/.30

Economic Releases
8:30 am EST

• PPI Final Demand MoM for June is estimated to rise +.4% versus a +.4% gain in May.

• PPI Ex Food and Energy MoM for June is estimated to rise +.1% versus a -.1% decline in May. 
  

Upcoming Splits

• None of note

Other Potential Market Movers

• The Canadian Unemployment report, Bloomberg July US Economic Survey and the (CCL) business update could also impact trading today.

Market Hours
Normal:

• 9:30 am - 4:00 pm EST
  

BOTTOM LINE: Asian indices are mostly higher, boosted by technology and consumer 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.