Monday Watch

Today's Headlines

Bloomberg: 

• Hanjin Collapse Is Triggering Short-Term Rate Spike, Maersk Says. Maersk Line, the world’s largest container shipping company, is seeing a short-term rise in freight rates and an inflow of new clients after the collapse of Hanjin Shipping Co. “There’s no doubt that we’re seeing a reaction in the rate market,” Klaus Rud Sejling, the executive in charge of Maersk Line’s east-west network, said in a phone interview. “The question is, what will happen with the rates in the longer term. In the short term, the effect is positive, but there are many factors that can influence rates in the medium and in the long term.”
• Yen Rises as Aussie, Kiwi Hold Losses; Won Slides for Third Day. The yen gained as the Australian and New Zealand dollars held declines after a rout in global stocks hurt demand for higher-yielding assets. Japan’s currency halted a two-day drop after equities and emerging-market assets slid on Friday in the biggest slump since the U.K’s vote in late June to leave the European Union. Oil fell as OPEC and other producers mull a ceiling on output. Federal Reserve Governor Lael Brainard will speak in Chicago Monday. South Korea’s won fell for a third day, heading for its longest slide in two months.
• Hong Kong Stocks Retreat Most in Two Months on Fed Rate Concern. Hong Kong stocks slumped the most in more than two months, led by financial companies, amid concern central banks in the world’s biggest economies are questioning the benefits of loose monetary policy. The Hang Seng Index fell 2 percent as of 9:40 a.m., heading for its biggest loss since June 24, China Merchants Bank Co. and China Life Insurance Company Ltd. retreated more than 3 percent. A gauge of property stocks declined for the first time in eight days. The Shanghai Composite Index slid 1.7 percent, breaking its recent calm.
• Asia Stocks Slide on Central Bank Angst After U.S. Market Slumps. Asian stocks fell for a second day, following a rout in U.S. shares, as policy officials at central banks signaled a reluctance to extend stimulus. The MSCI Asia Pacific Index dropped 1 percent to 138.97 as of 9:04 a.m. in Tokyo. The losses follow a 2.4 percent tumble on the S&P 500 Index on Friday as volatility surged after Federal Reserve Bank of Boston President Eric Rosengren said the economy could overheat if they waited too long to raise interest rates, spurring bets on a hike by the end of the year. Equity markets in Singapore, Indonesia, the Philippines and Malaysia are among those closed for holidays Monday.
• Oil Extends Decline as U.S. Producers Boost Drilling Amid Glut. Oil extended declines following the biggest drop in more than a month after U.S. producers increased drilling as the market contends with an overhang of crude and fuel inventories. Futures slid as much as 1.7 percent in New York after losing 3.7 percent Friday. Rigs targeting crude rose for a second week to 414, the most since February, according to data from Baker Hughes Inc.

Wall Street Journal:

• Investors Flee Heavily Indebted Mongolia. Once a market darling, high-yielding, commodity-rich nation turns into pariah.
• New Tricks Make ISIS, Once Easily Tracked, a Sophisticated Opponent. A mix of encrypted chat apps, face-to-face meetings, written notes and misdirection leaves few electronic clues for Western intelligence agencies.

CNBC:

• A 'perfect storm' correction is coming, and nothing can stop it: Rosenberg. (video)

Zero Hedge:

• Videos Show Clinton Fainting During "Medical Episode" At 9/11 Ceremony. (video)
• Mainstream Media Meltdown: CNN, WaPo Front Page Chaos After Hillary Faints.
• Story Changes Again, Now Hillary's Doctor Claims She Has Pneumonia.
• Is A VaR Shock Just Starting: Here Is The Checklist. (graph)
• The Elephant In The Room: "What Else Could Go Right?"
• Chinese, Russian Navies Launch Largest Ever Joint Drill In South China Sea; Send Message To Washington.
• "There Will Be More Attacks" French PM Warns 15,000 Being Radicalized.
• Is This Widely Ignored Indicator Signaling Investor Complacency? (graph)
• Deutsche Warns Companies Will Sharply Cut 2017 Earnings Expectations Next. (graph)
• DOJ Study Finds "Real And Nearly Unprecedented" Spike In Homicides Around U.S.
• Why A 2% Move In Stocks Feels Like 20%. 
• "This Is An Unbelievable Disgrace For The Country" - Austria Stunned After Symbolic Election Delayed.

Business Insider:

• The terrorist threat is worse now than it was before 9/11.
• What happened on 9/11, 15 years ago today.
• 20 haunting photos from the September 11 attacks that Americans will never forget.
• The ECB keeps digging itself a deeper hole.
• German minister: There are 500 'potential attackers' in Germany who pose 'a real and present danger'.

ABC News:

• On 15th Anniversary of 9/11, 'The Grief Never Goes Away'.
  

Night Trading

• Asian indices are -2.25% to -1.5% on average.
• Asia Ex-Japan Investment Grade CDS Index 109.0 +2.5 basis points.
• Asia Pacific Sovereign CDS Index 38.25 +2.25 basis points.
• Bloomberg Emerging Markets Currency Index 72.50 -.18%.
• S&P 500 futures -.72%.
• NASDAQ 100 futures -.78%.

Morning Preview Links

Earnings of Note

Company/Estimate

• (UNFI)/.63

Economic Releases

• None of note

Upcoming Splits

• None of note

Other Potential Market Movers

• The Fed's Lockhart speaking, Fed's Neel Kashkari speaking, Fed's Brainard speaking, $24B 3Y T-Note auction, $20B 10Y T-Note auction, China industrial production report, OPEC Monthly Update, USDA WASDE report, Morgan Stanley Healthcare conference, Barclays Financial Services conference and the (CLI) analyst day could also impact trading today.

BOTTOM LINE: Asian indices are lower, weighed down by commodity and industrial shares in the region. I expect US stocks to open lower and to maintain losses into the afternoon. The Portfolio is 25% net long heading into the week.