Monday Watch

Today's Headlines

Bloomberg:

• Four US Tourists Attacked With Acid in Marseille, Official Says. Four young female U.S. tourists were attacked with acid Sunday in the French city of Marseille by a woman who has been arrested, the Marseille prosecutor's office said. Two of the tourists were injured in the face in the attack in the city's main Saint Charles train station and one of them has a possible eye injury, a spokeswoman for the Marseille prosecutor's office told The Associated Press in a phone call. She said all four of the tourists, who are in their 20s, have been hospitalized, two of them for shock. She said a 41 -year-old female suspect has been arrested.

• China Home Prices Rise in Fewer Cities as Property Market Cools. China’s home prices rose in the fewest cities since January, adding to signs of a real estate industry slowdown as officials persist with curbs to limit the risk of bubbles. New-home prices, excluding government-subsidized housing, in August gained in 46 of 70 cities tracked by the government, compared with 56 in July, the National Bureau of Statistics said on Monday. Prices fell in 18 cities from the previous month and were unchanged in six.

• World's Central Banks Can't Ignore the Bitcoin Boom, BIS Says. The world’s central banks can’t sit back and ignore the growth in cryptocurrencies as it could pose a risk to the stability of the financial system, according to the Bank for International Settlements.

• What the Surging Yuan Means for China's Economy. (video) The yuan’s surge this year is proving a double-edged sword, risking hurting the nation’s exports even while boosting the chances of currency and capital control reforms. The exchange rate’s 6 percent advance this year has crushed depreciation pressures, allowing policy makers the freedom to loosen capital outflow controls that may impact the currency. The People’s Bank of China took a step in that direction on Sept . 11, scrapping a reserve requirement on the trading of foreign-exchange forwards that had made it expensive to short the yuan. Some of the potential lifting of curbs may help companies by making their overseas investment efforts easier. Here’s a look at the implications of the yuan’s strength:

• The U.K.'s Economic Outlook Is Getting Rosier.

• Yen Falls as Havens Retreat; Stocks Climb in Asia. (video) The yen declined as havens retreated after the worst-case scenarios for North Korea and hurricanes in the U.S. didn’t eventuate, while stocks inched higher in Asia following a record-breaking Wall Street session. Futures on the S&P 500 Index advanced with equities in Australia, South Korea and Hong Kong. Japan markets are closed for a holiday on Monday. The S&P 500 climbed above 2,500 for the first time on Friday and the Dow Jones Industrial Average chalked another record close as investors shrugged off the latest North Korean missile test. The dollar bounced after declining on Friday when U.S. retail sales raised concerns about the strength of the economy. The Kospi index rose 0.9 percent and Australia’s main gauge was up 0.6 percent. The Hang Seng Index in Hong Kong gained 0.7 percent. Gauges in China were slightly higher. The MSCI Asia Pacific Index advanced 0.4 percent.

• IEA Sees Risk of Volatile Oil Prices on Weak Upstream Investment. A dearth of new investment in oil production is stoking a risk of tighter crude supply and unstable prices, even as demand growth is expected to slow over the next five years, according to a senior International Energy Agency official. The worldwide cushion of spare production capacity will shrink without further investment in exploration and output, Neil Atkinson, the head of the IEA’s oil markets and industry division, said Sunday at a conference in Manama, Bahrain. “There are still not enough signs of investment beginning to return, and that raises the risk of tightening of the market in the next five years and a risk to the stability of oil prices,” he said. “There is at least a possibility of going back to the situation we had 10 years ago where oil prices were very, very high at a time when demand was growing.”

• Northrop(NOC) Nears Deal in $7.5 Billion Range for Orbital(OA), WSJ Says.

Wall Street Journal:

• Hurricanes Stir Up Profits for Refiners. Even refinery owners with flooded plants could see an improvement to their bottom lines.

• Unlike Most Industries, Drone Makers and Operators Clamor for Federal Regulation. Leaders seek approval for broader commercial applications, so they buck the trend toward looser government oversight.

• Trump’s Deal Rejection Puts U.S. Policy on Chinese Investment in Focus. The president’s decision to block a Beijing-backed fund’s attempt to buy a U.S. chip firm is highlighting a national-security debate in Washington over Chinese money.

Fox News:

• Second suspect in London subway attack arrested; terror threat level downgraded to 'severe'. (video)

• Dozens arrested as second night of St. Louis protests turns violent. (video)

CNBC:

• Pittsburgh's self-driving car boom means $200,000 pay packages for robotics grads.

• Trump agrees stronger North Korea sanctions needed, South Korea says.

Zero Hedge:

• Kelly Loses Control Again As Trump Unleashes Epic Tweetstorm, Calls Kim Jong Un "Rocket Man".

• Long-Term Mortgage Delinquencies Seriously Under-Reported.

• "This Could Take Years" Feinstein Confirms Trump Jr. Will Give Public Testimony This Fall.

• BIS Finds Global Debt May Be Underreported By $14 Trillion.

• Haley Warns World: Mattis Will "Take Care" Of North Korea If Diplomacy Fails.

• Protesters Smash Windows, Throw Bricks At Cops In Second Night Of St. Louis Violence.

Business Insider:

• The Fed is getting ready for its 'biggest meeting of the year'.

• UBS: These are our top 5 picks for tech stocks.

• Facebook(FB) is getting aggressive in its quest to turn Instagram Stories into the next big ad platform.

Night Trading

• Asian indices are unch. to +1.0% on average.

• Asia Ex-Japan Investment Grade CDS Index 72.75 -1.25 basis points.

• Asia Pacific Sovereign CDS Index 18.25 -.25 basis point.

• Bloomberg Emerging Markets Currency Index 74.82 +.06%.

• S&P 500 futures +.22%.

• NASDAQ 100 futures +.20%.

Morning Preview Links

Earnings of Note

Company/Estimate

• (SCS)/.23

Economic Releases 
10:00 am EST

• The NAHB Housing Market Index for September is estimated to fall to 67.0 versus 68.0 in August. 

4:00 pm EST

• Net Long-Term TIC Flows for July.

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Eurozone CPI report, Australia Bank Minutes, Stephens Bank Forum and the DA Davidson Engineering/Construction Conference could also impact trading today.

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