Monday Watch

Today's Headlines

Bloomberg:

• Trump Says ‘Price to Pay’ in Syria After Vowing to Pull Out. President Donald Trump warned of a “big price to pay” in response to reports of a chemical attack outside Syria’s capital, days after he said he wanted to quickly end the U.S. military presence in the war-torn Middle East country. Rescue workers and activists said dozens died in a chemical assault amid renewed fire by Bashar al-Assad’s government on a rebel stronghold near Damascus. The use of chemical weapons in April 2017 provoked a U.S. missile strike, the first direct American hit on Assad’s regime since the conflict in Syria began in March 2011. While Trump has said he wants U.S. troops out of Syria “very soon,” he posted tweets Sunday condemning the attack, and saying Russian President Vladimir Putin and Iran “are responsible for backing Animal Assad.”

• Trump Vows China `Will Take Down Its Trade Barriers'. President Donald Trump said China will relax its trade restrictions in response to U.S. pressure “because it’s the right thing to do,” as the world’s largest economies teeter on the brink of a trade war that’s unsettled global financial markets and sent the U.S. stock market reeling. “China will take down its Trade Barriers because it is the right thing to do,” Trump said on Twitter early Sunday. “Taxes will become reciprocal & a deal will be made on Intellectual Property.” 

• World's Top Iron Shipper Says China's Import Boom Will Level Off.

• China’s Foreign Reserves Rise on Yuan Gains, Capital Curbs.  

• Asia Stocks Mixed as Trade in Focus; Dollar Steady: Markets Wrap. Benchmarks were little changed in Japan, Australia and South Korea. Chinese equity markets are due to reopen after a holiday, with traders getting their first chance to react to President Donald Trump’s order for a review of additional tariffs that prompted an aggressive response from China. The yen fluctuated ahead of remarks Monday by Bank of Japan Governor Haruhiko Kuroda at the start of his second term. While Friday’s selloff left U.S. stocks teetering on a key support level, futures on the S&P 500 Index climbed in early trading. Japan’s Topix index fluctuated as of 9:16 a.m. in Tokyo. Australia’s S&P/ASX 200 Index fell 0.1 percent. South Korea’s Kospi index was little changed. Hang Seng Index futures were up 0.4 percent. Futures on the S&P 500 gained 0.4 percent.  

• Five Things You Need to Know to Start Your Day.

Wall Street Journal:

• Trump Officials Soften Tone on Trade Dispute With China. Administration plays down talk of a worsening conflict, saying no penalties are imminent.

• Apple(AAPL), Amazon(AMZN) and Google(GOOGL) Also Are Bracing for Privacy Regulations. U.S. technology companies have stayed largely exempt from significant government regulation and self-policing of privacy, but that is about to change. 

• Many Investors Aren’t Losing Sleep Over the Tech Rout.

• Cracks Form in Global Growth Story, Rattling Investors.

• Food-Stamp Fight Imperils Farm Bill.

• Kinder Morgan Threatens to Halt Trans Mountain Pipeline Expansion.

MarketWatch.com:

• Buyer traffic rising as real-estate agents report concern over mortgage rates, inventory.

Fox News:

• Trump slams Obama over not crossing 'red line' in Syria with 'Animal Assad'. (video)

• Kim Jong Un willing to discuss getting rid of North Korea's nukes, US says.

CNBC: 

• Trump hails friendship with China's Xi, suggests country will negotiate over trade spat.  

• Trump says embattled EPA chief Pruitt's expenses are justified because he received 'death threats'.

• Republican senator says Facebook scandals may be 'too big' for company to fix alone.

• US says suspected chemical attack in Syria that killed dozens could demand an international response.

• Facebook(FB) suspends another data analytics firm after CNBC discovers it was using tactics like Cambridge Analytica.

• Today’s youth reject capitalism, but what do they want to replace it?

Zero Hedge: 

• Trump Threatens Putin, "Animal Assad" Over Syrian "Chemical Attack"; Russia Warns Of "Grave" Response If US Launches Strike.

• In Tweetstorm, Trump Vows China Will Cave In Trade War "Because It's The Right Thing To Do". 

• "Hit Their Stocks": Chinese Press Warns Of "Ample Weapons" To Win US Trade War. (graph)

• London Mayor Unveils New Stop-And-Frisk Police Policy To Enforce City-Wide Knife Ban.

• John Cryan Fired As Deutsche Bank(DB) CEO; Replaced By Retail Bank Head Sewing.

• Preliminary Nafta Deal Won't Be Ready In Time For Pan-American Summit.

• Deutsche Bank Preparing To Replace CEO John Cryan With Retail Banking Head.

• Kudlow: White House Planning Cuts To $1.3 Trillion Omnibus Spending Bill.

• Retail Real Estate Bubble Turns Manhattan Into A "Shopping Wasteland".

• Twitter(TWTR) CEO Endorses Leftist Blueprint To Drive Conservatives From Public Life.

Business Insider:

• German police foil half-marathon terror plot as they arrest 1 man who 'planned to knife spectators and participants'. 

• There's a record-setting disconnect in markets right now — and it has stocks spring-loaded for a recovery. 

• Walmart.com(WMT) blows Amazon(AMZN) out of the water in one key way.

Telegraph:

• The eurozone is already heading back into recession – and that could be catastrophic.

Night Trading

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

• Asia Ex-Japan Investment Grade CDS Index 78.0 +.5 basis points.

• Asia Pacific Sovereign CDS Index 13.25 +.25 basis point.

• Bloomberg Emerging Markets Currency Index 74.80 unch. 

• FTSE 100 futures +.4%.

• S&P 500 futures +.5%.

• NASDAQ 100 futures +.66%.

Morning Preview Links

Earnings of Note

Company/Estimate

• (SIGM)/-.21

Economic Releases

• None of note

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Germany Trade Balance report, (PSMT) monthly sales report and (WWE) business update call could also impact trading today.

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