Monday Watch

Today's Headlines

Bloomberg: 

• U.S., China Are Close to a Trade Deal That May End U.S. Tariffs.

• Here Are the S&P 500 Bull Cases That Get Help From a Trade Pact.  

• Yuan Strength Seen Ebbing as Economy Woes Eclipse Trade Progress.

• European Central Bankers Are Feeling Trump-Style Political Heat.

• May Accused of Buying Brexit Votes With $2 Billion to Poor Towns.    

• The Yen Is Still Sliding, Despite the Bulls. 

• Stocks, U.S. Futures, Yuan Climb on Trade Optimism. Asian stocks rose with U.S. futures, and the yuan and Australian dollar advanced after a report that the U.S. and China are close to a trade deal that may end American tariffs. The dollar and Treasuries dipped. Shares in Tokyo, Australia and South Korea gained as the latest sign of a breakthrough on trade negotiations lifted risk appetite. Beijing has made it clear in a series of recent talks with the U.S. that removing the tariffs on $200 billion of Chinese goods from day one was necessary to finalize any deal, according to people familiar. Meanwhile, weighing on the dollar was a warning against excessive strength in the greenback from U.S. President Donald Trump.
  Japan’s Topix index rose 0.9 percent as of 9:07 a.m. in Tokyo. Australia’s S&P/ASX 200 Index gained 0.4 percent. South Korea’s Kospi index added 0.8 percent. Hang Seng Index futures slid 0.2 percent. Futures on the S&P 500 Index added 0.4 percent.

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

• U.S.-China Deal, Dollar Strength, Aussie Credit Squeeze: Eco Day.

• Bond Traders Bet Yield-Curve Steepening Has More Steam. 

Wall Street Journal:

• Shale Companies, Adding Ever More Wells, Threaten Future of U.S. Oil Boom.

• Millennials Are the Therapy Generation.

• Weapon Makers Declare War on Drones.

• Investors Scale Back Inflation Bets, Signaling Doubts About Growth.

Fox News:

• Clinton says country is in 'full-fledged crisis' during speech in Selma to mark 'Bloody Sunday'.

CNBC:

• China is reportedly offering lower tariffs on some U.S. products as trade deal inches closer.
  

• The biggest change in global fuel regulations since leaded gas went away could cause price shocks.

• This chart suggests stocks will see a winning month.

Zero Hedge:    

• Here We Go Again: US, China "In Final Stages Of Completing Trade Deal".

• Greenpeace Co-Founder Rips "Pompous Little Twit" Ocasio-Cortez As "Garden-Variety Hypocrite" On Climate.

• Morgan Stanley: Q1 Will Mark The Trough Of This Mini-Cycle... And Central Banks May Resume Tightening.

• Faith No More: America's Trust In Mainstream Media Hits Rock Bottom.

• Echoes Of 2016: MSNBC Slanders Sanders With Outright Lies After Saturday Speech.

• Senate Poised To Reject Border Emergency, Provoking Trump's 1st Veto.

Night Trading

• Asian indices are -.25% to +.75% on average.

• Asia Ex-Japan Investment Grade CDS Index 68.0 -2.0 basis points.

• China Sovereign CDS 48.75 -.75 basis point.

• Bloomberg Emerging Markets Currency Index 68.29 -.02%.

• FTSE 100 futures +.41%.

• S&P 500 futures +.36%.

• NASDAQ 100 futures +.58%.

Morning Preview Links

Earnings of Note

Company/Estimate

Before the Open:

• (IPAR)/.24

After the Close:

• (CTRP)/-.04

• (CRM)/.55

Economic Releases 
10:00 am EST

• Construction Spending MoM for Dec. is estimated to rise +.2% versus a +.8% gain in Nov.

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Eurozone PPI report, Morgan Stanly Energy/Power Conference and the (EFX) investor meeting could also impact trading today.

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