Friday Watch

Evening Headlines
Bloomberg: 

• Trump Wields a More Powerful Weapon Than Tariffs for Trade War.

• U.S.-Listed Chinese Stocks Tumble at Fastest Pace Since 2008.

• Global Bond Rally Drives Treasury Yields to Lowest Since 2017.  

• Stocks Drop With Yields Amid Deepening Trade Woes. Stocks in Asia sank early Friday, on track for a third week of losses, as deepening trade tensions between the U.S. and China curb the growth outlook and drag sovereign bond yields to multi-year lows. Japan’s Topix index dropped 1% at the open, while Australia and South Korea saw smaller losses. The rally in bonds intensified, with yields on 10-year Treasuries slumping to the lowest since 2017 and their Australian equivalents reaching a fresh all-time low. The Bloomberg Dollar Spot Index surged to its highest level this year before retreating. Crude oil steadied after tumbling more than 5%. The yuan was flat amid signs of stabilization from China’s central bank this week. Japan’s Topix index fell 0.9% as of 9:12 a.m. in Tokyo. Hang Seng futures earlier slid 0.2%. Australia’s S&P/ASX 200 Index dropped 0.5%. South Korea’s Kospi index declined 0.3%. Futures on the S&P 500 Index added 0.2%.

• Oil Set for Biggest Weekly Drop of the Year on Trade Tensions

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

• Luckin Coffee Burns Investors in 39% Plunge From High After IPO.  

• Bloomberg’s Week in Pictures.

Wall Street Journal:

• Trade Snarl Spurs Aid to U.S. Farmers.

• Pelosi’s Impeachment Dilemma.

• Facebook Curbs Incentives to Sell Political Ads Ahead of Vote.

• Weinstein, Accusers Reach Tentative $44 Million Compensation Deal.

• Modi Wins Re-Election in India With Strong Mandate.

Fox News: 

• Pelosi's claim of Trump 'cover-up' is 2nd generation of Russia 'hoax:' WH spox.

CNBC:

• Mortgage rates fall sharply on China trade tensions

• Stocks making the biggest moves after hours: HP, Autodesk, Boeing and more.

• Wall Street is becoming convinced the trade war is here to stay and will only get worse.

Zero Hedge:   

• Bill Blain: "Xi Is In Much More Trouble Than We Think".

• Trump Orders FBI, CIA To "Fully Cooperate" With Barr; Grants "Full And Complete Authority To Declassify".

• Trump Unloads On 'Crazy Mess' Nancy Pelosi, Questions Mental State.

• Criticisms Of New SAT 'Adversity Score' Continue To Mount.

• Kyle Bass Hits Back At Critics Of His Latest 'Big Short'.

• Assange Hit With Espionage Act Violations As DoJ Unveils 17 New Charges.

• DARPA Wants To Create Mind-Controlled Weapons Of War.

• Rachel Maddow's Weekly Ratings Just Plunged To Yearly Lows.

• Crude, Credit, & Yield Curve Collapse As Stock Shorts Soar To 4-Year Highs.

Night Trading 

• Asian equity indices are -.5% to +.5% on average.

• Asia Ex-Japan Investment Grade CDS Index 74.50 +1.5 basis points.

• China Sovereign CDS 52.5 +2.0 basis points.

• Bloomberg Emerging Markets Currency Index 65.60 unch.

• S&P 500 futures +.31%.

• NASDAQ 100 futures +.39%.

Morning Preview Links 

Earnings of Note 
Company/Estimate

Before the Open:

• (BKE)/.35

• (FL)/1.60

• (HIBB)/1.31

After the Close:

• None of note

Economic Releases
8:30 am EST

• Preliminary Durable Goods Orders for April is estimated to fall -2.0% versus a +2.6% gain in March.

• Preliminary Durables Ex Transports for April is estimated to rise +.1% versus a +.3% gain in March.

• Preliminary Cap Goods Orders Non-Defense Ex-Air for April is estimated to fall -.1% versus unch. in March.
  

Upcoming Splits

• None of note

Other Potential Market Movers

• The Goldman Renewables Conference could also impact trading today.

BOTTOM LINE: Asian indices are mostly lower, weighed down by technology and commodity 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.