Friday Watch

Evening Headlines
Bloomberg:      

• Trump Again Downplays Iranian Attack After Navy Drone Shot Down.

• Crude Climbs by Most This Year as Iran Shoots Down U.S. Drone.    

• China Is Missing Out On an Epic Bond Rally Taking Off Globally.  

• French Economy Hit by Euro-Area Slowdown as Insee Cuts Outlook.

• Mexico Vows All-Out Border Crackdown While Lacking a Trump Goal.

• U.S. Border Faces ‘Overwhelming’ Strain, Agency Chief Says.

• Asia Stocks Seen Mixed With S&P 500 at Record High. Markets Wrap. Stocks in Asia looked set for a muted start Friday even as their U.S. counterparts climbed to a record high. Treasury yields climbed back above 2%. Futures were little changed in Japan, Hong Kong and Australia, with the MSCI Asia Pacific Index already up more than 3% on the week. Oil soared as President Donald Trump hinted at possible retaliation for Iran shooting down a U.S. drone. Energy stocks led U.S. share gains. The dollar slumped, while Treasuries gave up some gains seen in the wake of the Federal Reserve’s signal for lower interest rates. The S&P 500 Index rose 1%. Futures on Japan’s Nikkei 225 added 0.1% in Singapore. Hang Seng futures were little changed. Futures on Australia’s S&P/ASX 200 Index slid 0.1%.  

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

• Bloomberg’s Week in Pictures.

Wall Street Journal:

• S&P 500 Climbs to Record on Prospect of Fed Cuts.

• Joe Biden’s Race-Card Education.

• Investors Are Buying More of the Housing Market Than Ever.

• UnitedHealth Agrees to Buy Payments Firm Equian .

• McDonald’s Tests Robot Fryers and Voice-Activated Drive-Throughs.

Fox News:

• Top lawmakers speak out after Situation Room briefing with Trump on Iran threat.

MarketWatch.com:

• Tesla’s(TSLA) second-quarter sales are as good as it gets, Goldman Sachs says.

CNBC:

• CVS just laid out a big reason why health companies are worried about Amazon.

• Stocks making the biggest moves after hours.

• 10-year Treasury yield drops as low as 1.97%, first time below 2% since November 2016.

• Caterpillar CEO shrugs off China trade war exposure: ‘This is not new for us’.
  

Zero Hedge:

• Suicide Rates Among Young Americans Accelerates To Highest Level Since 2000 .

• Iran Releases Video Of Drone-Downing, Trump Warns "You'll Soon Find Out" If US Will .Attack.

• 1,000 Quakes In 3 Weeks In Key SoCal Seismic Zone: "We're Watching This Actvity Closely"

• Biden Doubles Down After Reminding Everyone Democrats Owned Slaves.

• Trump Says DOJ Investigating Whether Obama Tapped His Phone.

• With Libra Launch, Is Facebook Trying To Become A Virtual Country?

• Markets Turmoil On Downed-Drone, Powell-Promises, & Trump-Tweets.

Night Trading 

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

• Asia Ex-Japan Investment Grade CDS Index 64.50 -4.0 basis points.

• China Sovereign CDS 41.0 -1.75 basis points.

• Bloomberg Emerging Markets Currency Index 67.36 unch.

• S&P 500 futures -.06%.

• NASDAQ 100 futures -.08%.

Morning Preview Links 

Earnings of Note 
Company/Estimate

Before the Open:

• (KMX)

After the Close:

• None of note

Economic Releases
9:45 am EST

• Preliminary Markit US Manufacturing PMI for June is estimated at 50.5 versus 50.5 in May.

• Preliminary Markit US Services PMI for June is estimated to rise to 51.0 versus 50.9 in May.

10:00 am EST

• Existing Home Sales for May is estimated to rise to 5.27M versus 5.19M in May.
  

Upcoming Splits

• None of note

Other Potential Market Movers

• The Fed's Brainard speaking, Japan CPI report and the Eurozone PMI report could also impact trading today.

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