Monday Watch

Today's Headlines

Bloomberg:

• Trump Clarifies His Trade Regrets: China Tariffs Should Be Higher.

• China Preparing for Worsening U.S. Ties, Global Times’ Hu Says.  

• Tensions Escalate at Hong Kong Protest With Police Weapon Fired.

• Trump Aides Say He Has Power to Force Companies From China.

• Trump, Abe Cite Agreement in Principle on U.S.-Japan Trade Deal.  

• Macron Invites Iran's Zarif to G-7 Sidelines, Risks U.S. Outrage.  

• France Dangles Prospect of Zarif Meeting U.S. Team: G-7 Update.  

• U.S. Stock Futures Tumble, Yen Gains on Trade War. U.S. equity futures tumbled while the yen and Treasury contracts climbed after the latest escalation in the Sino-American trade war. The yuan weakened and stocks looked headed for steep losses in Asia. Futures were more than 2% lower in Tokyo and Hong Kong. S&P 500 contracts fell more than 1% after sliding Friday, when President Donald Trump announced additional levies on Chinese imports and called for American companies to pull out of Asia’s largest economy after China said it would impose retaliatory tariffs on U.S. goods. Trump acknowledged having second thoughts on escalating the trade war, only for aides to clarify he meant he regretted not raising tariffs even more. The yen touched a fresh 2019 high against the greenback, while the Aussie and kiwi dipped. Futures on the S&P 500 retreated 1.3% as of 7:31 a.m. in Tokyo. The underlying index sank 2.6% on Friday. Futures on Japan’s Nikkei 225 fell 2.6%. Hang Seng futures declined 2.4%. Futures on Australia’s S&P/ASX 200 Index lost 1.3%.

• Mideast Stocks Slide in Sign of Damage to Come From Trade War.   

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

• Oil Declines for a Fourth Day After Escalation in Trade War.

• Mnuchin Says Don't Take Trump's ‘Enemy’ Barb at Powell Literally.  

• Tropical Storm Dorian Moves Toward Caribbean Island of Barbados.   

• Target(TGT), Disney(DIS) Partner on Displays For Holidays.

Wall Street Journal:

• Latest Stock Volatility Adds to August Turbulence.

• David Koch.

• The New Pay Gap: What Firms Report Paying CEOs Versus What They Take Home.

• Americans Have Shifted Dramatically on What Values Matter Most.

• Trump Gambles That Trade War Will Pay Off in 2020.

• Hong Kong Protests Force Companies to Choose: Their Employees or China.

Fox News:

• Sanders camp weighs in after Biden's Obama comments make waves.

CNBC:

• Trump on US-China trade war: ‘I could declare a national emergency’

• At G-7, Trump says he is not happy about North Korea missile test.

• Trump hints at a ‘very big trade deal’ with Britain post Brexit.

• Kudlow does not expect China to retaliate against Trump’s latest tariffs despite Beijing’s warning.

Zero Hedge:   

• Chaos Continues: Gold Spikes, Yuan Crashes, Stocks Plunge As Asia Opens.

• Turkish Lira Flash Crashes, Plummets 15% In Seconds.

• China's Patience Runs Out As Beijing Signals It Has "Responsibility To Intervene" In Hong Kong.

• Trump Says He Regrets Escalating Trade War With China, White House Immediately Retracts.

• UK Birth Rate Plunges To Lowest Level In 80 Years As More Women Choose Careers Over Motherhood.

• New Video Emerges Of 6-Ton Russian Drone That Can Stay Aloft For 24-Hours.

• BigBrotherWatch: Facial Recognition "Epidemic" In The UK.

• YouTube Banning Robot Fighting Videos Over 'Animal Cruelty' .

• What Globalism Did Was To Transfer The US Economy To China, PCR.

Business Insider:

• Hong Kong police deployed water cannons for the first time after protests over surveillance turned violent.

• Muslims in China's most oppressed, closed-off region are turning to China's version of Gen Z favorite TikTok to communicate with the world.

Telegraph:

• The eurozone risks imploding - only a German spending spree can save it.

• Boris’s dastardly Brexit plan: keep stringing ’em along until it happens.

Night Trading

• Asian indices are -2.5% to -1.5% on average.

• Asia Ex-Japan Investment Grade CDS Index 64.5 +.25 basis point.

• China Sovereign CDS 50.25 +4.0 basis points.

• Bloomberg Emerging Markets Currency Index 65.15 -.25%.

• FTSE 100 futures n/a.

• S&P 500 futures -1.16%.

• NASDAQ 100 futures -1.37%.

Morning Preview Links

Earnings of Note

Company/Estimate

Before the Open:

• (OSIS)/1.06

After the Close:

• None of note

Economic Releases
8:30 am EST

• The Chicago Fed National Activity Index for July.

• Preliminary Durable Goods Orders for July is estimated to rise +1.1% versus a +1.9% gain in June.

• Preliminary Durables Ex Transports for July is estimated unch. versus a +1.0% gain in June.

• Preliminary Cap Goods Orders Non-Defense Ex-Air for July is estimated unch. versus a +1.5% gain in June. 
  

10:30 am EST

• The Dallas Fed Manufacturing Activity Index for August is estimated to rise to -1.0 versus -6.3 in July.
  

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Germany IFO Business Climate Index and the Jefferies Semi/IT Hardware/Communications Infrastructure Conference  could also impact trading today.

BOTTOM LINE: Asian indices are lower, weighed down by technology and industrial shares in the region. I expect US stocks to open lower and to maintain losses into the afternoon.  The Portfolio is 25% net long heading into the week.