Monday Watch

Today's Headlines

Bloomberg:   

• China Narrows Scope for Trade Deal With U.S. Ahead of Talks.     

• Brexit Deal Prospects Fade as Talks Stall, EU Signals Pessimism.

• Violence Flares in Hong Kong as Emergency Rule Spurs Backlash.

• HSBC to Cut Up to 10,000 Jobs to Slash Costs, FT Reports.

• Emerging-Market Calm Set to Fray as Trade and Fed Angst Deepen.

• Yen Edges Up, Yuan Slips as Focus Returns to Trade. The yen edged up and yuan slipped in early trading Monday after a report that China may be increasingly reluctant to agree to a broad trade deal ahead of talks with the U.S. this week. Japanese futures pared gains stemming from a solid close on Wall Street Friday. Trading in the region may be muted with Hong Kong and Chinese markets shut and Sydney on holiday. Senior Chinese officials have indicated the range of topics they’re willing to discuss has narrowed considerably, according to people familiar with the matter. U.S. stocks closed higher Friday, along with Treasuries, after solid hiring data quelled recession fears without crushing the odds of future Federal Reserve easing. Nikkei 225 futures rose 0.9%.

• Whatever the Future Holds, Stocks Are Not Priced for a Recession.  

• Fed’s George Sees No Need to Cut Rates Unless Slowdown Deepens.

• Unilever to Halve Use of New Plastic as Uproar Over Waste Grows.

Wall Street Journal:   

• Chinese Troops Warn Hong Kong Protesters as Emergency Law Triggers Backlash.

• Doctors, Once GOP Stalwarts, Now More Likely to Be Democrats.

• Norm Violations Are Now the Norm. 

• Can Democrats Take Impeachment Seriously?

• Vaping’s Black Market Complicates Efforts to Combat Crises.

• Fear Overtakes Greed in IPO Market.

• Arrests for Low-Level Crimes Are Plummeting, and the Experts Are Flummoxed.

• Dim Earnings Outlook Imperils Stocks.

MarketWatch.com:

• Silicon Valley’s final frontier for payments: ‘The neoliberal takeover of the human body’.

Fox News:

• House Dems believe they have enough votes to pass articles of impeachment, senior member reveals.

• Graham vows to force public testimony if Dems press on with Trump impeachment.

• Chris Wallace challenges Dem on not holding official impeachment vote.

CNBC:

• China is reportedly reluctant to agree to a broad US trade deal with talks set to restart.

• US small businesses are fighting an uphill battle against counterfeiters in China: ‘It’s like whack-a-mole’.

• Tech ‘break-up value’ analysis seeks to make the stocks look cheap, even if they stay together. 

• UAW says GM labor talks ‘have taken a turn for the worse’. 

• ‘Joker’ has highest October opening weekend of all-time, hauls in $93.5 million in the US.

Zero Hedge:    

• Futures, Yuan Tumble After China Balks At Pursuing "Broad Trade Deal".

• Hong Kong Violence Sends Home Prices Tumbling Over 20%, Puts HSBC In The Crosshairs.

• As Hong Kong ATMs Run Out Of Cash, Central Bank Steps In To Prevent "Panic Among The Public".

• Second Ukraine Whistleblower Comes Forward With "Firsthand Knowledge".

• In Huge Blow, Iran Confirms China Has Exited Crucial $5 Billlion Gas Project.

• ECB "Whistleblowers" Emerge: Former Central Bankers Cry Out Against Draghi's Monetary Insanity.

• These Are The Top American Cities For Starting A Small Business.

• Mish: "Escape Illinois: Get The Hell Out Now, We Are".

• Hong Kong Protesters Build Makeshift Catapult On Third Day Of Unrest Over 'Anti-Mask' Law.

• Bannon Says Concept Of "Deep" State Is 'Conspiracy Theory For Nutcases' Because "It's Right In Your Face".

• Inside The Life Of Hunter Biden: The WaPo Reveals A 'Troubling Tale Of Privilege'.

Business Insider:

• Cars with high-tech emergency brakes still hit child-size dummies in 89% of street-crossing tests, a new study has found.

• A Chinese hog farmer is breeding giant, polar bear-sized pigs that weigh over 1,100 pounds, while the country contends with pork shortages.

• Inside the science behind Elon Musk’s crazy plan to put chips in people’s brains and create human-AI hybrids.

• German authorities say Mercedes may have manipulated emissions readings on hundreds of thousands of vans.

Telegraph:

• Europe is again facing catastrophe, and they do not even yet know it.

Night Trading

• Asian indices are -.5% to +.25% on average.

• Asia Ex-Japan Investment Grade CDS Index 78.75 -.25 basis point.

• China Sovereign CDS 49.0 +.5 basis point.

• Bloomberg Emerging Markets Currency Index 65.65 +.01%.

• FTSE 100 futures -.14%.

• S&P 500 futures -.48%.

• NASDAQ 100 futures -.51%.

Morning Preview Links

Earnings of Note

Company/Estimate

Before the Open:

• None of note

After the Close:

• None of note

Economic Releases

3:00 pm EST

• Consumer Credit for Aug. is estimated at $15.0B versus $23.294B in July.
  

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Japan Trade Data report could also impact trading today.

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