Monday Watch

Today's Headlines

Bloomberg: 

• Xi Military Parade to Showcase China Missiles Spooking the U.S.   

• China Screens Patriotic Films to Whip Up Nationalistic Fervor.   

• Global Risks Put Yen at Top of Pile for 2019 Currency Forecasts.

• Draghi Urges Closer Fiscal Union, Higher Government Spending.

• Boris Johnson Won’t Resign If Exit Day Is Delayed: Brexit Update.    

• China Vows to Continue Opening Financial Markets.

• Stocks Set for Cautious Start on Trade Tensions. Stocks in Asia were set to start the week lower as investors weighed the latest signs of escalating trade tensions and awaited data on China’s economy. U.S. equity futures recovered some of Friday’s losses. Futures in Tokyo, Hong Kong and Sydney slipped after the S&P 500 retreated on Friday, when Bloomberg reported the Trump administration is considering sweeping limits to capital-market investments. The U.S. has no plans “at this time” to stop Chinese companies from listing on American exchanges, a Treasury official said over the weekend. Treasury futures retreated after U.S. bonds ended flat with the 10-year yield at 1.68%. In China, it’s the final day of trading before a week-long holiday. Futures on the S&P 500 Index rose 0.2% as of 8:07 a.m. in Tokyo. The underlying gauge fell 0.5% on Friday. Futures on Japan’s Nikkei 225 fell 0.3%. Hang Seng futures dropped 1.2%. Futures on Australia’s S&P/ASX 200 Index lost 0.2%.  

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

• Democrats Desperate to Derail Economy to Beat Trump, Ross Says.

• Clashes Intensify With Petrol Bombs and Fires: Hong Kong Update.

• Wall Street Falls in Love Again With Companies Loaded Up on Debt.

• Credit Suisse Saga Reveals Ever-Present Bank Surveillance State.

Wall Street Journal:

• Probe the Effort to Sink Kavanaugh.

• Leaks Resulted in Clampdown on Trump Call Records.

• Ugly Clashes as Hong Kong Protesters Battle Police Ahead of China Anniversary.

• WeWork’s Troubles Drag on NYC’s Office Market.

• Google(GOOG) Draws House Antitrust Scrutiny of Internet Protocol.

• Fewer Stocks Are Participating in the Market’s Rally.

• Shale Boom Is Slowing Just When the World Needs Oil Most.

MarketWatch.com:

• These three overlooked stocks are undervalued, says Greenwich Wealth.

• Trump re-election campaign rakes in $13 million two days following Pelosi impeachment announcement.  

• IPO market has begun pushing back on growth-at-all-costs private companies.

Fox News:

• Trump attorney Giuliani wasn’t alone in seeking intel on Biden in Ukraine drama, official tells Fox News.

• Trump attorney Giuliani defends probe into Dems, says he is simply a lawyer ‘defending a client’.

CNBC:

• Chinese delegation to travel to US for trade talks in two weeks.

• Wall Street analysts say these stocks are a ‘must own’.

• Why Facebook and Amazon have joined the race to bring computing to your face.
  

Zero Hedge:

• Here Is The Dirt Trump Wanted About The Bidens (And Why Zelensky Doesn't Want To Give It To Him).

• NYC Bans Calling Someone An "Illegal Alien", Threatening To Call ICE "When Motivated By Discrimination".

• Clinton Emailers Rattled After State Department Fires Off 'Culpability Letters' For Homebrew Server Messages.

• After Trump Accused Of Cover-Up, Susan Rice Admits Obama Put Transcripts On Top Secret Server Too.

• For Dems, Ukraine Is Perfect Extension Of Russian Narrative.

• Chipotle Now Installing Drive-Thru "Chipotlanes" For Customers Who Order Online.

• Biden Campaign Demands TV Networks Stop Booking Rudy Giuliani.

• Chaos Continues In Hong Kong; Undercover Cops Pull Guns Amid 'Aggressive Clearance Operation'.

• Yet More, High-Quality Video Of Trudeau In Blackface Has Emerged.

• Italy: Salvini Out, Migrants In.

Business Insider:

• Amazon(AMZN) may soon be able to track your phone’s location even if you don’t use any of its products or services.

Night Trading

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

• Asia Ex-Japan Investment Grade CDS Index 76.75 +.5 basis point.

• China Sovereign CDS 48.5 +.75 basis point.

• Bloomberg Emerging Markets Currency Index 65.31 -.02%.

• FTSE 100 futures -.09%.

• S&P 500 futures +.28%.

• NASDAQ 100 futures +.30%.

Morning Preview Links

Earnings of Note

Company/Estimate

Before the Open:

• (CALM)/-.94

• (THO)/1.49

After the Close:

• None of note

Economic Releases

9:45 am EST

• The MNI Chicago PMI for Sept. is estimated to fall to 50.0 versus 50.4 in Aug.
  

10:30 am EST

• Dallas Fed Manufacturing Activity for Sept. is estimated to fall to 1.5 versus 2.7 in Aug. 
  

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The German Unemployment Rate report could also impact trading today.

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

Weekly Outlook

• Wall St. Week Ahead by Reuters.
• Global Economy Week by Bloomberg.
• Stocks to Watch Next Week by Seeking Alpha.
• Weekly Economic Calendar by Briefing.com.

BOTTOM LINE: I expect US stocks to finish the week modestly lower on impeachment talk, technical selling, China trade tensions, global growth concerns, European/Emerging Markets/US High Yield debt angst and yen strength. My intermediate-term trading indicators are giving neutral signals and the Portfolio is 50% net long heading into the week.

Today's Headlines

Bloomberg:      

• Activists Hurl Bricks, Police Use Water Cannon: Hong Kong Update.

• ‘This Is Huge’: U.S. Threat to Curb Chinese Investments Hits Wall Street.

• China’s Top Diplomat Warns Trade War Could Plunge World Into Recession.

• China Markets to Test the Risk of Most Extreme U.S. Threat Yet.  

• Slowing Economy and Deflation Cause China’s Company Profits to Drop.  

• Oil Caps Worst Week Since July as Trump Revs Up China Trade Feud.  

• Charting the Global Economy: The Week in Review.

• Your Weekend Reading: Risk of Serious Harm.

• From Washington to Hong Kong, Defiance Abounds: Weekend Reads.  

• Early Signs of Vaping Health Risks Were Missed or Ignored.  

• Bitcoin Bulls Take to Twitter for Reassurance After Crypto Crash.

Wall Street Journal:

• Democrats Set Rapid Timetable for Trump Impeachment Probe.

• For China’s Xi, the Hong Kong Crisis Is Personal.

• Global Slowdown Spreads Across U.S. Economy.

Barron's:

• Had bullish commentary on (ONCE), (SGMO), (VRTX), (RGNX), (QURE), (KRYS), (AAL), (WFC), (PCTY), (KRNT) and (TREX).

MarketWatch.com:

• What investors need to know about a potential White House effort to block U.S. investment in China.

• The Future of Biotech: Our Roundtable Experts Pick 15 Promising Stocks.

Fox News:

• Gov. Cuomo: Pelosi folded to ‘leftist’ Dems, impeachment push 'unproductive'.

CNBC:

• White House deliberates block on all US investments in China.

• US pulling investment from China would be an ‘unmitigated disaster,’ says Yale’s Stephen Roach.

• Xi’s historic power grab has cost China a great deal of stability.

• As Amazon floods the market with Alexa devices, the business model is getting fresh scrutiny.

• More deaths, investigations and turmoil at Juul: Here’s what happened in the vaping crisis this week.

Zero Hedge:

• Erdogan: "Impossible" For Turkey To Stop Its Iranian Oil & Gas Imports.

• Intel Community Quietly Scrapped Requirement For "First-Hand Knowledge" Before CIA 'Rumorblower' Relied On Hearsay.

• For Renters, These Are The Most Expensive Neighborhoods In The US.

• China Unveils "Super Surveillance Camera" That Can Link To Its Social Credit System.

• Marriage Rates Are Falling Due To Shortage Of "Economically Attractive" Men, Study Finds.

• PCR: Adam Schiff Epitomizes The Total Collapse Of Democratic Party Integrity.

• Australia Introduces AI Cameras To Bust Distracted Drivers.

• New Docs Contradict Biden Claim That Fired Ukrainian Prosecutor Was Corrupt.

• Greta Thunberg To Poor Countries: Drop Dead.

• Nosedive: LAX Passenger Traffic Stalls, International Traffic Drops, Air Cargo Volumes Plunge.

• Sound Familiar? Banks Are Saddling Fannie & Freddie With Risky Mortgages, Study Finds.

• Is This How GOP Will Answer Pelosi's Pre-Planned, Lawfare-Assisted Impeachment Plan?

• Debt Bombs: Here Are The States With The Most Debt.

• US Treasury Denies It Plans To Block Chinese Listings On US Exchanges.

• 10 Reasons Democrats' Impeachment Argument Is Falling Apart.

• Bootleg Weed Vapes Found To Contain Cyanide.

• Quid Pro Nope: Ukraine Reportedly Had No Idea About Trump Withholding $400 Million Until Month After Call.

Business Insider:

• Hong Kong protesters say they're prepared to fight for democracy 'until we win or we die'.

The Telegraph:

• Impeaching a US president is always bad news for the markets.

Weekly Scoreboard*

S&P 500 2,948.29 -1.45%

 























The Weekly Wrap by Briefing.com.

 
Indices

• DJIA 26,780.68 -.75%

• NASDAQ 7,922.21 -2.69%

• Russell 2000 1,515.58 -2.80%

• S&P 500 High Beta 40.91 -2.94%

• Goldman 50 Most Shorted 143.13 -5.26%

• Wilshire 5000 30,219.15 -1.66%

• Russell 1000 Growth 1,585.97 -2.04%

• Russell 1000 Value 1,254.90 -1.06%

• S&P 500 Consumer Staples 624.21 +.72%

• MSCI Cyclicals-Defensives Spread 1,115.96 +.91%
  

• NYSE Technology 1,885.19 -3.18%

• Transports 10,338.98 -1.23%

• Utilities 874.07 +1.25%

• Bloomberg European Bank/Financial Services 71.21 -1.77%

• MSCI Emerging Markets 40.77 -2.08%

• HFRX Equity Hedge 1,242.03 -.16%

• HFRX Equity Market Neutral 957.59 +.07%

Sentiment/Internals

• NYSE Cumulative A/D Line 373,871 -1.05%

• Bloomberg New Highs-Lows Index -91 -340

• Bloomberg Crude Oil % Bulls 28.6 -56.2%

• CFTC Oil Net Speculative Position 427,105 -.26%

• CFTC Oil Total Open Interest 2,073,041 -.38%

• Total Put/Call 1.06 +1.92%

• OEX Put/Call .32 -87.7%

• ISE Sentiment 78.0 -12.3%

• NYSE Arms 1.18 -6.3%

• Volatility(VIX) 18.5 +21.1%

• S&P 500 Implied Correlation 45.23 +14.84%

• G7 Currency Volatility (VXY) 6.86 unch.

• Emerging Markets Currency Volatility (EM-VXY) 8.12 -1.34%

• Smart Money Flow Index 14,573.36 -1.73%

• ICI Money Mkt Mutual Fund Assets $3.443 Trillion +1.19%

• ICI Domestic Equity Mutual Fund/ETFs Weekly Flows +$11.807 Billion

• AAII % Bulls 29.4 -16.9%

• AAII % Bears 33.3 +19.6%

Futures Spot Prices

• CRB Index 175.72 -.91%

• Crude Oil 55.92 -3.92%

• Reformulated Gasoline 164.88 -1.99%

• Natural Gas 2.40 -5.21%

• Heating Oil 194.06 -2.97%

• Gold 1,497.20 -1.19%

• Bloomberg Base Metals Index 173.4 -1.58%

• Copper 259.60 +.12%

• US No. 1 Heavy Melt Scrap Steel 237.0 USD/Metric Tonne -.84%

• China Iron Ore Spot 87.51 USD/Metric Tonne -2.3%

• Lumber 371.0 -3.31%

• UBS-Bloomberg Agriculture 844.06 +1.26%

Economy

• Atlanta Fed GDPNow Forecast +2.11% +17.0 basis points

• ECRI Weekly Leading Economic Index Growth Rate -.2% +130.0 basis points
• Bloomberg US Recession Probability Next 12 Months 35.0% unch.

• Philly Fed ADS Real-Time Business Conditions Index .1265 -4.96%

• US Economic Policy Uncertainty Index 130.09 -3.54%

• S&P 500 Blended Forward 12 Months Mean EPS Estimate 176.06 -.12%

• Citi US Economic Surprise Index 44.30 +2.6 points

• Citi Eurozone Economic Surprise Index -74.90 -48.5 points

• Citi Emerging Markets Economic Surprise Index -8.10 +1.2 points

• Fed Fund Futures imply 54.5% chance of no change, 45.5% chance of rate cut on 10/30

• US Dollar Index 99.11 +.66%

• MSCI Emerging Markets Currency Index 1,609.28 -.37%

• Bitcoin/USD 8,032.22 -20.9%

• Euro/Yen Carry Return Index 122.58 -.32%

• Yield Curve 3.0 -1.0 basis point
  

• 10-Year US Treasury Yield 1.69% -5.0 basis points

• Federal Reserve's Balance Sheet $3.819 Trillion +.35%

• U.S. Sovereign Debt Credit Default Swap 14.57 -3.38%

• Illinois Municipal Debt Credit Default Swap 191.99 +.98%
  

• Italian/German 10Y Yld Spread 139.75 -4.75 basis points

• China Sovereign Debt Credit Default Swap 47.28 +6.2%
  

• Brazil Sovereign Debt Credit Default Swap 138.57 +5.05%
  

• Israel Sovereign Debt Credit Default Swap 56.32 -4.05%

• South Korea Sovereign Debt Credit Default Swap 33.27 +1.05%

• Russia Sovereign Debt Credit Default Swap 84.73 +5.37%

• iBoxx Offshore RMB China Corporate High Yield Index 166.0 +.21%

• 10-Year TIPS Spread 1.54% -6.0 basis points

• TED Spread 32.5 +6.5 basis points

• 2-Year Swap Spread -.75 +3.5 basis points

• 3-Month EUR/USD Cross-Currency Basis Swap -31.5 -30.25 basis points

• N. America Investment Grade Credit Default Swap Index 61.83 +3.54%
  

• America Energy Sector High-Yield Credit Default Swap Index 436.0 +15.9%

• European Financial Sector Credit Default Swap Index 66.66 +5.19%
  

• Emerging Markets Credit Default Swap Index 212.47 +3.89%
  

• CMBS AAA Super Senior 10-Year Treasury Spread to Swaps 180.0 unch.
  

• M1 Money Supply $3.876 Trillion -.38%

• Commercial Paper Outstanding 1,097.40 +.4%

• 4-Week Moving Average of Jobless Claims 212,000 -250

• Continuing Claims Unemployment Rate 1.1% -10.0 basis points
  

• Average 30-Year Mortgage Rate 3.64% -9.0 basis points

• Weekly Mortgage Applications 512.20 -10.1%

• Bloomberg Consumer Comfort 61.7 -1.0 point

• Weekly Retail Sales +5.70% -20.0 basis points

• Nationwide Gas $2.65/gallon -.02/gallon

• Baltic Dry Index 1,963 -7.88%

• China (Export) Containerized Freight Index 807.84 -1.28%

• Oil Tanker Rate(Arabian Gulf to U.S. Gulf Coast) 35.0 +7.69%

• Rail Freight Carloads 277,876 +1.26%

Best Performing Style

• Mid-Cap Value -.5%

Worst Performing Style

• Small-Cap Growth -3.1%

Leading Sectors

• Airlines +2.0%

• Utilities +1.4%

• Papers +1.4%

• Homebuilding +.7%

• Retail +.6%

Lagging Sectors

• Education -4.5% 

• Biotech -5.4%

• Alt Energy -5.4%

• Healthcare Providers -5.5%

• Oil Service -8.8%

Weekly High-Volume Stock Gainers (1)

• DRNA

Weekly High-Volume Stock Losers (18)

• MSGN, MCO, ROKU, GWRE, MCK, BMRN, EVBG, BK, CYRX, SPWR, FSLR, BOX, CRWD, SMAR, AXDX, GKOS, MU and INMD

Weekly Charts

ETFs

• High-Volume Gainers

• High-Volume Losers

Stocks

• High-Volume Gainers

• High-Volume Losers

*5-Day Change