Monday Watch

Today's Headlines

Bloomberg:

• Trump’s Vow to Up Duties Casts Pall Over Crucial China Talks.

• U.S.-China Trade Deal Talks Enter Endgame: Global Economy Week.

• Kim Jong Un’s Cryptic Moves Puzzle North Korea Watchers. 

• Yuan Sinks With U.S. Stock Futures on Tariff Risk. The yuan plunged the most since August, U.S. stock futures tumbled along with crude oil prices after U.S. President Donald Trump threatened to increase tariffs on Chinese imports, casting a cloud over talks this week that were expected to finalize a trade deal. The shock statement, following weeks of reports of continued progress in negotiations between the world’s two largest economies, is set to roil Asian markets Monday. The yuan slid 0.8 percent in offshore trade, and contracts on the S&P 500 Index sank as much as 1.8 percent. The yen climbed. West Texas Intermediate crude slumped about 2 percent. The renewed tension eliminated all the cheer from a strong U.S. jobs report, which had sent American stocks up Friday. Futures on 10-year Treasuries advanced. Futures on the S&P 500 Index slid 1.4 percent as of 7:06 a.m. in Hong Kong. Contracts on the Nikkei 225 Stock Average fell 2 percent in Chicago. Futures on Australia’s S&P/ASX 200 Index were up 0.5 percent earlier.  

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

• A $300 Billion Blowup Has Traders Bracing for War in Washington.  

• Occidental to Sell Anadarko Africa Assets for $8.8 Billion.

• Trump Slams Kentucky Derby, Says Best Horse Was Denied Victory.

• EU to Start Formal Probe on Spotify's Apple Complaint, FT Says.

Wall Street Journal: 

• Trump Issues Tariff Threat as U.S., China Talks Set to Resume.

• The Burdens of BernieCare.

• Weeding Out Dubious Marijuana Science.

• Boeing(BA) Knew About Problem for a Year Before Telling FAA, Airlines.

• Moore, Cain Withdrawals Re-Up Search for Supporters on Fed Board.

• Israel, Gaza Trade Blows in Deadly Exchanges.

• Standing Against Psychiatry’s Crazes.

• Administration Backs Plan for More H-2B Visas, Irking Critics.

MarketWatch.com:

• These colleges now offer courses in cannabis.

Barron's:

• Had bullish commentary on (BURL), (LOVE), (FTCH), (NKE), (OXY), (ZUO) and (HD).

Fox News: 

• Biden gives Trump a nickname, lambasts president for Jim Crow 'sneaking back in'.

• More than 600 rockets fired at Israel from Gaza in less than 24 hours.

CNBC: 

• Amazon(AMZN) can already ship to 72% of US population within a day, this map shows.

• Micro futures for the major indices are about to launch. Here’s everything you need to know. 

• Americans are flocking to these 9 southern cities where business is booming and salaries are rising.

Zero Hedge:    

• Trade Deal Dead: Trump Says 10% China Tariff Rising To 25% On Friday, Another $325BN In Goods To Be Taxed.

• Dow Futures Plunge 500 Points Amid Trump Trade Threat Turmoil.

• As Trump Approval Rating On Economy Skyrockets, Biden Slams President As "Aberration".

• Russian Authorities Confirm 41 Dead After Aeroflot Jet Explodes On Landing In Moscow.

• Senate Dems Delete Embarrassing Poll Showing 70% Prefer Kavanaugh Over RBG.

• Analysts Confirm North Korea Launched First Ballistic Missile Since 2017.

• Tariff Man Set To Impose Duties on Yarn From China, India.

• Orwellian Cloud Remains Over Russia-Gate.

• California High School To Erase George Washington Mural: "Traumatizes Students".

• California Ready To Ban Trump From 2020 Election.

• Life-Threatening Risks Prompt FDA To Order "Black Box" Warning Labels For Ambien, Other Sleep Aids.

• Robots Taking Over "Miserable" Job Of Unloading Trucks As E-Commerce Margins Slide.

Business Insider

• Long shot Country House wins Kentucky Derby after Maximum Security finishes first but is disqualified.

Night Trading

• Asian indices are -1.5% to -.75% on average.

• Asia Ex-Japan Investment Grade CDS Index 66.5 +1.5 basis points.

• China Sovereign CDS 40.75 unch.

• Bloomberg Emerging Markets Currency Index 66.39 -.02%.

• FTSE 100 futures n/a.

• S&P 500 futures -1.67%.

• NASDAQ 100 futures -1.96%.

Morning Preview Links

Earnings of Note

Company/Estimate

Before the Open:

• (AMG)/3.26

• (PETS)/.46

• (SYY)/.70

• (TSN)/1.16

After the Close:

• (AIG)/1.06

• (ANDE)/.15

• (BKD)/-.37

• (CENT)/.71

• (RE)/5.90

• (FN)/.89

• (HTZ)/1.35

• (KLAC)/1.68

• (MOS)/.25

• (OXY)/.71

• (PXD)/1.62

• (RCII)/.35

Economic Releases

• None of note

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The (TRUP) CEO Q&A session 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 75% net long heading into the week.

Weekly Outlook

• Wall St. Week Ahead by Reuters. 
• 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 China trade deal concerns, global growth fears, oil decline, technical selling, yen strength and profit-taking. My intermediate-term trading indicators are giving neutral signals and the Portfolio is 75% net long heading into the week.

Today's Headlines

Bloomberg:       

• Trump Says Kim Won’t Break ‘Promise to Me’ After Weapons Test.  

• Germany’s Merkel Hits Out at ‘Protectionist Tendencies’ in Trade.

• Berkshire Ramps Up Stock Buybacks as Cash Pile Keeps Growing.  

• From a Drive to Damascus to an Abdication in Japan: Weekend Reads.  

• Robots Edge Closer to Unloading Trucks in Amazon-Era Milestone.

Wall Street Journal:

• The Voter Suppression Myth.

• The Pale Green New Deal.

• North Korea Fires Unidentified Short-Range Weapon.

Fox News:

• ‘Spying’ report puts former G-man on the defensive: ‘What would you have the FBI do?’

CNBC:

• These are the best stock performers that nobody is talking about.

• Parody website with embarrassing photos of Joe Biden outranks his official campaign page on Google.

• Warren Buffett explains why he’s making a bet in the energy industry.

• Warren Buffett says bitcoin is a ‘gambling device’ with ‘a lot of frauds connected with it’.

Zero Hedge: 

• Hamas Launches Nearly 100 Rockets In An Hour On Israel In Massive Escalation.

• Brexit Party Soars In European Parliament Polls, 9 Points Ahead Of Labour.

• German Car Registrations Fall 1.1% As Global Auto Recession Continues.

• Italy And Hungary Forge Alliance To Defend Europe's Borders From Migrant Invasion.

• Barr Launches Wide-Ranging Probe Into 2016 FBI Spying.

• James Woods Banned From Twitter As Silicon Valley Zaps Conservative 2020 Influencers.

• Toilets & Skyscrapers: How Chicagoland's Elite Push Property Tax Bills Onto Average Joes.

• CDC: Idiots Riding E-Scooters Suffering Easily Preventable Injuries.

• Sharyl Attkisson: How Media Narratives Became More Important Than Facts.

• San Francisco Bans Anti-Car-Burglar Warning Signs Because... Racist.

• CDOs That Nearly Destroyed The Global Economy Are Back, But Now They're "Safer".

• Ukraine Confirms DNC/Clinton Operative Sought 'Dirt' On Trump During 2016 Election.

• Biden Was Wrong: Defense Department Says China Plans To Replace US, Become Top Power.

• China's Mass Surveillance App Hacked; Code Reveals Specific Criteria For Illegal Oppression.

• Dow Suffers Longest Weekly Losing Streak Of Year As Fed Loses Control Of Short-End.

Business Insider:

• Bill de Blasio is reportedly going to announce a 2020 run for president, but all signs point to his campaign being a disaster in the making.

• Warren Buffett and Charlie Munger say Coca-Cola getting into cannabis would ruin the company's 'wholesome image'.

• Why the esports audience is set to surge — and how brands can take advantage of increased fans and viewership.

• Twice as many Canadians are trying marijuana for the first time since it was legalized.

The Telegraph:

• US unemployment falls to levels not seen for half a century.

Weekly Scoreboard*

S&P 500 2,943.95 +.14%

 
























The Weekly Wrap by Briefing.com.

 
Indices

• DJIA 26,510.17 -.08%

• NASDAQ 8,152.18 +.08%

• Russell 2000 1,609.82 +1.08%

• S&P 500 High Beta 43.99 -.09%

• Goldman 50 Most Shorted 163.23 +.52%

• Wilshire 5000 30,345.18 +.27%

• Russell 1000 Growth 1,591.32 -.09%

• Russell 1000 Value 1,254.30 +.44%

• S&P 500 Consumer Staples 590.26 +.77%

• MSCI Cyclicals-Defensives Spread 1,122.33 -.30%
  

• NYSE Technology 1,998.89 +.71%

• Transports 10,955.02 +.77%

• Utilities 783.03 +.12%

• Bloomberg European Bank/Financial Services 81.20 +.58%

• MSCI Emerging Markets 44.21 +.56%

• HFRX Equity Hedge 1,228.22 +.08%

• HFRX Equity Market Neutral 962.98 +.08%

Sentiment/Internals

• NYSE Cumulative A/D Line 255,359 +.26%

• Bloomberg New Highs-Lows Index 19 -127

• Bloomberg Crude Oil % Bulls 33.33 -37.5%

• CFTC Oil Net Speculative Position 547,359 +6.23%

• CFTC Oil Total Open Interest 2,139,213 +2.25%

• Total Put/Call .73 -14.5%

• OEX Put/Call 1.18 +27.59%

• ISE Sentiment 90.0 -12.0%

• NYSE Arms .90 +9.41%

• Volatility(VIX) 13.09 +3.53%

• S&P 500 Implied Correlation 35.42 +.57%

• G7 Currency Volatility (VXY) 5.91 +.17%

• Emerging Markets Currency Volatility (EM-VXY) 7.87 -3.91%

• Smart Money Flow Index 14,354.72 -.85%

• ICI Money Mkt Mutual Fund Assets $3.072 Trillion +.71%

• ICI Domestic Equity Mutual Fund/ETFs Weekly Flows +$3.993 Billion

• AAII % Bulls 39.0 +16.4%

• AAII % Bears 21.3 +5.8%

Futures Spot Prices

• CRB Index 181.77 -1.56%

• Crude Oil 62.0 -1.32%

• Reformulated Gasoline 202.62 -.24%

• Natural Gas 2.56 +1.19%

• Heating Oil 207.19 +1.52%

• Gold 1,280.50 -.57%

• Bloomberg Base Metals Index 180.26 -2.73%

• Copper 281.70 -2.29%

• US No. 1 Heavy Melt Scrap Steel 307.0 USD/Metric Tonne -.81%

• China Iron Ore Spot 94.0 USD/Metric Tonne +3.62%

• Lumber 350.10 +.17%

• UBS-Bloomberg Agriculture 858.24 -1.78%

Economy

• Atlanta Fed GDPNow Forecast +1.67% -100.0 basis points

• ECRI Weekly Leading Economic Index Growth Rate 1.1% -30.0 basis points
• Bloomberg US Recession Probability Next 12 Months 25.0% unch.

• Philly Fed ADS Real-Time Business Conditions Index -.0426 +14.46%

• US Economic Policy Uncertainty Index 100.16 -.44%

• S&P 500 Blended Forward 12 Months Mean EPS Estimate 173.51 +.17%

• Citi US Economic Surprise Index -52.10 +5.0 points

• Citi Eurozone Economic Surprise Index -22.40 +16.6 points

• Citi Emerging Markets Economic Surprise Index -10.40 -5.6 points

• Fed Fund Futures imply 96.8% chance of no change, 3.2% chance of 25 basis point cut on 6/19

• US Dollar Index 97.50 -.55%

• MSCI Emerging Markets Currency Index 1,635.77 -.16%

• Bitcoin/USD 5,679.48 +11.67%

• Euro/Yen Carry Return Index 129.21 -.01%

• Yield Curve 19.25 -2.5 basis points
  

• 10-Year US Treasury Yield 2.53% +2.0 basis points

• Federal Reserve's Balance Sheet $3.851 Trillion -1.0%

• U.S. Sovereign Debt Credit Default Swap 17.72 +10.72%

• Illinois Municipal Debt Credit Default Swap 178.49 -.02%

• Italian/German 10Y Yld Spread 253.5 -7.0 basis points

• China Sovereign Debt Credit Default Swap 41.07 -2.16%
  

• Emerging Markets Sovereign Debt CDS Index 71.45 -3.18%
  

• Israel Sovereign Debt Credit Default Swap 67.75 +1.19%

• South Korea Sovereign Debt Credit Default Swap 32.21 +2.11%

• Russia Sovereign Debt Credit Default Swap 126.92 -.69%

• iBoxx Offshore RMB China Corporate High Yield Index 162.21 +.29%

• 10-Year TIPS Spread 1.91% -6.0 basis points

• TED Spread 15.75 -2.0 basis points

• 2-Year Swap Spread 11.0 +.5 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -20.25 -2.5 basis points

• N. America Investment Grade Credit Default Swap Index 57.76 +.31%
  

• America Energy Sector High-Yield Credit Default Swap Index 456.0 +2.0%

• European Financial Sector Credit Default Swap Index 69.62 -2.77%
  

• Emerging Markets Credit Default Swap Index 187.63 -3.66%
  

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

• M1 Money Supply $3.789 Trillion -.28%

• Commercial Paper Outstanding 1,065.0 -.1%

• 4-Week Moving Average of Jobless Claims 212,500 -6,500

• Continuing Claims Unemployment Rate 1.2% unch.
  

• Average 30-Year Mortgage Rate 4.14% -6.0 basis points

• Weekly Mortgage Applications 407.20 -4.32%

• Bloomberg Consumer Comfort 60.4 -.4 point

• Weekly Retail Sales +5.50% unch.

• Nationwide Gas $2.90/gallon +.06/gallon

• Baltic Dry Index 1032.0 +16.1%

• China (Export) Containerized Freight Index 802.27 +.12%

• Oil Tanker Rate(Arabian Gulf to U.S. Gulf Coast) 20.0 unch.

• Rail Freight Carloads 265,874 +.66%

Best Performing Style

• Small-Cap Value +1.0%

Worst Performing Style

• Large-Cap Growth -.2%

Leading Sectors

• Homebuilding +2.6%

• Disk Drives +2.4%

• Social Media +2.4%

• Airlines +2.3%

• Shipping +2.3%

Lagging Sectors

• Construction -2.2% 

• Gaming -2.3%

• Oil Service -4.2%

• Gold & Silver -4.8%

• Coal -5.3%

Weekly High-Volume Stock Gainers (29)

• ZIXI, WAIR, CBLK, UCTT, BRKR, WW, CCS, NWL, LPLA, PODD, BLDR, MNST, FLOW, SSYS, CYRX, XRAY, BE, DATA, ENPH, IDCC, VIAV, WSC, TACO, KBR, CONE, PRFT, GMS, COHU and FRPT

Weekly High-Volume Stock Losers (16)

• UTHR, MSGN, FLR, VIVO, AXL, HRTX, POST, FTNT, ALNY, FLDM, TDC, EBS, STAA, ANET, CTSH and REGI

Weekly Charts

ETFs

• High-Volume Gainers

• High-Volume Losers

Stocks

• High-Volume Gainers

• High-Volume Losers

*5-Day Change