White House economic advisor Larry Kudlow confirmed Thursday’s reports that the US and China agreed to roll back tariffs on each other’s goods in stages as trade negotiations continued.  Kudlow sad “IF there’s a phase one trade deal, there are going to be tariff agreements and concessions.”

Meanwhile trade advisor Peter Navarro told Fox Business “There is no agreement at this time to remove any of the existing tariffs as a condition of the phase one deal and the only person who can make that decision is President Donald J. Trump and it’s as simple as that.”

Walt Disney (DIS) is up over 5% premarket on the success of “The Lion King” and “Toy Story 4”.  CEO Bob Iger said they have spent the last several years transforming the company to an extraordinary direct-to-consumer experience and Disney is excited to launch the Disney+ streaming service on November 12.

Activision Blizzard (ATVI) the company behind the “Call of Duty” and “World of Warcraft” gaming franchises is down over 1% after beating expectations but lowering fourth quarter guidance.  They will be introducing mobile and free-to-play versions of their franchises with the goal of increasing audience sizes and monetization.

The Gap (GPS) is down over 9% after missing expectations and lowering projections.  Their 15-year CEO Art Peck will be stepping down.

Alibaba is looking to raise more capital with a $15B share offering on the Hong Kong exchange.  The offering would make Alibaba the largest market cap company in the world.

Earnings include DUK, REV, and SSP.

The economic calendar is light with Consumer Sentiment, Inflation Expectations, and Wholesale Inventories @ 10:00 am ET.

Volatility is shrinking and should remain muted to the upside.

No Size bias as Globex Size volume is light.

A Fed rate course reversal???  St. Louis Fed President James Bullard said yesterday that a “darkened” global trade narrative could slow the growth of the US economy, followed by a “downward policy rate adjustment may be warranted soon.”  The bulls sent US stocks up into yesterday’s cash close.

Markets will be watching Fed speak closely this morning: John Williams @ 8:30am EST and Chair Jerome Powell @ 9:55am EST.  CME futures predict a 50% chance of a rate cut in July with 2 more before 2020.  That would be quite a reversal in Fed policy…

FAANG companies are in US lawmakers’ crosshairs.  A House Judiciary committee announced a top-to-bottom review of US tech companies and the DOJ and FTC announced they would tackle large monopolistic companies such as Alphabet, Apple, Amazon, and Facebook.

Dem David Cicilline of RI said “The growth of monopoly power across our economy is one of the most pressing economic and political challenges we face today…  market power in digital markets presents a whole new set of dangers.”

In the same vein, Apple announced they will be killing iTunes and instead split music, podcasts, and TV into separate apps.  Earnings today include CRM, AMBA, GWRE, CBRL, GME, TIF, LE, HQY, and NAV.

The economic calendar is light with Factory Orders and Constructions Spending @ 10:00am EST.  Volatility continues to tick up and if Powell hints at decreasing rates, the ES could move today.  Size bias is a divergent short into Bullard’s 8:30am talk.

US and global stock markets are a little rattled by Trump comments concerning a scheduled June 12 Singapore meeting with North Korea and US trade war progress with China.  The US and South Korea held a joint military exercise last week and now Trump is saying there’s a good chance the North Korean meeting will not take place on June 12, but still a good chance it will at some point in the future.  About the trade negotiations with China, Trump said it’s “a start” but he was “not pleased” with the progress.  US retailers Target and Lowes missed earnings estimates while jeweler Tiffany & Co. crushed their expectations.  The economic calendar focus is Oil @ 10:30am and Fed minutes @ 2:00pm EST.  Before the main events, we have PMI Composite Flash @ 9:45am EST and New Home Sales @ 10:00am EST.  The ES has pulled back enough where upside volatility should not be hindered as we’ve experienced over the last week.  Volatility continues to contract, but there’s more room to expand now.  Size bias is short on increased Globex volume into the US session open.