Wednesday Watch

Evening Headlines 
Bloomberg:

• Ukraine Talks Planned as Poroshenko Restarts Push in East. Ukraine, Russia, Germany and France are planning a meeting of foreign ministers today after President Petro Poroshenko ended a cease-fire and vowed to retake territory from separatists in the violence-torn east. Russia’s top diplomat, Sergei Lavrov, endorsed talks in Berlin proposed by his German counterpart, Frank-Walter Steinmeier, the Foreign Ministry in Moscow said on its website yesterday after a phone conversation between the two ministers. In a separate call with U.S. Secretary of State John Kerry, Lavrov called for an end to Ukraine’s military campaign against pro-Russian rebels, according to another statement. 

• Sale of 4,000 U.S. Missiles to Iraq Is Readied. The State Department has told lawmakers informally that the Obama administration wants to sell Iraq more than 4,000 additional Hellfire missiles for the government’s fight against Islamic insurgents, according to people familiar with the plan. Sale of the laser-guided missiles made by Lockheed Martin Corp. (LMT) would be in addition to 500 previously purchased, of which about 400 have been delivered. 

• Record Bond Sales Show Li Focused on GDP Over Debt: China Credit. China’s Premier Li Keqiang has promised to cut credit while also meeting a 7.5 percent economic growth target. Record bond sales last quarter show which pledge he’s prioritizing. Issuance jumped 54 percent from the previous three months to 1.55 trillion yuan ($250 billion), the most in data compiled by Bloomberg.

• Komatsu CEO Flags China Slump as Mining Nears Bottom. Komatsu Ltd. (6301), the world’s second biggest maker of building and mining equipment, said sales in China are falling more steeply than anticipated, joining larger peer Caterpillar Inc. (CAT) in flagging fraying Asian demand. Komatsu’s sales in China, where economic growth is slowing, dropped dramatically in April and May and it will probably miss its annual target for the nation, Chief Executive Officer Tetsuji Ohashi said in an interview, citing delays to the start of some construction projects.

• China’s Repression of Savers Eases.

• Best Taiwan Fund Braces for Stocks Retreat After Rally. Taiwan’s best-performing equities fund is bracing for stock market declines over the next two months after the biggest foreign inflows in Asia this year sent the benchmark index to a seven-year high.

• Asian Stocks Rise on Global Optimism as Aussie Retreats. Asian stocks climbed, with the regional index at a six-year high, and credit risk in the region fell as expanding manufacturing in the largest economies buoys the global outlook. Australia’s dollar dropped after worse-than-estimated trade figures as platinum and copper slid. The MSCI Asia Pacific Index rose 0.6 percent by 10:54 a.m. in Tokyo, trading at the highest level since June 10, 2008, as most major regional indexes gained.

Wall Street Journal:

• FTC Sues T-Mobile Over Unauthorized Wireless Charges. Commission Says Company Reaped Millions of Dollars From 'Cramming'.

CNBC: 

• Jamie Dimon says he has 'curable' throat cancer.

• China's infamous swag markets lose their shine.

Zero Hedge: 

• ISIS Is Hiring Judges, Doctors And Engineers As Al-Qaeda Prepares For War Against Caliphate.

• Was The Department Of Defense Behind Facebook’s(FB) Controversial Manipulation Study?

• Santelli Slams America's 'Debt-Is-Wealth' Mentality. (video)

• 18 Signs That The Global Economic Crisis Is Accelerating As We Enter H2 2014.

• Goldman's Global Leading Indicator Drops In June. (graph)

• Global Markets Just Reached Record "Death Cross"-iness.

• The 5 Labor Market Data Points That Will Drive Asset Markets. (graph)

Business Insider:

• New Flu Strain Created For Research Leaves The Human Immune System Completely Defenseless.

• China’s Internal Tensions Are Reaching Dangerous Levels.

• Why Hong Kong Is Having Its Biggest Protests Since 1997.

• Iran Has Deployed All Of Its Su-25 Attack Planes To Iraq.

• GASPARINO: Layoffs Are Coming To Goldman Sachs(GS).

Telegraph: 

• We must end this addiction to debt as the engine of growth. There has been no serious attempt to get to grips with the financial cycle, which requires moving away from debt as the engine of growth. 

• Russia's economic crisis deepens as EU readies fresh sanctions over Ukraine. New sanctions against Russian companies could be imposed after the collapse of the Ukraine ceasefire. 

Evening Recommendations

• None of note

Night Trading

• Asian equity indices are unch. to +.75% on average.

• Asia Ex-Japan Investment Grade CDS Index 103.5 unch.

• Asia Pacific Sovereign CDS Index 72.75 -1.0 basis point.

• FTSE-100 futures -.07%.

• S&P 500 futures +.07%.

• NASDAQ 100 futures  +.09%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (GBX)/.74

• (STZ)/.93

Economic Releases
8:15 am EST

• The ADP Employment Change for June is estimated to rise to 205K versus 179K in May.

10:00 am EST

• Factory Orders for May are estimated to fall -.3% versus a +.7% gain in April.

10:30 am EST

• Bloomberg consensus estimates call for a weekly crude oil inventory decline of -2,070,000 barrels versus a +1,742,000 barrel gain the prior week. Gasoline supplies are estimated to rise by +90,000 barrels versus a +710,000 barrel gain the prior week. Distillate inventories are estimated to rise by +720,000 barrels versus a +1,177,000 barrel gain the prior week. Finally, Refinery Utilization is estimated to rise by +.71% versus a +1.4% gain the prior week.

Upcoming Splits

• None of note

Other Potential Market Movers

• The Fed's Yellen speaking, Eurozone PPI, China Non-Manufacturing PMI, Challenger Job Cuts for June, RBC Consumer Outlook Index for July, ISM New York for June and the weekly MBA mortgage applications report could impact trading today.

BOTTOM LINE: Asian indices are mostly higher, boosted by commodity and industrial shares in the region. I expect US stocks to open modestly higher and to weaken into the afternoon, finishing mixed. The Portfolio is 75% net long heading into the day.