Wednesday Watch

Evening Headlines 
Bloomberg: 

• Hong Kong Leader Leung Jeered by Democracy Protesters. Hong Kong’s Chief Executive Leung Chun-ying was jeered by pro-democracy demonstrators at a ceremony to hoist the Chinese flag as the city entered the sixth day of protests seeking free elections. Leung arrived by boat at Golden Bauhinia Square to mark the 65th anniversary of the founding of the People’s Republic of China. The site is near the main protests in Admiralty, where organizers estimated more than 100,000 people gathered last night to demand Leung step aside and China drop plans to vet candidates in a leadership election planned for 2017.
• Yahoo(YHOO) Restricted in China as Hong Kong Protests Spur New Control. Users trying to access Yahoo! Inc.’s (YHOO) main website from mainland China faced disrupted service yesterday as the government sought to restrict the flow of information amid student-led protests in Hong Kong. The www.yahoo.com site was inaccessible in some parts of the country, according to Greatfire.org, a group that monitors Internet censorship. The pattern suggested a “man-in-the-middle attack,” in which an attacker intercepts data that Internet users exchange with Yahoo’s servers, the group said.
• Putin Reserve Rubles Vanish in Crimea Grab. After proclaiming in 2007 that the ruble was poised to become a haven for global investors, the Russian leader has watched it fade, a victim of his nation’s stagnating economy since the land grab in Ukraine. Now so much money is leaving Russia that its central bank is considering temporary capital controls, according to two officials with direct knowledge of the discussions. 
• French Policy Stupor Sends Bearish Equity Bets Soaring. French stocks have beaten euro-area stocks for six years. Options traders are betting 2014 will be different. With a budget deficit poised to rise and economic growth running at half the region’s rate, investor sentiment on the CAC 40 Index (CAC) is deteriorating. Options protecting against swings in the equity gauge cost the most since April 2013 relative to the Euro Stoxx 50 Index, data compiled by Bloomberg show. 
• China Factory Gauge Unchanged as Manufacturing Subdued. China’s manufacturing stayed subdued last month as an official gauge was unchanged, with the world’s second-largest economy weighed down by a property slump. The government’s Purchasing Managers’ Index (CPMINDX) was at 51.1 in September, the same as August’s reading and compared with the 51.0 median estimate in a Bloomberg News survey of economists. Readings above 50 signal expansion.
• Sydney Homes Costing More Than New York Spurs RBA Review. To see why Australia’s central bank has shifted its stance on home-lending curbs, look no further than Sydney’s inner city where a one-bedroom apartment sold at the weekend for 35 percent more than its last price in 2012. The 54-square-meter (581-square-foot) property in Surry Hills was purchased by an investor for A$647,000 ($565,931), said Con Fotaras, a sales consultant at Belle Property Surry Hills who brokered the transaction. “It’s really hard to put a price on a property at the moment,” he said of a Sydney market where the median home price is higher than in New York.
• Rajan Warns Ultra-Low Rates May Distort With No Benefits. Indian central bank Governor Raghuram Rajan warned that near-zero interest rates in developed markets may be distorting asset prices without creating any real gain in economic activity. “We have had ultra-low interest rates for close to six years, and at some point you have dug a hole so deep in terms of asset prices that any attempt to get out of this has an immediate effect on asset prices,” Rajan said in an interview with Bloomberg TV India. While that may be worth the price to spur the economy, if it doesn’t respond “then you may have incurred the cost of distorted asset prices without the gain of real activity.” The debate remains inconclusive, he said.
• Asian Stock Index Retreats on U.S. Confidence, Hong Kong. Asian stocks fell, with the benchmark index heading for a fourth day of losses, after consumer confidence in the U.S. unexpectedly declined and Hong Kong braced for bigger protests as Chinese holidays started. The MSCI Asia Pacific Index (MXAP) slid 0.1 percent to 140.20 as of 9:02 a.m. in Japan after retreating to a four-month low yesterday.
• Platinum Slides to 5-Year Low as Demand Wanes After Strike Ends. Platinum sank to the lowest level since 2009 as a surge in the dollar curbed investor interest, extending the first quarterly loss this year spurred by the resumption of output in South Africa after a strike. Gold held losses near a nine-month low. The metal for immediate delivery fell as much as 1.2 percent to $1,285.50 an ounce, the lowest price since Oct. 5, 2009, extending a retreat from a 10-month high of $1,519.68 in July. It traded at $1,287 by 8:34 a.m. in Singapore, according to Bloomberg generic pricing.
• Rising U.S. Crude Exports Move Closer to 1957 Record. U.S. oil exports, which in July reached the highest level since 1957, are set to climb to a record by the end of 2014 as producers find ways around a four-decade restriction on crude leaving the country. The U.S. sent 401,000 barrels a day abroad in July, 54,000 shy of the record set in March 1957, according to data compiled by the Energy Information Administration, the Energy Department’s statistical unit. While Canada accounted for 93 percent of the shipments, Italy, Singapore and Switzerland also took U.S. oil. Coupled with Alaskan oil bound for Asia, total U.S. exports will reach 1 million barrels a day by the middle of 2015, according to Citigroup Inc. (C)
• Mosquito Virus That Walloped Caribbean Spreads in U.S. A mosquito-borne virus that can cause debilitating joint pain lasting for years has spread to the continental U.S. after infecting hundreds of thousands of people in the Caribbean and Central America. The virus is called Chikungunya, an African name meaning “to become contorted.” While the illness, first identified in Tanzania in 1952, has long bedeviled Africa and Asia, the only recorded cases in the U.S. before July involved patients who contracted the virus abroad.

Wall Street Journal: 

• Ukraine Forces Repel Two Fresh Assaults on Donetsk's Airport. Airport Has Become Center of Battles in Recent Days Despite Sept. 5 Truce. Ukrainian forces repelled two fresh assaults by pro-Russia rebels on the airport in the eastern city of Donetsk on Tuesday, a military spokesman said, as fighting for the strategic site showed no sign of ending despite a cease-fire signed nearly a month ago. European Union diplomats, meanwhile, decided to keep sanctions on Russia in place while the truce deal is still being implemented. The spokesman, Col....
• Italy's Economic Woes Highlight Dilemma for European Central Bank. Weak Eurozone Inflation, Falling Prices in Italy Put Pressure on ECB to Act.
• Brazil Leader Regains Edge in Election Polls. Two new electoral polls show Brazilian President Dilma Rousseff widening her lead over her main challenger in a likely second-round runoff, surveys that disappointed many investors who hope for the incumbent's ouster. The leader would get 49% of the vote in a head-to-head showdown with Socialist Party candidate Marina Silva in late October, said a survey released Tuesday by polling firm Datafolha. Ms. Silva would capture...
• SEC Grants Citigroup Waivers, Easing Hedge-Fund Curbs. Restrictions Would Have Crimped Some Banking, Including Selling Hedge-Fund Investments to Individuals.

Fox News:

• CDC confirms first case of Ebola in US. The Centers for Disease Control and Prevention (CDC) confirmed on Tuesday that a patient being treated at a Dallas hospital has tested positive for Ebola, the first case diagnosed in the United States. The patient left Liberia on September 19 and arrived in the United States on September 20, CDC director, Dr. Tom Frieden told reporters at a press conference Tuesday. It’s the first patient to be diagnosed with this particular strain of Ebola outside of Africa.

MarketWatch.com:

• U.S. Ebola case boosts drug makers working on treatments.

Zero Hedge:

• CDC Confirms First Ebola Case Diagnosed In The US, In Dallas Hospital - Press Conference Live Feed. (video)
• What Just Happened In Today's "Crazy" And Biggest Ever "Window-Dressing" Reverse Repo? (graph)
• Investors Are Too Comfortable In The Fed's Win-Win Conditions For Taking Risk.
• "Russia Could Ditch Dollar In 2-3 Years"; Deputy PM Warns Nuclear Subs "Could Reach Any Country On Any Continent".
• Small Caps Suffer Worst Quarter In 3 Years; Bonds Leading Year-To-Date. (graph)
• Rick Santelli Slams Central Bank Intervention For "Taking The Voters Out Of The Game". (video)
• More Lies: Watchdog Finds Government "Greatly Exaggerated" Success In Funding Small Businesses Last Year.
• "If Something Rattles This Ponzi Scheme, Life In America Will Change Overnight".

Business Insider: 

• The FCC Might Ban Broadcasters From Saying The 'Redskins' Team Name.
• JP Morgan(JPM) Is About To Face An Enormous Class Action Lawsuit By Investors.

Reuters:

• Mario Draghi to push ECB to buy Greek, Cypriot 'junk' loans: FT.

Obama takes on coal with first-ever carbon limits
Read more at http://www.philly.com/philly/news/politics/20130919_ap_0f857b20e0c144a5a1e1b9dddc9f9d72.html#YRThyDOhArykUeYy.9Brazil cuts 2014 GDP growth forecast, keeps fiscal goal

Evening Recommendations

• None of note

Night Trading

• Asian equity indices are -.50% to unch. on average.

• Asia Ex-Japan Investment Grade CDS Index 99.0 -2.5 basis points.

• Asia Pacific Sovereign CDS Index 71.5 -1.75 basis points.

• FTSE-100 futures -.36%.

• S&P 500 futures -.06%.

• NASDAQ 100 futures  -.08%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (AYI)/1.22
• (ESI)/.72

Economic Releases
8:15 am EST

• The ADP Employment Change for September is estimated to rise to 205K versus 204K in August. 

9:45 am EST

• Final US Manufacturing PMI for September is estimated at 57.9 versus a prior estimate of 57.9.

10:00 am EST

• ISM Manufacturing for September is estimated to fall to 58.5 versus 59.0 in August.
• ISM Prices Paid for September is estimated to fall to 57.0 versus 58.0 in August.
• Construction Spending for August is estimated to rise +.5% versus a +1.8% gain in July.

10:30 am EST

• Bloomberg consensus estimates call for a weekly crude oil inventory build of +925,000 barrels versus a -4,273,000 barrel decline the prior week. Gasoline inventories are estimated to fall by -661,110 barrels versus a -414,000 barrel decline the prior week. Distillate supplies are estimated to fall by -88,890 barrels versus a +823,000 barrel gain the prior week. Finally, Refinery Utilization is estimated to fall by -.73% versus a +.4% gain the prior week.

Afternoon:

• Total Vehicle Sales for September are estimated to fall to 16.8M versus 17.45M in August.
  

Upcoming Splits

• None of note

Other Potential Market Movers

• The Eurozone PMI, weekly MBA Mortgage Applications report, (ADSK) investor day, (GM) business conference call and the (CP) investor day could also impact trading today.

BOTTOM LINE: Asian indices are mostly lower, weighed down by industrial and technology shares in the region. I expect US stocks to open mixed and to weaken into the afternoon, finishing modestly lower. The Portfolio is 25% net long heading into the day.