Wednesday Watch

Evening Headlines

Bloomberg:

• Asian Junk's House of Cards. 
• Goldman Says Dollar Surge Far From Over as Traders Misprice Fed. Goldman Sachs Group Inc. is holding fast to its bullish-dollar call, undeterred by plunging expectations for a Federal Reserve interest-rate increase. A gauge of the U.S. currency held near the strongest closing level since August reached Tuesday as higher U.S. yields bolstered the greenback’s allure versus major peers even as futures showed reduced odds of a Fed rate hike next week. The dollar’s advance was supported by waning demand for currencies of natural-resource-exporting nations, which fell amid a rout in commodities prices and as investors’ appetite for riskier assets diminished.
• Asian Stocks Extend Global Slide as Volatility Measures Soar. Asian stocks extended a global slump and volatility soared after a report showed fund managers are hoarding more money in cash amid uncertainty over the trajectory of central bank stimulus globally. The MSCI Asia Pacific Index lost 0.6 percent to 136.36 as of 9:13 a.m. in Tokyo. The measure is on course for a fifth day of declines after valuations this month climbed to the highest in more than a year and investors adjusted portfolios and forecasts to reflect prospects of less monetary stimulus globally. In Tokyo, the Topix index fell 0.7 percent after the Nikkei newspaper said the Bank of Japan is considering delving deeper into negative interest rates, a controversial move that hurt bank shares earlier this year.
• Buffett Loses $1.4 Billion as Wells Fargo Tumbles on Scandal. Warren Buffett had $1.4 billion wiped from his fortune Tuesday after Wells Fargo & Co. fell 3.3 percent as the fallout continued from revelations that bank employees had opened more than 2 million accounts without clients’ approval. Berkshire Hathaway Inc., the lender’s biggest shareholder, fell 2 percent, causing the 86-year-old’s fortune to drop more than anyone else’s on the Bloomberg Billionaires Index. The U.S. investor is the world’s fourth-richest person with a net worth of $65.8 billion.

Wall Street Journal:

• Clinton’s Stealthy Single-Payer Gambit. The ‘public option’ could be implemented around the country—without congressional approval. It looks like 2017 will be ObamaCare’s worst year yet. The three major insurers, along with many smaller plans, are largely exiting the health-insurance exchanges, leaving more than half of U.S. counties with only one or two health-plan choices, according to the Kaiser Family Foundation. Nearly 36% of ObamaCare regions may have only one participating insurance carrier offering plans for 2017, according to health-care analytics firm Avalere Health. Data from analysts at Barclays and Credit Suisse project that health-insurance...

Fox News:

• Obama hits campaign trail for Clinton amid rough patch, calls her 'fit’ to lead. (video) President Obama returned Tuesday to the campaign trail to help fellow Democrat Hillary Clinton through arguably the rockiest stretch of her White House campaign, brushing aside the controversies that have dogged her candidacy and assuring voters she's “fit” for office -- as she spends a second day off the trail on doctor's orders.
  

CNBC:

• Next couple of months could be very dangerous for investors, expert says. (video)
• Black Swan investor warns of central bank bubble. (video)

Zero Hedge:

• CBS Caught Editing Clip, Transcript In Which Bill Clinton Says Hillary Fainted "Frequently".
• "Rampant Fraud" Exposed In Obamacare Exchanges: 100% Of Fictitious Enrollees Obtained Subsidies. 
• Doctor Explains Why Hillary's 9/11 "Medical Episode" Is More Consistent With Parkinson's Than Pneumonia.
• European Civil War Looms: French Professor Fears Growing "Jihad Generation" Among Unemployed Muslims.
• A Disturbing Development: Interactive Brokers Implements Price Caps.
• Crude Chaos Strikes On Disappointing Post-Hurricane Rebound In Inventories.
• Bond Bloodbath Bashes Brainard Bounce As 'BillionBears' Slam Stocks. (graph)

Business Insider:

• 'Political retaliation': North Carolina governor fires back over NCAA decision to pull events out of the state.
• WESTON: Here's why markets have suddenly gone haywire.
• The farm bubble has burst.
• A hedge fund manager who shut down his fund following a government raid is now lashing out.

Washington Post:

• Democrats ask for investigation of Trump Foundation donation.

Telegraph:

• Draghi: EU must redistribute wealth and strengthen borders to save the union.

Night Trading 

• Asian equity indices are -.75% to -.25% on average.
• Asia Ex-Japan Investment Grade CDS Index 112.5 +6.0 basis points.
• Asia Pacific Sovereign CDS Index 39.75+1.5 basis points.
• Bloomberg Emerging Markets Currency Index 72.04 -.06%. 
• S&P 500 futures +.16%. 
• NASDAQ 100 futures +.10%.

Morning Preview Links

Earnings of Note
Company/Estimate 

• (CBRL)/2.13
• (HAIN)/.57
• (APOG)/.67
• (LAKE)/.10 

Economic Releases
8:30 am EST

• The Import Price Index MoM for August is estimated to fall -.1% versus a +.1% gain in July.
  

10:30 am EST

• Bloomberg consensus estimates call for a weekly crude oil inventory gain of +2,767,820 barrels versus a -14,513,000 barrel decline the prior week. Gasoline supplies are estimated to fall by -604,550 barrels versus a -4,211,000 barrel decline the prior week. Distillate Inventories are estimated to rise by +1,292,640 barrels versus a +3,382,000 barrel gain the prior week. Finally, Refinery Utilization is estimated to fall by -.39% versus a +.9% gain prior.

Upcoming Splits 

• (BIP) 3-for-2
• (BMI) 2-for-1

Other Potential Market Movers

• The Australia Unemployment report, weekly MBA mortgage applications report, BofA Healthcare conference, CSFB Small/Mid-Cap Conference, (F) investor day and the (LEG) investor day 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 mixed and to weaken into the afternoon, finishing modestly lower. The Portfolio is 25% net long heading into the day.