Wednesday Watch

Evening Headlines

Bloomberg:

• Asia's Central Banks Brace for Fed Rate Hike. Asia’s central banks are bracing for the Federal Reserve to lift interest rates this month for only the third time in a decade. Higher U.S. borrowing costs ripple through Asia by driving up bond yields, reducing the region’s appeal to foreign investors and thereby pressuring local currencies. In response, some Asian central banks historically have faced pressure to shield their economies with rate hikes of their own.

• Japan's Fourth-Quarter Economic Growth Revised Up to 1.2%. Gross domestic product expanded 1.2 percent on an annualized basis from the previous quarter in the three months through December, according to data released by the Cabinet Office on Wednesday (preliminary figure was +1%; median estimate of economists +1.5%).

• Japanese Stocks Follow Weak U.S. Trading Session. The Topix index retreated even as data showed Japan’s economy expanded more than initially reported in the fourth quarter. Australia’s equity benchmark index fell while South Korean shares gained for a third day. The S&P 500 is about 1 percent off the record high it reached on March 1 with the Federal Reserve all but certain to raise borrowing costs next week. The yield on 10-year Treasury notes was steady at 2.51 percent, while the dollar was little changed. The yen rose less than 0.1 percent to 113.93 per dollar as of 9:35 a.m. in Tokyo. The Bloomberg Dollar Spot Index was little changed on Tuesday. Japan’s Topix index fell 0.3 percent, dropping for the third time in four days. The S&P/ASX 200 Index lost 0.1 percent and South Korea’s Kospi index added 0.1 percent.

• Gundlach Predicts `Old School' Fed Will Do Sequential Hikes.

• Blackstone's Byron Wien on Market Forecast, Fed Policy. (video)

• Apollo Seeks $20 Billion by May for New Buyout Fund.

Wall Street Journal:

• Central Banks Ratchet Up Reserves. ‘External reserves are a form of insurance for sovereigns against crisis and defaults,’ says an analyst.

Fox News:

• Four dead, dozens injured after train hits charter bus in Mississippi. (video)

CNBC:

• OPEC: Deeper crude oil output cuts are happening. (video)

• BP is assuming $55 to $60 oil for the next five years, CEO Bob Dudley says. (video)

Zero Hedge:

• Wikileaks Unveils 'Vault 7': "The Largest Ever Publication Of Confidential CIA Documents"; Another Snowden Emerges.

• Comey To Testify In Russia "Election Hacking" Hearing On March 20.

• "It's A Train Wreck": Conservative Groups Savage GOP Healthcare Plan.

• US Credit Card Debt Sees Biggest Drop In Over Four Years. (graph)

• Marc Hanson: "Everything Has Changed In Housing". (graph)

• Former NSA Whistleblower: "Trump Is Absolutely Right, Everything Was Being Monitored".

• WTI Dips (But RBOB Rips) As Crude Inventories Surge More Than Expected. (graph)

• Jeff Gundlach's Latest Webcast "The Byrds": Live Updates.

• Stock Slide Escalates Amid Copper, Credit, & Crude Carnage. (graph)

Business Insider:

• Conservative media outlets are turning against the Republican Obamacare replacement plan.

• Mexico's criminal and political worlds are shifting, and 2017 is off to the most violent start on record.

Night Trading 

• Asian equity indices are -.25% to unch. on average.

• Asia Ex-Japan Investment Grade CDS Index 95.25 -.25 basis point.

• Asia Pacific Sovereign CDS Index 27.0 -.5 basis point

• Bloomberg Emerging Markets Currency Index 71.24 unch. 

• S&P 500 futures -.19%. 

• NASDAQ 100 futures -.19%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (BOBE)/.76

• (CIEN)/.29

• (HOV)/-.04

• (TECD)/2.16

• (PLCE)/1.59

• (VRA)/.23

Economic Releases
8:15 am EST

• The ADP Employment Change for February is estimated to fall to 189K versus 246K in January. 

8:30 am EST

• Final 4Q Non-Farm Productivity is estimated to rise +1.5% versus a prior estimate of a +1.3% . 

• Final 4Q Unit Labor Costs are estimated to rise +1.6% versus a prior estimate of a +1.7% gain. 

10:30 am EST 

• Bloomberg consensus estimates call for a weekly crude oil inventory build of +1,148,500 barrels versus a +1,501,000 barrel gain the prior week. Gasoline supplies are estimated to fall by -1,560,880 barrels versus a -546,000 barrel decline the prior week. Distillate inventories are estimated to fall by -955,630 barrels versus a -925,00 barrel decline the prior week. Finally, Refinery Utilization is estimated to rise by +.11% versus a +1.7% gain the prior week.

Upcoming Splits

• None of note

Other Potential Market Movers

• The China Exports report, China CPI report, $20B 10Y T-Note auction, weekly MBA Mortgage Applications report, UBS Consumer/Retail Conference, (AXP) investor day and the (SWFT) Mid-Quarter Conference Call could also impact trading today.

BOTTOM LINE:  Asian indices are modestly 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 50% net long heading into the day.