Wednesday Watch

Evening Headlines

Bloomberg:        

• One of China's Biggest Asset Managers Prepares to Dump Stocks.

• Trump Defers to Congress on U.S. Response to Khashoggi Killing. 

• Asia Stocks Look Mixed as Late U.S. Rally Falters. Asian stocks headed for a mixed start to trading Wednesday as worries about future earnings revived by Caterpillar Inc. dragged U.S. equities lower, offsetting a late-in-the-day revival of risk appetite. Treasuries climbed with the yen and gold. An afternoon rally in the S&P 500 Index helped buoy futures for Japan and China equities, indicating the two-biggest Asian markets may eke out gains at the open, while Hong Kong futures pointed to a lower start. Australian shares were flat. Treasuries led gains in safe-haven assets, though 10-year yields did pare losses into the close. Oil maintained losses after tumbling more than 4 percent on a pledge by Saudi Arabia to meet any supply shortfall that materializes from Iranian sanctions. The dollar was lower against most major peers. Futures on Japan’s Nikkei 225 added 1 percent in Singapore trading. FTSE China A50 Index futures advanced 0.8 percent. Australia’s S&P/ASX 200 Index added less than 0.1 percent. Futures on Hong Kong’s Hang Seng Index fell 0.3 percent. S&P 500 futures lost 0.1 percent.    

• Five Things You Need to Know to Start Your Day.

• Oil Tumbles 5% After Saudis Pledge to Produce as Much as They Can.

• Semis Set for More Pain After Texas Instruments Warns on Demand.

Wall St. Journal:

• Stocks’ Wild Swings Rattle Investors. 

• Another Migrant Caravan Gathers in Guatemala. 

• Manufacturers See Signs of New Risks.

MarketWatch.com:

• China investors fear too much stock is being used as collateral, a big market drag.

• China’s stock selloff could wreak a lot more havoc before it’s over: Merrill Lynch.

CNBC:         

• The fear gauge and strong earnings tell Jim Cramer this bottom in the stock market may be real.

• Target's(TGT) battle plan for the holidays: Free two-day shipping, more staff and toys.  

• Texas Instruments(TXN) falls after posting revenue miss, disappointing outlook.

• E-cigarette maker Juul boosts lobbying spend by 452% amid regulatory crackdown.

• Stocks making the biggest moves after hours: Texas Instruments, iRobot, Barnes & Noble and more.

Zero Hedge: 

• New Migrant Caravan Forms; Former Trump Campaign Adviser Calls "Political Gift" Before Midterms.

• "Shorting Bond Vol Is Now A Dangerous Game": Here's How One Trader Is Going Long.

• Category 3 Hurricane Willa Makes Landfall In Mexico Tonight - 500,000 Tourists In Path.

• Rates Of STDs Rise Sharply: "We Are Sliding Backward".

• The New Social Media: Alternatives To Facebook, YouTube, Twitter, And Other Big Tech Platforms.

• Brady: Trump's 10% Tax Cut To Be Advanced Only If Republicans Retain Control Of House.

• Obama Calls Trump "Tin-Pot Dictator", Takes Credit For "Economic Miracles".

• "Worst Coverup Ever": Trump Blasts Saudis Over Khashoggi Murder; US To Revoke Visas.

• WTI Slumps Back To A $65 Handle After Huge Crude Build.

• US Plunge Protection Team Rescues Market As Global Stocks Turn Red For 2018.

Night Trading 

• Asian equity indices are -.25% to +.50% on average.

• Asia Ex-Japan Investment Grade CDS Index 89.50 +1.5 basis points. 

• Asia Pacific Sovereign CDS Index 10.0 +.25 basis point.

• Bloomberg Emerging Markets Currency Index 66.82 -.01%.

• FTSE 100 futures +.56%.

• S&P 500 futures -.15%.

• NASDAQ 100 futures -.22%.

Morning Preview Links

Earnings of Note
Company/Estimate
Before the Open:

• (ALXN)/1.75

• (AB)/.63

• (T)/.95

• (BA)/3.47

• (BSX)/.34

• (FCX)/.32

• (GD)/2.77

• (HLT)/.76

• (ITW)/1.88

• (IR)/1.71

• (LH)/2.89

• (NSC)/2.44

• (NOC)/4.36

• (OC)/1.66

• (SCHN)/.95

• (TUP)/.82

• (UPS)/1.82

After the Close:

• (AMD)/.13

• (AFL)/.99

• (ABX)/.06

• (ETH)/.33

• (FFIV)/2.63

• (F)/.28

• (KNX)/.58

• (LSTR)/1.60

• (LVS)/.81

• (MSFT)/.96

• (ORLY)/4.30

• (RJF)/1.81

• (TSLA)/-.10

• (V)/1.20

• (WHR)/3.77

• (XLNX)/.76

Economic Releases

9:00 am EST

• The FHFA House Price Index MoM for August is estimated to rise +.3% versus a +.2% gain in September.
  

9:45 am EST

• The Preliminary Markit US Manufacturing PMI for October is estimated to fall to 55.3 versus 55.6 in September.

• The Preliminary Markit US Services PMI for October is estimated to rise to 54.0 versus 53.5 in September.
  

10:00 am EST

• New Home Sales for September is estimated to fall to 625K versus 629K in August.

10:30 am EST

• Bloomberg consensus estimates call for a weekly crude oil inventory gain of +3,522,920 barrels versus a +6,490,000 barrel gain the prior week. Gasoline supplies are estimated to fall by -1,424,750 barrels versus a -2,016,000 barrel decline the prior week. Distillate inventories are estimated to fall by -1,681,830 barrels versus a -827,000 barrel decline the prior week. Finally, Refinery Utilization is estimated to rise by +.09% versus unch. prior.

2:00 pm EST

• US Fed's Beige Book report. 

Upcoming Splits

• None of note

Other Potential Market Movers

• The Fed's Bostic speaking, Fed's Bullard speaking, Fed's Mester speaking, Eurozone PMI report, $39B 5Y T-Note auction, weekly MBA Mortgage and the (HPE) analyst meeting could also impact trading today.

BOTTOM LINE:  Asian indices are are mostly higher, boosted by consumer and industrial shares in the region. I expect US stocks to open modestly lower and to rally into the afternoon, finishing mixed.  The Portfolio is 50% net long heading into the day.