Wednesday Watch

Evening Headlines

Bloomberg:        

• China's Yuan Has Ominous 7 in Sight as Bearish Bets Mount.

• Lighthizer, Freeland Meet Tuesday to Discuss Trade Deal.

• Senators Question Super Micro on Report of Chinese Hardware Hack.

• Investors Underestimating Risk of a Financial Shock, IMF Warns.

• Asian Stocks Start Mixed; Treasuries Hold Gains. Asian stocks began Wednesday mixed following a volatile session for U.S. equities and as yields on Treasuries retreated from a seven-year peak. The dollar nudged lower. The recent sell-off in bonds and equities eased, with Japanese shares rising after four days of losses, while stocks were little changed in South Korea and Australia. Futures nudged higher in Hong Kong and China. The S&P 500 Index was dragged down by materials shares, after a profit warning in the sector, while technology shares rebounded from a three-day rout. The sell-off in Treasuries showed some signs of stabilizing as the yield on the 10-year benchmark edged down to 3.21 percent. The Bloomberg Dollar Spot Index continued edging lower after U.S. President Donald Trump said the Federal Reserve is moving too fast with interest-rate hikes. Japan’s Topix index rose 0.5 percent as of 9:23 a.m. in Tokyo. Futures on the FTSE China A50 Index added 0.1 percent. Futures on Hong Kong’s Hang Seng Index advanced 0.2 percent. Australia’s S&P/ASX 200 Index slipped 0.1 percent. South Korea’s Kospi dipped 0.1 percent. Futures on the S&P 500 were little changed.    

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

• Powell Warned on EM, Trump Deficit Plan, Italy Worried: Eco Day.

• Short Seller Who Foresaw Valeant Crash Now Bets on Tesla Falling.

Wall St. Journal:

• SoftBank Discusses Taking Majority Stake in WeWork.

• America’s Economy Isn’t Overheating.

• Britain and European Union Edge Closer to a Deal on Brexit.

• Health Care Crowds Out Jobs, Taxes in Midterm Ads.

• Thousands of Southerners Planted Trees for Retirement. It Didn’t Work.

• Beijing Struggles to Boost Growth and Keep Yuan Stable.

• U.S.’s Largest Home Builder in Talks to Offload Lending Unit.

• IMF Warns of Possible Emerging-Markets Crisis.

• Italy Watchdog Casts Doubt on Official Growth Estimate.

MarketWatch.com:

• Here’s what Trump’s ethanol plan means for farmers, refiners and motorists.

Fox News:  

• WATCH LIVE: President tells rally 'Democrats are the party of crime. Republicans are the party of safety'.

• Paul calls for calm after Kavanaugh: 'Someone is going to be killed'.

CNBC:         

• CNBC unveils its annual list of 100 promising start-ups to watch.  

• Michael strengthens to a Category 3 hurricane as it barrels toward Florida Panhandle.

• Netflix(NFLX) plunged into a correction this week, but one top technician says this is a chance to buy.

• Cramer admits he's getting 'a little cautious' about the Fed's effect on the economy.

• Bitcoin should be having a good year. Its decline is a warning signal, researcher says.

Zero Hedge: 

• Bill Clinton's Sexual Assault Allegations Are 'Different', Hillary Says.

• After Torrid Growth, US Trucking Faces A Sharp Slowdown.

• Mayor De Blasio Signs Law Establishing 'Third Gender' For NYC Birth Certificates.

• Trump Says He "Doesn't Like What The Fed Is Doing", Is Considering Goldman's Powell For UN Ambassador.

• "The Land Of The Living Dead": Inside San Francisco's Most Disgusting City Block.

• These Are The Top 20 Hedge Fund Long And Short Positions.

• New Evidence Of Chinese Spy Hardware Found By Ex-Mossad Investigators; Super Micro Shares Plunge.

• Bonds Best Day In 7 Weeks Sparks US Equity Chaos.

Business Insider:

• An alarming report shows hackers can break into US weapons systems in less than an hour.

Telegraph:        

• EU financial sector at risk as derivative deal stalls.

Night Trading 

• Asian equity indices are -.5% to +.25% on average.

• Asia Ex-Japan Investment Grade CDS Index 84.75 -.5 basis point. 

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

• Bloomberg Emerging Markets Currency Index 66.34 +.08%.

• FTSE 100 futures -.17%.

• S&P 500 futures -.02%.

• NASDAQ 100 futures -.02%.

Morning Preview Links

Earnings of Note
Company/Estimate
Before the Open:

• (FAST)/.67

After the Close:

• None of note

Economic Releases

8:30 am EST

• PPI Final Demand MoM for September is estimated to rise +.2% versus a -.1% decline in August.

• PPI Ex Food and Energy MoM for September is estimated to rise +.2% versus a +.1% gain in August.
  

10:00 am EST

• Wholesale Trade Sales MoM for August is estimated to rise +.5% versus unch. in July. 

Upcoming Splits

• (SHOO) 3-for-2

Other Potential Market Movers

• The Fed's Williams speaking, Fed's Evans speaking, Fed's Bostic speaking, Fed's Williams speaking, UK Trade Balance report, weekly MBA Mortgage Applications report, (COST) Sept. sales results and the (SAFM) investor conference could also impact trading today.

BOTTOM LINE:  Asian indices are mostly lower, weighed down by consumer 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 50% net long heading into the day.