Wednesday Watch

Evening Headlines

Bloomberg:     

• U.K. Parliament Moves Closer to Stopping a No-Deal Brexit.

• Kudlow Says China Deal Hinges on Enforcement, Structural Issues.

• Asia Stocks Follow U.S. Drop; Treasuries Hold Gain. Asian stocks followed their U.S. counterparts lower as rising pessimism that trade tensions with China will persist helped send technology and multinational companies tumbling. Treasuries held gains, oil fell and the dollar steadied. Japanese and Australian shares slipped and futures in Hong Kong pointed to losses after all major U.S. benchmarks declined. Chipmakers dropped more than 3 percent, with every member of the Philadelphia Semiconductor Index in the red. The S&P 500 briefly pared losses after presidential adviser Lawrence Kudlow said a Financial Times report that the U.S. canceled a preliminary meeting with Chinese officials was untrue. After the close of U.S. trading, Senate Majority Leader Mitch McConnell scheduled a vote for Thursday on Democratic-backed legislation to reopen the government, the first sign of a possible way out of the shutdown. Japan’s Topix Index fell 0.7 percent. S&P/ASX 200 fell 0.2 percent. S&P 500 futures were little changed.  

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

• China Consumer Crunch, Trust But Verify, Fed Board Seat: Eco Day.

• Oil Slumps Most in a Month as IMF, Trade Dispute Darken Outlook.

• McConnell to Allow Votes on Competing Bills to End Shutdown.  

• Newark Airport Flights Are Halted After Reports of Drones.

Wall St. Journal: 

• How Companies Secretly Boost Their Glassdoor Ratings.

• The Women’s March Follows Farrakhan off a Cliff.

• Supreme Court to Examine New York Gun Restrictions.

• Business Groups: China’s Plan for Tech Dominance Is Advancing.  
  

• Wall Street Backlash Sinks Plan to Transform Swaps Market.

MarketWatch.com:

• Shawn Snyder: These 3 leading economic indicators show no recession is coming.

• Here’s what really worries investors about China’s slowdown.

Fox News:

• Hoyer’s one-word answer when asked about Trump giving State of the Union address to House.

CNBC:

• China’s slowing growth improves the chances for an ‘advantageous’ trade deal: Jim Cramer.

• Stocks making the biggest moves after hours: IBM, Capital One and more.

• Economy may be at slowest pace of Trump term, but recession is not likely this year, economists say.

Zero Hedge:

• The First 'iPhone Bailout' Is Now A Reality.

• China's Military Cuts Ground Force By Half In Major "Transformation" To Boost Navy, Air Force.

• IBM Jumps On Guidance Boost Despite Revenue Slide, Massive Addbacks, Bizarre Tax Rate.

• USDJPY, Stocks Fade As McConnell Denies NYTimes 'Shutdown Deal' Report.

• Stocks Jump On Kudlow Denial: "There Is No Cancellation. None. Zero.".

• Ocasio-Cortez Gives "Zero F*cks"; Claims World Will End In 12 Years, US Should Pay Reparations To "Heal".

• Stocks Suffer Most Since Xmas Eve As 'Big Trouble' In China Spreads.

Telegraph:

• Eurozone faces risky game of 'political chicken' as debt fears rise.

Night Trading 

• Asian equity indices are -.75% to -.25% on average.

• Asia Ex-Japan Investment Grade CDS Index 87.0 +1.25 basis points. 

• China Sovereign CDS 61.50 +1.5 basis points.

• Bloomberg Emerging Markets Currency Index 67.69 -.33%.

• FTSE 100 futures -1.3%.

• S&P 500 futures +.08%.

• NASDAQ 100 futures +.16%.

Morning Preview Links

Earnings of Note
Company/Estimate
Before the Open:

• (ABT)/.81

• (ASML)/1.78

• (CMCSA)/.63

• (PG)/1.21

• (PGR)/1.01

• (UTX)/1.53

• (WAT)/2.64

After the Close:

• (BXS)/.54

• (CP)/4.25

• (FFIV)/2.53

• (F)/.30

• (LRCX)/3.68

• (LVS)/.84

• (RJF)/1.73

• (SLG)/1.60

• (TXN)/1.28

• (URI)/4.87

• (VAR)/1.07

• (XLNX)/.86

Economic Releases

9:00 am EST

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

10:00 am EST

• The Richmond Fed Manufacturing Index for Jan. is estimated to rise to -1 versus -8 in Dec.

Upcoming Splits

• None of note

Other Potential Market Movers

• The Eurozone Consumer Confidence report, weekly US retail sales reports, weekly MBA Mortgage Applications report and the (KMI) investor day could also impact trading today.

BOTTOM LINE:  Asian indices are 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.