Wednesday Watch

Evening Headlines

Bloomberg:   

• Deaths Hit 1,112; Xi Vows to Meet Economic Goals: Virus Update.  

• RBA’s Heath Says Virus Is ‘Serious Downside Risk’ to Growth.

• Virus Hits China’s Gold Jewelry Demand as Shoppers Stay Away.

• Coronavirus Infections on Japan Cruise Ship Leap to 174. 

• Korean Jobless Rises For Fifth Month Amid Manufacturing Woes.

• Asia’s Stocks Trade Mixed, Treasuries Hold Losses. Asian stocks opened in mixed fashion Wednesday as investors weighed the spreading coronavirus against expectations for policy support. Treasuries held modest losses. Australia’s shares ticked up after earnings from the country’s biggest bank and the nation’s bond yields advanced. Japanese stocks swung in early trading, reopening after a holiday. South Korea’s equities were little changed amid a surprise increase in the country’s unemployment rate. Meanwhile, New Zealand’s central bank left interest rates unchanged and said forecasts showed no chance of a cut this year. The kiwi dollar advanced. Earlier, the S&P 500 Index closed off the day’s highs Tuesday on reports of fresh antitrust scrutiny for tech firms, though still posted a fresh record. Ten-year Treasury yields were around 1.60%. Japan’s Topix index slipped 0.2% as of 10:05 a.m. in Tokyo. South Korea’s Kospi fell 0.1%. Futures on the S&P 500 were flat. The underlying gauge rose 0.2% on Tuesday. Australia’s S&P/ASX 200 Index rose 0.4%.  

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

• Coronavirus Fears Creep Into Official U.S. Commodity Forecasts.

• Bernie Sanders Seeks Defining Win, Yet Race Remains Fluid  .

• GOP’s 21% Corporate Tax Rate Locked In by Congressional Gridlock.

Wall Street Journal:

• Coronavirus Needs a Free Press.

• Sanders Aims for Outright Victory.

• U.S. Officials Say Huawei Can Covertly Access Networks.

• At Outbreak’s Center, Locals Question Accuracy of Virus Tests.

• FTC Expands Antitrust Probe Into Tech Companies.

• Airbnb Swings to a Loss as Costs Climb Ahead of IPO.

Fox News:

• LIVE COVERAGE: This could be the key to NH victory, as polls begin to close in bitterly contested race.

• Smollett indicted on 6 counts for allegedly lying about attack claims.

CNBC:

• Coronavirus live updates: Outbreak could affect US-China phase one trade deal, official says

• Coronavirus will speed up US-China ‘decoupling’ more than trade war, Milken says

• Lyft beats revenue estimates but stock falls

• Beyond cloud, analytics and social—tech’s next evolution

• Here’s a first look at Samsung’s new $1,400 folding phone.

• Stocks making the biggest moves after hours: Bed Bath & Beyond, Lyft, Western Union & more.

Zero Hedge:

• Hubei Reports Another 94 Deaths, Bringing Global Total To 1,112.

• Beijing Hunts Down Chinese Citizens Challenging Official Coronavirus Narrative

• Both Roger Stone Prosecutors Resign 'Immediately' After DOJ Rejects Absurd Sentencing Proposal.

• Airbnb IPO In Peril After Unexpected Loss, Coronavirus Fears.

• "Angry People Will No Longer Be Afraid" - 1000s Of Chinese Miltary/Police Quarantined, Dozens Diagnosed After CCP Lies.

• Joe Scarborough Celebrates Demographic "Freight Train" That Will Collapse GOP.

• US Household Debt Soars Most Since Crisis In Q4 Amid Explosion In New Mortgage Originations.

• WSJ Publishes "Highly Classified" Evidence Proving Huawei Spies For Beijing.

• WTI Drops Back Below $50 After Bigger Than Expected Crude Build.

• Stocks Pump'n'Dump After FTC Spoils The MAGA Party.

Business Insider:

• Nurses in Wuhan shave their heads to prevent infection.

• Fed president Neel Kashkari tears into 'giant garbage dumpster' cryptocurrencies: 'I'm seeing more noise and more fraud than I'm seeing anything useful'.

John Hopkins University:

• Coronavirus Global Cases. (map)

Night Trading 

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

• Asia Ex-Japan Investment Grade CDS Index 50.0 -.75 basis point.

• China Sovereign CDS 35.0 -1.0 basis point.

• Bloomberg Emerging Markets Currency Index  65.16 +.05%.

• FTSE 100 futures -.03%.

• S&P 500 futures +.06%.

• NASDAQ 100 futures +.10%.

Morning Preview Links

Earnings of Note 
Company/Estimate

Before the Open:

• (AB)/.70

• (GOLD)/.14

• (BG)/.29

• (CME)/1.55

• (CVS)/1.69

• (GPN)/1.60

• (TAP)/.78

• (MCO)/1.92

• (SHOP)/.24

• (TEVA)/.61

After the Close:

• (ANDE)/.50

• (AMAT)/.93

• (CF)/.26

• (CSCO)/.76

• (EFX)/1.49

• (MRO)/.11 

• (MGM)/.27

• (NTAP)/1.18

• (RDFN)/-.12

• (SPWR)/.24

• (TRIP)/.34

Economic Releases 
10:30 am EST

• Bloomberg consensus estimates call for a weekly crude oil inventory gain of +3,157,420 barrels versus a +3,355,000 barrel gain the prior week. Gasoline supplies are estimated to rise by +620,000 barrels versus a -91,000 barrel decline the prior week. Distillate inventories are estimated to fall by -628,050 barrels versus a -1,512,000 barrel decline the prior week. Finally, Refinery Utilization is estimated to fall by -.23% versus a +.2% gain prior.

2:00 pm EST

• The Monthly Budget Statement for Jan. is estimated at -$10.0B versus $8.7B in Dec.
  

Upcoming Splits

• None of note

Other Potential Market Movers

• The Fed's Powell testimony to Congress, Eurozone Industrial Production report, $27B 10Y T-Note auction, weekly MBA Mortgage Applications report, Cowen Aerospace/Defense/Industrials conference could also impact trading today.

Market Hours
Normal:

• 9:30 am - 4:00 pm EST
  

BOTTOM LINE: Asian indices are mostly higher, boosted by financial and commodity 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.