Wednesday Watch

Evening Headlines

Bloomberg:        

• Brexit Pushes Britain to Brink as Government Fights for Survival.

• Why May Is Facing a U.K. Confidence Vote (And How It Works).

• EU Expresses Horror at Brexit Vote, Refuses to Reopen Deal.  

• China Adding Stimulus Emboldens Asia Stock Traders to Hit `Buy'.  

• Bonds That Were Ground Zero for China Debt Worries Now Top Pick.

• Asia Stocks Mixed as Rally Eases; Pound Steadies. The rally that drove Asian equities to a six-week high showed signs of stalling Wednesday, while the pound steadied after U.K. politicians voted down a Brexit deal. Shares in Australia and South Korea were little changed and Japanese equities retreated from their almost 9 percent advance since Christmas. Earlier, the S&P 500 Index climbed the most in a week as risk assets across the globe were spurred in part by signs of more stimulus to come in China. The 10-year Treasury yield held at 2.71 percent, while the dollar was steady against major peers. The yield spread between five-year and 30-year Treasuries steepened Tuesday, touching a level unseen since February amid further comments from Federal Reserve officials stressing patience when it comes to policy changes. Japan’s Topix index slid 0.4 percent as of 9:07 a.m. in Tokyo. Hang Seng futures slid 0.1 percent. Australia’s S&P/ASX 200 Index was little changed. Futures on the S&P 500 added 0.1 percent.    

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

• Fed Hawk Urges Patience, What's Next for Central Banks: Eco Day.  

• Junk Bond Forecasts Are Quickly Going From Good to Great.

Wall St. Journal: 

• U.K. Parliament Roundly Rejects May’s Brexit Plan.

• Big Banks Find Sweet Spot.

• Census Can’t Ask About Citizenship, Judge Rules.

• Accountability for Brexit.

• Think College Is Expensive? Wait Until It’s Free.

• White House Looks to Shake Democrats’ Resolve on Shutdown. 

• Walmart(WMT) Could Leave CVS Caremark Pharmacy Networks Amid Dispute.

• Fed’s Dovish Shift Buoys Markets in 2019’s First Weeks.

Fox News:

• As new US-bound caravan grows to more than 2,000, Mexicans lash out against another wave of migrants.

CNBC:

• Theresa May lost big on her Brexit deal vote — here’s what could happen now

• Stocks making the biggest moves after hours: United Airlines, Snap, Apple & more.

• Netflix’s(NFLX) price bump means Amazon(AMZN), Apple’s(AAPL) stocks are bargains.

• PayPal(PYPL) shares could soon break through the $100 level, says trader.

• Here’s how much members of Congress get paid, even during a government shutdown.

• Cramer Remix: Don’t take your cue on all of retail from Macy’s(M).

• Cramer’s charts suggest lower volatility, higher stock prices in coming months.

Zero Hedge:

• American Psychologists Join Gillette, Warn "Traditional Masculinity Can Hurt Boys".

• 'Senior Trump Official': "I Hope A Long Shutdown Smokes Out The Resistance".

• Race-Baiting CNN Analyst Slams Host For "White Privilege", Then Discovers He's Black.

• A New Tactic To Suppress Online Speech: Taxing Social Media.

• Kirsten Gillibrand Announces Plans To Run For President.

• Ukrainian Hackers Broke Into The SEC's EDGAR Database, Made $4.1 Million From Insider Trades.

• Round Two: Snowmageddon Threatens East Coast This Weekend.

• WTI Dips After Smaller Than Expected Crude Draw.

• Entire 'Market' Rallies On NFLX Price-Hike - Shrugs Off Dimon, May, & Grassley.

Business Insider:

• United Airlines' profit tops Wall Street expectations thanks to a new strategy at its hubs.

Telegraph:

• Comment: We risk talking the UK economy into recession with all those Brexit scare tactics.

Night Trading 

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

• Asia Ex-Japan Investment Grade CDS Index 88.50 -1.5 basis points. 

• China Sovereign CDS 61.5 -2.0 basis points.

• Bloomberg Emerging Markets Currency Index 67.84 -.04%.

• FTSE 100 futures -.26%.

• S&P 500 futures +.09%.

• NASDAQ 100 futures +.06%.

Morning Preview Links

Earnings of Note
Company/Estimate
Before the Open:

• (BAC)/.63

• (BLK)/6.40

• (SCHW)/.64

• (CMA)/1.89

• (GS)/4.78

• (PNC)/2.78

• (USB)/1.06

After the Close:

• (AA)/.50

• (CSX)/.99

• (FUL)/.99

• (KMI)/.25

• (PLXS)/.90

Economic Releases

8:30 am EST

• The Import Price Index MoM for Dec. is estimated to fall -1.3% versus a -1.6% decline in Nov.

• The Import Price Index MoM Ex-Petro for Dec. is estimated unch. versus a -,3% decline in Nov.

• The Export Price Index MoM for Dec. is estimated to fall -.7% versus a -.9% decline in Nov.
  

10:00 am EST

• The NAHB Housing Market Index for January is estimated at 56.0 versus 56.0 in Dec.
  

10:30 am EST

• Bloomberg consensus estimates call for a weekly crude oil inventory decline of -1,392,330 barrels versus a -1,680,000 barrel decline the prior week. Gasoline supplies are estimated to rise by +2,524,560 barrels versus a +8,066,000 barrel gain the prior week. Distillate inventories are estimated to rise by +1,504,110 barrels versus a +10,611,000 barrel gain the prior week. Finally, Refinery Utilization is estimated to fall -.66% versus a -1.1% decline prior.

2:00 pm EST

• US Fed Beige Book release.
  

Upcoming Splits

• None of note

Other Potential Market Movers

• The China Home Price report, UK/Germany CPI reports, weekly MBA Mortgage Applications report, TD Securities Mining Conference and the (UNFI) investor day could also impact trading today.

BOTTOM LINE:  Asian indices are slightly lower, weighed down by financial and consumer shares in the region. I expect US stocks to open mixed and to strengthen into the afternoon, finishing modestly higher.  The Portfolio is 100% net long heading into the day.