Wednesday Watch

Evening Headlines
Bloomberg:    

• Senate Republicans Hint at Overriding Any Trump Veto on Tariffs.

• Asia Stocks Rally as Fed Signals It's Ready to Act. Stocks in Asia rose after Federal Reserve Chairman Jerome Powell signaled an openness to rate cuts, giving a kicker to risk appetite that remains fragile amid trade-war tensions. Treasuries steadied after Tuesday’s drop. Japan led the charge, with the Topix index up more than 1.5%. Gains were more modest in Korea and Australia. The S&P 500 Index rose over 2% and Treasury yields climbed from multi-year lows Tuesday as Powell said the central bank is monitoring the impact of the trade war and would act as appropriate to sustain the U.S. expansion. Japan’s Topix index rose 1.6% as of 9:05 a.m. in Tokyo. Futures on the S&P 500 edged 0.2% higher. The underlying gauge surged 2.1% Tuesday. Australia’s S&P/ASX 200 Index advanced 0.5%. South Korea’s Kospi index added 0.5%.  

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

• Powell Opens Door to Cut, Central Banks Poised to Act: Eco Day.  

• Oil Slides as Rising U.S. Stockpiles Stoke Fears of Supply Glut.

• Big Tech Could Get Subpoenas in House Probe, Top Democrat Says.

• Short-Seller Pain That Began Monday Just Became a Bloodbath.

• Central Banks Are Poised to Act as World Economic Warnings Flash.  

• Bitcoin Indicator Flashes a Sell Signal as Slump Accelerates.

Wall Street Journal:

• Square(SQ) Sends Millions of Digital Receipts, Sometimes to the Wrong Person.

• Fed Puts Interest Rate Cut in Play.

• Justice Thomas on Abortion and Eugenics.

• Washington’s Anti-Growth Turn.

• Safe Space or Police State? Monitoring Your Kids Online.

• Hong Kong Remembers Tiananmen Square Victims 30 Years On.

• China Warns Its Citizens About Visiting or Studying in the U.S.

• Senate Republicans Threaten to Block Trump on Mexico Tariffs. 

• House Passes Bill Aimed at Protecting Immigrants Brought Illegally to U.S. as Children.

Fox News:

• Hours after DOJ slammed House Dems over Barr treatment, Nadler offers to negotiate.

CNBC: 

• Stocks making the biggest moves after hours: Salesforce, GameStop, Skyworks and more.

• One FANG stock is about to break out, chart suggests.

• Tiffany(TIF) says sales to Chinese tourists are plummeting because of the trade war.

• Salesforce(CRM) shares rise on earnings beat.

Zero Hedge: 

• Bloomberg Rival Refinitiv Censors Reuters Story About Censorship Of Tiananmen Square Anniversary Coverage.

• US Auto Sales Pause Plunge In May, Helped By Bloated Inventories And Fleet Sales.

• 'Coward Of Broward' Arrested: Former Sheriff's Deputy Who Ran From Mass Shooting Faces 11 Counts.

• WTI Erases Day's Gains After API Reports Major Inventory Builds.

• Due To Cataclysmic Flooding, Millions Of Acres Of US Farmland Will Not Be Planted With Crops This Year.

• Trump Threatens New National Emergency To Enact Mexico Tariffs.

• CNN, Maddow Ratings In Absolute Freefall After Russia Narrative Collapses.

• Dollar Dumps, Yields Jump On Biggest Stock Short-Squeeze In 5 Months.

Business Insider:

• In a major reversal, California says coffee 'does not pose a significant cancer risk' and may even help protect against some cancers.

• 34 photos of Melania and Donald Trump's historic state visit with the Queen.

Night Trading 

• Asian equity indices are +.5% to +1.0% on average.

• Asia Ex-Japan Investment Grade CDS Index 77.25 -3.5 basis points.

• China Sovereign CDS 56.50 -3.0 basis points.

• Bloomberg Emerging Markets Currency Index 66.54 +.04%.

• S&P 500 futures +.32%.

• NASDAQ 100 futures +.47%.

Morning Preview Links 

Earnings of Note 
Company/Estimate

Before the Open:

• (AEO)/.21

• (BF/B)/.30

• (CPB)/.47

• (GIII)/.22

• (VRA)/-.07

After the Close:

• (FIVE)/.35

• (SFIX)/-.03

• (UNFI)/.52

• (CLDR)/-.23

• (CMTL)/.26

• (ABM)/.42

Economic Releases
8:15 am EST

• The ADP Employment Change for May is estimated at 185K versus 275K in April.

10:00 am EST

• The ISM Non-Manufacturing Index for May is estimated to fall to 55.4 versus 55.5 in April.
  

10:30 am EST

• Bloomberg consensus estimates call for a weekly crude oil inventory decline of -1,433,450 barrels versus a -282,000 barrel decline the prior week. Gasoline supplies are estimated to rise by +354,300 barrels versus a +2,204,000 barrel gain the prior week. Distillate inventories are estimated to fall by -55,100 barrels versus a -1,615,000 barrel decline the prior week. Finally, Refinery Utilization is estimated to rise by +.63% versus a +1.3% gain the prior week.
  

2:00 pm EST

• Fed's Beige Book report.

Upcoming Splits

• None of note

Other Potential Market Movers

• The China Services PMI report, Eurozone PPI report, Eurozone PMI Services report, weekly MBA Mortgage Applications report, Deutsche Bank Industrials Conference, CSFB Energy Conference, William Blair Growth Stock Conference, (IFF) investor day, UBS Industrials/Transport Conference, (PRU) investor day, (PLXS) analyst day and the (COST) May sales results could also impact trading today.

BOTTOM LINE: Asian indices are higher, boosted by industrial and technology shares in the region. I expect US stocks to open modestly higher and to maintain gains into the afternoon. The Portfolio is 75% net long heading into the day.