Wednesday Watch

Evening Headlines
Bloomberg:       

• EU Leaders Nominate Lagarde for ECB President: Summit Update.

• Pence Abruptly Cancels Trip; Official Says ‘No Cause for Alarm’.

• Asia Stocks Slip; U.S. Yields Hit New 2 1/2-Year Low. Stocks in Asia were mostly lower Wednesday as investors took a breather after four weeks of gains. Ten-year Treasury yields dipped to the lowest since November 2016 following a disappointing run of economic data. Japanese shares slipped with equities in Korea and Hong Kong, while those in Australia edged higher. The yen hit its high for the session after the Bank of Japan made small tweaks to its bond buying program. The rally extended in Treasuries and gold. News on European Central Bank and Federal Reserve leadership appointments underlined the prospect for easier monetary policy, which could offer support for a range of assets. Futures on the S&P 500 Index slid 0.1% as of 10:20 a.m. in Tokyo. The underlying gauge rose 0.3% Tuesday. Japan’s Topix fell 0.8%. Hong Kong’s Hang Seng Index declined 0.3%. Australia’s S&P/ASX 200 Index rose 0.4%. South Korea’s Kospi lost 0.6%.  

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

• Lagarde Supremacy, Depth of Fed Cut, Truce Too Late: Eco Day.

• Grim Earnings Forecasts Are Getting Worse by the Week.

• Hedge Funds Are Tracking Private Jets to Find the Next Megadeal.

Wall Street Journal:

• IMF’s Lagarde Nominated to Run ECB.

• Tech Giants Battle Spread of Spurious Cancer Treatments.

• A Leftist Mob Attacked Me in Portland.

• Nike(NKE) Defends Pulling ‘Betsy Ross’ Sneaker as Arizona Governor Withdraws Aid.

• China Hardens Line on Hong Kong Protests, Hinting It Could Intervene.

Fox News:

• Navy SEAL celebrates 'not guilty' verdict in murder trial as wife says family 'terrorized'.

• Mayor Pete using police shooting probe to 'further political campaign:' officer.

CNBC:

• Trump to nominate Judy Shelton, Christopher Waller to the Federal Reserve.

• Amazon is making grocery brands pay for losses on Prime Day promotions, as focus on profit grows.

• Symantec shares soar on report that Broadcom is in talks to acquire the security software maker.

Zero Hedge:

• Would The Founding Fathers Be Banned From Social Media? 

• Arizona Blocks Nike After Kaepernick-Complaint Sparks Virtue-Signaling Sneaker Ban.

• Pastors: Ocasio-Cortez And MSM Spewing 'Misinformation' On Border Facility Conditions .

• Gold Surges After Trump Nominates Gold Standard Advocate Judy Shelton To Fed Board.

• Sorry, Elon: Waymo's Robo Taxis Win Approval To Start Carrying Passengers.

• Trump Admin Drops Fight For Citizenship Question In 2020 Census.  

• Tesla(TSLA) Shares Spike 8% On Record Deliveries And Record Production In Q2 2019.

• Bigger-Than-Expected Crude Draw Fails To Revive Oil's Worst OPEC Reaction Since 2014.

• Gold Soars Most In 8 Months As Copper & Crude Collapse.

Business Insider: 

• Chinese officials are forcing tourists to install an invasive app that downloads their texts and scans their phones at the border of one of the most surveilled regions in the country.

• Hedge funds are failing left and right and billionaire investors say the carnage has only gotten started.

Night Trading 

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

• Asia Ex-Japan Investment Grade CDS Index 62.50 +.5 basis point.

• China Sovereign CDS 42.25 +.75 basis point.

• Bloomberg Emerging Markets Currency Index  67.59 -.03%.

• S&P 500 futures -.13%.

• NASDAQ 100 futures -.10%.

Morning Preview Links 

Earnings of Note 
Company/Estimate

Before the Open:

• (ISCA)/.39

• (OMN)/.21

After the Close:

• None of note

Economic Releases
7:30 am EST

• Challenger Job Cuts YoY for June.

8:15 am EST

• The ADP Employment Change for June is estimated to rise to 140K versus 27K in May.
  

8:30 am EST

• The Trade Balance for May is estimated at -$54.0B versus -$50.8B in April.

• Initial Jobless Claims for last week are estimated to fall to 223K versus 227K the prior week.

• Continuing Claims are estimated to fall to 1675K versus 1688K prior.

10:00 am EST

• Factory Orders for May are estimated to fall -.6% versus a -.8% decline in April.

• The ISM Non-Manufacturing Index for June is estimated to fall to 56.0 versus 56.9 in May.
  

10:30 am EST

• Bloomberg consensus estimates call for a weekly crude oil inventory decline of -2,312,710 barrels versus a -1,278,800 barrel decline the prior week. Gasoline supplies are estimated to fall by -2,703,430 barrels versus a -996,000 barrel decline the prior week. Distillate inventories are estimated to fall by -1,491,290 barrels the prior week. Finally, Refinery Utilization is estimated to fall by -.27% versus a +.3% gain prior.
  

Upcoming Splits

• None of note

Other Potential Market Movers

• The China Services PMI, weekly Bloomberg Consumer Comfort Index, weekly MBA Mortgage Applications report and the (F) conference call could also impact trading today.

BOTTOM LINE: Asian indices are mostly 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 75% net long heading into the day.