Wednesday Watch

Evening Headlines
Bloomberg:             

• U.S., China's Top Trade Officials Make First Contact Since Truce.   

• Trade War Threatens Chinese Factories’ Existence, Supplier Says. 

• U.K. Parliament Flexes Muscle as Johnson Doubles Down on No-Deal.

• Investors Might Be Underpricing Draghi’s Desire for a July Move.

• Asian Stocks Set for Mixed Trading Ahead of Powell. Stocks in Asia looked set to trade mixed after U.S. equities made little headway and investors awaited clues on policy from Federal Reserve Chair Jerome Powell. The dollar strengthened to its highest since mid-June and Treasuries slipped. Futures in Japan pointed to a flat start, while contracts rose in Hong Kong and Australia. The S&P 500 Index edged higher as technology shares climbed. The yield on 10-year Treasuries nudged up to 2.06%. The Mexican peso dropped after that country’s finance minister quit. Futures on the S&P 500 Index were flat as of 7:47 a.m. in Tokyo. The underlying gauge gained 0.1% Tuesday. Futures on Japan’s Nikkei 225 were little changed in Singapore. Hang Seng futures earlier added 0.5%. Futures on Australia’s S&P/ASX 200 Index advanced 0.5%.  

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

• Traders Are Certain the Fed Will Cut in July, But Unsure What’s Next.

• DNA-Testing Service Exposed Thousands of Customer Records Online.

Wall Street Journal:

• Virgin Galactic to Go Public.

• Judge Rejects Trump Plan to Swap Legal Team in Census Case.

• Powell’s Approach to Interest Rates Wins Bipartisan Backing.

• Mexico Finance Minister Resigns in Surprise Move; Peso Falls. 
  

• Border Apprehensions Decline for First Time Since January.

Fox News: 

• Epstein booted from Mar-a-Lago in case more sickening than Weinstein, Cosby: best-selling author.

• JASON CHAFFETZ: Will IG report on FBI surveillance be classification cover-up?

CNBC:

• Fed chief faces tough task in Congressional testimony: ‘Walking a tightrope over Niagara Falls’.

• Lighthizer, Mnuchin spoke with Chinese Vice Premier Liu He on Tuesday.

• Stocks making the biggest moves after hours: Levi Strauss, T-Mobile, Facebook.

Zero Hedge: 

• Italy's 50 Year Bonds Are 6x Oversubscribed As Investors Lose Their Minds.

• Bidens Earned More Than $15 Million In The Past Two Years.

• Ship Seized In Record $1.3 Billion Cocaine Bust Belongs To JPMorgan.

• Snyder: Epstein Case Has The Potential To Be The Biggest Scandal In American History.

• Class 8 Truck Orders Crash 70% In June After A 71% Drop In May .

• AOC 'Womansplains' Sexism To Kellyanne Conway After 'Catfight' Comment.

• Jeffrey Epstein's Wikipedia Page Stealth-Edited To Remove Ties To Democrats.

• WTI Spikes After Huge Crude Draw.

• Despite Late-Day Panic-Buying, Dow Suffers Longest Losing Streak In 4 Months.

Business Insider:  

• The UK is running out of time to prepare for a no-deal Brexit as work is 'not happening quickly enough'.

• From Bill Clinton to Naomi Campbell: Here are some of the famous people who have flown on Jeffrey Epstein's private plane, which has been dubbed the 'Lolita Express'.

• A new quote from Steve Jobs reveals what the late Apple cofounder really thought of Tim Cook: 'Tim's not a product guy'.

Night Trading 

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

• Asia Ex-Japan Investment Grade CDS Index 64.50 +2.5 basis points.

• China Sovereign CDS 42.5 +1.75 basis points.

• Bloomberg Emerging Markets Currency Index  67.25 unch.

• S&P 500 futures +.08%.

• NASDAQ 100 futures +.13%.

Morning Preview Links 

Earnings of Note 
Company/Estimate

Before the Open:

• (ANGO)/.26

• (KHC)/.61

• (MSM)/1.49

After the Close:

• (AIR)/.63

• (BBBY)/.08

• (PSMT)/.50

Economic Releases 
10:00 am EST

• Wholesale Trade Sales MoM for May is estimated to rise +.3% versus a -.4% decline in April.
  

10:30 am EST

• Bloomberg consensus estimates call for a weekly crude oil inventory decline of -1,692,170 barrels versus a -1,085,000 barrel decline the prior week. Gasoline supplies are estimated to fall by -1,825,270 barrels versus a -1,583,000 barrel decline the prior week. Distillate inventories are estimated to rise by +641,180 barrels versus a +1,408,000 barrel gain the prior week. Finally, Refinery Utilization is estimated to fall by -.06% versus unch. prior.
  

2:00 pm EST

• FOMC June 19 Meeting Minutes.
  

Upcoming Splits

• None of note

Other Potential Market Movers

• The Fed's Powell testimony to Congress, Fed's Bullard speaking, China CPI report, UK industrial production report, $24B 10Y T-Note auction, weekly MBA Mortgage Applications report, (WYNN) investor day and the (COST) June sales results could also impact trading today.

BOTTOM LINE: Asian indices are mostly higher, boosted by commodity and technology shares in the region. I expect US stocks to open mixed and to rally into the afternoon, finishing modestly higher. The Portfolio is 100% net long heading into the day.