Wednesday Watch

Evening Headlines

Bloomberg:     

• Life in China Is Getting Harder, and Xi Jinping Should Worry.

• China’s Economy Struggling Across All Sectors, Beige Book Says.

• U.S. Considers Way to Heighten Airbus Tariff Pain for the EU.

• A Record $85 Billion Japan Bond Frenzy Is About to Reverse.

• Asia Stock Futures Drop Amid U.S. Political Risk. Stocks in Asia looked set to fall after U.S. equities dropped and Treasuries rose on political turmoil in Washington. Futures pointed to losses in Tokyo, Sydney and Hong Kong after the S&P 500 fell the most in a month. Speaker Nancy Pelosi said the House is opening a formal impeachment inquiry of President Donald Trump. The benchmark cut losses earlier in the day after Trump said he would release a complete transcript on Wednesday of his phone call with the Ukrainian president, which is the subject of a congressional investigation and a whistle-blower complaint from an unidentified intelligence official. The 10-year Treasury yield hit a two-week low, while the dollar fell to session lows and yen strengthened. Futures on the S&P 500 Index added 0.1% as of 7:52 a.m. in Tokyo. The underlying gauge fell 0.8% on Tuesday. Futures on Japan’s Nikkei 225 slid 1%. Hang Seng futures earlier lost 0.6%. Futures on Australia’s S&P/ASX 200 Index declined 1.1%. 

• Oil Falls as Report Signals U.S. Crude Stockpiles on the Rise.

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

• College-Scandal Punishment Gets Harsher With Richer Bribes.

Wall Street Journal:

•   Trump Authorizes Release of Ukraine Call Transcript.

•   The Biden-Clinton Method.

•   California’s Hobo Paradise.

•   WeWork’s Neumann Steps Down as CEO.

•   Saudi Arabia Considers Doubling Stakes in Aramco Public Offering.

Fox News:

• Pelosi announces formal impeachment inquiry into Trump as outcry from Dems hits fever pitch.

• Iranian President Rouhani bashes Trump in sit-down with Chris Wallace.

• Trump slams Pelosi after she announces impeachment inquiry.

CNBC:

• S&P 500 drops the most in a month on Trump impeachment concerns.

• Nike shares hit all-time high as new products drive sales, earnings top expectations.

• Bitcoin crashes 15% to below $8,000 for first time since June.

• Vaping giant Juul is cutting staff in corporate restructuring as scrutiny intensifies.
  

Zero Hedge:

• Trump Slams Democrats' "Witch Hunt Garbage" After Pelosi Launches Impeachment Probes.

• Macron Slams Greta Thunberg After Teenage Activist Sues France Over Climate - But Leaves Out China.

• The Disturbing Cult Of Greta Thunberg.

• "Terribly Divisive": Tulsi Gabbard Refuses To Join Fellow Democrats' Calls For Impeachment.

• Cryptos Are Collapsing Led By Altcoin Bloodbath.

• "Billionaires Shouldn't Exist": Bernie Proposes Tax To Cut Billionaire Wealth In Half.

• The Latest Numbers Tell Us That The Global Economic Slowdown Is Accelerating Dramatically.

• WTI Extends Losses After Second Weekly Surprise Crude Build.

• Stocks Slammed On Sentiment Slump, Trade Turmoil, & Impeachment Anxiety.

Business Insider:

• WeWork could cause a disaster for New York City's real-estate market.

• Elon Musk is doubling down on China as car sales plummet and electric-vehicle subsidies are slashed.

• The top 10 toys of the holiday season sold at Walmart, Amazon, and Target according to experts.

Telegraph:

• Tone deaf Fed will soon slash rates to near zero and relaunch quantitative easing.

Night Trading 

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

• Asia Ex-Japan Investment Grade CDS Index 74.75 +1.5 basis points.

• China Sovereign CDS 48.25 +2.75 basis points.

• Bloomberg Emerging Markets Currency Index  65.59 unch.

• FTSE 100 futures -.56%.

• S&P 500 futures +.18%.

• NASDAQ 100 futures +.20%.

Morning Preview Links 

Earnings of Note 
Company/Estimate

Before the Open:

• (WOR)/.75

After the Close:

• (AIR)/.51

• (FUL)/.90

• (KBH)/.66

Economic Releases
10:00 am EST

• New Home Sales for August are estimated to rise to 658K versus 635K in July.

10:30 am EST

• Bloomberg consensus estimates call for a weekly crude oil inventory gain of +37,360 barrels versus a +1,058,000 barrel gain the prior week. Gasoline supplies are estimated to fall by -192,700 barrels versus a +781,000 barrel gain the prior week. Distillate inventories are estimated to fall by -622,7000 barrels versus a +437,000 barrel gain the prior week. Finally, Refinery Utilization is estimated to fall by -.63% versus a -3.9% decline prior.
  

Upcoming Splits

• None of note

Other Potential Market Movers

• The GfK Consumer Confidence report, $41B 5Y T-Note auction, weekly MBA Mortgage Applications report, Sidoti Investor Conference, Wells Fargo Consumer/Beauty Conference, (VFC) investor day and the (BBY) investor meeting could also impact trading today.

BOTTOM LINE: Asian indices are lower, weighed down by energy and industrial 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.