Economic data, Fed's Beige Book, Deere earnings: 3 things to watch for in the markets on Wednesday

John Deere combine harvesters sit on display during the Farm Progress Show in Boone, Iowa, U.S., on Tuesday, Aug. 28, 2018.
Daniel Acker | Bloomberg | Getty Images

Here are the most important things to know about Wednesday before you hit the door.

1. Economic data

We'll get a bunch of economic data on Wednesday including durable goods and pending home sales. Orders to U.S. factories for big-ticket manufactured goods are expected to rebound slightly after tumbling 1.2%, the largest amount in four months, in September. Durable goods orders for October are expected to slow 1%, according to economists polled by Dow Jones. The slowing growth in durable goods underscores the problems the manufacturing sector is having in the face of a global slowdown and trade war uncertainty.

Pending home sales are released at 10:00 a.m. on Wednesday and economists are expecting home sales to slow from September's growth of 1.5%. Pending home sales, a report that measures signed contracts to buy existing homes, got a boost in September from lower interest rates. Economists are expecting a 0.2% increase in pending home sales for the month of October, according to FactSet.

2. Fed's Beige Book

The Federal Reserve's Summary of Commentary on Current Economic Conditions, also known as the Beige Book, will be released at 2 p.m. on Wednesday. The commentary is an important indicator of the state of the U.S. economy and a look into how the Federal Reserve views its monetary policy stance. The Fed has lowered interest rates three times this year but has signaled they are pausing for now.

Dallas Federal Reserve President Robert Kaplan told CNBC's Steve Liesman on Tuesday he is expecting U.S. economic growth to slow substantially in the fourth quarter because businesses are cutting their inventories because of the U.S.-China trade war.

3. Deere earnings, a trade war proxy

Heavy equipment company Deere reports fiscal fourth quarter earnings before the bell on Wednesday. J.P. Morgan is expecting earnings of $2.07 per share, compared to the $2.30 reported in the same quarter last year. The firm said investors will be focused on full year 2020 guidance and management commentary on the fundamentals of U.S. agriculture amid a trade war between the U.S. and China.

Deere's outlook is a good proxy for the risk in the trade war. Farmers have been hit hard by the trade tensions and a cut to production from Deere could signal more trouble ahead.

"With corn exports down ~60% marketing YTD and soybeans about to face new crop competition from Brazil, it is difficult to see how management can present an upbeat fundamental outlook," said J.P. Morgan analyst Ann Duignan in a note to clients on Monday.

Shares of Deere are up nearly 20% in the last three months.

Major events (all times ET):

8:30 a.m. Initial claims

8:30 a.m. Durable goods

8:30 a.m. Real GDP Q3

10:00 a.m. Personal income

10:00 a.m. Pending home sales

1:00 p.m. 7-year note auction

2:00 p.m. Beige book

Major earnings:

Deere (before the bell)

DouYu (before the bell)

—with reporting from CNBC's Michael Bloom.