Friday Watch

Evening Headlines 
Bloomberg:

• Hagel Says U.S. Mulls Adding Brigade to Counter Russia. Defense Secretary Chuck Hagel said permanently stationing an additional U.S. Army brigade in Europe is among options to beef up security as Russian troops remain massed along Ukraine’s eastern border. The North Atlantic Treaty Organization has asked its top military commander, U.S. Air Force General Philip Breedlove, to study “a number of new possibilities, new measures, new options that we and NATO should consider,” Hagel said in an interview today in Honolulu with Bloomberg News and Bloomberg Television. Asked if those included permanently stationing a third brigade of 5,000 troops in Europe, Hagel said, “That’s all part of the measures that could be considered.”  

• Tencent Sinks on Valuation Amid Biggest Stock Swings Since 2011. Tencent Holdings Ltd. (700) fell to a two-month low while volatility in the shares rose to the highest level since December 2011 amid growing concern that Internet companies are overvalued.

• Asian Stocks Decline Before U.S Employment Report. Asian stocks fell, with the regional equities benchmark index on course to snap its longest winning streak this year, as investors awaited data on U.S. jobs growth. The MSCI Asia Pacific Index slid 0.2 percent to 138.81 as of 9:01 a.m. in Tokyo, before markets opened in China and Hong Kong.

Wall Street Journal:

• China Cash Shortage Brings IOUs to Fore. Use of Acceptance Drafts Grows as Economy Slows, Banks Hesitate to Lend. 

• Noonan: A Catastrophe Like No Other. The president tries to put a good face on ObamaCare.

• Heading for Asia, U.S. Defense Secretary Sends a Message to China. Chuck Hagel Says Washington Is 'Increasingly Concerned' About Disputes in the South China Sea.

Fox News:

• Ex-CIA boss Morell challenged for omitting key facts on Benghazi. In his opening statement during highly anticipated testimony Wednesday on Benghazi, former CIA deputy director Michael Morell claimed to be an intelligence professional who was willing to lay out the facts -- no matter how damaging.

• Fort Hood gunman may have had angry words with fellow soldiers before rampage, Army says. Fort Hood gunman Ivan Lopez may have had angry words with fellow soldiers before opening fire on the military base and killing three, wounding 16 and then turning the gun on himself, an Army official said Thursday.

MarketWatch.com:

• China central bank: Economy in 'reasonable range'. China's central bank said current domestic economic conditions remain within a "reasonable range," though the economy still faces complicated situations. Domestic price levels are basically steady, but growth continues to slow for some other emerging economies, the People's Bank of China said in a brief statement released Thursday following its quarterly policy meeting.

CNBC:

• Watch Art Cashin: Traders see 'no-lose situation'. (video) Art Cashin said he's hearing that a lot of traders see Friday's March employment report as a "no-lose situation."

Zero Hedge:

• China General Says "War With Japan Increasingly Likely" As Russia Conducts New Army Drill Near Latvia, Estonia.

• White House Petition Launched To Ban HFT Market Abuse.

• The Economic Catastrophe That Is Abenomics Sends Japanese Gas Prices To Five Year Highs. (graph)

• What Happened The Last Time Japan Raised Its Consumption Tax? (graph)

• BATS Admits CEO Lied About HFT On CNBC.

• "Bazooka Theory" And Why The Authorities Won't Pull The Trigger.

Reuters:

• Emerging markets output growth falls 4th straight month-survey. Business activity across emerging markets fell for the fourth straight month in March, with output contracting in three of the four biggest economies, a survey showed on Friday. HSBC's composite emerging markets index of manufacturing and services purchasing managers' surveys slipped to 50.3 from 51.1 in February, teetering on the 50 threshold that marks the difference between expansion and contraction.

Securities Times:

• China's Changsha Denies Report on Home Buying Curbs. Changsha Municipal Commission of Housing and Urban-Rural Development denied that the city is discussing possibility of easing property purchase curbs.

Evening Recommendations

• None of note

Night Trading

• Asian equity indices are -.50% to unch. on average.

• Asia Ex-Japan Investment Grade CDS Index 124.50 +3.5 basis points.

• Asia Pacific Sovereign CDS Index 89.5 +2.0 basis points.

• FTSE-100 futures +.35%.

• S&P 500 futures +.13%.

• NASDAQ 100 futures  +.18%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (AZZ)/.42

• (KMX)/.53

Economic Releases
8:30 am EST

• The Change in Non-Farm Payrolls for March is estimated at 200K versus 175K in February.

• The Unemployment Rate for March is estimated to fall to 6.6% versus 6.7% in February.

• Average Hourly Earnings for March are estimated to rise +.2% versus a +.4% gain in February.

Upcoming Splits

• (DEG) 4-for-1

• (SFUN) 5-for-1

• (NJ) 2-for-1

Other Potential Market Movers

• The German Factory Orders report 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 modestly higher and to weaken into the afternoon, finishing modestly lower. The Portfolio is 50% net long heading into the day.