Tuesday Watch

Evening Headlines 
Bloomberg:

• Top China Banks Poised to Sell Preferred Stock to Buffer Capital. ICBC (1398), China Construction Bank Corp. (939), Agricultural Bank of China Ltd. (601288) and Bank of China Ltd. said in the past week they’re preparing to sell the stock as they reported a combined 12 percent increase in 2013 profit, down from 15 percent a year earlier. Preferred stock, available under a trial approved by regulators last month, permits banks to raise capital without selling dilutive common equity. The shares can be converted into common stock if capital ratios fall below a certain level.

• Asian Stocks Fall First Time in 5 Days. Asian stocks fell, with the regional benchmark index on course for its first loss in five days, ahead of Chinese manufacturing data expected to confirm growth is slowing in the world’s second-largest economy. The MSCI Asia Pacific Index lost 0.2 percent to 137.72 as of 9:27 a.m. in Tokyo. 

• Easier Loans: Haven't We Seen This Movie Before?

• Ebola’s Death Toll Reaches 80 in ‘Unprecedented’ Outbreak. The Ebola outbreak in Guinea, where the death toll climbed to 80, is “unprecedented,” international aid organization Doctors Without Borders said. In neighboring Liberia, one of two confirmed cases has died, while a second person who died with a suspected Ebola infection tested negative for the virus, the World Health Organization said in a statement.

CNBC:

• Caterpillar(CAT) dodged paying $2.4 billion in taxes: Senate report. Heavy equipment giant Caterpillar shifted $8 billion in profits to an offshore Swiss affiliate over the last decade, and avoided paying $2.4 billion in U.S. taxes, according to a new report from the Senate Permanent Subcommittee on Investigations.

Zero Hedge:

• Japanese Outlook Data Collapses As China's PMI Misses And Beats (And Economy Contracts & Expands). (graph)

• As If 194 Hedge Fund Suddenly Cried Out In Terror, And Were Suddenly Silenced.

• Summing Up Q1 Fundamentals (In 2 Simple Charts).

• IPO Madness & The Lesson Of History. (graph)

• Here Come The Feds: FBI Probing HFT.

• The Best (And Worst) Global Equity Markets In The First Quarter. (graph)

• Nigel Farage: Europe Has "Blood On Its Hands" Over Ukraine.

• High Frequency Talking: Santelli Vs Pisani. (video)

ValueWalk:

• Speculative Net Short Position In Ten Year Futures Largest Since 2005. (graph)

Business Insider:

• Manhattan U.S. Attorney's Office Warns 'A Significant Financial Institution' May Get Charge With A Serious Crime.

• North Korea Threatens A 'New Kind Of Nuclear Test'.

Washington Examiner:

• They Blew Up the Healthcare System for This?

Financial Times:

• Alert on leveraged loan terms. One of the biggest buyers of US leveraged loans is sounding the alarm over unusual new terms being jammed into deals, increasing risk in one of the hottest investment areas of recent years. Eaton Vance, the US fund management group, says company owners are seeking – and increasingly being granted – extra freedom to pile on more debt in the future without recourse to existing lenders.

Evening Recommendations

• None of note

Night Trading

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

• Asia Ex-Japan Investment Grade CDS Index 125.0 -3.0 basis points.

• Asia Pacific Sovereign CDS Index 89.75 -3.0 basis points.

• FTSE-100 futures +.28%.

• S&P 500 futures +.05%.

• NASDAQ 100 futures  -.01%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (APOL)/.19

• (TECD)/1.93

Economic Releases
9:45 am EST

• Final March US Manufacturing PMI is estimated to rise to 56.0 versus a prior estimate of 55.5.

10:00 am EST

• ISM Manufacturing for March is estimated to rise to 54.0 versus 53.2 in February.

• ISM Prices Paid for March is estimated to fall to 59.5 versus 60.0 in February.

• Construction Spending for February is estimated to rise +.1% versus a +.1% gain in January.

• IBD/TIPP Economic Optimism for April is estimated to rise to 46.0 versus 45.1 in March.

Afternoon:

• Total Vehicle Sales for March are estimated to rise to 15.8M versus 15.27M in February.
  

Upcoming Splits

• (PEGA) 2-for-1

• (GOOG) 2-for-1 

Other Potential Market Movers

• The Eurozone unemployment rate, Eurozone Manufacturing PMI and the weekly retail sales reports could also impact trading today.

BOTTOM LINE: Asian indices are mostly higher, boosted by industrial and real estate shares in the region. I expect US stocks to open modestly higher and to weaken into the afternoon, finishing mixed. The Portfolio is 50% net long heading into the day.