Friday Watch

Evening Headlines
Bloomberg: 

• `Trade of a Decade'? It Doesn't Bode Well for Emerging Markets. Behind the best gains for emerging markets since 2009, there are some ominous signs that the rally is about to hit a wall. The 13 percent surge in stocks last month was accompanied by the lowest trading volume for five years in the markets with the biggest advances and the weakest company profits for six. In the foreign-exchange market, currencies are mirroring moves in oil prices by the most since 2012, suggesting vulnerability to any renewed weakness in commodities. It all underscores the fragility of a rebound driven by $37 billion of inflows from investors in March, more than in any month since June 2014. Bears including Barclays Plc. and UBS AG say it’s at odds with falling exports and contracting manufacturing in developing economies, while the forces behind the rally -- a dovish Federal Reserve, stability in China’s economy and rises in oil prices -- are unlikely to persist. “The macro picture for emerging markets hasn’t really changed much since January,” said Yerlan Syzdykov, a London-based emerging-market bond manager at Pioneer Investment Management Ltd., whose fund beat 98 percent of its peers over the past three years. “The economic slowdown in emerging markets will continue until 2018.”
• Singapore Home Prices Have Longest Slide in Almost Two Decades. Singapore home prices dropped for a tenth quarter, posting the longest losing streak in almost two decades, as tighter mortgage curbs cooled demand in Asia’s second-most expensive housing market. An index tracking private residential prices fell 0.7 percent in the three months ended March 31 from the previous quarter, matching the longest losing run since 1998, according to preliminary data from the Urban Redevelopment Authority on Friday. The government has signaled it is reluctant to lift property cooling measures it began introducing in 2009, for fear it will lead to overheating in the market once again. The residential curbs have included a cap on debt repayment costs at 60 percent of a borrower’s monthly income and higher stamp duties on home purchases, after low interest rates and demand from foreign buyers raised concerns prices had risen too far too fast.
• Corporate Sentiment in Japan Slumps to Near Three-Year Low. Sentiment among Japan’s large manufacturers deteriorated to the lowest level since mid-2013 as a stronger yen posed risks to company profits, undermining efforts to spur recovery in the world’s third-largest economy. The Tankan index of confidence among large manufacturers stood at 6 in March, the Bank of Japan said Friday, declining from 12 three months ago. A positive number means there are more optimists than pessimists among manufacturers. Economists had forecast 8 in a Bloomberg survey. The drop in sentiment from large employers suggests business investment and wage growth will remain tepid, underscoring the challenges faced by BOJ Governor Haruhiko Kuroda and Prime Minister Shinzo. Abe is front-loading budget spending while Kuroda has added a negative rate to his monetary policy arsenal. 
• Asian Stocks Sink With Oil as Aussie, Copper Rally on China Data. Asian stocks slid as the fresh quarter got under way, with Japanese equities leading losses amid a slump in corporate sentiment. Commodity currencies and copper rose after a gauge of Chinese manufacturing expanded for the first time since July. After recording their best month since October, Asian shares retreated Friday amid losses of more than 1 percent for stock gauges in Japan and Australia. The yen resumed gains as the greenback extended declines after its worst monthly performance since 2010. The Australian and New Zealand currencies strengthened, while the Malaysian ringgit rose for a fifth day. Crude fell back toward $38 a barrel on glut concerns. The MSCI Asia Pacific Index lost 1.3 percent as of 10:35 a.m. Tokyo time, falling for the first time in three days. The gauge added 8.2 percent in March, paring back its quarterly loss to 2.3 percent.

Wall Street Journal:

• U.S. Moves to Give Iran Limited Access to Dollars. Proposal on sanctions relief comes amid rising criticism from Tehran. The Obama administration is preparing to give Iran limited access to U.S. dollars as part of looser sanctions on Tehran, according to congressional staff members and a former American official briefed on the plans.
• Trump’s Mess Has Become His Message. His supporters are getting embarrassed by his sheer dumb grossness.

Fox News:

• Fox Business Network Poll: Cruz leads in Wisconsin. (video) Ted Cruz leads Donald Trump in the Republican nomination contest in Wisconsin, according to a Fox Business Network Poll released Thursday. Cruz garners 42 percent among Wisconsin likely GOP primary voters, while Trump receives 32 percent.  John Kasich comes in third with 19 percent. Among just those who say they will “definitely” vote, Cruz’s lead over Trump widens to 46-33 percent, and Kasich gets 16 percent. There is a big gender gap.  Women back Cruz over Trump by a 19-point margin (46-27 percent).  The two candidates are much closer among men:  Cruz gets 40 percent to Trump’s 35 percent. Cruz’s advantage over the real estate mogul also comes from self-described “very” conservative voters, who give him a 36-point lead (61 percent Cruz vs. 25 percent Trump). 
• 'One shot at the queen': FBI, AG intensify focus on Clinton email probe. (video) As the FBI enters the final phases of its investigation into Hillary Clinton’s use of an unauthorized email server for government business, Attorney General Loretta Lynch and FBI Director James Comey are meeting frequently to discuss the progress and handling of the highly sensitive case, a source told Fox News. Among the issues discussed in the meetings, which have been taking place several times per week, are who will be interviewed and in what order, according to an intelligence source close to the ongoing case. Emails released by the State Department have already shown Clinton and several key aides used the personal, unsecured network to send more than 1,000 messages which have been deemed classified. 

Zero Hedge:

• AsiaPac Data Deluge: China Good, South Korea Bad, Japan Ugly. (graph) 
• 2016: The End Of The Global Debt Super Cycle. (graph)
• Hong Kong Retail Sales Crash Most Since 1999 As Stocks Soar 14%. (graph)
• Worst Case Scenario: 73% Down From Here. (graph)
• Olympics In Doubt As Brazil Sports Minister Quits, Rio Governor Says "This Is The Worst Situation I've Ever Seen".
• Maybe You're Confused By The Fed – But Wall Street Isn't.
• China Unveils 'Trumpian' Tariffs On All Foreign Goods.
• The Reason Anbang Pulled The Starwood Offer: It Couldn't Prove It Has The Funds.
• Something Did Break After All: Repo Rate Soars Most Since September 2008. (graph)
• Fed Levitation & The Looming Liquidity Trap.
• Copper Continues To Crumble Amid Record China Inventories.
• For Canada's Banks This Is "The Next Shoe To Drop", And Why It Will Drop This Spring. (graph)
• Q1 2016: Gold Glows Amid The Greatest Stock Market Comeback In The History Of Investing. (graph)

Business Insider:

• China's manufacturing sector bounces back.
• Trump's abortion comments are giving Democrats plenty of ammunition for November.
• Corporate profit margins might've just put in a generational peak. (graph)
• Railroad stocks are getting crushed by the collapse in oil and coal prices.
• JOHN MAULDIN: The next recession will blow out the US budget.

21st Century Business Herald:

• Beijing Resumes Lands Sale Requirement to Curb Home Prices. Beijing imposed land sale requirements on a new sale of plots, citing bidding documnets posted on Beijing Municipal Bureau of Land and Resource's website.

Night Trading 

• Asian equity indices are -1.75% to -.5% on average.
• Asia Ex-Japan Investment Grade CDS Index 144.25 -2.75 basis points. 
• Asia Pacific Sovereign CDS Index 58.5 +3.25 basis points. 
• Bloomberg Emerging Markets Currency Index 72.62 -.06%. 
• S&P 500 futures -.13%. 
• NASDAQ 100 futures -.24%.

Morning Preview Links

Earnings of Note
Company/Estimate 

• (BBRY)/-.10

Economic Releases  
8:30 am EST

• The Change in Non-Farm Payrolls for March is estimated to fall to 205K versus 242K in February.
• The Unemployment Rate for March is estimated at 4.9% versus 4.9% in February.
• Average Hourly Earnings for March is estimated to rise by +.2% versus a -.1% decline in February.       

10:00 am EST

• ISM Manufacturing for March is estimated to rise to 50.9 versus 49.5 in February.
• ISM Prices Paid for March is estimated to rise to 44.0 versus 38.5 in February.
• Construction Spending for February is estimated to rise +.1% versus a +1.5% gain in January.
• Final Univ. of Mich. Consumer Confidence for March is estimated to rise to 90.5 versus 90.0 in February.    

Afternoon:

• Wards Total Vehicle Sales for March is estimated to rise to 17.5M versus 17.43M in February.

Upcoming Splits 

• None of note

Other Potential Market Movers

• The Fed's Mester speaking, UK Manufacturing PMI report and the (F) March sales conference call could also impact trading today.

BOTTOM LINE: Asian indices are lower, weighed down by industrial and technology shares in the region. I expect US stocks to open mixed and to weaken into the afternoon, finishing modestly lower. The Portfolio is 25% net long heading into the day.