Monday Watch

Today's Headlines

Bloomberg:

• Trump Said to Issue Far-Reaching Reversal of Obama Climate Push. President Donald Trump is set to sign a sweeping executive order on Tuesday aimed at promoting domestic oil, coal and natural gas by reversing much of his predecessor’s efforts to address climate change. The document lays out a broad blueprint for the Trump administration to dismantle the architecture that former President Barack Obama built to combat the phenomenon, according to details shared with Bloomberg News. Some of the changes would happen immediately, while others would take years to complete. The order will compel federal agencies to quickly identify any actions that could burden the production or use of domestic energy resources, including nuclear power, and then work to suspend, revise or rescind the policies unless they are legally mandated, are necessary for the public interest or promote development.

• Momentum Builds for Yen to Break 110. The most oversold Group-of-10 currency since the U.S. election is making a comeback. A reassessment on the likelihood of pro-growth policies in the U.S. and a series of domestic and technical factors have combined to reignite buying interest in the yen, and analysts see more upside. Rising Japanese real interest rates, the yen’s haven status from global political uncertainty and technical signals monitored by foreign exchange traders have helped the currency rebound 7 percent from December lows against the dollar. Momentum is building and a further 2 percent rise to 108 yen per dollar is possible by June, according to market participants.

• Dollar, S&P 500 Futures Drop. The dollar and U.S. equity futures built on Friday’s declines and gold climbed as investors shunned risk assets amid increased skepticism of U.S. President Donald Trump’s ability to implement his economic agenda after last week’s failed U.S. health-care deal. The yen rose 0.8 percent to 110.51 per dollar. The Bloomberg Dollar Spot Index fell 0.3 percent. Japan’s Topix lost 0.9 percent and Australia’s S&P/ASX 200 Index retreated 0.5 percent, led by a slide in materials producers.

Wall Street Journal:

• White House Opens Door to Democrats in Wake of Health-Bill Failure. Move signals Trump administration is fed up with many factions in House Republican conference.

• Republicans’ Tax Overhaul Could Face Its Own Slings and Arrows. Rewriting the U.S. tax code may appear easier than tackling health care, but there may be other squabbles, hurdles and difficult trade-offs. 

• How Democrats Aided in the Demise of the GOP’s Health Bill. Supporters of Obamacare launched an all-out campaign for its survival.

• Iraq Military Contradicts Claim U.S.-Led Coalition Airstrike Killed Civilians, Blames Islamic State. Statement says blast triggered by a militant booby trap, not a coalition airstrike, killed scores of civilians in Mosul.

• Powering America’s Manufacturing Renaissance: Foreign Robots. The U.S. is being beaten by European and Japanese firms in the race to supply cutting-edge production machinery behind the new automated factory floor.

• Chinese Conglomerate HNA to Buy Stake in U.S. Asset Manager. HNA Capital US to pay about $446 million for share in Old Mutual unit OM Asset Management.

• Iran Slaps Sanctions on 15 U.S. Companies as Animosity Grows. Raytheon, Magnum Research among the companies affected by sanctions from Tehran.

Fox News: 

• Cincinnati nightclub shooting: 1 dead, 15 people injured. (video)

• Priebus on ObamaCare overhaul: It’s time for GOP to 'start governing’. (video)

• Freedom Caucus' Jordan: End ObamaCare blaming, ‘Let’s get to work’. (video)

CNBC:

• China finds a new source of cutting-edge military technology: US startups.

• France's Le Pen says euro exit 'wouldn't be chaos'.

Zero Hedge:

• "Much Worse Then Watergate", Former CIA Officer Admits Trump 'Wiretapping' Likely True. (video)

• This Is The Nightmare Scenario For The GOP: A $2 Trillion Funding "Hole".

• "They're Baaack! And Why You Should Be Worried – Very Worried".

• America's March To Default. (graph)

• Mnuchin "Not Worried" About Robotization Of America's Workforce Despite Shocking New Report.

• On The Edge Of An "Uncontrollable Liquidity Event": The Definitive Guide To China's Financial System.

• Bond Bears Panic, Cover Shorts At Fastest Pace Since Brexit; But Rate-Hike Bets Top $3 Trillion. (graph)

• Condo Flippers In Miami-Dade Left Twisting In The Wind.

• One Dead, 14 Injured After Ohio Nightclub Shooting; Shooter At Large.

• OPEC, Non-OPEC Oil Producers Recommend Extending Production Cuts By Six Months.

Business Insider:

• The UK is about to formally trigger the Brexit process — here's what that means.

• More homebuyers are turning to the risky mortgages that were popular before the housing crash.

Night Trading

• Asian indices are -1.0% to unch. on average.

• Asia Ex-Japan Investment Grade CDS Index 95.75 unch.

• Asia Pacific Sovereign CDS Index 21.0 -4.25 basis points.

• Bloomberg Emerging Markets Currency Index 72.57 +.08%.

• S&P 500 futures -.67%.

• NASDAQ 100 futures -.69%.

Morning Preview Links

Earnings of Note

Company/Estimate

• (CALM)/.23

• (GIII)/-.12

• (RHT)/.61

Economic Releases
10:30 am EST

• Dallas Fed Manufacturing Activity for March is estimated to fall to 22.0 versus 24.5 in February.

Upcoming Splits

• None of note

Other Potential Market Movers

• The Fed's Evans speaking, Fed's Kaplan speaking, 2Y T-Note auction, Germany IFO Index and the China Industrial Production report could also impact trading today.

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