Monday Watch

Today's Headlines

Bloomberg:

• Dozens Killed in Two Egyptian Church Bombings on Palm Sunday. Back-to-back bombings at two Egyptian churches on Palm Sunday killed more than three dozen people in the deadliest assault on the country’s Coptic Christian community in years. One of the targets was the seat of the Coptic Orthodox church in Alexandria. Islamic State claimed the attacks on the Mar Girgis church in the Nile Delta city of Tanta and St. Mark’s cathedral in Alexandria, according to the U.S.-based SITE Intel Group, which monitors jihadist channels on social media. At least 27 people were reported killed in the Tanta bombing, Health Ministry spokesman Khaled Mogahed said. At least 13 others died in Alexandria, and 40 were wounded, Health Minister Ahmed Emad El Din Rady told reporters. One of the fatalities was a police officer who tried to prevent a suspected suicide bomber from entering the church. Pope Tawadros II, who had led Palm Sunday Mass in Alexandria, wasn’t hurt, state-run media said. The attacks underscored the challenges confronting the government of President Abdel-Fattah El-Sisi as it tries to attract international investors to revive an economy battered by years of unrest. In his meeting with President Donald Trump at the White House last week, the Egyptian leader focused on the need to combat terrorism while also pressing for continued U.S. aid to his nation.

• Egypt Declares State of Emergency After Fatal Church Attacks.

• How Terror Threatens to Transform Sweden Amid Calls for Unity.

• Xi Buys Time With Trump as Tensions Loom Over North Korea Threat. After predicting a “very difficult” encounter with Chinese President Xi Jinping, Donald Trump emerged from their first meeting hailing “an outstanding relationship” between chiefs of the world’s biggest economies. Xi was similarly upbeat about his U.S. counterpart after the 18-hour summit in Florida that ended on Friday, saying they “got deeply acquainted, established a kind of trust and built an initial working relationship and friendship."

• Asia Stocks Set for Gains as Profit Season Starts. Asian stocks are poised for modest gains when trading starts in a week that will see the earnings results season get underway, while political uncertainty and central banks remain in focus. Equity-index futures in Japan, Hong Kong and Australia climbed in most recent trading, as traders in the Asia-Pacific region had their first chance to react to worse-than-forecast U.S. hiring data. The Australian dollar traded steady, while the yen weakened against the dollar. The yen traded at 111.21 per dollar as of 7.22 a.m. in Tokyo. The Aussie traded flat at 75.01 U.S. cents before home-loan data due Monday. Futures on Nikkei 225, S&P/ASX 200 and Hang Seng indexes all climb in late Friday trading. New Zealand’s S&P/NZX 50 Index lost 0.2 percent.

• Fed's Big Unwind Risks Reigniting U.S. Bond Market Volatility. Even with the bond market’s muted response to the Federal Reserve’s plan to begin winding down its almost $4.3 trillion portfolio of mortgage and Treasury securities, there are plenty of reasons why the calm probably won’t last. Out of style for almost a decade, volatility may be on its way back if you take a closer look at the mechanics of the Treasury and mortgage markets. Despite the Fed’s mantra of seeking to carry out its policy shift in a “gradual and predictable manner,” analysts say the effects of ending the reinvestment of the proceeds from maturing securities will still be felt.

• A Foreign Threat to U.S. Treasuries That Dwarfs Fed's Debt Hoard.

• Delta Delays Drag Into Fifth Day, Testing Passengers' Patience.

Wall Street Journal: 

• Blasts Hit Two Egyptian Churches, Killing at Least 47. Coptic Christian sanctuaries in Tanta, Alexandria were packed for Palm Sunday; nation’s president seeks state of emergency.

• Democrats’ Conditions for Tax Overhaul Make Bipartisan Deal Unlikely. GOP attempts to reach across the aisle are complicated by lack of agreement on priorities.

• How Goldman Sachs(GS) Made More Than $1 Billion With Your Credit Score. Goldman, which bought TransUnion in 2012, doubled down on clients like online lending startups that were hungry for data on borrowers.

• Online Retailers' New Warehouses Heat Up Local Job Markets.

• Reviving Repeal and Replace. The GOP is running out of time as insurance markets deteriorate.

Fox News: 

• Tillerson, Trump team try to clarify foreign policy after airstrikes. (video)

• Surveillance footage moments before Egypt church bombing. (video)

CNBC:

• Get ready for pumped up prices! Here's why RBC's Helima Croft says crude could surge nearly 20% within months. (video)

Zero Hedge:

• ISIS Attacks US-Led Base In Southern Syria, As Assad Said To Use White Phosphorus.

• Russia, Iran Warn U.S. They Will "Respond With Force" If Syria "Red Lines" Crossed Again.

• Second-Order Consequences of Self-Driving Vehicles.

• Trump Said To Weigh More Sanctions Against Russia, Iran For Supporting Syria.

• "The Bear Market Is On Hold": Deutsche Bank Throws In The Towel On Its Treasury Short. 

• China Offers "Concessions" To Avoid Trade War As Trump Readies Anti-Dumping Probe.

• US Ambassador To UN: "Regime Change In Syria Is Now A Top Priority For Trump".

• Confusion In Bond World, As Eurodollar Shorts Hit New Record High Over $3 Trillion.

• Government Shutdown Odds Are Rising, Goldman Warns.

• In Rare Twitter Appearance, Kyle Bass Slams Chinese Capital Lockdown.

• Great Debt Unwind: Personal And Commercial Bankruptcies Surge In March. (graph)

• Bank Of America: "Previously This Has Only Happened In 2000 And 2008". (graph)

• Over 37 Killed In Two Coptic Christian Church Bombings In Egypt; ISIS Claims Responsibility.

Business Insider:

• A foreign policy expert explains why Marine Le Pen could win the French election. (video)

• PwC's global chairman says we'll see 'that scenario of a negative growth rate' if we don't deal with job-killing robots.

• The retail apocalypse is crushing a corner of Wall Street and triggering a downward spiral.

• GOLDMAN: There's a group of investors with $121 billion in dry powder to make new deals.

• It's getting too late to short the retail sector.

Night Trading

• Asian indices are -.25% to +.5% on average.

• Asia Ex-Japan Investment Grade CDS Index 95.5 +.5 basis point.

• Asia Pacific Sovereign CDS Index 21.25 unch.

• Bloomberg Emerging Markets Currency Index 71.67 -.05%.

• S&P 500 futures +.09%.

• NASDAQ 100 futures +.08%.

Morning Preview Links

Earnings of Note

Company/Estimate

• (LAYN)/-.13

Economic Releases
10:00 am EST

• The Labor Market Conditions Index for March is estimated to fall to 1.0 versus 1.3 in February.  

Upcoming Splits

• (CPRT) 2-for-1

• (DRYS) 1-for-4

Other Potential Market Movers

• The Fed's Yellen speaking, Australia Home Loans report, (UAL) traffic data, (LUV) traffic data could also impact trading today.

BOTTOM LINE: Asian indices are mostly higher, boosted by energy and industrial shares in the region. I expect US stocks to open mixed and to rally  into the afternoon, finishing modestly higher. The Portfolio is 75% net long heading into the week.