Thursday Watch

Evening Headlines

Bloomberg:

• Chinese Traders Return to More Bullish Markets After Holiday. The world is looking a better place for China’s investors as the nation’s financial markets reopen following a week-long break. Global equities have rebounded during the Lunar New Year holidays as the fear of faster inflation ebbed. Hong Kong stock gauges are among the world’s best performers, with the Hang Seng Index rallying 3 percent. The offshore yuan -- which traded during the break -- strengthened past the onshore rate.

• Italy Has Built a Buffer to Shield Debt From Higher Rates.

• Asia Stocks Slip With U.S. Futures, Dollar Gains. (video) Asian stocks declined with U.S. equity index futures as investors adjust to the Federal Reserve’s latest comments on the economy. The dollar jumped alongside Treasury yields. Futures on the S&P 500 Index slipped after a rally fizzled Wednesday following minutes from the Fed’s January meeting showing increasing confidence that economic growth will pick up steam despite its concerns around inflation. Stocks opened lower in Japan and South Korea, with traders in Chinese markets due to return after a holiday. Japan’s Topix index fell 0.8 percent as of 9:24 a.m. in Tokyo and South Korea’s Kospi index retreated 0.7 percent. Australia’s S&P/ASX 200 Index was little changed. Futures on the S&P 500 slid 0.2 percent. The gauge lost 0.6 percent on Wednesday. The MSCI Asia Pacific Index declined 0.5 percent.

• Five Things You Need to Know to Start Your Day. (video)

• Hedge Fund Manager Palomba Leaves Citadel After Losses.

• Bond Market Guide to Trading When 10-Year Treasury Yields Hit 3%.

Wall Street Journal:

• The FBI’s Parkland Fail. The list of fatal mistakes by federal agencies in recent years is staggering.

• Iran’s Syrian Front. Assad’s atrocities grow as Tehran builds a new anti-Israel satellite.

• Fed Gives Bullish Signals on Economy. Economic data bolsters central bank officials’ plans to keep raising short-term interest rates this year.

• Toys “R” Us Plans to Close Another 200 Stores. Retailer’s corporate staff would also suffer layoffs following a disappointing holiday season.

• Boko Haram Kidnaps More Schoolgirls in Nigeria. Raid by Islamist militants at technical college leaves scores missing, echoing seizures in Chibok that sparked global outcry in 2014.

MarketWatch.com: 

• Why the stock market’s highs and lows are nothing to fear.

• Venture capitalist to tech leaders: Stop pretending AI won’t destroy jobs.

Fox News:

• Trump on preventing mass shootings: 'we're going to get it done'. (video)

• Iran could soon be spying on smartphones worldwide, report claims.

CNBC:

• US is looking at potential new sanctions against Russia.

• British lawmakers are launching an inquiry into cryptocurrencies. (video)

• Stocks making the biggest moves after hours: Roku, Pandora & more.

• Telegram is holding a secretive second pre-ICO sale.

• Malicious use of A.I. could turn self-driving cars and drones into weapons, top researchers warn.

• SEC charges former bitcoin exchange and its founder with fraud.

Zero Hedge: 

• Broward Sheriff: Deputies Will Now Carry Rifles On School Grounds.

• 'Crumbs' Crushed - Soaring Economic Optimism Could Ruin Dems' "Blue Wave" Midterms.

• WTI/RBOB Rebound After Surprise Crude Draw. (graph)

• Why Are The Taxpayer-Funded Salaries Of A Quarter-Million Federal Employees, A State Secret?

• "They Had More Information Than Us" - Sanders Blames Clinton For Not Exposing Russian Meddling.

• Watch The Boston Dynamics Robot Dog Fight Back Against A Human. (video)

• Libor-OIS Blowing Out On Rising Repatriation Concerns, Collapsing Front-End Funding. (graph)

• CNN Doxxes Elderly Woman, Badgers At House Over Russian Trolls.

• Dow Plunges 500 Points As Bond Yields, Dollar Spike. (graph)

Business Insider:

• Amid controversy over Intel CEO's stock sale, SEC warns executives about trading shares before disclosing security breaches.

• A fracking sand shortage could put a pause on the US shale boom.

Night Trading 

• Asian equity indices are -1.0% to +.5% on average.

• Asia Ex-Japan Investment Grade CDS Index 70.50 +1.0 basis point. 

• Asia Pacific Sovereign CDS Index 12.75 +.25 basis point.

• Bloomberg Emerging Markets Currency Index 75.37 -.05%.

• FTSE 100 futures -.97%.

• S&P 500 futures -.48%.

• NASDAQ 100 futures -.71%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (APA)/.25

• (AAWW)/2.15

• (BLMN)/.39

• (CHK)/.25

• (HRL)/.44

• (MGA)/1.56

• (NEM)/.37

• (PWR)/.44

• (SAGE)/-2.01

• (SAFM)/1.17

• (SFM)/.15

• (TK)/-.24

• (TTC)/.44

• (VC)/1.69

• (CTRP)/.16

• (FSLR)/-.30

• (HLF)/.98

• (HPQ)/.42

• (INTU)/.34

• (MELI)/.55

• (RRGB)/.54

• (RDFN)/-.05

• (RH)/1.54

• (OLED)/.84

• (WING)/.16

• (ZOES)/-.12

Economic Releases

8:30 am EST

• Initial Jobless Claims for last week are estimated at 230K versus 230K the prior week.

• Continuing Claims are estimated to fall to 1935K versus 1942K the prior week.

10:00 am EST

• The Leading Index for January is estimated to rise +.7% versus a +.6% gain in December.

11:00 am EST

• Kansas City Fed Manufacturing Activity for February is estimated to rise to 18.0 versus 16.0 in January.

• Bloomberg consensus estimates call for a weekly crude oil inventory build of +2,354,700 barrels versus a +1,841,000 barrel gain the prior week. Gasoline supplies are estimated to rise by +742,200 barrels versus a +3,599,000 barrel gain the prior week. Distillate inventories are estimated to fall by -1,093,600 barrels versus a -459,000 barrel decline the prior week. Finally, Refinery Utilization is estimated to fall by -.8% versus a -2.7% decline prior.
  

Upcoming Splits

• None of note

Other Potential Market Movers

• The Fed's Quarles speaking, Fed's Dudley speaking, Fed's Bostic speaking, Japan CPI report, Germany IFO Business Climate Index, weekly EIA natural gas inventory report and the $29B 7Y T-Note auction could also impact trading today.

BOTTOM LINE:  Asian indices are mostly lower, weighed down by commodity 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 day.