Monday Watch

Today's Headlines

Bloomberg:

• Trump Trade Adviser Says Tariff `Exemptions' Possible. The Trump administration shows scant sign of watering down its plan to impose stiff tariffs on steel and aluminum imports with carve-outs for specific countries, despite opposition from U.S. allies and Republican lawmakers. The president’s trade advisers fanned out across television news shows on Sunday to defend the move, saying it was necessary to ensure the survival of the domestic steel and aluminum industries and would be put into effect soon. In spite of pleas from Canada, Great Britain and other U.S. partners, shipments from U.S. allies will not be excluded from the action, they said. Some exemptions though may be granted to specific products deemed necessary to U.S. businesses.

• Trade Wars Are Bad and Hard to Win, U.K. Tells Trump. The U.K. has “deep concern” about the U.S. plan to slap tariffs on steel and aluminum imports, and negotiated accords are better, Prime Minister Theresa May told President Donald Trump. The two leaders spoke Sunday by telephone, with May saying “multilateral action was the only way to resolve the problem of global overcapacity in all parties’ interests,” according to a spokesman for the prime minister. Trump’s vow that trade wars are good and are easy to win also drew a rebuke from one of May’s most senior ministers, who said the conflicts are bad and hard to win.

• EU Plans to Tax 2%-6% of Tech Giants' Sales, Le Maire Tells JDD. The European Union will unveil a directive within weeks on taxing between 2 percent and 6 percent of big technology companies’ revenue, French economy minister Bruno Le Maire said in an interview with the weekly newspaper Journal du Dimanche. "It will be closer to 2 percent than 6 percent," Le Maire told the paper, saying the EU directive is a starting point that will be refined. "I prefer an applicable text very quickly rather than endless negotiations," he said. The European Commission is considering the tax on revenue as it’s easier than focusing on earnings, given the different rules between countries. EU countries have been looking into methods to tax companies like Amazon.com Inc., Facebook Inc. and Alphabet Inc.’s Google in a way that captures the true value created in the region.

• Asia Stocks Mixed; Euro Volatile on Italian Vote.

• Five Things You Need to Know to Start Your Day.

• Biggest Libya Oil Field Is Said to Stop Pumping on Pipeline Halt. Libya’s Sharara oil field stopped pumping crude oil several days after output plunged at another of the OPEC member’s biggest deposits. The halt resulted from the closing of a pipeline from Sharara to the Zawiya refinery, according to a person with knowledge of the matter. The North African country’s largest field halted production on Sunday, a second person with knowledge said. Libya had been pumping 1.1 million barrels a day as of March 1, with Sharara contributing 300,000 of that. The field is run by a joint venture between the National Oil Corp. and Repsol SA, Total SA, OMV AG and Statoil ASA.

• World's Best Performing Macro Hedge Fund Lost 16% Last Month.

Wall Street Journal:

• Trump’s Tough Talk on Trade Rattles Investors. White House decision to impose tariffs on steel and aluminum imports raises concern that a broader protectionist trade policy may be in the offing.

• Trump Administration Beats Back Warnings on Tariffs. Trading partners, U.S. companies voice concerns over proposal on steel and aluminum.

• Your Location Data Is Being Sold—Often Without Your Knowledge. Location-based ads are growing, which means the industry has more ways than ever to track you. 

• Credit-Card Losses Surge at Small Banks. Charge-offs linger near eight-year high, which some say is a sign of the financial fragility of middle-and-lower-income consumers. 

• Europe’s Fragile Center Takes New Blows. Italian parliamentary vote, German coalition deal reflect populists' advances, wider dissatisfaction with establishment.

CNBC: 

• China says it does not want a trade war with US.

• Trump praises Chinese president extending tenure 'for life'.

• As Italy votes, Europe fears populist, euroskeptic gains.

• Italy looks like it's headed to a hung parliament — here’s what happens next.

• China raises 2018 military budget by 8.1 percent.

• China keeps growth target of about 6.5 percent this year.

Zero Hedge:

• Ben Garrison: "The War Against The Free Speech Of The Right Will End Badly".

• Watch As Canada's Trudeau "Explains" Trade With The US. (video)

• Trump Jokes: "Maybe We'll Abolish Presidential Terms Someday".

• Trump Offers No Tariff Exemptions In Conversations With World Leaders: Ross.

• US Army Tanks To Get Invisible Futuristic Missile Shields.

• Crisis Averted: Merkel Set For 4th Term After SPD Backs Grand Coalition.

• 'Rent-For-Sex': Landlords Exploit Thousands Of Broke Millenials.

• Zuesse: America's News Media Foment Hate.

• Trump Warns "It's Time For Change" In The Countries Responsible For America's Trade Deficit.

Night Trading

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

• Asia Ex-Japan Investment Grade CDS Index 69.75 +.25 basis point.

• Asia Pacific Sovereign CDS Index 12.0 unch.

• Bloomberg Emerging Markets Currency Index 75.27 -.11%. 

• FTSE 100 futures +.29%.

• S&P 500 futures -.44%.

• NASDAQ 100 futures -.37%.

Morning Preview Links

Earnings of Note

Company/Estimate

• (ALOG)/.69

• (NX)/-.10

• (NLS)/.31

Economic Releases
10:00 am EST

• ISM Non-Manufacturing for February is estimated to fall to 58.8 versus 59.9 in January.

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Deutsche Bank Media/Telecom/Business Services Conference could also impact trading today.

BOTTOM LINE: Asian indices are mostly lower, weighed down by financial and industrial shares in the region. I expect US stocks to open modestly lower and to maintain losses into the afternoon.  The Portfolio is 50% net long heading into the week.