Tuesday Watch

Evening Headlines

Bloomberg:

• Draghi’s Three Reasons to Justify No Change in ECB Guidance. Mario Draghi has just received a triple whammy of evidence to justify playing it safe when he meets with fellow European Central Bank policy makers this week. U.S. President Donald Trump’s plan to impose tariffs on foreign steel and aluminum has raised the specter of a global trade war, and the anti-establishment surge in Italy puts a question mark over the political outlook for one of the euro area’s biggest and most-indebted economies. Meanwhile, the upswing in the 19-nation bloc may be hitting a speed bump.

• Goldman's Moe Says Tariffs Won't Have Meaningful Impact on China. (video)

• Equity Gains Spread to Asia as Trade Worries Ease. Japan’s Topix index surged almost 2 percent and shares in Australia and South Korea also gained. The S&P 500 Index advanced for a second day after hedge fund billionaire Ray Dalio called the threat of a trade war “political show” and House Speaker Paul Ryan urged the president to reconsider tariffs on steel and aluminum. Ten-year Treasury yields advanced toward 2.90 percent. Japan’s Topix was up 1.8 percent and the Nikkei 225 Stock Average climbed 2.1 percent as of 9:23 a.m. in Tokyo. Australia’s S&P/ASX 200 Index added 1.3 percent. South Korea’s Kospi index advanced 1.1 percent. Futures on Hong Kong’s Hang Seng Index rose 1.2 percent. Contracts on the S&P 500 Index gained less than 0.05 percent. The underlying measure rose 1.1 percent.

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

• Don't Fret the Volatility, These Charts Signal Rally Can Go On. (graph)

• Apple(AAPL) Turns Up Audio Ambition With High-End Headphones. (video)

Wall Street Journal:

• Stock Buybacks Are Proof of Tax Reform’s Success. Companies help workers not by being philanthropic but by investing capital in profitable ideas.

• Trump Tariffs Spark GOP Rift. President tries to extract Nafta concessions while GOP congressional leaders work to derail proposal. 

• Can a Onetime Nader-Supporting ‘Bomb Thrower’ Win Arizona’s Senate Seat? Democrats Hope So. Rep. Kyrsten Sinema, the likely nominee is trying to transform herself into a conservative Democrat by being a semi-reliable supporter of the president.

• U.S. Orders Qualcomm to Delay Meeting for Review of Broadcom Offer. Move represents a highly unusual intervention by Washington.

• Fed Considering ‘Broad Revisions’ to Volcker Rule Compliance. Top Fed regulatory official Randal Quarles calls rule ‘complex regulation that is not working well’.

Fox News:

• FBI agent Peter Strzok was told of possible breach into Clinton's server but didn't follow up, sources say.

CNBC: 

• Nordstrom(JWN) rejects initial takeover offer from Nordstrom family for $50 per share.

• Stocks making the biggest moves after hours: Nordstrom, Ascena Retail Group & Analogic.

• Dorm living for professionals comes to San Francisco.

• Big Wall Street banks see chance to weaken post-crisis rule.

• Nucor(NUE) CEO on Trump tariffs: 'We're treating other countries how they treat us'. (video)

• Homebuilders are in correction territory, but one technician says you should buy the pullback. (video)

Zero Hedge:  

• "His Investigation Is BS": Former Trump Aide Refuses To Cooperate With Mueller Subpoena; Hints Trump, Carter May Have Colluded With Russia.

• Oscars Ratings Plunge To All-Time Low.

• The Tyranny Of Algos Is Here.

• Oh Canada! The Looming Economic Meltdown.

• The East Coast Is Bracing For Another Monster Winter Storm.

• From Euphoria To Panic: Retail Investors Fled Stocks In February. (graph)

• Tariff Tantrum Turns To Buying-Panic As Stocks Shrug Off Global Trade War Threat. (graph)

Business Insider:

• San Francisco is losing more residents than any other city in the US, creating a shortage of U-Hauls that puts a rental at $2,000 just to move to Las Vegas.

• I got my son a STEM toy that teaches kids the basics of robotics and programming — and he loved it.

Night Trading 

• Asian equity indices are +.25% to +1.25% on average.

• Asia Ex-Japan Investment Grade CDS Index 69.0 -.5 basis point. 

• Asia Pacific Sovereign CDS Index 12.0 unch.

• Bloomberg Emerging Markets Currency Index 75.46 +.04%.

• FTSE 100 futures +.40%.

• S&P 500 futures -.01%.

• NASDAQ 100 futures +.06%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (CIEN)/.12

• (DCI)/.44

• (JW/A)/.82

• (TGT)/1.38

• (ADSK)/-.11

• (HRB)/-1.29

• (KFY)/.58

• (ROST)/.93

• (URBN)/.63

Economic Releases

10:00 am EST

• Factory Orders for January are estimated to fall -1.4% versus a +1.7% gain in December.

Upcoming Splits

• None of note

Other Potential Market Movers

• The Fed's Dudley speaking, Fed's Kaplan speaking, Fed's Brainard speaking, (LRCX) analyst meeting, (VMI) investor day, (PBI) analyst day, (CVX) analyst meeting, Australia Retail Sales report, weekly US retail sales reports and the RBC Financial Institutions Conference could also impact trading today.

BOTTOM LINE:  Asian indices are mostly higher, boosted by industrial and technology shares in the region. I expect US stocks to open mixed and to rally into the afternoon, finishing modestly higher.  The Portfolio is 100% net long heading into the day.