Today's Headlines

Bloomberg:

• NATO Urges Intact Ukraine as Russia Holds Military Drill. NATO made a plea for keeping post-revolutionary Ukraine in one piece as tensions mounted in the Crimea region and the Kremlin ordered a test of combat readiness of nearby Russian military units. Defense ministers of the 28-nation U.S.-led military alliance called for a “sovereign, independent and stable” Ukraine, emphasizing the “principle of inviolability of frontiers.” North Atlantic Treaty Organization Secretary General Anders Fogh Rasmussen said the warning was addressed “to whom it may concern.” Allied defense ministers issued the statement at a meeting in Brussels today after Interfax reported that Russian President Vladimir Putin ordered the military drills involving around 150,000 troops in Russia’s central and western military districts, including areas bordering Ukraine. 

• Yatsenyuk Named Ukraine Prime Minister as Default Battle Looms. Arseniy Yatsenyuk was named Ukraine’s new prime minister, giving him responsibility for steering the country clear of default after the bloodiest events in the country’s post-World War II history. The announcement by Evehen Nishchuk, spokesman for the protest movement, was made to a packed Independence Square in Kiev today, the site of a three-month uprising that culminated in the overthrow of former President Viktor Yanukovych last week. Oleksandr Shlapak was named finance minister. Interim President Oleksandr Turchynov, standing on the same stage, said he expects parliament to approve the appointments tomorrow. 

• European Stocks Decline From Highest Level in Six Years. European stocks fell from a six-year high as declines in banks including Credit Suisse Group AG outweighed better-than-forecast data on U.S. home purchases. Credit Suisse retreated 2.5 percent as a person familiar with the matter said U.S. regulators are investigating its accounting practices. Jeronimo Martins SGPS SA dropped 6.5 percent after reporting 2013 net income that missed predictions. Anheuser-Busch InBev NV rose 2.8 percent after the brewer posted earnings growth that exceeded estimates and predicted improvements in its largest markets. The Stoxx Europe 600 Index retreated 0.2 percent to 337.7 at the close of trading, paring earlier losses of as much as 0.6 percent.

• Cattle Rise to Record With Hogs Gaining on Shrinking Meat Supply. Cattle futures rose to a record as ranchers struggle to boost the U.S. herd from a 63-year low, and hogs climbed to a 34-month high after a virus that kills piglets spread, spurring concerns that meat supplies will shrink. Beef output in the U.S., the world’s top producer, will fall 5.3 percent this year to 24.35 billion pounds (11.04 million metric tons), the lowest since 1994, the Department of Agriculture has forecast. At the start of this year, the cattle herd fell to 87.7 million head, the lowest since 1951, following drought and high feed costs. Porcine epidemic virus has killed more than 4 million pigs, according to an industry group.

• WTI Crude Rises on Cushing Supplies. WTI for April delivery advanced 76 cents to settle at $102.59 a barrel on the New York Mercantile Exchange. Prices are up 5.2 percent this month and 11 percent in the past year. The volume of all futures traded was 18 percent below the 100-day average at 2:57 p.m.

• IMF Staff Decry Income Equality in Report Backing Social Welfare. Economists at the International Monetary Fund, the global lender criticized for its fiscal austerity prescriptions, defended policies aimed at reducing income inequality in a study that showed they strengthen growth. According to the IMF research released today, income inequality shouldn’t be ignored because it may result in low and unsustainable growth. “Non-extreme” redistribution policies such as taxes and social programs make economic expansions more durable, the economists wrote. 

• Dimon Says Threats to JPMorgan(JPM) Span Google to China Banks. Jamie Dimon, who built JPMorgan Chase & Co. (JPM) into the world’s biggest investment bank, said threats to its dominance may come from Beijing, Silicon Valley and a San Francisco-based rival with a stage-coach logo.

• JPMorgan(JPM), Goldman(GS), 16 Other Firms to End Analyst Previews. JPMorgan Chase & Co. (JPM) and Goldman Sachs Group Inc. (GS) were among 18 financial firms that agreed to stop participating in some surveys of analyst sentiment while New York investigates early access to the information.

Fox News:

• Sen. Paul tries to block Obama's 'political' surgeon general nominee. Sen. Rand Paul is trying to block the nomination of President Obama’s surgeon general nominee, Dr. Vivek Murthy, over what he calls “serious concerns” about Murthy’s leadership in a group that promotes ObamaCare and gun control.

• Greenpeace co-founder: No scientific proof humans are dominant cause of warming climate. A co-founder of Greenpeace told lawmakers there is no evidence man is contributing to climate change, and said he left the group when it became more interested in politics than the environment. Patrick Moore, a Canadian ecologist and business consultant who was a member of Greenpeace from 1971-86, told members of the Senate Environment and Public Works Committee environmental groups like the one he helped establish use faulty computer models and scare tactics in promoting claims man-made gases are heating up the planet.

MarketWatch:

• Stock market investor fears expected to rise. (graph) Volatility index seen rebounding to long-term levels.

• ‘Shadow banks’ pose risk to China investors. Opinion: Economy is shaky, but high-stakes games continue. China’s debt concerns are complicated by two fundamental issues — the rise in borrowing by local governments and the increase in the role of the shadow banking system. Both underscore China’s entrepreneurial spirit, but also point to deep problems in the country’s financial system.

CNBC: 

• These six investors made $1 billion-plus last year.

ZeroHedge:

• What Weather? New Home Sales Surge 9.6% In Feb As Median Home Price Drops To 5 Month low. (graph)

• Mortgage Applications Plunge Most In 3 Months; "Purchases" Collapse To 19 Year Lows. (graph)

• French Joblessness Surges To New Record High (Up 30 Of Last 32 Months). (graph)

• Turkish Lira Blows Out As Graft Scandal Comes Back With A Vengeance. (graph)

• Ocwen, Dubbed "Next Generation Subprime Lender" By Moodys, Is Focus Of NY State Regulator.

• US Warns Russia Over "Provocative" Actions In Ukraine.

• Short Squeeze Goes Parabolic. (graph)

Business Insider: 

• US F-15s In Estonia Were Diverted To Intercept A Russian Spy Plane. 

• Nigerian Islamists Kill 59 Pupils In Boarding School Attack.

Reuters:

• Moody's warns mortgage servicers may turn to offering risky loans. Credit rating agency Moody's Corp warned that mortgage servicers such as Ocwen Financial Corp could be pushed into subprime lending as their core business comes under increased regulatory scrutiny. The rapid growth of mortgage servicers since the subprime crisis has drawn the attention of state and federal regulators who are concerned about the companies' capacity to collect mortgage payments in large volumes.

• Exports of US construction equipment fell 25 pct in 2013, AEM says. Foreign sales of U.S.-made construction equipment dropped sharply in 2013, snapping a three-year export surge that had been one of the bright spots in the country's halting economic recovery, according to a report released on Wednesday by a leading industry trade group. The Association of Equipment Manufacturers said foreign sales of U.S.-made bulldozers, excavators, aerial work platforms and other big machines used by builders and miners fell 25 percent last year, pulled down by an especially acute decline in demand in the Asia-Pacific region. 

• Global smartphone growth to fall sharply in 2014 - IDC. Growth in global smartphone shipments will fall sharply this year and keep slowing through 2018, with average prices dropping significantly as demand shifts to China and other developing countries, according to market research firm IDC. Annual growth in 2014 is expected to be 19.3 percent and then decline to 6.2 percent in 2018, IDC said in a report on Wednesday. That follows a 39.2 percent jump in 2013 when smartphone shipments topped 1 billion units for the first time. 

• EMERGING MARKETS-Ukraine currency hits record low, Brazil real snaps winning streak.

• Mexico factory exports, consumer imports slip in January. Mexican factory exports fell in January for the fifth month in a row, while non-oil consumer imports also dipped, signaling further headwinds for a tepid economic recovery in Latin America's No. 2 economy. Non-oil manufactured exports fell 1.78 percent in January compared with December, the national statistics agency said on Wednesday, signaling slack demand from the United States for local goods.

• GLOBAL MARKETS -Russian rouble slumps to 5-year low, yuan steady.

Southern Metropolis Daily:

• Some Guangzhou, Shenzhen Banks Raise Mortgage Rates. Shanghai Pudong Development Bank, Huaxia Bank and China Guangfa Bank raised lending rate for first-home purchases by 10%-20% at their Shenzhen branches.

Bear Radar

Style Underperformer:

• Large-Cap Value -.15%

Sector Underperformers:

• 1) Gold & Silver -1.21% 2) Telecom -1.05% 3) Energy -.50%

Stocks Falling on Unusual Volume:

• UTIW, DGI, CLH, VLRS, SEAC, DWA, QEP, AEGR, RGR, FSLR, CLGX, BGFV, ITMN, JAZZ, SWHC, WAC, EPE, LMOS, QCOR, TASR, PEGA, QUNR, EC, CHK, APA, SUSS, KOG, GHDX, NDRO, ECYT, STAY, ESI and QEP

Stocks With Unusual Put Option Activity:

• 1) EBIX 2) SPLS 3) FSLR 4) SCHW 5) DECK
  

Stocks With Most Negative News Mentions:

• 1) CHK 2) COP 3) ESI 4) VLO 5) WFC
  

Charts:

• ETFs Falling on Unusual Volume

• Stocks Falling on Unusual Volume

Bull Radar

Style Outperformer:

• Small-Cap Growth +.77%

Sector Outperformers:

• 1) Homebuilders +2.21% 2) Retail +1.86% 3) Hospitals +1.66%
  

Stocks Rising on Unusual Volume:

• ANIK, EXAM, EIGI, AMBC, ZU, CRI, ANF, PRAN, NFX, DLTR, BKS, FENG, RP, LOW, SUNE, RRD, FRGI, EIGI, SCTY, DYAX, FEYE, TGT, SLCA and NEWM

Stocks With Unusual Call Option Activity:

• 1) AVNR 2) QEP 3) DLTR 4) TASR 5) CLR

Stocks With Most Positive News Mentions:

• 1) ANF 2) TGT 3) GOOG 4) BKS 5) HD
  

Charts:

• ETFs Rising on Unusual Volume 

• Stocks Rising on Unusual Volume

Wednesday Watch

Evening Headlines 
Bloomberg:

• Ukraine Vows to Protect Bank Deposits as Government Vote Delayed. Ukraine is weighing measures to stem cash withdrawals after as much as 7 percent of deposits were taken from banks during last week’s bloody uprising, underscoring the need for action to fend off a default. Withdrawals peaked with as much as 30 billion hryvnias ($3.1 billion) Feb. 18-20 as police and anti-government demonstrators fought in the center of Kiev, Natsionalnyi Bank Ukrainy Governor Stepan Kubiv, 51, appointed Feb. 24, said yesterday in his first interview.

• Crisis Gauge Rises to Record High as Swaps Avoided: China Credit. China's credit-market gauges are triggering alarm bells, as banks grow cautious in lending to each other while investors prefer the safest government bonds. The spread between the two-year sovereign yield and the similar-maturity interest-rate swap, a gauge of financial stress, reached 121 basis points on Feb. 19, the widest in Bloomberg data going back to 2007. Two days later, the cost to lock in the three-month Shanghai interbank offered rate for one year reached an eight-month high of 94 basis points over similar contracts based on repurchase agreements, which are considered safer because they involve government securities as collateral. 

• China Mulls Holidays for Nanjing Massacre, Japan Defeat. China is considering new national holidays to mark the Nanjing Massacre and Japan’s defeat in World War II, the official Xinhua News Agency reported. Sept. 3 may be designated a victory holiday and Dec. 13 a national memorial day for victims of Nanjing, Xinhua said yesterday, citing draft decisions by the Standing Committee of the National People’s Congress. The actual number of Chinese killed in the weeks after Japanese forces captured Nanjing in 1937 is in dispute. China estimates the figure at 300,000, with some Japanese nationalists denying the massacre occurred at all. 

• China Faces Lost Decade as Stocks Echo Japan: Chart of the Day. China’s stock market is turning Japanese. The CHART OF THE DAY shows the Shanghai Composite Index is repeating a pattern in the Nikkei 225 Stock Average during the 1980s and 1990s. The Japanese gauge tumbled as much as 80 percent from its 1989 peak as a collapse in home prices hobbled the nation’s financial system and led to a decade of tepid economic growth. The Shanghai index has dropped 60 percent since the end of 2007, erasing almost $2 trillion of market value.

• China’s Yuan Trades Near Seven-Month Low as PBOC Lowers Fixing. China’s yuan traded near the weakest level in seven months as the central bank lowered its daily reference rate amid speculation it is looking to counter one-way appreciation speculation on the currency. The People’s Bank of China cut the yuan’s fixing by 0.01 percent to 6.1192 per dollar, the weakest since Dec. 20. The currency in Shanghai slipped 0.01 percent to 6.1270 as of 10:20 a.m., according to China Foreign Exchange Trade System prices. It touched 6.1351 earlier, the weakest since July 30. The spot rate was 0.13 percent lower than the fixing, after the two converged yesterday for the first time since September 2012.

• Asia Stocks Pare Drop as Aussie Falls Amid China Concerns. Asian stocks pared declines, with the benchmark index set for a first monthly gain since October, and natural gas headed for its biggest three-day rout since 2007. The Australian dollar weakened against all peers amid concern China’s economy is slowing as financial stress builds. The MSCI Asia Pacific Index slipped 0.1 percent by 12:32 p.m. in Tokyo, after falling as much as 0.4 percent, and has advanced 2.3 percent this month. The CSI 300 Index of shares in Shanghai and Shenzhen traded near its lowest close since December 2012.

• Copper Trades Near Three-Week Low on Global Growth Concerns. Copper traded near a three-week low after a report showed flagging U.S. consumer confidence and amid concern that China’s growth is slowing, damping demand prospects from the world’s two biggest users. The contract for delivery in three months on the London Metal Exchange was little changed at $7,066 a metric ton by 11:11 a.m. in Tokyo. The metal touched $7,034 yesterday, the lowest since Feb. 6. Futures are down 4 percent this year.

• Merkel Said to Call for Stronger EU in Disappointment to Cameron. Merkel Said to Call for Stronger EU in Disappointment to Cameron. Chancellor Angela Merkel will call for a stronger European Union in a speech in London that may disappoint Prime Minister David Cameron, according to a German government official with direct knowledge of her preparations. While Merkel will use her address tomorrow to echo Cameron’s calls for reform of the EU, she will stress that all changes must be carried out to strengthen and not weaken the 28-nation bloc, said the official, who asked not to be named because the diplomacy before the trip is private. Only through a stronger EU can Europe remain competitive in a globalized economy, Merkel will say, according to the official.

• Credit Suisse Helped Clients Hide Billions, Senate Says. Credit Suisse Group AG (CSGN) helped American customers hide as much as $10 billion in assets from the Internal Revenue Service, more than double the amount previously known, according to a U.S. Senate committee. A report by the Senate Permanent Subcommittee on Investigations criticized the Zurich-based bank for failing to discipline any senior executives in the face of widespread tax evasion fostered by 1,800 Credit Suisse employees serving U.S. clients. The firm also misled investors about growth in its private banking unit, according to the report.

• BofA(BAC) Discloses New Probes Amid Surge in Possible Legal Costs. Bank of America Corp., the second-biggest U.S. lender, disclosed new probes into mortgage and foreign-exchange units and boosted an estimate of potential legal losses by 20 percent to $6.1 billion.

Wall Street Journal: 

• Mt. Gox Receives Subpoena From Federal Prosecutor: Source. 
• White House Weighs Four Options for Revamping NSA Phone Surveillance. Proposals Range From Running Program Through Phone Companies to Ditching It Altogether.
• Dave Camp: How to Fix Our Appalling Tax Code. Every year Americans spend more than six billion hours and $168 billion to file their returns.

Fox News:

• Increased domestic spending may be behind proposed military cuts, CBO report suggests. As the Obama administration announces proposed sweeping defense cuts, a Congressional Budget Office report documents how increases in other areas of domestic spending may be forcing the White House to reduce money for the military. The CBO report finds that mandatory spending, which includes Social Security, Medicare and Medicaid, is projected to rise $85 billion, or 4 percent, to $2.1 trillion this year.

Zero Hedge: 

• China's Corporate Debt Hits Record $12 Trillion. (graph)

• Howard Davies On The Banks That Ate The Economy.

• 10 Things That Worry Quants.

• The Economic Roadmap Ahead: "It Isn't That Complicated".

Business Insider:

• 5 Photos That Will Make You Really Glad You're Not In Beijing Right Now.

• House Passes Bill Allowing Phone 'Unlocking' That Would Allow People To Switch Carriers With Ease.

• One Key Reason Why Investors Don't Want Venezuela To Turn Into Ukraine.

• Bitcoin Is In A Nightmare Fight For Survival.

• JPMorgan(JPM) To Cut 8,000 Jobs, Lowers 2014 Profit Target.

• The 33 Biggest Geopolitical Risks For America In 2014.

Reuters: 

• BOJ Kuroda: Japan getting on track towards reaching price target. Bank of Japan Governor Haruhiko Kuroda said on Wednesday that Japan's economy is getting on track towards achieving a 2 percent inflation target as price hikes spread to a broader range of goods on the back of a narrowing output gap. 

• First Solar(FSLR) profit hit by choppy revenue from projects. U.S. solar company First Solar Inc reported a lower-than-expected quarterly profit and forecast weak first-quarter earnings, hurt by irregular revenue from its solar projects. The solar panel maker's shares, which have gained three-quarters of their value in the past year, slipped 12 percent after the bell on Tuesday.

China Securities Journal: 

• China Should Expand Property Tax Reform Trial. China should "actively" expand the property tax reform trial to fight against speculation in the property market, Jia Kang and Liang Ji, researchers at Finance Ministry's research institute for fiscal science, write in an article. 

Shanghai Securities News:

• China to Strengthen Property Land Control This Year. China will strengthen control of land used in property development this year to ensure land prices are "reasonable," citing Liao Yonglin, head of the land use and management department of Ministry of Land and Resources. The newspaper says such comments signal that property control policies will continue.

Evening Recommendations

• None of note

Night Trading

• Asian equity indices are -.50% to +.25% on average.

• Asia Ex-Japan Investment Grade CDS Index 136.0 +2.0 basis points.

• Asia Pacific Sovereign CDS Index 103.25 -2.5 basis points.

• FTSE-100 futures -.16%.

• S&P 500 futures +.23%.

• NASDAQ 100 futures  +.20%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (DLTR)/1.05

• (LOW)/.31

• (CRI)/1.00

• (CHK)/.40

• (TJX)/.82

• (AES)/.29

• (CVC)/.09

• (TGT)/1.24

• (BKS)/.51

• (ANF)/1.03

• (JCP)/-.86

• (LB)/1.61

• (ADSK)/.34

• (NDLS)/.12

• (DFRG)/.38 

• (PZZA)/.41

Economic Releases
10:00 am EST

• New Home Sales for January are estimated to fall to 400K versus 414K in December.
  

10:30 am EST

• Bloomberg consensus estimates call for a weekly crude oil inventory build of +1,155,000 barrels versus a +973,000 barrel gain the prior week. Gasoline supplies are estimated to fall by -760,000 barrels versus a +309,000 barrel gain the prior week. Distillate inventories are estimated to fall by -1,160,000 barrels versus a -339,000 barrel decline the prior week. Finally, Refinery Utilization is estimated to fall by -.16% versus a -.3% decline the prior week.

Upcoming Splits

• None of note

Other Potential Market Movers

• The Fed's Pianalto speaking, Fed's Rosengren speaking, UK GDP data, $35B 5Y T-Note auction, weekly MBA mortgage applications report, (APA) investor day, (RRD) investor day, (OUTR) analyst day, Simmons Energy Conference, KeyBanc Consumer Conference, Keefe Bruyette Bank Conference and the BofA Merrill Ag Conference could also impact trading today.

BOTTOM LINE: Asian indices are mostly lower, weighed down by real estate and financial shares in the region. I expect US stocks to open mixed and to weaken into the afternoon, finishing modestly lower. The Portfolio is 25% net long heading into the day.

Stocks Lower into Final Hour on Rising Global Growth Fears, Yen Strength, Technical Selling, Healthcare/Financial Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Lower
  

• Sector Performance: Most Sectors Declining
  

• Volume: Around Average

• Market Leading Stocks: Underperforming

Equity Investor Angst:

• Volatility(VIX) 14.22 -.07%

• Euro/Yen Carry Return Index 146.40 +.35%

• Emerging Markets Currency Volatility(VXY) 8.71 +.46%

• S&P 500 Implied Correlation 52.53 +.19%

• ISE Sentiment Index 101.0 -16.53%

• Total Put/Call .78 +1.30%

• NYSE Arms 1.06 -4.96% 

Credit Investor Angst:

• North American Investment Grade CDS Index 64.71 +1.30%

• European Financial Sector CDS Index 86.89 +.11%

• Western Europe Sovereign Debt CDS Index 53.0 unch.

• Asia Pacific Sovereign Debt CDS Index 103.14 -2.49%

• Emerging Market CDS Index 303.09 +.20%

• China Blended Corporate Spread Index 358.50 +.06%

• 2-Year Swap Spread 13.5 +.25 basis point

• TED Spread 19.25 -.75 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -5.75 +.25 basis point

Economic Gauges:

• 3-Month T-Bill Yield .04% unch.

• Yield Curve 239.0 -3.0 basis points

• China Import Iron Ore Spot $119.10/Metric Tonne -.67%

• Citi US Economic Surprise Index -14.60 -2.8 points

• Citi Emerging Markets Economic Surprise Index 13.90 +.2 point

• 10-Year TIPS Spread 2.17 +1 basis point

Overseas Futures:

• Nikkei Futures: Indicating -160 open in Japan

• DAX Futures: Indicating -30 open in Germany

Portfolio: 

• Higher: On gains in my biotech/retail sector longs, index hedges and emerging markets shorts

• Disclosed Trades: Added to my (IWM)/(QQQ) hedges and to my (EEM) short

• Market Exposure: Moved to 25% Net Long

Today's Headlines

Bloomberg:

• Goldman(GS) Sticks to Ukraine Currency Rout Call: East Europe Credit. As Ukraine investors greeted the ouster of President Viktor Yanukovych with the biggest bond rally this year, calls by interim leaders for as much as $35 billion in aid are weighing on the currency. The yield on Ukraine’s dollar bonds due in 2023 dropped 93 basis points yesterday to a four-week low of 9.26 percent, the biggest decline since Dec. 17, before rising 12 basis points today. The hryvnia weakened 6.4 percent to 9.8 per dollar at 2:57 p.m. in Kiev, data compiled by Bloomberg show. That extended this year’s decline to 16 percent, the most among currencies tracked by Bloomberg after the Argentine peso and the Kazakh tenge. 

• Ukraine Central Bank Seeks to Halt Deposit Outflow After 7% Drop. Ukraine is considering measures to stem withdrawals after as much as 7 percent of deposits were taken from banks during last week’s deadly clashes in the capital, according to the new governor of the central bank. Withdrawals peaked between Feb. 18-20 as police and anti-government demonstrators fought in the center of Kiev, Stepan Kubiv, who was appointed yesterday, said in his first interview. As much as 30 billion hryvnias ($3.1 billion) were withdrawn during the three-day period, he said.

• Nomura Risk Rises in Early Warning for Abenomics: Japan Credit. Nomura Holdings Inc.'s bond risk has risen this year even as its borrowing costs fell, as doubt emerge over the prospects for Prime Minister Shinzo Abe's stimulus policies. The cost to insure the debt of Japan's biggest brokerage against non-payment has climbed 24 basis points in 2014 to 99.3 on Feb. 24, according to CMA. That compared with an 8.3 point increase in the Markit iTraxx Japan index to 75.8, while the gauge for U.S. financial companies was unch. at 74.0.

• Emerging Market CDS Trading Jumps 31% in 2013, EMTA Says. Trading in emerging market credit default swaps increased to $1.064 trillion in transactions, according to a survey of 12 major dealers conducted by EMTA. 4Q trading up +94% from the same period in 2012 to $276 billion. Largest CDS volumes in 4Q were in Brazil, at $65 billion. "Sovereign CDS has increasingly become more widely used as a hedging tool, especially as the EM corporate market has exploded over the last several years," EMTA wrote, citing Jeff Williams, a strategist at Citigroup. 

• China’s Stocks Fall on Property Concerns as Yuan Weakens. China’s stocks dropped, sending the benchmark index to its biggest retreat in five months, amid speculation a weaker property market and falling currency will curb corporate earnings. The yuan sank the most since 2010. The Shanghai Composite Index (SHCOMP) declined 2 percent to 2,034.22, extending its four-day retreat to 5.1 percent. China Vanke Co.’s B shares tumbled 8 percent, leading declines among developers. Qingdao Haier Co. (600690), the nation’s biggest refrigerator maker, lost 3.9 percent. The yuan depreciated 0.46 percent, the steepest drop since Nov. 1, 2010, to close at 6.1266 per dollar.

• Tepco Says Fukushima Radiation ‘Significantly’ Undercounted. Tokyo Electric Power Co. (9501) is re-analyzing 164 water samples collected last year at the wrecked Fukushima atomic plant because previous readings “significantly undercounted” radiation levels. The utility known as Tepco said the levels were undercounted due to errors in its testing of beta radiation, which includes strontium-90, an isotope linked to bone cancer. None of the samples were taken from seawater, the company said today in an e-mailed statement.

• Caixa Said to Curb Lending as Brazil Seeks to Avoid Rating Cut. Caixa Economica Federal, the bank owned by Brazil's government, will slow lending growth this year by about 40% to help protect the nation's credit rating, said a person familiar with the matter. The bank expects to expand its loan book by 22% this year, after 37% growth in 2013, said the person.  

• European Stocks Are Little Changed With Vivendi Declining. European stocks were little changed, paring earlier losses in the last hour of trading and closing at its highest level since January 2008. Jyske Bank A/S (JYSK) rallied 11 percent after buying BRFkredit A/S. Vivendi SA (VIV), the French company preparing to spin off its phone business SFR, slipped 1.1 percent after posting fourth-quarter revenue that missed analysts’ estimates. Fresenius Medical Care AG slumped 5.7 percent after the world’s biggest provider of kidney dialysis forecast a decline in 2014 profit. The Stoxx Europe 600 Index gained less than 0.1 percent to 338.39 at the close of trading in London after earlier falling as much as 0.5 percent.

• Copper Extends Losses on Weaker Yuan, Tighter Property Financing. 

• WTI Crude Falls on China Growth Concern Amid Ample Supply. WTI for April delivery decreased $1, or 1 percent, to $101.82 a barrel at 2:07 p.m. on the New York Mercantile Exchange. The volume of all futures traded was 20 percent below the 100-day average. Futures are up 3.5 percent this year. 

• Gold Advances to 16-Week High on U.S. Consumer Confidence Index. Gold futures for April delivery rose 0.2 percent to $1,341 an ounce at 11:17 a.m. on the Comex in New York, after touching $1,343, the highest for a most-active contract since Oct. 31.

• Rail Stocks to Lag Behind Earnings as U.S. GDP Help Fades: EcoPulse. Shares of U.S. railroad companies are poised to lag behind the broader market after more than a decade of outpacing it, as the boost to earnings from U.S. growth could start to wane. The relative performance of the Standard & Poor’s Supercomposite Railroads Index -- which includes Union Pacific Corp. (UNP), Norfolk Southern (NSC) Corp. and CSX Corp. -- has stalled in the last 12 months, leading the S&P 500 Index by 2.9 percentage points after being ahead by almost 500 percentage points since 2000. 

• JPMorgan Sees 8,000 Consumer, Mortgage Bank Job Cuts in 2014. JPMorgan Chase & Co. (JPM:US), the biggest U.S. bank, said it would eliminate about 8,000 jobs in the consumer and mortgage banking units this year as demand for refinancings declines. The reductions would bring total staffing cuts to 24,500 in the two divisions since the start of 2013, New York-based JPMorgan said in a presentation today. Last year, the firm said it would eliminate as many as 19,000 in the two divisions by the end of 2014. 

• Polar Air to Lock on Eastern U.S. at Least to Mid-March. The eastern U.S. will be locked into a pattern of cold air, boosting energy use, through the first half of March, forecasters say. Frigid weather will dominate from the Midwest to the Northeast as well as eastern Canada for at least the next two weeks and possibly beyond, said Matt Rogers, president of Commodity Weather Group LLC in Bethesda, Maryland.

• Biggest Banks Said to Face Asset Tax in Republican Plan.

Wall Street Journal:

• Fed's Tarullo Sees Signs of Market Risks. The Federal Reserve's leading bank supervisor, Daniel Tarullo, said Tuesday that he is seeing modestly increased risks in credit markets, particularly in corporate bonds and leveraged loans. Mr. Tarullo said the U.S. central bank shouldn't rule out using monetary policy to fight potentially damaging asset bubbles, but stressed it should first try to employ and refine current existing regulatory tools for spotting such threats to financial stability. "High-yield corporate bond and leveraged loan funds, for instance, have seen strong inflows, reflecting greater investor appetite for risky corporate credits, while underwriting standards have deteriorated, raising the possibility of large losses going forward," Tarullo told a conference sponsored by the National Association for Business Economics. "At present, our monitoring does find some evidence of increased duration and credit risk, but the increases appear relatively moderate to date--particularly at the largest banks and life insurers," Mr. Tarullo said. "Monetary policy action cannot be taken off the table as a response to the build-up of broad and sustained systemic risk."

ZeroHedge:

• Consumer Confidence Drops Most In 4 Months. (graph)

• Ukraine Bonds Re-Collapse As Russia Warns Of "High Chance Of Default". (graph)

• Ukraine Calls Russia's Bluff, Slashes Nat Gas Imports By 80%.

• Tesla(TSLA) Enterprise Value Just 25% Below That Of General Motors(GM).

• Meanwhile, On The Main Square In Sevastopol: Live Webcast.

Business Insider: 

• The Pentagon Is Killing A Combat-Proven Aircraft That Most Troops Totally Love.

• Volunteering In America Is At Its Lowest Level In At Least A Decade.

• Syrian Al Qaeda Group Gives An Ultimatum To Its Islamist Rivals.

• IBM Employees Fear Company Will Begin Up To 13,000 Layoffs Tomorrow.

Digital Journal:

• TransUnion: Auto Loan Debt Rises for 11th Straight Quarter; Delinquencies Remain Subdue. Auto loan debt per borrower increased for the 11^th straight quarter, moving up 4.4% from $16,060 in Q4 2012 to $16,769 in Q4 2013. On a quarterly basis, auto loan debt also increased from $16,685 in Q3 2013. The auto loan delinquency rate (the ratio of borrowers 60 days or more delinquent on their auto loans) increased to 1.14% in Q4 2013, up on both a quarterly and yearly basis (from 1.04% in Q3 2013 and 1.09% in Q4 2012).

Reuters: 

• U.S. Fed says stress test results to be released on March 20.

Telegraph:

• French to break deficit promise to EU. EU says France's deficit will climb to 4pc of output this year and remain at 3.9pc in 2015.

US-China Perception Monitor: 

• China Not Afraid of Conflict. China "is not only unafraid of war, but also courageous in welcoming reasonable and lawful conflict".