Evening Headlines
Bloomberg:
- Russia Shrugs Off Sanctions as It Seals Claim to Crimea. Russia
cemented its claim to Crimea
as President Vladimir Putin showed no sign of backing down in the
standoff over Ukraine’s breakaway Black Sea region, prompting Western
leaders to vow further sanctions this week. Putin signed an accord
yesterday setting in motion Crimea’s accession to Russia, while British
Prime Minister David Cameron vowed to push European leaders to agree on
additional measures
against Russia when they meet tomorrow in Brussels. As tensions
rose, Ukraine accused Russian forces of being involved in a
shooting that killed a Ukrainian soldier.
- Short Sellers Target Chinese Developers as Rout Deepens. Stock traders have doubled bearish
bets against some of the biggest Chinese developers amid growing
concern that a weaker real-estate market will curb property sales just as borrowing costs surge. Short interest in Evergrande Real Estate Group Ltd. (3333), the nation’s fourth-largest developer by market value, was at 8.4
percent yesterday, up from 3.2 percent a year ago, according to
data compiled by Bloomberg and Markit Group Ltd. It reached a
record 8.6 percent of shares outstanding on March 4. Wagers
against Hong Kong-listed Guangzhou R&F Properties Co. and Agile
Property Holdings Ltd. have both reached the highest since
December 2012.
- China Mobile Under Pressure as IPhones, WeChat Curb Profit. China
Mobile Ltd. (941) faces a triple whammy of apps, iPhone subsidies and
regulations that likely will cost the world’s largest carrier as much as
$1.8 billion in profit this year. The state-run phone company is contending with falling
income as customers flock to free messaging applications like
Tencent Holdings Ltd.’s WeChat and buy Apple Inc. devices at a
subsidized discount. The government also will impose a new
telecommunications tax as part of an effort to lower prices and
improve customer service.
- Japan Posts Bigger-Than-Forecast Trade Deficit for February.
Japan’s trade deficit exceeded analysts’ estimates in February,
underscoring drags on the nation’s recovery as a sales-tax increase
looms in April. The 800 billion yen ($7.9 billion) shortfall reported by
the finance ministry in Tokyo today was more than the 600 billion yen
median estimate in a Bloomberg News survey of 31 economists. Imports (JNTBIMPY) expanded 9 percent from a year earlier, and exports rose 9.8 percent. Import volumes fell 0.5 percent from a year earlier, the
first decline since September, today’s report showed.
- Japan Display Slumps in Trading Debut After $3.1 Billion IPO.
Japan Display Inc. plunged in its debut after the supplier of screens
for Apple Inc. devices priced shares through an initial public offering
at the bottom of a planned range. The IPO raised 318.5 billion yen ($3.1
billion) with an offer price of 900 yen. The stock declined as much as 22 percent
and traded at 749 yen as of 10:04 a.m. in Tokyo.
- Asian Stock Gauge Fluctuates Before Fed Policy Statement.
Asia’s benchmark stock gauge fluctuated as investors weighed the
prospect of further sanctions against Russia and awaited the Federal
Reserve’s policy statement. Japan Display Inc. sank in its trading
debut. Nufarm Ltd. climbed 4.3 percent in Sydney as Credit Suisse Group
AG and UBS AG raised their ratings on Australia’s biggest supplier of
agricultural chemicals after the company said it would close two
manufacturing sites. Japan Display tumbled 17 percent on its first
trading day in Tokyo after the supplier of screens for Apple Inc.
devices raised 318.5 billion yen ($3.1
billion) through an initial public offering. Newcrest Mining
Ltd. advanced 3.6 percent in Sydney after CLSA Asia Pacific
Markets raised its rating on the stock to buy.
The MSCI Asia Pacific Index was little changed at 135.06 as
of 10:23 a.m. in Tokyo, after rising 0.2 percent and falling 0.1
percent.
- VIX Trader Pays $8 Million on Bet Gauge to Rally 60% by May. An investor paid about $7.95
million for a trade that will pay off if the Chicago Board
Options Exchange Volatility Index rallies at least 60 percent by
May. The trader bought 150,000 bullish contracts on the VIX
expiring in May with a strike price of 22, while selling the
same number of May 30 calls in a strategy known as a call
spread, according to New York-based Miller Tabak & Co. The trade
cost 53 cents to put on for each contract and it will profit if
the volatility gauge rises above 22.53 from the current level
around 14, data compiled by Bloomberg show. It has a maximum
payoff if the VIX more than doubles to 30.
- Junk Bonds at $2
Trillion as Gundlach Pulls Back: Credit Markets. The junk-bond bonanza
that's doubled the market to almost $2 trillion since the credit crisis
has Jeffrey Gundlach heading toward the exit. With borrowing costs for
the least-creditworthy companies approaching a record low, junk bonds no
longer provide enough of a buffer from rising Treasury yields as the
Fed scales back its bond buying, said Gundlach, whose firm oversees $49
billion. "They've squeezed all the toothpaste out of the tube," the bond
manager said in a telephone interview from Los Angles. "There is
interest-rate risk that's just being masked by fund flows holding up the
prices of junk bonds." Junk bonds, which have returned 148%
since the end of 2008, are showing signs of froth as five years of
easy-month policies by central banks caused investors to pour
unprecedented amounts of money into the high-yield market. That's helped
push the amount of junk bonds worldwide to $1.97 trillion from less
than $1 trillion in March 2009, Bank of America Merrill Lynch index data
show.
- Corporates Surpass ’07 Mortgage Bonds as Risk Escalates.
Corporate debt is accounting for
the biggest portion of the U.S. bond market ever, with $9.8
trillion of debentures surpassing the 2007 peak of the mortgage-securities boom that triggered the financial crisis.
Debt issued by companies from Verizon Communications Inc. (VZ) to
Caesars Entertainment Corp. (CZR) made up almost 25 percent of the $39.9
trillion in U.S. bonds outstanding at year-end, up from 19 percent five
years earlier, according to data published March 14 by the Securities
Industry and Financial Markets Association. Outside the $11.9 trillion
of Treasuries, corporates are the largest component of the world’s
biggest debt market. Obligations are mounting as the Federal Reserve
pulls back from more than five years of easy-money policies that spurred
the borrowing glut. With economists forecasting benchmark yields
will rise, that’s raising concern companies facing $3.5 trillion of
maturities by the end of 2018 will find it more costly to refinance,
similar to what U.S. homeowners faced six years ago. “The market
is getting more and more similar to that 2007 time period,” Jody Lurie, a
corporate credit analyst at Janney Montgomery Scott LLC in
Philadelphia, said in a telephone interview. Investors “are going down
in credit quality to the
point that it’s detrimental to potentially getting back the
principal.”
- IRS Employee Took Home Data on 20,000 Workers at Agency. A U.S. Internal Revenue Service
employee took home a computer thumb drive containing unencrypted
data on 20,000 fellow workers, the agency said in a statement
today.
Wall Street Journal:
MarketWatch.com:
- Fed transparency boils down to 16 dots on a page. Of all the Federal Reserve’s moves toward transparency since Ben
Bernanke took over the central bank in 2006 , the one with the most
impact this week will be 16 dots on a piece of paper, said Joseph
Lavorgna, chief U.S. economist at Deutsche Bank.
Zero Hedge:
Business Insider:
NY Times:
- Costly Loans Are Drawing Attention From States. The crackdown gained momentum on Tuesday when the Illinois attorney
general, Lisa Madigan, accused All Credit Lenders of misleading
borrowers into taking out expensive loans that come with insurance
products that they do not need or cannot use.
Reuters:
- Adobe(ADBE) forecasts results above estimates as web subscriptions rise.
Adobe Systems Inc, the maker
of Photoshop and Acrobat software, forecast current-quarter profit and
revenue above analysts' estimates, citing strong demand for its Creative
Cloud suite and digital marketing software. Shares of the company, which also posted
better-than-expected results for the first quarter ended Feb.
28, rose 1 percent in extended trading.
- Oracle(ORCL) quarterly results disappoint Wall Street; shares fall. Oracle Corp(ORCL)
posted higher third-quarter revenue and profit that failed to satisfy
investors looking for signs of a sustained turnaround and its shares
fell about 4 percent. Shareholders had grown
more optimistic after Oracle's previous quarterly results, but still
worried about slow IT spending and growing competition from smaller,
nimble rivals.
Telegraph:
Bild:
- Tymoshenko Says Putin Speech 'Fascist Propaganda'. Ukraine hoping for "more" when it comes to Western sanctions against Russia, Yulia Tymoshenko is cited as saying in an interview. Says Putin speech sends message he doesn't care about the Western opinion of Ukraine crisis.
Evening Recommendations
Night Trading
- Asian equity indices are -.50% to +.25% on average.
- Asia Ex-Japan Investment Grade CDS Index 128.0 unch.
- Asia Pacific Sovereign CDS Index 96.25 -1.25 basis points.
- NASDAQ 100 futures -.07%.
Morning Preview Links
Earnings of Note
Company/Estimate
- (GIS)/.61
- (KBH)/.08
- (FDX)/1.46
- (VRA)/.46
- (XONE)/.01
- (GES)/.79
- (JBL)/.11
- (CTAS)/.69
- (MLHR)/.34
Economic Releases
8:30 am EST
- The 4Q Current Account Deficit is estimated at -$88.0B versus -$94.8B in 3Q.
10:30 am EST
- Bloomberg consensus estimates call for a weekly crude oil inventory
build of +2,315,000 barrels versus a +6,180,000 barrel gain the prior
week. Gasoline supplies are estimated to fall by -1,245,000 versus a
-5,230,000 decline the prior week. Distillate supplies are estimated to
fall by -745,000 versus a -533,000 barrel decline the prior week.
Finally, Refinery Utilization is estimated to fall by -.47% versus a
-1.4% decline the prior week.
2:00 pm EST
- The FOMC is expected to leave the benchmark fed funds rate at .25%.
- The Fed's QE3 pace for March is estimated at $55B versus $65B in February.
Upcoming Splits
Other Potential Market Movers
- The
FOMC Economic Projections, Fed's Yellen speaking, BoE Minutes, weekly
MBA mortgage applications report, weekly retail sales reports, (GRA)
investor day and the (FSLR) analyst meeting could also impact trading
today.
BOTTOM LINE: Asian indices are mostly lower, weighed down by technology and financial shares in the region. I expect US stocks to open modestly higher and to weaken into the afternoon, finishing modestly lower. The Portfolio is 50% net long heading into the day.
Broad Equity Market Tone:
- Advance/Decline Line: Substantially Higher
- Sector Performance: Most Sectors Rising
- Market Leading Stocks: Outperforming
Equity Investor Angst:
- Volatility(VIX) 14.35 -8.25%
- Euro/Yen Carry Return Index 147.51 -.21%
- Emerging Markets Currency Volatility(VXY) 8.85 -1.23%
- S&P 500 Implied Correlation 52.98 -4.18%
- ISE Sentiment Index 162.0 +74.19%
- Total Put/Call .71 -14.46%
Credit Investor Angst:
- North American Investment Grade CDS Index 63.41 -2.63%
- European Financial Sector CDS Index 88.12 -3.79%
- Western Europe Sovereign Debt CDS Index 48.35 -2.44%
- Asia Pacific Sovereign Debt CDS Index 98.69 +.52%
- Emerging Market CDS Index 315.82 -2.08%
- China Blended Corporate Spread Index 381.76 -.67%
- 2-Year Swap Spread 13.5 -.25 basis point
- TED Spread 10.0 +.25 basis point
- 3-Month EUR/USD Cross-Currency Basis Swap -3.25 +.75 basis point
Economic Gauges:
- 3-Month T-Bill Yield .05% unch.
- China Import Iron Ore Spot $110.50/Metric Tonne +.82%
- Citi US Economic Surprise Index -33.50 +2.3 points
- Citi Emerging Markets Economic Surprise Index -6.10 +2.6 points
- 10-Year TIPS Spread 2.19 unch.
Overseas Futures:
- Nikkei Futures: Indicating +44 open in Japan
- DAX Futures: Indicating +24 open in Germany
Portfolio:
- Slightly Higher: On gains in my tech/biotech/medical sector longs
- Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges and some of my (EEM) short, then added them back
- Market Exposure: 50% Net Long
Bloomberg:
- Ukraine Says Conflict With Russia Turned Military From Political. Ukraine’s
government said its conflict with Russia has entered a military phase
as clashes in the breakaway Crimea region intensified, killing at least
one Ukrainian serviceman. The country is seeking to set up a
commission including the defense ministers of Russia, the U.S. and the
U.K. to avert
further escalation, Prime Minister Arseniy Yatsenyuk told
reporters in Kiev. A soldier was killed when unidentified masked
gunmen stormed a military installation in Crimea, Vladyslav
Seleznyov, a spokesman for Ukraine’s defense ministry in the
region, said by phone. Tensions are increasing after Russian President
Vladimir Putin flouted Western sanctions and signed a treaty annexing
Crimea into the Russian Federation. The Black Sea peninsula in a
disputed March 16 referendum voted to leave Ukraine and join Russia. Russia has 25,000 troops in Crimea, which are blocking 38 Ukrainian units in the region, Serhiy Hayduk, the head of the
Ukrainian Navy, said via video link. Hayduk will speak with a
Russian deputy defense minister to avert escalation, he said.
- Russian Troop Buildup Seen at Ukraine Border After Crimea. Russia has increased its military presence near Ukraine’s
border as it tries to repeat the events that led up to Crimea’s
incorporation into Russia in the east of the country, the governor of
the Kharkiv region said. Russian forces have been boosted in the
last five days, massing along roadways about 15 kilometers (9 miles)
from the border, said Ihor Baluta, appointed by the interim government
in Kiev after the ouster of Viktor Yanukovych last month. “They
are concentrated along the highways, which implies they want to move
quickly into our territory,” Baluta said in an interview in Ukraine’s
second biggest city today. “Russia is trying to create the situation
unfolding now in the south here in eastern regions.”
- Putin Says Russia Doesn’t Want Ukraine Split After Crimea.
Western leaders condemned Russian President Vladimir Putin’s push to
annex Crimea and promised further sanctions as early as this week,
ratcheting up pressure in the biggest diplomatic crisis since the Cold
War. British Prime Minister David Cameron called Putin’s seizure of
the Black Sea peninsula from Ukraine a breach of international law that
sent “a chilling message across the continent of Europe.” He vowed to
push European leaders to agree to further measures against Russia when
they meet March 20. U.S. Vice President Joe Biden, in Poland on a trip
to meet regional allies, predicted “additional
sanctions” over what he called “a brazen military incursion.”
- Ruble Drops With Bonds as Putin Backs Crimea Accession Bid.
The ruble and government bonds fell after President Vladimir Putin said
he supported a request from Ukraine’s breakaway Crimea region to join
Russia, stoking concern harsher western sanctions may follow. Stocks
gained.The ruble weakened 0.4 percent to 42.8996 against Bank
Rossii’s target basket of dollars and euros by 2:30 p.m. in Moscow. The
yield on government bonds due February 2027 rose eight basis points, or
0.08
percentage point, to 9.44 percent.
- Bearish Bets on Japan Stocks Jump to Highest in 5 Years. Bearish bets on Japanese stocks
surged to the highest in at least five years, signaling
investors predict further declines for a market that’s already
the developed world’s worst performer this year. Short sales
comprised 36 percent of total trading on the Tokyo Stock Exchange
yesterday, the highest since the data series began in October 2008.
Paper manufacturers were the most-shorted industry, followed by banks
and brokerages, the exchange data show.
- German ZEW Investor Confidence Falls to Lowest Since August.
German investor confidence fell to the lowest since
August as political uncertainty in Ukraine threatens to weigh on a
recovery in Europe’s largest economy that may be nearing its peak. The
ZEW Center for European Economic Research in Mannheim said its index of
investor and analyst expectations, which aims to predict economic
developments
six months in advance, slid to 46.6 from 55.7 in February. That’s the
third monthly decline. Economists forecast a decline to 52, according to
the median of 41 estimates in a Bloomberg News survey. The gauge
reached a seven-year high of 62 in December.
- IMF Growth Forecasts Seen Too Optimistic in Large-Loan Countries. The International Monetary Fund tends to be too upbeat when projecting the economic growth of countries that receive large loans, an internal audit found. In a report that looks at IMF loan programs between 2002
and 2011, the auditor found that “the forecast bias at program
inception was optimistic and significant” for nations that
could borrow more than their size at the fund would allow under
the “exceptional access” rule.
- European Stocks Advance, Extending Rally; Kuoni Increases.
European stocks rose, extending their biggest gain in two weeks, after
Russian President Vladimir Putin said he isn’t seeking to split up
Ukraine. Kuoni Reisen Holding AG (KUNN) climbed 8.2 percent after
Switzerland’s biggest travel company posted 2013 profit that exceeded
analysts’ estimates. SBM Offshore NV rallied 6.3 percent. Cairn Energy
Plc fell to its lowest price in more than 10 years after saying it is
suspending a buyback program. Scania
AB declined 2.1 percent after a board committee recommended
rejecting Volkswagen AG’s takeover offer. The Stoxx Europe 600 Index gained 0.6 percent to 327.93 at the close in London, after earlier falling as much as 0.5
percent.
- High-Speed Trading Faces New York Probe Into Fairness. New York’s top law enforcer has opened a broad investigation into
whether U.S. stock exchanges and alternative venues provide
high-frequency traders with improper advantages. Attorney
General Eric Schneiderman said today that he’s examining the sale of
products and services that offer faster access to data and richer
information on trades than what’s typically available to the public.
Wall Street banks and rapid-fire trading firms pay thousands of dollars a
month for these services from firms including Nasdaq OMX Group Inc.
(NDAQ) and IntercontinentalExchange Group Inc.’s New York Stock
Exchange.
Wall Street Journal:
- Russia's Putin Signs Treaty to Annex Crimea. President Says Ukraine Region Is Vital to Russia's Security. In
an otherwise defiant speech to both houses of parliament and top
officials, Mr. Putin dismissed sanctions and threats of other
consequences from Europe and the U.S., saying the West had "crossed the
line" by fomenting what he called a putsch in Kiev earlier this year.
- CFTC Expected to Delay Planned Overseas Derivatives Trading Restrictions. New Rules on Derivatives Trading Set to Go Into Effect March 24.
The Commodity Futures Trading Commission is expected to delay planned
overseas derivatives trading restrictions relating to a continuing
effort to harmonize domestic and international rules. The CFTC, the main
U.S. derivatives regulator, is likely to put off restrictions on
derivatives trading in Europe set to go into effect March 24, according
to a person familiar with the matter. It was unclear how long the delay
would last.
MarketWatch:
ZeroHedge:
Business Insider:
- This Is The Top, Right? Borrowing money against your home to buy stocks at multi-year highs? What could go wrong?
Style Underperformer:
Sector Underperformers:
- 1) Gaming -.22% 2) Retail -.14% 3) Papers -.11%
Stocks Falling on Unusual Volume:
- CHH, HART, XLRN, CHKR, DSW, SFLY, MTSI, BIS, WRLD, ICLD, NDAQ, KNDI,
STAA, GME, SFM, FPRX, HMC, IIVI, SPN, DLR, SINA, UBSH, FMC, NVGS, DSW and STAA
Stocks With Unusual Put Option Activity:
- 1) CWH 2) NKE 3) MSFT 4) XLK 5) OIH
Stocks With Most Negative News Mentions:
- 1) GM 2) TSLA 3) CVS 4) INTL 5) UTIW
Charts:
Style Outperformer:
Sector Outperformers:
- 1) Hospitals +2.49% 2) Biotech +2.12% 3) Software +1.79%
Stocks Rising on Unusual Volume:
- FF, MXWL, VNET, PVA, YNDX, RMBS, FDS, GTAT, ZU, LOCK and AR
Stocks With Unusual Call Option Activity:
- 1) CDE 2) VIAB 3) WLP 4) RMBS 5) IDRA
Stocks With Most Positive News Mentions:
- 1) CME 2) HPQ 3) JCI 4) T 5) ORCL
Charts:
Evening Headlines
Bloomberg:
- Putin Moves Toward Claiming Crimea as U.S. Joins EU on Sanctions. Russian President Vladimir Putin
took another step toward annexing Crimea, defying sanctions
imposed by the U.S. and European Union in the worst standoff
with Russia since the end of the Cold War. Acting in concert, the U.S. and EU unveiled penalties
yesterday on Russian and Ukrainian officials linked to efforts
to wrest Crimea from Ukraine. Putin responded by recognizing the
breakaway Black Sea region as a sovereign state while Western
leaders warned that Russia would face added sanctions, including
possibly on energy assets, if it moved deeper into Ukraine.
- Evergrande Bonds Decline Amid China Housing Bankruptcy. Stocks and bonds issued by Chinese
real estate companies slumped after the collapse of a private
developer added to concern that defaults are starting to mount
as the economy slows and the government reins in lending. Prices on the dollar bonds sold by Evergrande Real Estate
Group Ltd., the nation’s fourth largest developer by market
value, fell 0.5 cent on the dollar yesterday, sending yields to the highest since August. Prices
on Kaisa Group Holdings Ltd. (1638)’s bonds maturing in 2018 dropped to
a seven-month low. Shares of E-House China Holdings Ltd. (EJ), the
online real estate services provider, slid 2.6 percent while SouFun
Holdings Ltd. (SFUN) retreated
for a seventh day.
- China Home-Price Growth Slows in Big Cities on Tight Credit. Chinese new-home price growth
slowed last month, led by the four cities the government defines
as first tier, amid tighter credit to rein in excessive
borrowing and individual city measures to curb property prices.
Prices in Beijing and the southern business hub of Shenzhen
each rose 0.2 percent in February from a month earlier, the National
Bureau of Statistics said today. That was the slowest pace since October
2012. They added 0.4 percent in Shanghai, the smallest increase since
November 2012, and gained 0.5 percent in Guangzhou. Prices climbed in 57
of the 70 cities tracked by the
government. That compares with 62 in January.
- Japan Analysts Split on Fiscal Crisis Time as Tax Looms: Economy. Economists
are split over how long Japan’s government has to rein in the world’s
biggest debt burden, a Bloomberg News survey shows, adding to a debate
on whether the government should keep ratcheting up a sales tax. Eleven of 34 analysts said the government has four years or less to put fiscal policy on a sustainable path and avoid a
crisis, while seven said it has over 10 years. BNP Paribas SA
and Credit Suisse Group AG were among five saying it’s too late
to avert one. UBS AG says chances of a fiscal crisis are remote.
- Russia Sounds Alarm on Economic Crisis as West Imposes Sanctions. “The situation in the economy bears clear signs of a
crisis,” Deputy Economy Minister Sergei Belyakov said in Moscow
yesterday. The cabinet needs to refrain from raising the fiscal
burden on companies, which would be the “wrong approach,” he
said. “Taking money from companies and asking them afterward to
modernize production is illogical and strange.”
- Asian Stocks Rise From Five-Week Low on U.S. Factory Data. Asian stocks rose, with the
regional gauge rebounding from a five-week low, as data showing
an improvement in U.S. factory output boosted optimism in the
world’s biggest economy. The MSCI Asia Pacific Index climbed 0.4 percent to 134.65 as of 9:02 a.m. in Tokyo. The gauge slumped 3.5 percent last week as data on Chinese industrial production and retail sales
disappointed investors.
- Milk Costs Most Ever on Surging Demand for U.S. Dairy Exports.
Milk futures in Chicago jumped to an all-time high as surging U.S.
dairy exports depleted supplies available for domestic consumers. Shippers
sold 162,999 metric tons of milk powder, cheese, butterfat and whey in
January, up 19 percent from a year earlier, according to the latest data
from the U.S. Dairy Export
Council. Almost 15 percent of milk production went to exported
goods, up from 12 percent a year earlier, the group said. Cheese
shipments climbed 46 percent.
- Sony Corp. Said Cutting Jobs at Entertainment Division.
Sony Corp. (6758) began a new round of job cuts at its entertainment
division, said a person with knowledge of the situation, part of Chief
Executive Officer Kazuo Hirai’s effort to improve profitability at the
unit. The reductions are taking place at the Culver City,
California-based film and television studio, as well as other
locations worldwide, said the person, who asked not to be named
because the details aren’t yet public.
Wall Street Journal:
- Chinese Companies Caught in Yuan Riptide. Bets by Firms and Individuals on a Rise in Currency Face Losses as Country Changes Tack. China's decision to squeeze speculators out of its currency is causing pain for local companies and individual investors. The
yuan fell on Monday to its lowest level in 10 months against the dollar
after the government over the weekend doubled the currency's daily
trading range. The decision, foreshadowed by months of hints by Chinese
officials, followed a weekslong campaign by the country's central bank
to weaken the yuan. China is attempting
to reduce the amount of money flowing into the country from foreign
investors looking to profit on a rise in the yuan. The government sees
this cash as inflating asset prices and making the economy more
vulnerable to financial shocks.
- Taper Talk Slammed Strong Emerging Nations Most. New research argues emerging-market nations hit hardest in the run up to the Federal Reserve’s
decision to cut back its bond buying were those whose financial houses
were in the best order, relatively speaking—a finding contrary to much
recent conventional wisdom.
- Obama's Unserious Sanctions. The U.S. and Europe help lift the Russian stock market.
President
Obama and the European Union announced their sanctions
response to Vladimir Putin's rolling conquest of Crimea on Monday, and
the most accurate assessment came from financial markets. Moscow's
stock exchange, which has been battered for two weeks in fear of Western
sanctions, rose 3.7%. Congratulations, Mr. President. You gave the
Kremlin a sanctions relief rally. Mr. Obama had promised
"consequences" if Mr. Putin followed through with the Crimean
referendum, so we doubt even the Russian President thought the West's
actions would be this weak. Russian opposition leader
Alexei Navalny
tweeted from Moscow that the sanctions list was "of course,
funny." He added that "Obama only delighted all our crooks and
encouraged them." That turned out to be literally true when one of the Russians on Mr. Obama's list, Deputy Prime Minister
Dmitry Rogozin,
tweeted, "It seems to me that some kind of joker wrote the U.S. president's order :)" LOL.
Fox News:
- Ukraine officials pleading with US to provide military aid, lawmaker says. Ukrainian officials pleaded with visiting U.S. lawmakers this past
weekend to provide military aid, claiming their ousted president
intentionally gutted the nation's defenses so it would be vulnerable to a
Russian takeover, one of those U.S. lawmakers told Fox News. "They wanted arms," the lawmaker said, "even recognizing that it
could be cited by Putin as an excuse, a provocation for further military
action by him. They said Putin's goal has never been Crimea; his goal
is Kiev."
CNBC:
Zero Hedge:
ValueWalk:
Business Insider:
Telegraph:
Evening Recommendations
Cowen:
- Rated (CBI) Outperform, target $98.
- Rated (FLR) Outperform, target $90.
Night Trading
- Asian equity indices are +.25% to +.75% on average.
- Asia Ex-Japan Investment Grade CDS Index 128.0 -7.5 basis points.
- Asia Pacific Sovereign CDS Index 97.5 -4.25 basis points.
- NASDAQ 100 futures +.13%.
Morning Preview Links
Earnings of Note
Company/Estimate
Economic Releases
8:30 am EST
- The Consumer Price Index for February is estimated to rise +.1% versus a +.1% gain in January.
- The CPI Ex Food & Energy for February is estimated to rise +.1% versus a +.1% gain in January.
- Housing Starts for February are estimated to rise to 910K versus 880K in January.
- Building Permits for February are estimated to rise to 960K versus 937K in January.
9:00 am EST
- Net Long-Term TIC Flows for January are estimated at $40.0B versus -$45.9B in December.
Upcoming Splits
Other Potential Market Movers
- The German ZEW Index, weekly retail sales reports and the (SNCR) investor meeting could also impact trading today.
BOTTOM LINE: Asian
indices are mostly higher, boosted by technology and industrial
shares in the region. I expect US stocks to open modestly higher
and to weaken into the afternoon, finishing mixed. The Portfolio is 50%
net long heading into the day.
