Bull Radar

Style Outperformer:

• Small-Cap Growth +.92%

Sector Outperformers:

• 1) Gaming +1.95% 2) Homebuilders +1.89% 3) Biotech +1.73%
  

Stocks Rising on Unusual Volume:

• DRTX, ISRG, MXWL, RBCN, ARWR, ZU, PCYC, INFA, VRNT, CELG and NVDA

Stocks With Unusual Call Option Activity:

• 1) JCI 2) F 3) ISRG 4) APOL 5) LLY

Stocks With Most Positive News Mentions:

• 1) ISRG 2) F 3) NVDA 4) LVS 5) GOOG
  

Charts:

• ETFs Rising on Unusual Volume 

• Stocks Rising on Unusual Volume

Tuesday Watch

Evening Headlines 
Bloomberg:

• Top China Banks Poised to Sell Preferred Stock to Buffer Capital. ICBC (1398), China Construction Bank Corp. (939), Agricultural Bank of China Ltd. (601288) and Bank of China Ltd. said in the past week they’re preparing to sell the stock as they reported a combined 12 percent increase in 2013 profit, down from 15 percent a year earlier. Preferred stock, available under a trial approved by regulators last month, permits banks to raise capital without selling dilutive common equity. The shares can be converted into common stock if capital ratios fall below a certain level.

• Asian Stocks Fall First Time in 5 Days. Asian stocks fell, with the regional benchmark index on course for its first loss in five days, ahead of Chinese manufacturing data expected to confirm growth is slowing in the world’s second-largest economy. The MSCI Asia Pacific Index lost 0.2 percent to 137.72 as of 9:27 a.m. in Tokyo. 

• Easier Loans: Haven't We Seen This Movie Before?

• Ebola’s Death Toll Reaches 80 in ‘Unprecedented’ Outbreak. The Ebola outbreak in Guinea, where the death toll climbed to 80, is “unprecedented,” international aid organization Doctors Without Borders said. In neighboring Liberia, one of two confirmed cases has died, while a second person who died with a suspected Ebola infection tested negative for the virus, the World Health Organization said in a statement.

CNBC:

• Caterpillar(CAT) dodged paying $2.4 billion in taxes: Senate report. Heavy equipment giant Caterpillar shifted $8 billion in profits to an offshore Swiss affiliate over the last decade, and avoided paying $2.4 billion in U.S. taxes, according to a new report from the Senate Permanent Subcommittee on Investigations.

Zero Hedge:

• Japanese Outlook Data Collapses As China's PMI Misses And Beats (And Economy Contracts & Expands). (graph)

• As If 194 Hedge Fund Suddenly Cried Out In Terror, And Were Suddenly Silenced.

• Summing Up Q1 Fundamentals (In 2 Simple Charts).

• IPO Madness & The Lesson Of History. (graph)

• Here Come The Feds: FBI Probing HFT.

• The Best (And Worst) Global Equity Markets In The First Quarter. (graph)

• Nigel Farage: Europe Has "Blood On Its Hands" Over Ukraine.

• High Frequency Talking: Santelli Vs Pisani. (video)

ValueWalk:

• Speculative Net Short Position In Ten Year Futures Largest Since 2005. (graph)

Business Insider:

• Manhattan U.S. Attorney's Office Warns 'A Significant Financial Institution' May Get Charge With A Serious Crime.

• North Korea Threatens A 'New Kind Of Nuclear Test'.

Washington Examiner:

• They Blew Up the Healthcare System for This?

Financial Times:

• Alert on leveraged loan terms. One of the biggest buyers of US leveraged loans is sounding the alarm over unusual new terms being jammed into deals, increasing risk in one of the hottest investment areas of recent years. Eaton Vance, the US fund management group, says company owners are seeking – and increasingly being granted – extra freedom to pile on more debt in the future without recourse to existing lenders.

Evening Recommendations

• None of note

Night Trading

• Asian equity indices are -.25% to +.75% on average.

• Asia Ex-Japan Investment Grade CDS Index 125.0 -3.0 basis points.

• Asia Pacific Sovereign CDS Index 89.75 -3.0 basis points.

• FTSE-100 futures +.28%.

• S&P 500 futures +.05%.

• NASDAQ 100 futures  -.01%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (APOL)/.19

• (TECD)/1.93

Economic Releases
9:45 am EST

• Final March US Manufacturing PMI is estimated to rise to 56.0 versus a prior estimate of 55.5.

10:00 am EST

• ISM Manufacturing for March is estimated to rise to 54.0 versus 53.2 in February.

• ISM Prices Paid for March is estimated to fall to 59.5 versus 60.0 in February.

• Construction Spending for February is estimated to rise +.1% versus a +.1% gain in January.

• IBD/TIPP Economic Optimism for April is estimated to rise to 46.0 versus 45.1 in March.

Afternoon:

• Total Vehicle Sales for March are estimated to rise to 15.8M versus 15.27M in February.
  

Upcoming Splits

• (PEGA) 2-for-1

• (GOOG) 2-for-1 

Other Potential Market Movers

• The Eurozone unemployment rate, Eurozone Manufacturing PMI and the weekly retail sales reports could also impact trading today.

BOTTOM LINE: Asian indices are mostly higher, boosted by industrial and real estate 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.

Stocks Rising into Afternoon on Diminished Russia/Ukraine Tensions, Central Bank Hopes, Quarter-End Window-Dressing, Biotech/Gaming Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Higher
  

• Sector Performance: Most Sectors Rising
  

• Volume: Slightly Below Average

• Market Leading Stocks: Performing In Line

Equity Investor Angst:

• Volatility(VIX) 13.80 -4.23%

• Euro/Yen Carry Return Index 148.06 +.36%

• Emerging Markets Currency Volatility(VXY) 8.55 -1.95%

• S&P 500 Implied Correlation 53.52 -2.25%

• ISE Sentiment Index 83.0 -23.05%

• Total Put/Call .96 -2.04%

• NYSE Arms .96 +26.71% 

Credit Investor Angst:

• North American Investment Grade CDS Index 69.36 -1.66%

• European Financial Sector CDS Index 92.62 -2.44%

• Western Europe Sovereign Debt CDS Index 45.90 -3.03%

• Asia Pacific Sovereign Debt CDS Index 90.30 -2.40%

• Emerging Market CDS Index 293.37 -2.29%

• China Blended Corporate Spread Index 362.75 -2.03%

• 2-Year Swap Spread 12.75 +.75 basis point

• TED Spread 20.0 +.25 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -3.25 unch.

Economic Gauges:

• 3-Month T-Bill Yield .03% -1.0 basis point

• Yield Curve 230.0 +4.0 basis points

• China Import Iron Ore Spot $116.80/Metric Tonne +4.01%

• Citi US Economic Surprise Index -32.60 -3.1 points

• Citi Emerging Markets Economic Surprise Index -8.70 -2.3 points

• 10-Year TIPS Spread 2.14 unch.

Overseas Futures:

• Nikkei Futures: Indicating +35 open in Japan

• DAX Futures: Indicating +37 open in Germany

Portfolio: 

• Higher: On gains in my biotech/tech/medical sector longs

• Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges, then added them back

• Market Exposure: 50% Net Long

Today's Headlines

Bloomberg:

• Medvedev in Crimea as Ukraine Rejects Russia Proposal. Prime Minister Dmitry Medvedev arrived in Crimea in the first visit by a top official since Russia annexed the peninsula, as Ukraine rejected the Kremlin’s demands that it grant its regions greater powers. Medvedev’s trip today came just hours after U.S. Secretary of State John Kerry demanded Russia pull its forces back from Ukraine’s border at talks in Paris with Russian Foreign Minister Sergei Lavrov, saying they are “creating a climate of fear and intimidation in Ukraine.” Lavrov demanded that Ukraine should devolve power to give its regions more autonomy and ensure the rights of Russian speakers. 
• IMF Says European Banks Had Up to $300 Billion Subsidy. Large banks in the euro area benefited from as much as $300 billion in implicit public subsidies four years after the global financial crisis because of investors’ expectations that governments would not let them fail, according to the International Monetary Fund.
• European Stocks Climb After Weekly Gain as Novartis Rises. European advanced, after the biggest weekly gain in more than a month, as investors awaited economic data out of Europe and America later this week. Novartis AG climbed 3.5 percent after the Swiss drugmaker said the last phase of a clinical trial showed a treatment for chronic heart failure helped patients live longer. Banca Monte dei Paschi di Siena SpA jumped to a 14-month high after its biggest investor said it is selling an additional stake. RWE AG lost 1.3 percent after UBS AG recommended avoiding the stock. The Stoxx Europe 600 Index added 0.2 percent to 334.31 at the close of trading in London.
• Hedge Fund Letters to Tell of Favorite Trades Unraveling. Pity the poor folks who have to write letters to investors on behalf of equity-focused hedge funds this month. Various measures of performance indicate the alternative investment vehicles may have a lot of explaining to do in March. The Global X Guru Index ETF (GURU), which aims to mimic returns of the top hedge-fund stock holdings, has lost 2 percent this month for its worst performance versus the Standard & Poor’s 500 Index since it was created in 2012.

Wall Street Journal:

• South Korea Fires Back at North Amid Pyongyang's Drills. Shells From Both Countries Fell in the Sea, South Korean Official Says. North Korea fired artillery across its maritime border with South Korea in the Yellow Sea on Monday as part of a military drill, prompting South Korea to return fire in the latest reminder of the unstable security situation on the Korean peninsula. The latest provocation from Pyongyang came just as the U.S. and South Korea conducted a large-scale joint military exercise focused on amphibious operations in South Korea. 
• WSJ's Hilsenrath: Yellen Sees Slack in Economy. Federal Reserve Chairwoman Offers Defense of Central Bank's Easy-Money Policies.

Fox News:

• Ukraine braces for Crimean refugees after Russia annexes peninsula. Thousands of refugees from the newly-annexed Crimea have begun pouring into mainland Ukraine following Russia’s invasion of the peninsula last month, headed for hastily-assembled shelters and the homes of countrymen.

ZeroHedge:

• London Real Estate Prices Soar 68% In Five Years: Here's Why In 1 Chart. (graph)
• European Inflation Slides To Lowest Since 2009. (graph)
• Chicago PMI Plunges To 7-Month Lows, Misses By Most In A Year. (graph)
• Stocks Surge As Yellen Goes Uber-Dovish, Says "Fed Short Of Reaching Employment And Inflation Goals".
• Russian Platoon Withdrawing From Ukrainian Border, Russian Defense Ministry Says.
• Japan Gives Residents All Clear To Return To Fukushima Disaster "Hot Zone".
• "The Market Is Rigged" - Michael Lewis Explains How HFTs "Screw" Investors Every Day. (video)

Business Insider:

• Russia Has Perfected The Art Of Provocation.
• One Of The World's Smartest Investors Thinks Anonymous Apps Like Whisper And Secret Are Fads That Won't Make Money.
• One Of The World's Smartest Investors Thinks Anonymous Apps Like Whisper And Secret Are Fads That Won't Make Money.
• Corporate America Continues To Be Super-Negative About Earnings Guidance. (graph)
• NYSE Margin Debt Levels Have Hit New Highs. (graph)
• How Much Should People Worry About The 'Unprecedented' Ebola Outbreak In Guinea?
• Putin Has Already Successfully Moved The Goalposts On Crimea.
• PANASONIC: We Haven't Yet Committed To Elon Musk's Gigafactory.
• BRICS Support For Russia's Invasion Of Crimea Signals A New International Era.
• Retail Stores Are Dying. (graph)

Telegraph:

• France way behind on budget targets, Francois Hollande prepares shake-up. Official figures put France's public deficit at 4.3pc of output last year, compared with a target of 4.1pc.

Bear Radar

Style Underperformer:

• Large-Cap Value +.62%

Sector Underperformers:

• 1) Gold & Silver -1.90% 2) Oil Service -.31% 3) Energy -.22%

Stocks Falling on Unusual Volume:

• OCIP, MNTA, UTIW, BIS, OCRX, MX, MEOH, GY, MZOR, SSTK, HAWK, SNN, UFS, PBYI, CHMI, PGTI, CXW, FIVE, CLVS, CGIX, GSK, MYL, CACI and HDS

Stocks With Unusual Put Option Activity:

• 1) NUAN 2) XLU 3) XLP 4) MRO 5) KRE
  

Stocks With Most Negative News Mentions:

• 1) GM 2) BBRY 3) TSLA 4) TWTR 5) BA
  

Charts:

• ETFs Falling on Unusual Volume

• Stocks Falling on Unusual Volume

Bull Radar

Style Outperformer:

• Small-Cap Growth +1.32%

Sector Outperformers:

• 1) Gaming +2.62% 2) Airlines +1.98% 3) Biotech +1.96%
  

Stocks Rising on Unusual Volume:

• NDZ, ACAS, EXAS, TEVA, NVS, EW, ECHO and COMM

Stocks With Unusual Call Option Activity:

• 1) ACAS 2) COP 3) CI 4) FDO 5) CHRW

Stocks With Most Positive News Mentions:

• 1) T 2) COP 3) JNJ 4) MU 5) CMI
  

Charts:

• ETFs Rising on Unusual Volume 

• Stocks Rising on Unusual Volume