Bull Radar

Style Outperformer:

• Large-Cap Value -.06%

Sector Outperformers:

• 1) Semis +.45% 2) Utilities +.31% 3) Steel +.28%
  

Stocks Rising on Unusual Volume:

• RPM, ACTG and AMBA

Stocks With Unusual Call Option Activity:

• 1) DLLR 2) BKS 3) FOXA 4) CY 5) EOG

Stocks With Most Positive News Mentions:

• 1) P 2) T 3) NFLX 4) AAPL 5) NVDA
  

Charts:

• ETFs Rising on Unusual Volume 

• Stocks Rising on Unusual Volume

Thursday Watch

Evening Headlines 
Bloomberg:

• Abe Loan Push Impeded by Companies Hoarding Cash: Japan Credit. Japanese banks are the most keen to lend companies money in 17 years. Corporate treasurers don’t need the cash. A Bank of Japan index measuring the prevalence of mid-sized companies saying banks are willing to make loans rose to 19 in March, the highest since June 1997, according to Tankan data. Yet demand for loans from businesses remains below levels before the global financial crisis, other central bank data show.

• Brazil Lifts Rate to 11% as Food Shock Worsens Price Outlook. Brazil’s central bank extended the world’s longest interest rate tightening cycle, after a food price shock increased chances that inflation will accelerate beyond the target range for a second straight year. The bank’s board, led by its President Alexandre Tombini, today voted unanimously to raise the Selic rate to 11 percent from 10.75 percent, as forecast by all 57 economists surveyed by Bloomberg. Policy makers have raised borrowing costs by 375 basis points, or 3.75 percentage points, in less than a year. 

• Prada Forecasts Slowing Sales Growth as Luxury Demand Slides. Prada SpA (1913), the Italian maker of $2,950 leather handbags, forecast slowing sales growth this year amid a maturing Chinese market and soft demand in Europe. Same-store sales will rise at a “low single-digit” pace in the financial year through January 2015, Milan-based Prada said yesterday, less than last year’s 7 percent increase. Growth will be “mid single-digit” the year after, the company said as it reported profit for last year that missed analyst estimates.

• Asian Stocks Rise on Weaker Yen as Won Slips With Copper. Asian stocks rose, with Japanese shares driving the regional index to its longest rally this year, as the yen traded near a two-month low before a review of euro-area monetary policy and U.S. payrolls data. South Korea’s won snapped a six-day gain as copper and oil fell. The MSCI Asia Pacific Index added 0.1 percent by 10:06 a.m. in Tokyo, rising a seventh day in the longest run of gains since December.

• EPA Failed to Disclose Cancer Risk to People in Studies. The U.S. Environmental Protection Agency failed to disclose cancer risks to people it exposed to harmful pollutants in research studies, a government watchdog says. The EPA, which warns of dangers from diesel exhaust and tiny particles in its rules to cut pollution, recruited people for tests on those pollutants in 2010 and 2011. Consent forms they were given didn’t mention cancer because the agency considered the risks minimal, the agency’s Office of Inspector General said today in a report. “When justifying a job-killing regulation, EPA argues exposure to particulate matter is deadly, but when they are conducting experiments, they say human exposure studies are not harmful,” Louisiana Republican Senator David Vitter said in a statement, reacting to the report.

Wall Street Journal:

• One Dead, at Least 14 Injured in Fort Hood Shooting. Military Base Was Site of Mass Shooting in 2009. A gunman opened fire at Texas' Fort Hood military base Wednesday, injuring at least 14 people before apparently shooting himself, officials said. The incident marks the third time there has been a shooting at a U.S. military base in seven months and comes less than five years after another shooting rampage at Fort Hood ended with 13 dead and more than 30 injured. The base, in a press release, said its Directorate of Emergency Services had received an initial report that a suspected shooter had been killed, but was still trying to confirm that. A Defense Department official said the extent of the injuries wasn't immediately clear.

• Yelp(YELP) Regularly Gets Subpoenas About Users. FTC Says It Has Received 2,046 Complaints Since 2008.  

• Small Banks Look to Sell as Rules Bite. Executives Say Costs of New Regulations Are Taking a Toll.

• Investors Clamor for Risky Debt Offerings. Buyers Grab Securities With Weak Ratings, Tired of Lower Yields on Safer Deals. Risky debt is flying off the shelves. Investors are snapping up low-rated securities backed by companies, home mortgages and car loans at a clip rarely seen since the financial crisis, as fund managers and others tire of paltry yields on safer assets. Buyers poured $3.42 billion into taxable U.S. high-yield mutual funds and exchange-traded funds in the first quarter, outpacing the year-earlier period's $1.76 billion total, said fund tracker Lipper, and following a full-year outflow of $4.98 billion in 2013. At the same time, robust demand for the lowest-rated portions of some asset-backed securities has enabled issuers to cut offered yields, investors said.

CNBC:

• More Americans see middle class status slipping. A sense of belonging to the middle class occupies a cherished place in America. It conjures images of self-sufficient people with stable jobs and pleasant homes working toward prosperity. Yet, nearly five years after the Great Recession ended, more people are coming to the painful realization that they're no longer part of it.

Zero Hedge:

• Lewis Explains The Casino: "Why Are You Even Arguing" That This Is Not Rigged?

• David Stockman: "A Gang Of Unelected PhDs Have Staged An Economics Coup D'Etat".

• JPMorgan(JPM) Explains: The Problem Is The Inexorable Rise In Entitlement Payments.

• The Obamacare Ship Of Fools.

• Reverse Mortgages Spike 20% In 2013 As Baby Boomers Scramble For Cash.

• HSBC China Composite PMI Tumbles To 28-Month Lows As Services Fell (& Rose). (graph)

Reuters:

• Juniper(JNPR) to cut 6 pct jobs, focus on high-growth businesses. Network gear maker Juniper Networks Inc , which is under pressure from investor Elliott Management Corp to slim down, said it plans to reduce its global workforce by 6 percent and focus on its high-growth businesses.

Liquidity crunch a catalyst for big China slowdown – analysts The mini liquidity crunch is the early warning sign of a substantial economic correction long overdue, amid rising leverage and a broken growth model, say bearish analysts.


While we want you to share, we ask you use the functions on-site rather than copy/paste. See T's & C's for details. http://www.euromoney.com/Article/3222433/Liquidity-crunch-a-catalyst-for-big-China-slowdownanalysts.html?copyrightInfo=true

China Securities Journal:

• China Shouldn't Scrap National Home Buying Curbs. China shouldn't remove home purchase curbs nationwide as supply still can't meet demand in 1st-tier citites and some 2nd-teir cities, according to a front-page commentary written by reporter Zhang Min.

Shanghai Securities News:

• China 1Q Consumer Prices May Rise 2.3%. Chinese consumer prices may rise 2.3% in 1Q and 2.5% for the full year, according to an article by Zhang Qianrong from State Information Center, a think tank affiliated to the National Development and Reform Commission published today. Producer prices may fall 1.9% in 1Q and .6% for the full year, the article said. China should prepare for deflation risks on production overcapacity and declining demand, Zhang wrote.

Evening Recommendations
Piper Jaffray:

• Rated (INTC) Overweight, target $30.

• Rated (FSL) Overweight, target $31.

Night Trading

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

• Asia Ex-Japan Investment Grade CDS Index 121.0 -.75 basis point.

• Asia Pacific Sovereign CDS Index 87.5 -.75 basis point.

• FTSE-100 futures +.08%.

• S&P 500 futures -.03%.

• NASDAQ 100 futures  -.03%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (PERY)/.03

• (GBX)/.60

• (SCHN)/.07

• (MU)/.75

• (GPN)/.95

Economic Releases
8:30 am EST

• The Trade Deficit for February is estimated at -$38.5B versus -$39.1B in January.

• Initial Jobless Claims are estimated to rise to 319K versus 311K the prior week.

• Continuing Claims are estimated to rise to 2843K versus 2823K prior.

9:45 am EST

• Final Markit US Services PMI for March is estimated at 55.5 versus a prior estimate of 55.5.

10:00 am EST

• The ISM Non-Manufacturing Composite for March is estimated to rise to 53.5 versus 51.6 in February.

Upcoming Splits

• None of note

Other Potential Market Movers

• The China HSBC Services PMI, ECB rate decision/Draghi speaking, Eurozone Services PMI, Challenger Job Cuts for March, RBC Consumer Outlook Index for April, weekly Bloomberg Consumer Comfort Index, weekly EIA natural gas inventory report, (BGC) investor day and the (CIEN) investor day 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 mixed and to weaken into the afternoon, finishing modestly lower. The Portfolio is 50% net long heading into the day.

Stocks Slightly Higher into Final Hour on Diminished Global Growth Fears, Yen Weakness, Short-Covering, Retail/Metals & Mining Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: About Even
  

• Sector Performance: Mixed
  

• Volume: Around Average

• Market Leading Stocks: Performing In Line

Equity Investor Angst:

• Volatility(VIX) 13.28 +1.27%

• Euro/Yen Carry Return Index 148.95 -.15%

• Emerging Markets Currency Volatility(VXY) 8.37 -.48%

• S&P 500 Implied Correlation 52.68 +.53%

• ISE Sentiment Index 102.0 +7.37%

• Total Put/Call .62 -38.0% 

• NYSE Arms .64 -42.22% 

Credit Investor Angst:

• North American Investment Grade CDS Index 67.46 -.05%

• European Financial Sector CDS Index 88.49 +.25%

• Western Europe Sovereign Debt CDS Index 44.69 -2.89%
• Asia Pacific Sovereign Debt CDS Index 87.87 -.34%

• Emerging Market CDS Index 288.50 +1.36%

• China Blended Corporate Spread Index 353.89 -1.29%
• 2-Year Swap Spread 11.25 -.75 basis point

• TED Spread 21.0 +1.25 basis points

• 3-Month EUR/USD Cross-Currency Basis Swap -3.25 -.5 basis point

Economic Gauges:

• 3-Month T-Bill Yield .02% -1.0 basis point

• Yield Curve 235.0 +3.0 basis points

• China Import Iron Ore Spot $115.30/Metric Tonne -1.96%

• Citi US Economic Surprise Index -32.80 +1.7 points

• Citi Emerging Markets Economic Surprise Index -8.20 -1.0 point

• 10-Year TIPS Spread 2.15 +1.0 basis point

Overseas Futures:

• Nikkei Futures: Indicating +117 open in Japan

• DAX Futures: Indicating +19 open in Germany

Portfolio: 

• Slightly Lower: On losses in my biotech/tech sector longs

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

• Market Exposure: Moved to 25% Net Long

Today's Headlines

Bloomberg: 

• NATO Warns Russia Force on Ukraine Border Ready to Act. NATO leaders warned today that Russian forces massed near the country’s border with Ukraine are in a high state of readiness and that any incursion across the frontier would be a “historic mistake.” The presence of as many as 40,000 soldiers along Ukraine’s eastern border is fueling concern that Russia is poised to invade on the pretext of protecting Russian-speaking inhabitants of eastern and southern Ukraine. Backed by state-run media, President Vladimir Putin says the Kiev-based government is influenced by Russophobe extremists and hasn’t done enough to stop them from persecuting Russian-speakers. “We have seen a very massive Russian military buildup along the Ukrainian borders,” North Atlantic Treaty Organization Secretary General Anders Fogh Rasmussen said after a two-day meeting of alliance foreign ministers in Brussels. “We also know that these Russian military armed forces are at very high readiness.”

• China Leverage Seen Rising Through 2016. China’s debt is poised to keep expanding faster than the economy through at least 2016, testing the limits of a credit-driven growth model that’s already exceeded the imbalances in Japan before its lost decade. The combined ratio of government, corporate and household debt to gross domestic product is set to climb to 236.5 percent in 2016 from 225 percent last year, based on median estimates in a Bloomberg News survey of economists and analysts. Asked when the ratio will peak over the next decade, the largest proportion of respondents said 2018 or 2019.

• China Dot-Coms Rush to U.S. as Buyers Shrug Off Murky Structures. Sky-high valuations mixed with murky corporate structures often scare off investors. That’s less so if the companies are from China. From microblogging site Weibo Corp. (0962693D) to real-estate website Leju Holdings Ltd., China-based companies have announced more than $2.5 billion of U.S. initial public offerings in 2014, data compiled by Bloomberg show. That’s the most since the fourth quarter of 2007, when Chinese stocks in the U.S. peaked before losing almost two-thirds of their value. The rush isn’t slowing soon.  

• Euro-Area Banks Face Tougher Risk-Model Scrutiny: Barnier. Euro-area banks face tougher scrutiny of how they measure the risk of losses on their assets, the European Union’s financial-services chief said. Michel Barnier said that once the European Central Bank takes on oversight of euro-area lenders in November, its tasks will include tackling potential inconsistencies in the so-called risk-weight models banks use to measure the capital they need to withstand crises.

• Euro-Area Economic Growth Revised Down to 0.2% in Fourth Quarter. The euro-area economy grew at a slower pace in the fourth quarter than initially estimated, providing further evidence for the European Central Bank assessment that the currency bloc’s recovery is still fragile. Gross domestic product expanded 0.2 percent in the three months through December, according to data posted on the website of the European Union’s statistics office today. That’s down from the preliminary measure of 0.3 percent on March 5. 

• European Stocks Gain for Seventh Day. European stocks climbed for a seventh day after a U.S. private-payrolls report showed companies in the world’s largest economy added more workers last month and factory orders increased in February. Deutsche Post AG gained 4.6 percent after Europe’s largest mail service predicted operating profit will rise through 2020. Neste Oil Oyj rallied 5.6 percent after a U.S. Senate committee proposed extending a tax credit for biodiesel. Deutsche Boerse AG dropped 2.2 percent after confirming that one of its businesses has become the subject of a criminal investigation. The Stoxx Europe 600 Index advanced 0.2 percent to 336.93 at the close of trading.

• Gold Rises on Speculation Seven-Week Low to Spur Demand. Gold futures for June delivery added 1 percent to $1,292.90 an ounce at 10:31 a.m. on the Comex in New York. Prices dropped to $1,277.40 yesterday.

• ICE Said Close to Start of Credit-Swap Futures That Mimic Index. IntercontinentalExchange Group Inc. (ICE), owner of the world’s largest credit-default swap clearinghouse, is close to offering futures on the most-active derivative indexes. The new contracts will replicate the lineup of companies included in the investment-grade and high-yield swap indexes owned by Markit Group Ltd., according to a person with knowledge of the plan. ICE, as the company is known, failed in an earlier effort at credit-swaps futures that sought to give investors a way to bet on improving or deteriorating credit markets.

• Ex-State Department Contractor Gets 13 Months for Leak. Former U.S. State Department contractor Stephen Kim was sentenced to 13 months in prison for disclosing intelligence on North Korea to a Fox News reporter in a case that sparked criticism from free-press advocates of the Obama administration’s crackdown on unauthorized leaks.

Wall Street Journal:

• Chinese Investors Scramble Into Dubai. After pouring billions of dollars into cities from London to New York to Sydney, Chinese investors are looking to Dubai with a fresh appetite. The influx of money is beginning to reshape post-financial crisis Dubai. As the WSJ’s Rory Jones reports:

• Highlights from the Supreme Court’s Campaign-Finance Ruling. The Supreme Court on Wednesday struck down aggregate limits on political contributions, concluding in a 5-4 ruling that the goal of fighting corruption doesn’t justify the burden on First Amendment rights imposed by such restrictions. Here are highlights from the majority opinion written by Chief Justice John Roberts.

• IMF's Lagarde: Global Economy May Face Years of Slow, Subpar Growth. Christine Lagarde Says if Central Banks and Lawmakers Don't Help Boost Output, Global Growth Could Remain Sluggish.

Fox News:

• Ex-CIA chief confirms he ignored Benghazi guidance from top officer on ground. The former acting director of the CIA, in his first public testimony on Benghazi, confirmed that he ignored guidance from the top CIA officer on the ground in favor of reporting from analysts far removed from the scene, in shaping the flawed "talking points" which said the attack sprung from a protest.

CNBC:

• Looming debt defaults mark turning point for China. China's ruling party has spoken: The money-lending party is over. In response to an historic lending boom that has saddled China with too much of everything from unsold real estate to underused mines and factories, the government in recent weeks has sent a clear message to lenders and borrowers: The days of easy credit are over. The move comes as China's $9.4 billion economy show signs of a slowdown after a borrowing-and-spending spree that left behind billions of dollars worth of bank write-downs and the restructuring of billions more in failed and troubled loans in money-losing companies.

ZeroHedge:

• Furious Russia Will Retaliate Over "Illegal And Absurd" Payment Block By "Hostile" JPMorgan(JPM).

• Goodbye Blythe Masters.

• Presenting The Next Market Rigged By High Frequency Trading. (graph)

• The Fed Goes Hunting For "Asset Price Bubbles".

• Double Whammy Shocker From Goldman Which Is Also Waving Goodbye To The NYSE.

• What Happens After The Low-Hanging Fruit Has Been Picked?

• Factory Orders Beat Expectations Thanks To Major Seasonal Adjustments. (graph)

• W(h)ither Petrodollar: Russia, Iran Announce $20 Billion Oil-For-Goods Deal.

• De-escalation Off: US Navy Sends Warship To Black Sea "In Direct Response To Ukraine Circumstances".

Business Insider:

• How Amazon's(AMZN) Fire TV Box Could Be A Huge Threat To Netflix(NFLX).

• The Massive Recalls Have Us Wondering Whether The Government Actually Saved GM(GM).

• It's Becoming Clear That Russia Wants To Break Up Ukraine. 

• St. Louis Fed's Bullard Sees The Fed Hiking Rates In Early 2015.

Foreign Policy:

• The Russians Are Coming. 10 very good reasons not to believe Vladimir Putin when he says he's totally not going to invade eastern Ukraine.

Reuters: 

• Chile copper mines weather quake; some ports shut.

• U.S. senator accuses GM(GM) of 'culture of cover-up' in recalls. General Motors Co came under withering attack for its decade-long failure to notify the public about defective parts linked to fatal crashes, as a U.S. Senate hearing opened on Wednesday with accusations that the company fostered "a culture of cover-up." Democratic Senator Claire McCaskill rebutted some of GM CEO Mary Barra's testimony to a House of Representatives panel on Tuesday that her company had recently cleaned up its act.

• Brazil likely to raise interest rates again, signals more hikes. Brazil will likely raise interest rates for the ninth straight time on Wednesday, aiming to tame a surge in food prices that threatens to push inflation through the official target ceiling in an electoral year. All 62 economists polled by Reuters expect the central bank to raise its benchmark Selic rate by 25 basis points to 11 percent -- what would be the highest level in more than two years.

Bear Radar

Style Underperformer:

• Small-Cap Growth +.02%

Sector Underperformers:

• 1) Education -3.07% 2) HMOs -.82% 3) Software -.64%

Stocks Falling on Unusual Volume:

• LQDT, HE, APOL, ESS, UNF, FIVE, AGU, MTCN, SNN, ELLI, IMPV, HSTM, TBI, LDRH, DEO, TSN, WUBA, JGW, SAP, CRTO, YELP, BWLD, CBOE, DATA and ECOM

Stocks With Unusual Put Option Activity:

• 1) RVBD 2) XLY 3) HD 4) KSS 5) CMI
  

Stocks With Most Negative News Mentions:

• 1) CSCO 2) AGU 3) TWTR 4) GM 5) HSTM
  

Charts:

• ETFs Falling on Unusual Volume

• Stocks Falling on Unusual Volume

Bull Radar

Style Outperformer:

• Mid-Cap Growth +.25%

Sector Outperformers:

• 1) Gold & Silver +2.18% 2) Airlines +1.09% 3) Retail +.68%
  

Stocks Rising on Unusual Volume:

• PRSC, AFOP, MYGN, GLOG, TFM, GTAT, XLRN and LPI

Stocks With Unusual Call Option Activity:

• 1) DG 2) MNKD 3) APOL 4) ADT 5) OXY

Stocks With Most Positive News Mentions:

• 1) AYI 2) FB 3) JNPR 4) CME 5) MON
  

Charts:

• ETFs Rising on Unusual Volume 

• Stocks Rising on Unusual Volume