Monday Watch

Weekend Headlines 
Bloomberg:

• Ukraine Claims Russian Military Buildup Along Border. Ukraine said there is a buildup of Russian military equipment along the eastern border, as President Petro Poroshenko in Kiev announced an armed forces upgrade worth $3 billion. German Chancellor Angela Merkel is seeking to give momentum to a diplomatic resolution to the conflict convulsing Ukraine as Poroshenko prepares to meet Russian President Vladimir Putin this week. The Russian buildup of military equpiment is taking place in the region around the city of Rostov, in at least one case 1.5 kilometers (1 mile) from the Ukraine border, according to military spokesman Andriy Lysenko. Pro-Russia rebels have ruined “almost all” of the infrastructure in the city of Luhansk while shelling of Ukrainian troops from the Russian side continues, Lysenko told reporters today. 

• Ukraine Says Army Spending Raised As Merkel Warns on Gas. Ukraine announced a military spending increase before preliminary peace talks with President Vladimir Putin tomorrow, as German Chancellor Angela Merkel pressed for resolution of a parallel dispute over Russian natural gas supplies to Europe this winter. The armed conflict with pro-Russian rebels showed no signs of abating in war-torn eastern Ukraine. Putin will meet with his Ukrainian counterpart Petro Poroshenko during trade talks in the Belarus capital Minsk. “Unfortunately, there will always be a military threat to Ukraine,” Poroshenko said yesterday in revealing the spending increase of more than 40 billion hryvnia ($3 billion). “War has come from the side nobody expected.”

• Russian Media Stocks Lead Drop as Ukraine Crisis Deepens. Media companies led a rout in Russian stocks in New York after Mail.ru Group Ltd. (MAIL), which operates the country’s biggest social networks, cut its sales forecast amid a slowing economy and tension in Ukraine. Yandex NV, Russia’s largest Internet company, fell for a third day and CTC Media Ltd., which owns the nation’s sixth-biggest TV station, declined the most in two weeks on Aug. 22. Mail.ru plunged 12 percent in London. The Bloomberg Russia-US Equity Index of the country’s most-traded shares in the U.S. slumped 0.8 percent after stocks in Moscow ended a ten-day advance, the longest stretch of gains in almost nine years.

• Israel Threatens Expanded Airstrikes, Gaza Ground Operation. Israeli Prime Minister Benjamin Netanyahu told residents of the Hamas-ruled Gaza Strip that any militant target was fair game, as aircraft struck dozens of sites and his defense minister hinted at a new ground incursion. “I urge Gaza residents to immediately evacuate all facilities used by Hamas to carry out terrorist activities,” Netanyahu said at a cabinet meeting held at military headquarters today in Tel Aviv, according to an e-mailed statement. “Every such site is a target for us.”

• Chinese Jet Barrel-Rolls Over U.S. Plane Bringing Protest. A Chinese fighter jet in international waters buzzed a U.S. Navy surveillance aircraft within 20 feet and did a barrel roll over it in what the White House called a provocation. The Aug. 19 incident took place about 135 miles (217 kilometers) east of Hainan Island, the southernmost tip of China, amid international tensions over China’s increasingly assertive territorial claims. U.S. and Chinese planes have had several close encounters over the sea since March. 

• Asian Stocks Decline as Investors Weigh Yellen Comments. Asian stocks fell as investors weighed comments from central bank leaders for clues to monetary policy ahead of conflict negotiations between Russia and Ukraine. Chugai Pharmaceutical Co. slumped 8.7 percent after a person familiar with the matter said Roche Holding AG will decide against bidding for the almost 40 percent of the Japanese drugmaker that it doesn’t already own. Caltex Australia Ltd. (CTX) climbed 4.6 percent after the Australian oil refiner said it plans to cuts 350 jobs and raised its interim dividend more than analyst forecasts. The MSCI Asia Pacific Index (MXAP) slid 0.1 percent to 148.31 as of 9:36 a.m. in Hong Kong.

• Hedge Fund Crude Bets Tumble Amid Surging Global Supply. Speculators are the least bullish on U.S. crude oil prices in 16 months as refinery maintenance weakens demand at a time when Libya and Iraq are swelling global supplies. Futures dropped a fifth consecutive week after money managers reduced net-long positions in West Texas Intermediate, the U.S. benchmark grade, by 14 percent in the seven days ended Aug. 19, the Commodity Futures Trading Commission said.

Wall Street Journal: 

• Pressure Mounts on Obama to Act on Islamic State. Republicans Press for More Action Against Islamic State. President Barack Obama faces pressure at home and in the Middle East to quickly step up strikes at Islamic State militants, but also reluctance from some within his own party and European allies to do so. The leading options under consideration for strikes in Syria—if Mr. Obama decides to expand the fight—are narrow in scope, designed to prevent the Islamic State from carrying out any plots that threaten Americans and from...

• France Calls for Action to Cut Off ISIS Money Supply. France on Friday called for coordinated international action to cut off the Islamic State's access to financial resources amid fears that the Sunni insurgency has become the world's richest jihadist movement. French Foreign Minister Laurent Fabius said the extremist group, already a formidable military force, has enhanced its power by amassing huge piles of cash, thanks in part to individual donors from the Middle East. "The attacks in New York on Sept. 11, 2001, cost $1 million," Mr. Fabius told French radio RMC. "Today, we estimate the Islamic State has several billions."  

• Burger King(BKC) in Talks to Buy Tim Hortons in Canada Tax Deal. Tie-Up Would Be Structured as Tax Inversion With a Combined Market Value of About $18 Billion. 

• Ukraine Showcases Military Might in Independence Day Celebration. Parade Draws Mixed Reaction as Conflict Continues in East. Soldiers, rockets and armored vehicles paraded through central Kiev on Sunday, some of them on their way to the front lines in the east, as Ukraine celebrated its Independence Day with a crisp display of military might that stood in contrast to a grinding conflict in which the Ukrainian offensive appears to be losing momentum.

Fox News:

• Northern California rocked by magnitude 6.0 earthquake. A magnitude 6.0 earthquake hit Northern California near Napa Valley Sunday, injuring at least 120 — 3 critically — and causing extensive damage, including fires sparked by burst gas lines, in the largest tremor to rock the Bay Area since the magnitude 6.9 Loma Prieta quake in 1989.

CNBC:

• China plans its own OS to take on likes of Microsoft(MSFT), Google(GOOG).

Zero Hedge:

• Janet Yellen Is An Insult To Americans.

• Ebola Epidemic Numbers Vastly Under-Reported Due To "Shadow Zones", WHO Warns.

• 5 Things To Ponder: Interesting Stuff.

• White House Accuses Russia Of Painting Military Vehicles White; Merkel Agrees "Actions Represent Dangerous Escalation".

• Did Demand Concerns Spark The Biggest Drop In US Oil Rig Count Since 2012? (graph)

• ISIS Just Crossed "The Line". (cartoon)

• 3 Things Worth Thinking About.

• China's Baby-Boom Bets Go Bust. (video)

• Scottish Independence 'Yes' Vote Is A "High Risk" Event, Citi Warns.

• Obama's "Do Nothing Stupid" Foreign Policy Fails Again As 'New' Iraqi Government Formation Crumbles.

• Europe's Real Borrowing Costs. (graphs)

• The G-20's Solution To Systemically Unstable, "Too Big To Fail" Banks: More Debt.

• Putin's Chief 'Integration' Advisor Warns "Transition Has Always Come About Through War". (video)

• China’s Reaction: America Is A “Disgusting Thief Spying Over His Neighbor’s Fence”.

• Russia Asks If America Is Still Fit To "Participate In Solving International Problems".

• The Broken Links In The Fed's Chain Of Cause & Effect.

• CME Delays Futures Opens Due To "Glitch"; USD Jumps On EUR, JPY Weakness. (graph)

• Mal-Investment Mania - The Second-Lien Scramble Is Back. (graph)

• How Hedge Funds Are Making Money In 2014: The Full Strategy Breakdown. (graph)

• Krugman's Keynesian Crackpottery: Wasteful Spending Is Better Than Nothing!

ValueWalk:

• Why The Fed Could Raise Rates By March 2015.

Business Insider:

• This Chart From Mario Draghi Reveals The Slow-Motion Catastrophe That Is The Eurozone.

• HSBC Is Getting Sued Over Its Alleged Role In 'Death Bonds'.

• A Megascreen In Beijing Played Graphic Video Of James Foley's Beheading And Ferguson Protests On A Loop.

• China Wants Its Own Operating System By October.

• Pressure Builds Within Fed To Signal New Policy Course.

• Janet Yellen Referenced This 19-Component Labor Market Index At Jackson Hole. (graph)

• Roche To Buy US Biotech Firm InterMune(ITMN) For $8.3 Billion.

Seeking Alpha:

• 8 Reasons Why A New Global Financial Crisis Could Be On The Way. 

Repubblica:

• Sapin Says Euro Area Risks Spiraling Contraction. French Finance Minister Sapin says euro members must slow pace of deficit reduction to help economy, according to interview in la Repubblica.

Nikkei:

• Japan Sales Tax Increase Loses Public Support. Support fell 6 points to 30% from month-earlier, while opposition rose 4 points to 63%, citing poll by Nikkei and TV Tokyo.

Kyodo:

• 57 Children in Fukushima Found to Have Thyroid Cancer. Fukushima prefecture has found 57 people with thyroid cancer who were 18 years old or younger during the Fukushima Dai-Ichi reactor disaster in March 2011.

China Daily:

• China May Start Nationwide Property Tax Next Year. China may introduce a nationwide property tax next year following trials in Chongqing and Shanghai, citing an official from the National People's Congress. Planned property tax swill target land, not just housing as in the trials, the report said.
  

Weekend Recommendations

Barron's:

• Bullish commentary on (PEP), (BG), (APA), (HD) and (HAS).

• Bearish commentary on (SHLD).

Night Trading

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

• Asia Ex-Japan Investment Grade CDS Index 101.0 +1.0 basis point.

• Asia Pacific Sovereign CDS Index 67.75 -.75 basis point.

• FTSE-100 futures n/a.

• S&P 500 futures +.17%.

• NASDAQ 100 futures +.23%.

Morning Preview Links

Earnings of Note
Company/Estimate

• None of note

Economic Releases
8:30 am EST

• The Chicago Fed Nat Activity Index for July is estimated to rise to .2 versus .12 in June.

9:45 am EST

• Preliminary Markit US Services PMI for August is estimated to fall to 58.0 versus 60.8 in July.

10:00 am EST

• New Home Sales for July are estimated to rise to 429K versus 406K in June.
  

10:30 am EST

• Dallas Fed Manufacturing Activity for August is estimated to rise to 12.8 versus 12.7 in July.
  

Upcoming Splits

• (RKT) 2-for-1

Other Potential Market Movers

• The German IFO and the (VMW) Analyst Day could also impact trading today.

BOTTOM LINE: Asian indices are mostly lower, weighed down by commodity 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 week.

Weekly Outlook

Week Ahead  by Bloomberg. 
Wall St. Week Ahead by Reuters.
Stocks to Watch Monday by MarketWatch.
Weekly Economic Calendar by Briefing.com.

BOTTOM LINE: I expect US stocks to finish the week mixed as central bank hopes, investor performance angst and yen weakness offset Russia-Ukraine/Mideast tensions, rising European/Emerging Markets debt angst and technical selling. My intermediate-term trading indicators are giving neutral signals and the Portfolio is 50% net long heading into the week.

Market Week in Review

• S&P 500 1,988.40 +1.7%*

 The Weekly Wrap by Briefing.com.

*5-Day Change

Weekly Scoreboard*

Indices

• S&P 500 1,988.40 +1.7%

• DJIA 17,001.22 +2.0%

• NASDAQ 4,538.55 +1.65%

• Russell 2000 1,160.34 +1.64%

• S&P 500 High Beta 33.86 +2.61%

• Wilshire 5000 20,766.30 +1.72%

• Russell 1000 Growth 929.47 +1.86%

• Russell 1000 Value 998.81 +1.59%

• S&P 500 Consumer Staples 460.97 +.75%

• Solactive US Cyclical 136.94 +1.90%

• Morgan Stanley Technology 995.22 +2.27%

• Transports 8,429.91 +2.0%

• Utilities 555.25 +1.17%

• Bloomberg European Bank/Financial Services 106.31 +2.52%

• MSCI Emerging Markets 44.90 +.73%

• HFRX Equity Hedge 1,173.49 +.87%

• HFRX Equity Market Neutral 973.80 +.08%

Sentiment/Internals

• NYSE Cumulative A/D Line 230,358 +1.15%

• Bloomberg New Highs-Lows Index 258 +258

• Bloomberg Crude Oil % Bulls 37.14 +11.43%

• CFTC Oil Net Speculative Position 323,473 -.18%

• CFTC Oil Total Open Interest 1,542,337 -2.61%

• Total Put/Call .93 -6.06%

• OEX Put/Call .55 -40.86%

• ISE Sentiment 117.0 +56.0%

• NYSE Arms 1.18 -6.34%

• Volatility(VIX) 11.47 -12.78%

• S&P 500 Implied Correlation 44.85 -11.45%

• G7 Currency Volatility (VXY) 5.83 -.85%

• Emerging Markets Currency Volatility (EM-VXY) 6.62 -2.93%

• Smart Money Flow Index 11,443.44 +.36%

• ICI Money Mkt Mutual Fund Assets $2.584 Trillion +.26%

• ICI US Equity Weekly Net New Cash Flow -$1.070 Billion

• AAII % Bulls 46.1 +15.8%

• AAII % Bears 23.6 -12.3%

Futures Spot Prices

• CRB Index 288.67 -.43%

• Crude Oil 93.65 -3.69%

• Reformulated Gasoline 273.84 +1.47%

• Natural Gas 3.84 +1.42%

• Heating Oil 282.79 -.57%

• Gold 1,279.30 -1.95%

• Bloomberg Base Metals Index 205.41 +3.13%

• Copper 320.45 +3.07%

• US No. 1 Heavy Melt Scrap Steel 356.67 USD/Ton unch.

• China Iron Ore Spot 90.10 USD/Ton -3.53%

• Lumber 352.50 +1.73%

• UBS-Bloomberg Agriculture 1,288.13 -.97%

Economy

• ECRI Weekly Leading Economic Index Growth Rate 3.6% -20 basis points

• Philly Fed ADS Real-Time Business Conditions Index .1764 -1.07%

• S&P 500 Blended Forward 12 Months Mean EPS Estimate 127.45 unch.

• Citi US Economic Surprise Index -4.40 +1.3 points

• Citi Eurozone Economic Surprise Index -36.20 -1.0 point

• Citi Emerging Markets Economic Surprise Index -14.80 -7.0 points

• Fed Fund Futures imply 36.0% chance of no change, 64.0% chance of 25 basis point cut on 9/17

• US Dollar Index 82.34 +1.12%

• Euro/Yen Carry Return Index 143.70 +.35%

• Yield Curve 191.0 -2.0 basis points

• 10-Year US Treasury Yield 2.40% +6.0 basis points

• Federal Reserve's Balance Sheet $4.371 Trillion -.43%

• U.S. Sovereign Debt Credit Default Swap 17.97 +3.07%

• Illinois Municipal Debt Credit Default Swap 162.0 -3.25%

• Western Europe Sovereign Debt Credit Default Swap Index 31.09 -8.25%

• Asia Pacific Sovereign Debt Credit Default Swap Index 67.75 -5.06%
  

• Emerging Markets Sovereign Debt CDS Index 210.14 -2.01%
  

• Israel Sovereign Debt Credit Default Swap 84.86 -.75%

• Iraq Sovereign Debt Credit Default Swap 338.28 -1.69%

• Russia Sovereign Debt Credit Default Swap 230.50 -4.86%

• China Blended Corporate Spread Index 311.65 -.33%

• 10-Year TIPS Spread 2.15% -5.0 basis points

• TED Spread 22.0 +1.0 basis point

• 2-Year Swap Spread 22.5 +.25 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -12.5 +1.0 basis point

• N. America Investment Grade Credit Default Swap Index 56.99 -5.12%
  

• European Financial Sector Credit Default Swap Index 62.92 -9.46%
  

• Emerging Markets Credit Default Swap Index 280.61 +2.78%
  

• CMBS AAA Super Senior 10-Year Treasury Spread  to Swaps 84.0 unch.

• M1 Money Supply $2.825 Trillion -2.13%

• Commercial Paper Outstanding 1,022.80 -1.40%

• 4-Week Moving Average of Jobless Claims 300,750 +5,000

• Continuing Claims Unemployment Rate 1.9% unch.

• Average 30-Year Mortgage Rate 4.10% -2.0 basis points

• Weekly Mortgage Applications 342.40 +1.39%

• Bloomberg Consumer Comfort 36.6 -.2 point

• Weekly Retail Sales +4.20% -60 basis points

• Nationwide Gas $3.44/gallon -.03/gallon

• Baltic Dry Index 1,096 +7.98%

• China (Export) Containerized Freight Index 1,114.09 +.37%

• Oil Tanker Rate(Arabian Gulf to U.S. Gulf Coast) 30.0 unch.

• Rail Freight Carloads 270,316 +1.56%

Best Performing Style

• Mid-Cap Growth +2.1%

Worst Performing Style

• Small-Cap Growth +1.4%

Leading Sectors

• Retail +5.8%

• Oil Tankers +5.0%

• Homebuilders +4.7%

• Alt Energy +3.5%

• Airlines +3.4%

Lagging Sectors

• Telecom +.4% 

• Gaming +.4%

• Social Media +.2%

• Agriculture -.1%

• Gold & Silver -2.5%

Weekly High-Volume Stock Gainers (8)

• IRF, TASR, AEO, AMWD, MNST, SLXP, HAIN and LNDC

Weekly High-Volume Stock Losers (5)

• MRCY, SSI, KIRK, LCI and RDEN

Weekly Charts
ETFs

• High-Volume Gainers

• High-Volume Losers

Stocks

• High-Volume Gainers

• High-Volume Losers

*5-Day Change

Stocks Slightly Lower into Final Hour on Escalating Russia-Ukraine Tensions, Diminished Central Bank Hopes, Emerging Markets Debt Angst, Commodity/REIT Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Slightly Higher
  

• Sector Performance: Mixed
  

• Volume: Light

• Market Leading Stocks: Outperforming

Equity Investor Angst:

• Volatility(VIX) 11.85 +.77%

• Euro/Yen Carry Return Index 143.72 -.18%

• Emerging Markets Currency Volatility(VXY) 6.62 -1.05%

• S&P 500 Implied Correlation 45.52 -8.19%

• ISE Sentiment Index 137.0 -3.52%

• Total Put/Call 1.01 +44.29%

• NYSE Arms 1.12 +12.70% 

Credit Investor Angst:

• North American Investment Grade CDS Index 57.60 +2.31%

• European Financial Sector CDS Index 63.33 +.36%

• Western Europe Sovereign Debt CDS Index 31.09 -2.57%
• Asia Pacific Sovereign Debt CDS Index 67.75 -1.18%

• Emerging Market CDS Index 280.36 +2.65%

• China Blended Corporate Spread Index 311.65 -.40%
• 2-Year Swap Spread 22.5 +.25 basis point

• TED Spread 22.0 +.5 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -12.50 +.5 basis point

Economic Gauges:

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

• Yield Curve 191.0 -3.0 basis points

• China Import Iron Ore Spot $90.10/Metric Tonne -1.96%

• Citi US Economic Surprise Index 4.40 +.4 point

• Citi Emerging Markets Economic Surprise Index -14.80 -.2 point

• 10-Year TIPS Spread 2.15 -3.0 basis points

Overseas Futures:

• Nikkei Futures: Indicating +1 open in Japan

• DAX Futures: Indicating -5 open in Germany

Portfolio: 

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

• Disclosed Trades: Added to my (IWM)/(QQQ) hedges, then covered some of them

• Market Exposure: 50% Net Long

Today's Headlines

Bloomberg:

• Russian Aid Convoy Without Consent Deemed Invasion by Ukraine. (video) Trucks carrying what Russia says is humanitarian aid reached the embattled Ukrainian city of Luhansk, the RIA Novosti news service said, after they crossed the border in what the government in Kiev denounced as an “invasion.” Russia was invading under the cover of the convoy, Valentyn Nalyvaychenko, the head of Ukraine’s security council, said on TV5. More than 200 trucks entered the country without a Red Cross escort through a border checkpoint in a rebel-held area and headed for Luhansk, according to a Bloomberg reporter on the scene. “We call this direct invasion,” Nalyvaychenko said. “We are witnessing a clearly planned and dangerous provocation against Ukraine, with the cynical use of the well-respected Red Cross.” 

• UN Says Syria Dead Double to 191,000 in Forgotten War. (video) The number of Syrian dead has doubled to at least 191,000 over 12 months with no end in sight to the conflict that fueled the rise of Islamic extremism spreading across the Middle East, the United Nations said. The number of deaths cover the period from March 2011 to April 2014 and are probably underestimated, the UN’s Geneva-based human-rights office said today in a 26-page report that based its estimates on data collected by the Syrian government and rights groups. The last UN report, issued in June 2013, estimated that 93,000 had been killed.

• Shiite Gunmen Kill 73 at Iraq Mosque as Sectarian Tension Spikes. Gunmen from a Shiite militia opened fire in a Sunni mosque in a province of Iraq neighboring Baghdad, killing scores of worshipers and ratcheting up sectarian tension exacerbated by an insurgent offensive and political infighting. The shooting in the village of Bani Wais in Diyala province killed at least 73 people, including the local imam, and wounded dozens, Basem al-Samarraei, deputy provincial governor, said by phone. The casualties also included women and children who were killed as they tried to save relatives from the gunfire, eyewitness Mahmoud al-Shimmary said in a telephone interview. 

• European Stocks Drop as Investors Weigh Yellen, Ukraine. European stocks declined, paring their biggest weekly gain in six months, after Federal Reserve Chair Janet Yellen underscored the persistence of labor-market slack in the U.S. economy and as investors watched rising tensions in Ukraine. Piraeus Bank SA and Banca Monte dei Paschi di Siena SpA gained at least 2.8 percent as a gauge of lenders advanced for a second day. Essentra Plc climbed 3.1 percent after JPMorgan Chase & Co. raised its rating on the U.K. maker of items from toothpaste tubes to packaging tape. CGG SA and Fugro NV lost at least 2.2 percent as oil and gas companies retreated. The Stoxx Europe 600 Index slipped 0.2 percent to 336.75 at the close of trading in London. 

• Yellen Facing Hard Call on When Labor Market Has Healed. (video) Federal Reserve Chair Janet Yellen said she still isn’t satisfied with the U.S. labor market. Deciding when she is won’t be easy. “The labor market has yet to fully recover,” Yellen said today in a speech at the Kansas City Fed’s annual conference in Jackson Hole, Wyoming. While the five-year expansion has put more Americans back to work, “a key challenge is to assess just how far the economy now stands from attainment of its maximum employment goal.”

• Bullard Sees ’Several Hundred Billion’ of Reverse Repos. The Federal Reserve will probably borrow “several hundred billion” dollars from money-market mutual funds and others to anchor the federal funds rate when it begins tightening policy, according to St. Louis Fed President James Bullard. “I don’t think it would have to be that large of a program. Possibly several hundred billion would be enough,” Bullard said, referring to the Fed’s overnight reverse repurchase facility, which it has been testing since September. “If that didn’t work, the committee could revisit that and increase the size of the program if we thought that was necessary,” Bullard said in an interview yesterday with Kathleen Hays on Bloomberg Radio in Jackson Hole, Wyoming.

• Too Much Corn With Nowhere to Go as U.S. Sees Record Crop. The ripening corn and soybean fields stretch for miles in every direction from Dennis Wentworth’s farm in Downs, Illinois. As he marveled at his best-yielding crops ever, he wondered aloud where the heck he’ll put it all. 

Wall Street Journal:

• Fed's Jackson Hole Conference:  Streaming Coverage.

Fox News: 

• Inhofe: ISIS wants to attack ‘major US city’. Oklahoma Republican Sen. James Inhofe warned that the Islamic State is looking to attack a “major U.S. city,” as he urged President Obama to adopt a more aggressive policy.

CNBC:

• Draghi says ECB stands ready to adjust policy further. European Central Bank chief Mario Draghi is confident that stimulus steps announced in June, helped by a weaker euro, will boost demand in the ailing euro zone economy, but stressed on Friday that the central bank stands ready to do more.

• Market bear becomes biggest bull on Wall Street. (video) One of Wall Street's biggest bears just did an about-face with his outlook for stocks. Barry Bannister, chief macro and portfolio strategist at Stifel Nicolaus, raised his year-end target for the S&P 500 by 20 percent, from 1,800 to 2,300. 

• High-end house flipping is soaring. (video)

ZeroHedge:

• Why The Fed Is Being Forced To End QE. (graph)

• Pentagon Demands Russia Remove Convoy "Immediately" As NYT Reports Russians Firing Artillery In Ukraine.

• Treasury Curve Collapses To Flattest Since Jan 2009. (graph)

• Is Portugal Next In Line For Wealth Confiscation?

• Stocks Slide As NATO 'Condemns" Russian Invasion, Warns Of "Alarming Build-Up" Of Forces.

NY Times:

• Russia Moves Artillery Units Into Ukraine, NATO Says. The Russian military has moved artillery units manned by Russian personnel inside Ukrainian territory in recent days and is using them to fire at Ukrainian forces, NATO officials said on Friday. The West has long accused Russia of supporting the separatist forces in eastern Ukraine, but this is the first time it has said it had evidence of the direct involvement of the Russian military. The Russian move represents a significant escalation of the Kremlin’s involvement in the fighting there and comes as a convoy of Russian trucks with humanitarian provisions has crossed into Ukrainian territory without Kiev’s permission.

Handelsblatt:

• Allianz Chief Economist Says ECB Should Reject QE. Allianz SE Chief Economist Michael Heise says in op-ed that Japan's experience shows broad-based government-bond purchases wouldn't help euro-area recovery. ECB should reject calls for broad-based purchases of government bonds, he said. "It is harmful if monetary policy permanently overrides market forces" as private-sector balance-sheet adjustments will be delayed and government indebtedness can steadily increase.