Bear Radar

Style Underperformer:

• Large-Cap Growth -.04%

Sector Underperformers:

• 1) Gaming -1.76% 2) Computer Hardware -.98% 3) Disk Drives -.81%

Stocks Falling on Unusual Volume:

• SXL, VRA, MRD, RAVN, BLT, HABT, HTHT, RESN, ACAD, TSN, RWLK, BWS, EMC, ERA, SINA, HMIN, AAC, MR, PPC, SAFM, TDW, SCMP, MA, HRL, USLV, ACAD and SCMP
  

Stocks With Unusual Put Option Activity:

• 1) VFC 2) RL 3) EMC 4) DO 5) XLP

Stocks With Most Negative News Mentions:

• 1) EMC 2) MR 3) VRA 4) PPC 5) WDC
  

Charts:

• ETFs Falling on Unusual Volume

• Stocks Falling on Unusual Volume

Bull Radar

Style Outperformer:

• Mid-Cap Growth +.14%

Sector Outperformers:

• 1) Hospitals +1.21% 2) Banks +.61% 3) Airlines +.59%
  

Stocks Rising on Unusual Volume:

• SUPN, KYTH, LL, MYL, PAY, QIHU, SNDK, IPXL, WTW and AXTA

Stocks With Unusual Call Option Activity:

• 1) MYL 2) TTWO 3) ACAD 4) TAP 5) EUO
  

Stocks With Most Positive News Mentions:

• 1) LUV 2) PAY 3) UTX 4) NFLX 5) IBM
  

Charts:

• ETFs Rising on Unusual Volume 

• Stocks Rising on Unusual Volume

Wednesday Watch

Evening Headlines 
Bloomberg:  

• Greece Is Taking a Risky Approach to Debt Talks: Vogt. (video)

• China's Solution to $3 Trillion Debt Is to Deal with It Later. China’s government has a creative solution to address repayment concerns hanging over more than $3 trillion in regional debt. It will deal with it later. The Finance Ministry issued a 1 trillion yuan ($160 billion) quota for local governments to convert maturing high-cost debt into lower-yielding municipal notes to be repaid at a future date, according to a March 8 statement. Questions left unanswered include whether investors will be forced into the swap, how much transparency there will be over assets involved and whether the liabilities will strain the nation’s finances.

• Suburb With 27% Jobless Shows Danger of Australian Recession. In a shopping center full of sale signs in Broadmeadows, a Melbourne suburb with 27 percent unemployment, Soney Kul is struggling to shift half-price jewelry. “People don’t want to spend,” the 27-year-old said, gesturing at the sparsely-filled display cases in his family-owned store, Altinbas. “They’re too scared to spend because they don’t know what the next day will hold.” After a decade-long mining boom powered by Chinese demand, Australia’s economy is falling back to earth fast. Among the worst hit are industrial areas like Broadmeadows, whose Ford Motor Co. plant will shut after a record-high currency made operations untenable, and the slowdown is spreading. Only four months after economists were forecasting interest-rate increases in 2015, the country’s central bank has cut its benchmark to a fresh record low.

• Asian Stocks Drop as Dollar Spurs World Rout; Oil Sub-$50. Asian stocks fell, extending a global selloff sparked by gains in the dollar as U.S. monetary policy diverges from the rest of the world. Copper slipped before Chinese economic data, and U.S. oil was below $49 a barrel. The MSCI Asia Pacific Index lost 0.3 percent by 9:55 a.m. in Tokyo, falling for a third day as Australia’s S&P/ASX 200 Index sank 0.7 percent. Japanese shares slipped 0.2 percent, with the yen close to a 7 1/2-year low. The greenback touched its strongest level since April 2003 against the euro and added 0.3 percent versus the Malaysian ringgit. 

• Euro Racing Toward Record Quarterly Drop on Draghi’s Bond Buying. The euro is poised for its biggest quarterly decline as the European Central bank embarks on purchases of sovereign debt this week to spur inflation. The shared currency has weakened about 11.5 percent this year, eclipsing the 10.6 percent decline during the credit crunch in the third quarter of 2008. The euro slumped to a 12-year low Wednesday as national central banks in the euro region were said to have purchased sovereign debt for a second day on Tuesday in their quantitative-easing program.

• Junk-Bond Protections Hit Lowest Quality on Record, Moody’s Says. Investor protections in new U.S. junk bonds fell to the weakest level in at least four years as risky borrowers are able to dictate terms to yield-starved investors, according to Moody’s Investors Service. The rating company’s gauge of the strength of investor safeguards registered its worst reading in February for newly issued speculative-grade bonds in data going back to January 2011, analysts Alexander Dill and Evan Friedman wrote in a report today. Moody’s covenant-quality gauge, in which 5 indicates the weakest protections and 1 the strongest, measured 4.51 for bonds issued in February, up from 4.41 in January and surpassing the previous record of 4.43 in September 2014. Covenants are protections written into bond documents that can restrict an issuer’s ability to borrow more.

• GE’s(GE) Immelt Earns $37 Million Payday After 2014 Business Revamp. General Electric Co. Chief Executive Officer Jeffrey Immelt’s compensation almost doubled in 2014 as his pension soared and he signed the company’s largest-ever acquisition. Immelt pocketed $37.3 million last year, including a bonus of $5.4 million, the Fairfield, Connecticut-based company said Tuesday in a filing with the U.S. Securities and Exchange Commission. His base salary rose 8.2 percent to $3.8 million.

Wall Street Journal:

• Fed Likely to Remove ‘Patient’ Barrier for Rate Increase as Soon as June. by Jon Hilsenrath. Shift at March meeting would create policy flexibility; inflation outlook key on fed-funds increase. The Federal Reserve is strongly considering removing a barrier to raising short-term interest rates as early as June by dropping its promise to be “patient” before acting. Discussions about interest-rate guidance and an uncertain inflation outlook are likely to take center stage at the Fed’s next meeting March 17-18. 

• The Fatal Flaw in Obama’s Dealings With Iran. Taking a collaborative approach to negotiating with bad actors always turns out badly. Better to coerce them. ‘Extraordinarily reasonable,” President Obama called it in an interview aired on Sunday, referring to the multiparty deal being negotiated on Iran’s nuclear-weapons program. When the talks began, Mr. Obama said it was “unacceptable” for Iran to acquire nuclear weapons. Now it isn’t clear whether that is actually his view. On Capitol Hill, distrust of the president is intense, fueled by resentment that he doesn’t intend to submit the nuclear deal for congressional approval. Forty-seven Republican .

Fox News:

• Grim new ISIS video appears to show child executing alleged Mossad spy.

• Clinton’s iPad while secretary of state not certified as 'secure,' sources say. (video) Not only was Hillary Clinton exclusively using a personal email account for government business, but according to her own memoir she relied on an iPad -- though security and investigative sources tell Fox News the device was "not certified as secure."

MarketWatch.com:

• Will China’s ‘money garrote’ strangle the global economy? Another part of China’s new normal is not just lower growth, but also an era where the central bank is no longer able to magically speed its money-printing presses.

Zero Hedge:

• Meet FaceBook For Fanatics: ISIS Launches CaliphateBook Social Network.

• Warren Buffett Wants To Give You A Car Loan.

• Hillary Clinton: "I Did Not Email Any Classified Materials".

• Happy 6th Birthday: The Day FASB Folded & "Mark-To-Fantasy" Was Born.

• Jeff Gundlach Discusses The Economy And The Markets: Slideshow And Live Webcast.

• From Nasdaq 5,000 To S&P Red For 2015 In 6 Days. (graph)

• Crude Pops & Drops As API Reports Unexpected Inventory Draw. (graph)

• Former SEC Director Admits The Truth: The Market Is Rigged.

• Is Social Unrest Coming To Saudi Arabia? New King Vows To Limit Oil Price Impact, Boost Security.

• "Unprecedented" JGB Supply/Demand Imbalance If Inflation Stays Muted In Japan, Morgan Stanley Says.

Business Insider:

• The Fed's inspector general conducted a secret investigation into the September 2012 FOMC statement leaks. 

• The complete destruction of Donetsk airport shows just how bad it's gotten in Ukraine.

• Why did Hillary Clinton delete about 30,000 emails?

Reuters:

• Japan machinery orders fall in sign of soft capex demand. Japan's core machinery orders fell 1.7 percent in January, suggesting that companies remain reluctant to increase capital expenditure given the uncertain economic outlook. The data underscores the challenges Prime Minister Shinzo Abe and the Bank of Japan face as they attempt to nudge firms into boosting spending on wages and equipment with their stimulus policies.

• ETF tracking the euro draws $37 mln bearish bet. A trader in the U.S. options market placed a $37 million bet against the euro on Tuesday, even as the dollar hit a multi-year high against the currency.

Evening Recommendations 

• None of note

Night Trading

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

• Asia Ex-Japan Investment Grade CDS Index 109.25 +3.5 basis points.

• Asia Pacific Sovereign CDS Index 68.0 +2.75 basis points.

• S&P 500 futures +.31%.

• NASDAQ 100 futures +.25%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (BWS)/.16

• (VRA)/.45

• (KKD)/.16

• (MW)/-.07

• (SGMS)/-.48

• (SHAK)/-.03

• (ZOES)/-.05

Economic Releases
10:30 am EST

• Bloomberg consensus estimates call for a weekly crude oil inventory build of +4,595,000 barrels versus a +10,303,000 barrel increase the prior week. Gasoline supplies are estimated to fall by -1,680,000 barrels versus a +46,000 barrel gain the prior week. Distillate supplies are estimated to fall by -2,260,000 barrels versus a -1,722,000 barrel decline the prior week. Finally, Refinery Utilization is estimated to fall by -.26% versus a -.8% decline the prior week.

Upcoming Splits

• None of note

Other Potential Market Movers

• The China retail sales report, CCAR results, $21B 10Y T-Note auction, weekly MBA mortgage applications report, Barclays Healthcare conference, (SNCR) analyst meeting, (MET) investor conference and the (TREX) analyst day could also impact trading today.

BOTTOM LINE: Asian indices are mostly lower, weighed down by commodity and technology 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 Falling Substantially into Final Hour on Fed Rate Hike Concerns, Earnings Worries, Rising European/Emerging Markets/US High-Yield Debt Angst, Tech/Financial Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Lower
  

• Sector Performance: Almost Every Sector Declining
  

• Volume: Below Average

• Market Leading Stocks: Underperforming

Equity Investor Angst:

• Volatility(VIX) 16.61 +10.29%

• Euro/Yen Carry Return Index 135.29 -1.49%

• Emerging Markets Currency Volatility(VXY) 10.70 +1.04%

• S&P 500 Implied Correlation 60.77 +2.34%

• ISE Sentiment Index 86.0 +14.67%

• Total Put/Call 1.07 -3.60%

• NYSE Arms 2.39 +103.88% 

Credit Investor Angst:

• North American Investment Grade CDS Index 64.80 +1.89%
• America Energy Sector High-Yield CDS Index 709.0 +2.15%

• European Financial Sector CDS Index 57.53 +.94%

• Western Europe Sovereign Debt CDS Index 20.10 -.64%
• Asia Pacific Sovereign Debt CDS Index 67.32 +3.23%

• Emerging Market CDS Index 412.90 +2.11%

• iBoxx Offshore RMB China Corporates High Yield Index 113.86 +.01%
• 2-Year Swap Spread 27.25 +.25 basis point

• TED Spread 26.0 unch.

• 3-Month EUR/USD Cross-Currency Basis Swap -23.5 unch.

Economic Gauges:

• 3-Month T-Bill Yield .01% unch.

• Yield Curve 145.0 -5.0 basis points

• China Import Iron Ore Spot $58.15/Metric Tonne -.73%

• Citi US Economic Surprise Index -50.10 -1.1 points
• Citi Eurozone Economic Surprise Index 47.1 -2.4 points

• Citi Emerging Markets Economic Surprise Index 12.30 +.1 point

• 10-Year TIPS Spread 1.74 -3.0 basis points

Overseas Futures:

• Nikkei Futures: Indicating -110 open in Japan

• DAX Futures: Indicating +9 open in Germany

Portfolio: 

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

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

• Market Exposure: Moved to 25% Net Long

Today's Headlines

Bloomberg:

• Greece Got a 'Deal' in February, but Here's Why Things Still Haven't Calmed Down
  
  It's one thing to have an agreement. It's another thing to implement it. On February 20th, the Eurogroup came to an agreement with Greece on a way to allow Greece access to further bailout funding.
  The agreement covered the way forward for Greece and consisted of three main elements.
  
• Greek Alternative Reality Clashes With Euro Area Losing Patience. Ask Greek Finance Minister Yanis Varoufakis about his country’s predicament, and you’re likely to get a very different response from the one echoing around the euro region. The Athens University professor said on Monday he’s convinced the six-week-old government is doing what’s needed to secure more funding and avoid bankruptcy. His counterparts, during a euro-area finance ministers’ meeting, spoke of mixed messages, dawdling and a lack of detail over Greece’s deteriorating financial situation. Impressions aside, Greece is running out of time, money and friends. France’s Michel Sapin, whose government had made the most conciliatory noises toward Greek calls for less austerity, expressed frustration with Varoufakis. Spain’s finance minister, concerned about an anti-austerity insurrection at home, also hardened the rhetoric.
• Draghi-Backed Report Says Sovereign Debt No More a Risk-Free Bet. Government debt can no longer be considered a risk-free asset for banks, and international regulators should consider changing the existing legislation, the European Systemic Risk Board said. “If sovereign exposures are in fact subject to default risk, consistency with a risk-focused approach to prudential regulation and supervision requires that this default risk is taken into account,” the ESRB said in a report on Tuesday, citing the majority view among its panel of experts. “Current prudential regulation of sovereign exposures is inconsistent with the conceptual approach that underlies the existing system of regulation.”   
• European Stocks Fall With Energy Shares Amid U.S. Rate Concern. European stocks fell for a second day as oil-and-gas shares dropped and concern grew the Federal Reserve is nearing an interest-rate increase. The Stoxx Europe 600 Index lost 0.9 percent to 389.66 at the close of trading. It earlier rose as much as 0.2 percent. All 19 industry groups fell, with energy shares dropping the most. Royal Dutch Shell Plc, BG Group Plc and BP Plc dropped more than 3 percent as crude fell for a fifth day amid signs a global supply glut will persist.
• History Suggests OPEC's Days Could Be Numbered. Could lower oil prices be the end of OPEC? As OPEC 's refusal to curb oil production contributes to a nine-month plunge in prices, a new paper suggests the group's days may be numbered.
• Fed Spurring Hedges in U.S. Stocks as Call Index Drops: Options. As the bull market in U.S. equities enters its seventh year, options traders are loading up on contracts to protect against losses if the rally loses steam. The ISE Sentiment Index, which tracks the number of calls traded relative to puts, touched the lowest level since June 2013 last week after a surge in hiring fueled speculation the Federal Reserve will raise borrowing costs this year.

Wall Street Journal: 

• Russian Auto Sales Plunge 38%. February’s decline accelerates; worst hit are midprice brands such as Chevrolet, Nissan. 
• CIA Gave Justice Department Secret Phone Scanning Technology. Marshals Service uses airborne devices that mimic cell towers to scan data on thousands of cellphones. 

MarketWatch.com: 

• S&P 500 teeters on major technical support. (graph)

ZeroHedge:

• Recession Alarm: Wholesale Sales Plunge Alongside Factory Orders, Worst Since Lehman. (graph)
• Central Banks Are Crack Dealers & Faith Healers.
• Dear Treasury Secretary Lew: Here Is All You Need To Know About HFT. (graph)
• Why Is Per Capita Energy Consumption At Recession Levels After Six Years Of "Recovery"? (graph)
• 30-Year Bund Yield Hits Record Low As Curve Flattens. (graph)
• Consumer Spending Tumbles: BofA Blames Snow, Oil; Claims Its Models Are Right, Reality Is Wrong. (graph)
• WTI Crude Slides To $48 Handle As Chevron Cuts Costs, Ramps Production. (graph)
• Next Mega-Bailout On Deck: White House Studying "New Bankruptcy Options" For Student-Loan Borrowers. (graph)
• Do Not Show Mario Draghi This Chart. (graph)
• US May Run Out Of Oil Storage Space As Soon As June. (graph)

Business Insider:

• A reporter pretended to be a jihadi bride to expose how ISIS lures women.
• The euro is so weak it's almost at parity with the dollar. (graph)
• It sounds like Obama doesn't have any friends on the world stage.
• Target(TGT) just started firing thousands of workers.
• Deutsche Bank says the euro is going to $0.85.
• More Russian tanks, equipment cross Ukraine border: U.S. official. Russian tanks and heavy military equipment have crossed the Ukrainian border in the last few days in breach of a European-brokered ceasefire agreed on Feb. 12, a senior U.S. State Department said on Tuesday. The comments by U.S. Assistant Secretary of State for Europe, Victoria Nuland, follow accusations by Ukraine and Western governments that Russia continues to send troops and weapons to support separatists in eastern Ukraine despite the ceasefire deal, a charge the Kremlin has denied. Eastern Ukraine and Crimea, the Black Sea peninsula annexed by Russia a year ago, was "suffering a reign of terror," Nuland told a congressional hearing on Ukraine, adding that the White House was still considering whether to arm Ukraine's military.

SiliconANGLE:

• Apple(AAPL) Watch: early reactions from analysts and the fashion conscious.

Investing.com:

• Russia stocks lower at close of trade. Russia stocks were lower after the close on Tuesday, as losses in the Manufacturing, Mining and Power sectors led shares lower. At the close in Moscow, the RTSI fell 6.43%, while the MICEX indexfell 3.65%.

Reuters: 

• Emerging marker currencies plunge as dollar soars. Emerging currencies sold off further on Tuesday with Turkey’s lira and South Africa’s rand hitting multi-year lows against a stronger dollar as expectations of a U.S. interest rate hike compound domestic fiscal and political woes.

Telegraph:

• Defiant Greece at daggers drawn with EU creditors. If Greeks are forced to choose between a restoration of their dignity or continued Troika humiliation, they will choose dignity, says the Greek prime minister.

Bear Radar

Style Underperformer:

• Large-Cap Growth -1.43%

Sector Underperformers:

• 1) Computer Hardware -2.57% 2) Energy -2.01% 3) Banks -2.0%

Stocks Falling on Unusual Volume:

• CLMT, CMTL, MAIN, EEP, NNBR, AKRX, GNC, IDT, TITN, UNFI, OCUL, CTCT, BKS, ROSE, QIHU, PTLA, WAL, CASY, KYTH, AAC, EEQ, KFY, ITCI, BPT, BSAC, VSI, UVE, OHRP, KFY and IMPV
  

Stocks With Unusual Put Option Activity:

• 1) XLK 2) XLB 3) NKE 4) EMC 5) UPS

Stocks With Most Negative News Mentions:

• 1) TRN 2) BKS 3) VLO 4) TGT 5) AA
  

Charts:

• ETFs Falling on Unusual Volume

• Stocks Falling on Unusual Volume