Today's Headlines

Bloomberg:

• Draghi Rejects Accusation That ECB Is Blackmailing Greece. Mario Draghi pushed back against an accusation that the European Central Bank is blackmailing Greece and compounding the pressure on the country. “Let me disagree with you about everything you said,” Draghi told Portuguese lawmaker Marisa Matias during his regular hearing at the European Parliament in Brussels. He was responding to a question about the withdrawal of a waiver that allowed the ECB to accept the country’s junk-rated debt as collateral. 
• Russia Accuses Ukraine of Truce Breaches as Clashes Persist. Clashes between Ukrainian troops and pro-Russian rebels continued to undermine a cease-fire in the country’s east as Russia accused the government in Kiev of violating the truce. The United Nations raised its death toll estimate to at least 6,072 and said 15,345 people have been wounded in the conflict that started last April. About 1.2 million people have registered as displaced within Ukraine and 747,357 have fled abroad, including 610,558 to Russia, the UN Office for the Coordination of Humanitarian Affairs said in a report Monday. Skirmishes between government troops and pro-Russian rebels continue to underscore the tenuous nature of a truce agreement negotiated last month in the Belarusian capital. While the cease-fire has checked the worst of the fighting, both sides are accusing each other of violations that are threatening to return to conflict to open war.
• U.S.-Russian Relationship `Irrevocably’ Broken: Bremmer. (video)
• Saudis Ready to Take ‘Necessary Measures’ in Yemen If Talks Fail. Saudi Arabia and its Gulf Cooperation Council partners will take “necessary measures” to restore stability in Yemen if peace talks fail to resolve the deepening conflict there, the Saudi foreign minister said. “We hope that this can be done peacefully but if it is not done peacefully, certainly countries of the region will take the necessary measures to protect the region from the aggression,” Saudi Foreign Minister Prince Saud al-Faisal said Monday during a press conference in Riyadh. 
• The Dollar Is Continuing Its Slide. This week doesn't look any better than last week so far. After suffering through one of its worst weeks in quite a while, things aren't getting any easier for U.S. dollar on Monday. The Dollar Spot Index is down again today, thanks in part to rallies by the euro and Swiss franc. 
• Europe Stocks Drop After Nearing Record With Seventh Weekly Gain. European stocks declined, after a seventh weekly gain pushed equities near an all-time high. The Stoxx Europe 600 Index slid 0.7 percent to 401.24 at the close of trading, paring earlier losses of as much as 1 percent.
• Fed’s Fischer Says Rate Increase Probably Warranted by End-2015. Federal Reserve Vice Chairman Stanley Fischer said raising interest rates from near zero “likely will be warranted before the end of the year” and subsequent increases probably won’t be uniform or predictable. “A smooth path upward in the federal funds rate will almost certainly not be realized” as the economy will encounter shocks such as the surprise plunge in oil prices or future geopolitical crises, Fischer said Monday in remarks prepared for delivery to the Economic Club of New York. He said while forward guidance on rates remains important, its role may diminish.
• These Junk Bond Outflows Show Just How Jumpy Buyers Have Become. The promise of low borrowing costs for longer just doesn’t pack the punch it used to. Last week should have been fantastic for the $1.3 trillion U.S. junk-bond market: the Federal Reserve scaled back its prediction for how quickly it will raise benchmark interest rates while also expressing confidence in the world’s biggest economy. That’s almost an ideal world for junk bonds. And yet investors yanked $1.3 billion from mutual funds that buy the debt last week, and they’ve pulled $2.9 billion this month, according to data compiled by Wells Fargo & Co. Dollar-denominated high-yield bonds, while rallying some immediately after the Fed statement was released Wednesday, have lost about 1 percent in March

CNBC:

• Fed's Bullard: Markets could have another 'tantrum'. (video)

ZeroHedge:  

• Trannies Tumble: Erase All Post-FOMC Gains. (graph)
• Is The Fed Still Fabricating Loan Creation Data? Bank Of America Would Like To Know. (graph)
• Don't Show Stanley Fischer This Chart. (graph)
• Tech Startup Bubble Has America's Retirement Funds Chasing Unicorns.
• Deutsche's Three "What If" Scenarios: What Happens After The Grexit.
• Existing Home Sales Miss (Again); Weather & "Unsuitably High Price Levels" Blamed. (graph)
• Illiquid Corporate Bond Market Will End In "Very Unpleasant Fashion". (graph)
• Another "Worst Since Lehman" Moment: 70% Of The "Developed" World Has Inflation Less Than 0.5%. (graph)
• US Economic Activity Worst Since 2011 Amid Major Downward Revisions, Chicago Fed Signals. (graph)

Business Insider:

• The New York Times wrote a brutal takedown of Chelsea Clinton's husband's hedge fund.
• The coal industry is about to face 'a wave of bankruptcies'.
• Hillary Clinton's credibility just took another hit in email flap.
• JP MORGAN: 'Are investors right to be concerned about the end of easy money? In our mind, Yes.'.
• Here's what the rally in biotechs looks like compared to the tech bubble. (graph)

Reuters:

• IBM(IBM) to share technology with China in strategy shift -CEO. IBM Corp will share technology with Chinese firms and will actively help build China's industry, CEO Virginia Rometty said in Beijing as she set out a strategy for one of the foreign firms hardest hit by China's shifting technology policies.
• Mester says Fed eyeing dollar as rate hike approaches -Bloomberg. The Federal Reserve is looking to the dollar among other factors as it considers when to raise interest rates, a move that should be made this year, Cleveland Fed President Loretta Mester said according to Bloomberg. Mester, who spoke on Bloomberg TV, repeated that June is still a viable option for the U.S. central bank to hike rates. She added that the drop in oil prices is going to be a positive for the economy. Mester spoke in Paris earlier on Monday.

Bear Radar

Style Underperformer:

• Small-Cap Growth -.15%

Sector Underperformers:

• 1) Road & Rail -3.51% 2) Biotech -2.36% 3) Semis -.73%

Stocks Falling on Unusual Volume:

• LBIO, PRTA, KSU, SONS, GTN, VRTX, SNP, TRCO, MON, BIB, ARG, NLNK, GLMD, MRTX, IBB, BFR, IRS, CUK, ESPR, IHG, DQ, BIIB, BRS, LULU, ITCI, RCPT, SONS, LBIO and TRCO
  

Stocks With Unusual Put Option Activity:

• 1) BHI 2) ADM 3) MTW 4) TOL 5) MON

Stocks With Most Negative News Mentions:

• 1) IPGP 2) KSU 3) NVDA 4) APC 5) SONS
  

Charts:

• ETFs Falling on Unusual Volume

• Stocks Falling on Unusual Volume

Bull Radar

Style Outperformer:

• Large-Cap Value +.18%

Sector Outperformers:

• 1) Hospitals +3.08% 2) Gold & Silver +1.29% 3) Tobacco +1.05%
  

Stocks Rising on Unusual Volume:

• FRSH, HLF, CYBR, WUBA, CMCM, JMEI, NMM, THC and TA

Stocks With Unusual Call Option Activity:

• 1) NRF 2) NLY 3) CZR 4) PFE 5) LLY
  

Stocks With Most Positive News Mentions:

• 1) DRI 2) GENW 3) EBAY 4) DVAX 5) PKE
  

Charts:

• ETFs Rising on Unusual Volume 

• Stocks Rising on Unusual Volume

Monday Watch

Weekend Headlines 
Bloomberg: 

• U.S. Should Consider Arming Ukrainians, Top NATO General Says. The U.S. should consider sending defensive weapons to Ukraine amid signs that last month’s cease-fire is crumbling, Air Force General Philip Breedlove said Sunday in Brussels. “I do not think that any tool of the U.S. or any other nation’s power should necessarily be off the table,” said Breedlove, the North Atlantic Treaty Organization’s top military commander. “Could it be destabilizing? The answer is yes. Inaction could also be destabilizing.” Rebels are amassing forces in the former Soviet republic’s eastern Donetsk and Luhansk regions, Ukrainian military spokesman Andriy Lysenko said in Kiev Sunday. Breedlove’s comments followed declarations by pro-Russian insurgents that they are preparing for a new offensive to expand their territory.  

• Greece Faces Decisive Week as Tsipras Is Set to Meet Merkel. Greek Prime Minister Alexis Tsipras is set to meet German Chancellor Angela Merkel for the second time in five days on Monday, at the start of a week that may prove decisive for Greece’s future in the euro area. The meeting in Berlin with the leader of the biggest contributor to Greece’s stalled 240 billion-euro ($259 billion) bailout is a precursor to make-or-break decisions Tsipras faces as his country’s financial predicament becomes ever more perilous. His government needs to spell out economic measures it plans to undertake as early as this week to unlock long-withheld aid payments that will keep the country afloat.

• Draghi Cheerleads for Economy as Greek Risk Looms Over Euro Area. Mario Draghi can gauge this week whether his optimism in the economy is well-founded. From business confidence in Germany to manufacturing in France and consumer spending in Italy, a smattering of data from across the 19-nation euro area will provide a glimpse at the state of the recovery. The European Central Bank president, who has become more upbeat on the economy since announcing his quantitative-easing program two months ago, will get a chance to present his view on Monday when he addresses the European Parliament in Brussels.

• No Risk Too Big as Bond Traders Plot Escape From Negative Yields. In the negative-yield vortex that is the European bond market, investors are discovering just what lengths they’re willing to go to generate returns. Norway’s $870 billion sovereign wealth fund said this month that it added Nigeria and lifted its share of lower-rated company debt to the highest since at least 2006. Allianz SE, Europe’s biggest insurer, is shifting from German bunds to bulk up on mortgages. JPMorgan Asset Management is buying speculative-grade corporate debt to boost returns. With the European Central Bank’s fight against deflation pushing yields on almost a third of the euro area’s $6.26 trillion of government bonds below zero, even the most risk-averse investors are taking chances on assets and regions that few would have considered just months ago. That’s exposing more clients to the inevitable trade-off that comes with the lure of higher returns: the likelihood of deeper losses.   

• Iran Talks Set for Decisive Week as Leaders Say Deal Reachable. Diplomats and leaders seeking an accord on Iran’s nuclear program said a deal is achievable as they prepare to enter a potentially decisive week for the talks. “We have not yet reached the finish line, but make no mistake, we have the opportunity to try to get this right,” U.S. Secretary of State John Kerry said on Saturday in Lausanne. A six-day session in the Swiss city broke up a day earlier, and talks are due to resume in the coming week.

• Topix Charts Evoking Calm Before 2013 Rout as Momentum Whips Up. Takashi Aoki has seen this chart before. The Tokyo-based fund manager is watching momentum indicators flashing signals Japan’s stock market is overheating, just as they were two years ago. Then and now, he says, few investors cared. When the pullback came in May 2013, it was abrupt: hints that the U.S. Federal Reserve would unwind stimulus drove the Topix index down 15 percent in 10 days. 

• China Internet Company Yielding 18% Shows Default Risks Brewing. Bonds of 11 Chinese companies now yield more than 15 percent as investors brace for the nation’s second onshore default amid record maturities in the coming quarter. Companies in Asia’s largest economy need to repay 1.5 trillion yuan ($242 billion) of local-currency notes in the period to June 30, the most for a quarter in Bloomberg data going back to 1998. The yield on Cloud Live Technology Group Co.’s 2017 debt jumped 157 basis points to 17.9 percent since the Beijing-based Internet company said on March 4 its ability to meet debt obligations next month face “big uncertainties.”

• China’s Internet Boom Starts to Fade. Just as the Nasdaq Composite Index surges to the cusp of the record high set during the dot-com-era, the excitement about China’s Internet boom is fading. Half of the 14 Chinese dot-coms that debuted in the U.S. last year are now trading below their initial sale prices. Even Alibaba Group Holding Ltd., one of those still up in price, has dropped 28 percent from its record high in November. On average, the 14 Chinese shares are down 3.1 percent this year, compared with a 6.1 percent advance in the Nasdaq. Investor confidence, so high when Alibaba brought its record $25 billion initial public offering to market last September, is being undermined now by a wave of poor earnings at Chinese technology companies. Those that went public last year including Weibo Corp., the microblogging service, and mobile dating app developer Momo Inc. have failed to deliver the revenue investors were expecting.   

• Evergrande Scraps $15 Billion Solar Push as China Property Drops. Evergrande Group, the parent of China’s most-indebted publicly traded homebuilder, scrapped its 90 billion-yuan ($14.5 billion) plan to branch out into solar power, stymieing its ambitions to become a clean-energy developer. After surveying the market, Evergrande, owned by billionaire Hui Ka Yan, concluded “the current timing is immature” to enter into solar power, the Guangzhou-based company said in an e-mailed statement to questions seeking an update on the plans. No funds have so far been spent on the solar business, the company added.

• Asian Stocks Advance From Six-Month High on Fed Rate Optimism. Asian stocks rose, with the regional benchmark index extending a six-month high, as speculation the Federal Reserve will proceed more slowly with interest-rate increases spurs a worldwide equity advance. The MSCI Asia Pacific Index gained 0.4 percent to 148.11 as of 9:01 a.m. in Tokyo, heading for its highest close since Sept. 8.

• Saudi’s Naimi Optimistic on Oil With Output Close to Record High. Saudi Arabia’s Oil Minister Ali al-Naimi is “optimistic” about the oil market and the world’s biggest exporter is pumping about 10 million barrels of crude a day, close to the record amount produced in 2013. Saudi Arabia is able to meet demand from any customer, al-Naimi said at a conference in Riyadh, Saudi Arabia, on Sunday. While global demand for oil is improving, there isn’t enough need to raise the nation’s production capacity beyond its current level of 12.5 million barrels a day, he said. OPEC’s refusal to cut production amid the surge in U.S. shale output fed a surplus that contributed to a drop of almost half in prices over the past year. The Organization of Petroleum Exporting Countries would have lost market share if it had cut output at the group’s Nov. 27 meeting, al-Naimi said. “Saudi Arabia cut output in 1980s to support prices. I was responsible for production at Aramco at that time, and I saw how prices fell, so we lost on output and on prices at the same time,” al-Naimi said. “We learned from that mistake.” Saudi Arabian Oil Co. is the state oil company known as Saudi Aramco.

Wall Street Journal:

• NATO Military Chief Philip Breedlove Flags Ukraine Risks. ‘Inaction could be destabilizing,’ says Breedlove. The North Atlantic Treaty Organization’s top military commander said Sunday that not delivering weapons to Ukraine carries risks and registered continued concerns about the implementation of the war-torn country’s cease-fire agreement signed in February.

• Sen. Ted Cruz of Texas to Announce 2016 GOP Presidential Bid. Champion of tea party movement sees advantage to starting early. Sen. Ted Cruz of Texas, a champion of the tea party movement who hopes to woo the GOP’s most conservative voters, is to announce on Monday that he is a candidate for his party’s presidential nomination in 2016, Cruz campaign aides say. Mr. Cruz would be the first major Republican candidate to officially announce a start to his campaign in what is sure to be a crowded field. 

• Strong Dollar Hammers Profits at U.S. Multinationals. Analysts have sharply reduced earnings estimates; smaller, domestically focused firms gain allure. The soaring dollar is crunching profits at giant U.S. multinationals, prompting Wall Street analysts to make their deepest cuts to earnings forecasts since the financial crisis and boosting the appeal of smaller, domestically focused companies. The dollar has jumped 12% in 2015 against the euro and is up 27% from a year ago. The WSJ Dollar Index, which measures the dollar against a basket of currencies, is up 5.3% this year. 

• It’s High Time to ‘Audit’ the Federal Reserve. Since 2008 the Fed has run vast, and risky, economic experiments without effective congressional oversight. The calls in Washington to “audit” the Federal Reserve are not for a narrow, bean-counting review of the institution’s financial statements. The audit’s goal is more fundamental: to assure that the checks and balances in a democratic government also apply to central bankers. It means figuring out how our elected representatives can effectively oversee unelected monetary “experts.” History shows that these so-called experts are prone to destructive inflationary and deflationary blunders, and that the Fed’s actions over... 

Fox News:

• UN Envoy warns: Yemen is being pushed 'to the edge of civil war'. (video) The U.N. special envoy for Yemen warned an emergency meeting of the U.N. Security Council on Sunday that events appear to be leading the country "to the edge of civil war" and urged all parties to step back from the brink and resolve the conflict peacefully. Jamal Benomar stressed repeatedly in a video briefing from Qatar that "peaceful dialogue is the only option we have."

CNBC:

• Starbucks(SBUX) ends "Race Together" campaign in stores, effort not over. Starbucks head Howard Schultz told employees on Sunday they will no longer be encouraged to write "Race Together" on drinks cups, but the company's effort to promote discussion of racial issues "is far from over."

Zero Hedge:

• One Last Look At The Real Economy Before It Implodes - Part 3. 

• Justice Department Rolls Out An Early Form Of Capital Controls In America.

• China Warns Against Irrational Exuberance.

• How HFT Destroys Markets: 50 Pages Of Evidence.

• The Farce That Is The "Market" In One Chart. This is what happened to the world's most valuable company(AAPL) in the last minutes of trading, when a few million shares in the last 10 minutes, and a volume slam in the last few seconds, sent the stock from just shy of $128 where it had been trading most of the day, to just over $125. A nearly $10 billion move in market cap in seconds.... on nothing. 

• Is Japan Zimbabwe?

• "Record Corporate Cash And Profitability" Are Lies: Here Is The Truth. (graph)

•  5 Things To Ponder: What Hath The Fed Wrought. (graph)

•  Hedge Funds Exploit Patent Laws To Push Down Biotechs.

• The Perfect Storm For Oil Hits In Two Months: US Crude Production To Soar Just As Storage Runs Out. (graph)

• 10 Charts Which Show We Are Much Worse Off Than Just Before The Last Economic Crisis. (graph)

• NATO Launches "Wide-Scale" War Games Near Russian Border, Creates "Line Of Troops". (video)

• Near Perfect Correlation Between Wages And Spending Bodes Poorly For Economy. (graph)

• Greeks Take It To The Mattresses As Graccident Looms.

• Open Letter To Janet Yellen. 

• No Longer Quiet On The Eastern Front (Part 2).

• Germany Gives Greece One Final Ultimatum After Friday's "Optimistic" Talks Devolve Into Disagreement And Confusion.

• US Officially Loses Battle Over China-Led Investment Bank.

• After The Fed Crushed The Middle Class, It Is Targeting The American Family.

• The Fed’s Trapped In The Corner With An Empty Bucket.

• Drowning In Liquidity But None In The Bond Market: The Spark Of The Next Financial Crisis? 

• BIS Slams The Fed: The Solution To Bubbles Is Not More Bubbles, It Is Avoiding Bubbles In The First Place.

• Spot The Odd One Out. (graph)

Business Insider:

• Iran's leader says ‘Of course, yes, death to America’ amid tense nuclear talks. Iran’s Supreme leader Ali Khamenei called for “Death to America” on Saturday, a day after President Barack Obama appealed to Iran to seize a “historic opportunity” for a nuclear deal and a better future, and as US Secretary of State John Kerry claimed substantial progress toward an accord. Khamenei told a crowd in Tehran that Iran would not capitulate to Western demands. When the crowd started shouting, “Death to America,” the ayatollah responded: “Of course yes, death to America, because America is the original source of this pressure.

• Google(GOOG) expected to face antitrust charges in Europe as soon as next month.

• Cash-strapped oil companies have two options: high-interest debt or bankruptcy.

• The Greek crisis is becoming a geopolitical mess.

• The White House-Israel rift isn't going away anytime soon.

• We're witnessing the biggest threat to US corporate earnings since the 2008 financial crisis.

• Iran-backed Shiite rebels have seized parts of a key city in Yemen.

• Italian economist and ex-prime minister: 'France is the big problem of the EU'.

• CIA director: Iran is becoming part of the problem in Iraq.

• Emerging markets are heading for a nasty dollar hangover.

• Russia warns Denmark its warships could become nuclear targets.

• The head of the most important startup farm in Silicon Valley thinks valuations are too high.

• Jewish leaders in Greece want Germany to pay more in reparations – with 7 decades of interest.

• New York Senator Chuck Schumer calls for an investigation into Lumber Liquidators' flooring. 

Reuters:

• Abe-Kuroda honeymoon soured by fiscal friction. A rift is emerging between Prime Minister Shinzo Abe and his hand-picked central bank boss on how to fix Japan's tattered finances, which could blunt the impact of the "Abenomics" stimulus policies they have worked together to prosecute. Two years into Bank of Japan Governor Haruhiko Kuroda's tenure, the cracks are becoming hard to conceal and could affect the timing of any further monetary easing and an eventual end to the massive money-printing program he set in train.

• Tenet(THC) near deal to buy United Surgical for more than $2.5 bln-WSJ. Hospital operator Tenet Healthcare Corp is poised to buy United Surgical Partners International Inc in a deal that could be worth more than $2.5 billion, the Wall Street Journal reported on Sunday, citing people familiar with the matter.

Financial Times:

• Greece’s leader warns Merkel of ‘impossible’ debt payments. Alexis Tsipras, the Greek prime minister, has warned Angela Merkel that it will be “impossible” for Athens to service debt obligations due in the coming weeks if the EU fails to distribute any short-term financial assistance to the country. The warning, contained in a letter sent by Mr Tsipras to the German chancellor and obtained by the Financial Times, comes as concerns mount that Athens will struggle to make pension and wage payments at the end of this month and could run out of cash before the end of April.

Economic Daily News:

• Suppliers Say Apple(AAPL) Watch Monthly Shipments Target Halved. Apple halved Apple Watch shipment target to 1.25m-1.5m a month because of suppliers' relatively low yield rates of assembling and display panels, citing people in the supply chain.

IRNA:

• Iran Is Not Given to Concessions, Negotiator Araghchi Tells IRNA. Iran is not to give away any concessions in talks with the 5+1, senior nuclear negotiator Abbas Araghchi cited as saying by the country's official Islamic Republic News Agency.

Night Trading

• Asian indices are unch. to +.75% on average.

• Asia Ex-Japan Investment Grade CDS Index 1113.0 -3.0 basis points.

• Asia Pacific Sovereign CDS Index 60.5 -3.5 basis points.

• S&P 500 futures +.13%.

• NASDAQ 100 futures +.13%.

Morning Preview Links

Earnings of Note
Company/Estimate

• None of note

Economic Releases
8:30 am EST

• The Chicago Fed National Activity Index for February is estimated to fall to .1 versus .13 in January.

10:00 am EST

• Existing Home Sales for February are estimated to rise to 4.92M versus 4.82M in January.

Upcoming Splits

• None of note

Other Potential Market Movers

• The Fed's Fisher speaking, Fed's Williams speaking, Fed's Mester speaking and the HSBC China PMI data could also impact trading today.

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

Weekly Outlook

Week Ahead by Bloomberg. 
Wall St. Week Ahead by Reuters.
Weekly Economic Calendar by Briefing.com.

BOTTOM LINE: I expect US stocks to finish the week modestly lower on global growth worries, European/Emerging Markets/US High-Yield debt angst, earnings concerns, profit-taking, crude oil weakness 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 2,108.10 +2.66%*

The Weekly Wrap by Briefing.com.

*5-Day Change