Bull Radar

Style Outperformer:

• Small-Cap Growth +.16%

Sector Outperformers:

• 1) Homebuilders +1.96% 2) Biotech +.95% 3) Restaurants +.65%
  

Stocks Rising on Unusual Volume:

• DGLY, ABMD, MKC, OVAS, MDXG, HDS and TWTR

Stocks With Unusual Call Option Activity:

• 1) CCL 2) CONN 3) QRVO 4) WLL 5) PAYX
  

Stocks With Most Positive News Mentions:

• 1) KMB 2) GOOG 3) DRI 4) CMI 5) PKE
  

Charts:

• ETFs Rising on Unusual Volume 

• Stocks Rising on Unusual Volume

Tuesday Watch

Evening Headlines 
Bloomberg: 

• Greece and Germany Head for a Showdown. (video)
• Yuan Usage Is Losing Momentum Outside Asia, HSBC Survey Suggests. The yuan’s rise in global trade is losing momentum and adoption outside of Asia-Pacific remains limited as complex rules deter companies, according to an annual survey by HSBC Holdings Plc. The report highlights the challenge for China as it seeks to internationalize its currency and open up its capital markets. Premier Li Keqiang is pushing for the yuan to be added to the International Monetary Fund’s basket of four reserve currencies, aiding the nation’s attempts to contest the dollar’s dominance in global trade and finance.
• Most Asian Stocks Retreat as Investors Await China Factory Data. Most Asian stocks fell, following a drop in U.S. equities, as industrial companies declined and investors awaited manufacturing data from China. About three shares dropped for every two that rose on the MSCI Asia Pacific Index, which traded little changed at 148.77 as of 9:03 a.m. in Tokyo.
• Iron Ore Cut 28% at Morgan Stanley on China’s Loss of Confidence. Morgan Stanley, which began the year saying the worst was probably over for iron ore prices, cut forecasts for the raw material through 2017, citing weak conditions in China and a seaborne surplus that’ll more than double. The steel-making commodity will average $57 a metric ton in 2015, 28 percent less than a previous forecast, analysts Tom Price and Joel Crane wrote in a quarterly report on Tuesday. The 2016 outlook was cut 13 percent to $65 and the 2017 forecast was reduced 5 percent to $71 a ton, according to the report. 
• Fed’s Rate Path Post-Liftoff Won’t Be Smooth, Fischer Says. Federal Reserve Vice Chairman Stanley Fischer wants investors to fasten their seatbelts. Fischer said on Monday in New York that raising interest rates “likely will be warranted before the end of the year” and cautioned policy wouldn’t be uniform or predictable. 
• Buyback Blackout Leaves U.S. Stocks on Their Own Before Earnings. U.S. stocks are entering part of the year when one of their biggest support systems goes away. Buybacks, which reached a monthly record in February and have surged so much they make up about 2 percent of daily volume, are customarily suspended during the five weeks before companies report quarterly results, according to Goldman Sachs Group Inc. With the busiest part of first-quarter earnings seasons beginning in April, the blackout is getting started now.

Wall Street Journal:

• U.S. Car-Making Boom? Not for Auto-Industry Workers. U.S. auto-industry wages have declined despite rise in output due to competition from foreign parts makers. U.S. auto production is nearing all-time highs on the back of strong domestic demand and steady export increases. But American-made cars and trucks are increasingly loaded with parts imported from Mexico, China and other nations.
• Fed’s Williams: Midyear Will Be Time to Start Rate Increase Debate. Federal Reserve Bank of San Francisco President John Williams reiterated on Monday his belief that central bankers should consider raising rates some time this summer.
• The Rising Menace From Disintegrating Yemen. The U.S. suffers a major setback in the war on terror as a proxy war between Iran and Saudi Arabia looms. The evacuation of U.S. Special Forces from their base in southern Yemen on Friday because al Qaeda had taken over the nearby city of al-Houta is hard to spin as anything but a major setback for the war on terror. All the more so since last month the few remaining U.S. diplomats in Yemen had flown out of San’a, the capital, because of the threat from Houthi rebels. The American ambassador to Yemen now operates from the Saudi port city of Jeddah.

Fox News:

• Terror triumvirate: ISIS, Al Qaeda, Boko Haram training together in Mauritania: analyst. (video) The world’s three most infamous terrorist organizations are working together at Al-Qaeda-run training camps in the Sahara Desert in Mauritania, where dozens of recruits from the U.S., Canada and Europe are being indoctrinated into violent jihad and training for attacks that could expand the so-called caliphate across North and West Africa, according to analysts.

Zero Hedge:

• How Much Time Do Americans Spend Plugged Into The Matrix Every Day?
• US "Loses" $500 Million In Weapons Given To Yemen, Now In Al-Qaeda Hands.
• Dollar-Dump, Biotech-Bruising , & Rail-Rout, Ruins Record Run In Stocks.
• The Moment When The San Francisco Fed Finally Figures Out What "Debt" Is.
• There Goes The Shale M&A Bid - Whiting Petroleum Finds 'No Buyer', Forced To Issue Massive Secondary. (graph)
• Paul Krugman Is Wrong About The UK And Borrowing.
• China Lands Hard: Rail Volume Plunges, PMI Tumbles Into Contraction, Employment Worst Since Lehman. (graph)
• Fortescue Explains Why Failed Refinancing Didn't Really Fail. (graph)
• The Real Reason The American Dream In Unraveling. (graph)
• Copper Baumgartner'd As China Opens. (graph)

Business Insider:

• Here's what Wall Street is losing from the oil crash: fees.

Financial Times: 

• Raise rates or face ‘devastating’ bubbles, says Fed official. The US risks inflating asset price bubbles with “devastating consequences” if it leaves interest rates at zero, according to a senior Federal Reserve official. James Bullard, head of the Reserve Bank of St Louis, told the Financial Times on Monday the Fed “should get on with normalisation” as soon as possible so that it does not have to raise rates more aggressively later causing significant market volatility.

Evening Recommendations 

• None of note

Night Trading

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

• Asia Ex-Japan Investment Grade CDS Index 112.75 -.25 basis point.

• Asia Pacific Sovereign CDS Index 60.25 -.25 basis point.

• S&P 500 futures unch.

• NASDAQ 100 futures +.03%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (GIII)/.83
• (HDS)/.10
• (IHS)/1.36
• (MKC)/.64
• (CBK)/-.10
• (SONC)/.12
• (SCS)/.20

Economic Releases
8:30 am EST

• The CPI for February is estimated to rise +.2% versus a -.7% decline in January.
• The CPI  Ex Food & Energy for February is estimated to rise +.1% versus a +.2% gain in January.

9:00 am EST

• The FHFA House Price Index for January is estimated to rise +.5% versus a +.8% gain in December.

9:45 am EST

• Preliminary US Markit Manufacturing PMI for March is estimated to fall to 54.6 versus 55.1 in February.

10:00 am EST

• New Home Sales for February are estimated to fall to 464K versus 481K in January. 
• Richmond Fed Manufacturing Index for March is estimated to rise to 3.0 versus 0.0 in February. 

Upcoming Splits

• (MGA) 2-for-1

Other Potential Market Movers

• The Fed's Bullard speaking, Eurozone PMI, UK CPI, 2Y T-Note auction, weekly US retail sales reports and the BB&T Industrials conference could also impact trading today.

BOTTOM LINE: Asian indices are mostly lower, weighed down by technology 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 25% net long heading into the day.

Stocks Slightly Higher into Final Hour on Central Bank Hopes, Euro Bounce, Less Emerging Markets Debt Angst, Metals & Mining/Hospital Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Modestly Higher
  

• Sector Performance: Mixed
  

• Volume: Light

• Market Leading Stocks: Underperforming

Equity Investor Angst:

• Volatility(VIX) 13.01 -.08%

• Euro/Yen Carry Return Index 136.96 +.93%

• Emerging Markets Currency Volatility(VXY) 10.29 -.96%

• S&P 500 Implied Correlation 61.41 +1.94%

• ISE Sentiment Index 94.0 -5.05%

• Total Put/Call .82 +2.50%

• NYSE Arms .79 +4.84% 

Credit Investor Angst:

• North American Investment Grade CDS Index 62.29 -1.12%
• America Energy Sector High-Yield CDS Index 1,024.0 -.19%

• European Financial Sector CDS Index 67.33 +4.72%

• Western Europe Sovereign Debt CDS Index 21.76 -.14%
• Asia Pacific Sovereign Debt CDS Index 60.60 -.06%

• Emerging Market CDS Index 317.89 -1.28%
  

• iBoxx Offshore RMB China Corporates High Yield Index 114.25 +.04%
• 2-Year Swap Spread 27.25 +.75 basis point

• TED Spread 26.75 +.75 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -22.75 unch.

Economic Gauges:

• 3-Month T-Bill Yield .00% unch.

• Yield Curve 134.0 -1.0 basis point

• China Import Iron Ore Spot $54.81/Metric Tonne +.27%

• Citi US Economic Surprise Index -73.30 -1.2 points
• Citi Eurozone Economic Surprise Index 39.70 -.5 point

• Citi Emerging Markets Economic Surprise Index .7 +1.3 points

• 10-Year TIPS Spread 1.75 -2.0 basis points

Overseas Futures:

• Nikkei Futures: Indicating -45 open in Japan

• DAX Futures: Indicating +25 open in Germany

Portfolio: 

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

• Disclosed Trades: None

• Market Exposure: 50% Net Long

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