Thursday Watch

Evening Headlines
Bloomberg:

• China Money Rate Jumps as Reserve Limits Hit Preferential Banks. China’s overnight money rate climbed by the most since the Lunar New Year holiday as some banks were obliged to set aside more funds as reserves at a time when open-market operations are draining cash from the financial system. Effective Thursday, the People’s Bank of China normalized reserve requirements for some lenders that had been assigned preferential terms. The monetary authority has added 580 billion yuan ($88.8 billion) to the financial system this week via auctions of seven-day reverse-repurchase agreements, less than the 960 billion yuan of contracts that mature through Friday. 
• Hedge Funds See No Respite Ahead in Asia After Brutal Start. Hedge funds in Asia, which struggled with a brutal market selloff last month, don’t see a respite anytime soon. The $241 million Orchid China Master Fund extended January’s 11.2 percent decline to slump another 2.6 percent this month through Feb. 15 and is bracing for more market swings, according to a letter to investors. The $33 million Truston Falcon Asia Fund has reduced unhedged positions amid extreme volatility and an uncertain outlook, it said in an investor letter. Open Door Capital Group, which suffered a 23 percent loss in its $188 million A-share fund last month, said in a letter that China’s slower growth “cannot provide any positive support for the capital market."
• Nikkei 225 in `Eerie' Parallel to Lehman Prelude in 2008: Chart. Japan’s Nikkei 225 gauge is tracing chart patterns seen in the 12 months through April 2008. A series of Federal Reserve rate cuts that began in September 2007 appeared too late, Norihiro Fujito, a strategist at Mitsubishi UFJ Morgan Stanley Securities, says in an interview today. The Nikkei fell 36% in the remaining eight months of 2008. The “eerie” parallel is unnerving, and may continue should U.S. and Japanese policy makers take the wrong actions, he said, referring to the recent Fed rate hike and a planned increase in Japan’s consumption tax.
• Australian Firms' Investment Plans Weakest in Nine Years. Australian companies’s annual investment plans fell to the lowest level in nine years as an expected pickup in spending by non-mining industries remains elusive. Firms plan to outlay A$82.6 billion of investment in the financial year beginning July 1, the weakest reading since 2007-08, government data showed Wednesday. The currency fell. The Reserve Bank of Australia had hoped that as mining investment and commodity prices retreated from record highs, easier monetary policy and a lower currency would encourage non-resources firms to open their pocket books. Yet it hasn’t been quite that simple. Governor Glenn Stevens acknowledged as much when he lamented this month the failure of “animal spirits” to really take hold. “Capital spending outside of mining is considerably weaker now than I would have expected,” Stevens told a parliamentary panel Feb. 12. “There is very little sign at this point of intentions to invest more.”
• China's Stocks Fall as Technology, Industrial Companies Retreat. Chinese stocks fell amid speculation recent gains for the benchmark index were overdone relative to the outlook for the economy and earnings. The Shanghai Composite Index slid 1.1 percent to 2,897.53 at 9:52 a.m. , led by technology and industrial companies. The benchmark gauge rebounded 10 percent from last month’s low through Wednesday as the government stepped up policy support ahead of the annual National People’s Congress. Agile Property Holdings Ltd. plunged the most in a month in Hong Kong after estimating a 70 percent drop in profits. The Hang Seng China Enterprises Index retreated for a third day.
• Most Asian Stocks Rise After Crude Rally as Japan Leads Advance. Most Asian stocks rose, following U.S. shares higher, as Japanese shares climbed and a turnaround in oil boosted energy companies. About three shares climbed for each that fell on the MSCI Asia Pacific Index, which traded little changed at 119.63 as of 9:05 a.m. in Tokyo. Energy and material shares led gains, while consumer companies dropped. Volatility over the past 30 days on the regional benchmark index remains near the highest level in four years amid tumbling oil prices and concern over the slowdown in China’s economy. U.S. crude erased a slump of more than 4 percent Wednesday to close above $32 a barrel.
• Rio Tinto(RIO) Dividend Cut Plan Fails to Prevent Moody's Downgrade. Rio Tinto Group had its credit rating cut by Moody’s Investors Service even after the miner announced plans to slash its dividend in response to plunging commodity prices. The world’s second biggest metal producer had its credit score lowered one level to Baa1, Moody’s third-lowest investment-grade rating, with a negative outlook. The downgrade follows a slide in energy and metals prices that’s put pressure on producers around the world and seen some, including Anglo American Plc, lose their investment-grade status. With profits falling, Rio Tinto has sought to shore up its balance sheet and announced earlier this month that it would lower its payment to shareholders by as much as half. “There has been a fundamental downward shift in the mining sector with the downturn being deeper and prospects for a recovery extended,” Moody’s said in a statement. “Ratings need to be re-calibrated to reflect expected performance over a more protracted challenging operating environment.”
• Islamic State Releases Video Targeting Facebook(FB), Twitter(TWTR) CEOs. Islamic State has released a new video that targets the chief executive officers of Facebook Inc. and Twitter Inc. The 25-minute clip shows the faces of Facebook’s Mark Zuckerberg and Twitter’s Jack Dorsey riddled with mock bullet holes, according to the Guardian newspaper and tweets by Rita Katz, director of the SITE Intelligence Group -- a company that monitors jihadist movements. The video was purportedly made by a group called the "Sons Caliphate Army." In January, the administration of U.S. President Barack Obama asked companies including Facebook and Twitter for help in the fight against terrorism. That gathering took place as Obama announced a new counterterrorism task force to thwart extremists and their use of social media after recent deadly attacks in Paris and San Bernardino, California.

Wall Street Journal:

• The Big New Threat to Oil Prices: A Glut of Gasoline. Several refineries in the Midwest have opted to reduce activity for economic reasons. Refineries in the U.S. Midwest are losing their thirst for oil, posing a new risk for the battered crude market. The Midwest accounts for nearly a quarter of the crude processed in the U.S. and is home to shale producers that have few other outlets for their oil. But refiners there are already swimming in gasoline and other fuel, forcing them to cut back production until the excess can be worked off.
• Sharp Accepts Foxconn’s $6.24 Billion Takeover Offer.
• U.S. Warns Banks Off Russian Bonds. State, Treasury say helping sell debt would undermine sanctions on country. 
• S&P 500 Earnings: Far Worse Than Advertised. The gap between reported and pro forma earnings last year reached its widest level since the financial crisis.
• The Donald Doesn’t Have a Lock—Yet. There is still time for a non-Trump majority to coalesce around a single candidate. Donald Trump scored a very impressive win in Nevada, taking 45.9% and 14 of the state’s 30 delegates to the GOP convention. But the Republican nomination is far from settled. After four contests, only 133 of the convention’s 2,472 delegates have been selected. The choices made by late-deciding voters would be a sign of consolidation, but in South Carolina Mr. Trump drew only 17% of those who made up their mind in the final week of the campaign. Among the 30% in Nevada who decided in the final week, Sen. Marco Rubio carried 42%, far more than any candidate. Donald Trump could well have a lock on the nomination after March 15 if a fragmented opposition gives him an absolute majority of delegates on that day. There is still time for the non-Trump GOP majority to coalesce around a single candidate, but not much.

CNBC:

• HP earnings fall on 'tough' PC and printer markets. (video) HP Inc. reported quarterly earnings that met analysts' expectations on Wednesday, but revenues in its printing and personal systems segments fell slightly more than Wall Street had estimated. The company posted fiscal first-quarter adjusted earnings per share of 36 cents on $12.25 billion in revenue. Analysts had expected HP to report earnings of about 36 cents per share on $12.2 billion in revenue, according to a consensus estimate from Thomson Reuters. HP shares wavered in after-hours trading after the announcement.
• Oil may push banks to boost reserves. (video) After JPMorgan announced Tuesday that it would increase reserves to offset losses on loans in the energy sector, Wall Street is waiting for more shoes to drop.

Zero Hedge:

• "Credit Risk Is Growing," FDIC Warns As Loss Provisions Jump $3.8 Billion In 3 Months. (graph)
• Canary, Meet Coal Mine: These Are The Tranches Where The CLO 2.0 Meltdown Begins. (graph)
• According To Morgan Stanley(MS) This Is The Biggest Threat To Deutsche Bank's Survival. (graph)
• Japanese 'Margin' Traders Suffer Biggest Losses "Since Lehman". (graph)
• Jim Rogers Warns "Governments Plan Is To Destroy The People Who Save". (video)
• When Currency Pegs Break, Global Dominoes Fall. (graph)
• Norway Warns Sweden Will Collapse, PM Will Defy Geneva Convention To Protect Border.
• Restoration Hardware(RH) Stock Crashes After Terrible Earnings; Company Blames Crashing Stock Price. (graph)
• Wedbush Goes There: "Beware The Panics And Crashes Of March".
• Citi: "We Have A Problem". (graph)
• What Could Go Wrong? Brazil Plans To Kill Zika With Gamma Radiation Burst.
• Here Are 100 Reasons Why We Need To Audit The Federal Reserve.
• Worst US Economy Since Government Shutdown Sparks Panic-Buying In Stocks. (graph)

Business Insider:

• MITT ROMNEY: There's good reason to believe there's a 'bombshell' in Donald Trump's taxes.
• Al-Qaeda is taking control of a pivotal Middle East country.
• Carl Icahn has lost billions on energy trades this year.
• US spy agencies are saying Clinton's emails should have been 'top secret' because of their content.
• 'Do you want to divide Europe?' Hungary's provocative prime minister discusses Europe's refugee crisis.
• 'China is clearly militarizing the South China Sea and you’d have to believe in the flat Earth to think otherwise'.
• Here’s your first look at the super cheap phone that will take on the iPhone in China. (video)
• Salesforce(CRM) shares soar after Q4 beat.

Reuters:

• Ackman's fund off 17.3 percent for year, erases banner gains from 2014.

Financial Times:

• S&P warns of Asia’s corporate repayment risk. Asia-Pacific companies are on the hook to repay almost $1tn of debt over the next four years — more than half of it priced in US dollars — according to Standard & Poor’s.

Night Trading 

• Asian equity indices are -1.25% to +.25% on average.
• Asia Ex-Japan Investment Grade CDS Index 157.25 +.75 basis point. 
• Asia Pacific Sovereign CDS Index 77.75 -1.25 basis points. 
• Bloomberg Emerging Markets Currency Index 68.54 +.02%. 
• S&P 500 futures -.14%. 
• NASDAQ 100 futures -.13%.

Morning Preview Links

Earnings of Note
Company/Estimate 

• (ALKS)/-.24
• (BUD)/1.61
• (APA)/-.46
• (BBY)/1.39
• (CVC)/.17
• (CPB)/.80
• (CRI)/1.29
• (CHS)/.00
• (DPZ)/1.11
• (KSS)/1.56
• (ZEUS)/-.17
• (PWR)/.28
• (SAFM)/.45
• (SHLD)/-2.62
• (SFM)/.16
• (TD)/1.19
• (VC)/.77
• (AIRM)/.64
• (ADSK)/.11
• (BIDU)/1.21
• (GPS)/.57
• (GG)/.00
• (HLF)/.97
• (MHK)/2.73
• (MNST)/.81
• (PANW)/.39
• (WTW)/.02
• (ZOES)/-.06 

Economic Releases 
8:30 am EST

• Initial Jobless Claims for last week are estimated to rise to 270K versus 262K the prior week.
• Continuing Claims are estimated to fall to 2253K versus 22723K prior. 
• Preliminary Durable Goods Orders for January are estimated to rise +2.9% versus -5.0% in December.
• Preliminary Durables Ex Transports for January are estimated to rise +.3% versus a -1.0% decline in December.
• Preliminary Cap Goods Orders Non-Defense Ex Air for January are estimated to rise +1.0% versus a -4.3% decline in December.

9:00 am EST

• The House Price Purchase Index for 4Q. 
• The FHFA House Price Index MoM for December is estimated to rise +.5% versus a +.5% gain in November. 

11:00 am EST

• Kansas City Fed Manufacturing for February is estimated to rise to -6.0 versus -9.0 in January.

Upcoming Splits 

• None of note

Other Potential Market Movers

• The Fed's Lockhart speaking, Fed's Williams speaking, UK GDP report, China Property Price report, $28B 7Y T-Note auction, weekly Bloomberg Consumer Comfort Index, weekly EIA natural gas inventory report, Cantor Internet/Tech Conference and the (ZION) investor conference could also impact trading today.

BOTTOM LINE: Asian indices are mostly lower, weighed down by financial 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 Reversing Higher into Final Hour on on China Stimulus Hopes, Oil Reversal, Short-Covering, Tech/Telecom Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Slightly Higher
  

• Sector Performance: Mixed
  

• Volume: Slightly Below Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 21.05 +.33%

• Euro/Yen Carry Return Index 128.62 -.36%

• Emerging Markets Currency Volatility(VXY) 12.29 +.24%

• S&P 500 Implied Correlation 62.87 -.62%

• ISE Sentiment Index 89.0 +27.14%

• Total Put/Call 1.03 -8.04%

• NYSE Arms 1.56 -15.96% 

Credit Investor Angst:

• North American Investment Grade CDS Index 116.25 +.22%

• America Energy Sector High-Yield CDS Index 2,339.0 +2.67%

• European Financial Sector CDS Index 122.88 +4.57%

• Western Europe Sovereign Debt CDS Index 32.83 +1.77%

• Asia Pacific Sovereign Debt CDS Index 77.99 -1.38%

• Emerging Market CDS Index 367.32 -.57%
  

• iBoxx Offshore RMB China Corporate High Yield Index 123.70 +.15%

• 2-Year Swap Spread 4.75 -1.0 basis point
  

• TED Spread 30.5 -.75 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -24.0 +.75 basis point
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 68.54 -.14%
• 3-Month T-Bill Yield .33% +1.0 basis point

• Yield Curve 99.0 -1.0 basis point
  

• China Import Iron Ore Spot $51.64/Metric Tonne +.08%

• Citi US Economic Surprise Index -38.60 -2.7 points

• Citi Eurozone Economic Surprise Index -54.30 +1.3 points

• Citi Emerging Markets Economic Surprise Index -8.70 -.5 point

• 10-Year TIPS Spread 1.37% +4.0 basis points
• 15.4% chance of Fed rate hike at April 27 meeting, 25.5% chance at June 15 meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating -25 open in Japan 
• China A50 Futures: Indicating -34 open in China

• DAX Futures: Indicating +92 open in Germany

Portfolio: 

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

• Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges 

• Market Exposure: Moved to 50% Net Long

Today's Headlines

Bloomberg:

• China's New Economy Is Hitting Asia's Exports. Take Korean cars: Shipments fell 21.5 percent in January from a year earlier, an even sharper decline than the month’s 18.8 percent drop in total exports. “With the big three sectors of Ulsan all in a slump, subcontractors to some of the big companies closed their businesses,” said Choi Jin Hyeok, research team leader at the Ulsan Chamber of Commerce & Industry. “I’m afraid headwinds may continue this year. Slower growth in China is the biggest risk as the main market for all those industries is China.”
• China's Shadow Banking Evolves to Dodge Crackdown. China’s shadow lending has evolved to dodge a clampdown, with brokers and funds taking on the role previously played by more heavily regulated trusts in expanding informal financing. Banks are increasingly turning to so-called directional asset-management plans issued by brokerages and the subsidiaries of mutual-fund providers to channel lending. The amount of money placed in such products jumped 70 percent last year to 18.8 trillion yuan ($2.9 trillion), outpacing the 17 percent growth for trust assets, according to data provided by industry groups. The expansion of less-regulated lending makes it harder for authorities to contain a debt pile that’s ballooning as economic growth slows to the least in 25 years.
• Hong Kong Expects Slowing Economic Growth as Tourism Slumps. Hong Kong’s economy may grow at its slowest annual pace since at least 2012, as a slump in tourist arrivals and exports continues to worsen, Financial Secretary John Tsang said. The economy may expand by 1 percent to 2 percent in 2016, slower than the 2.4 percent gain last year, Tsang told lawmakers on Wednesday in his annual budget speech. Gross domestic product growth advanced 0.2 percent in the fourth quarter from the preceding three months, below the 0.3 percent estimate of economists surveyed by Bloomberg. “Local consumption and investor sentiment have been dented by concerns over the uncertainties associated with the U.S. interest rate increases and the dimmer global economic outlook,” Tsang said. “The local economy is laden with risks in the year ahead; the outlook is far from promising.”
• Brazil Credit Ratings Cut to Junk by Moody’s. Brazil’s sovereign rating was cut to junk by Moody’s Investors Service, the last of the major ratings companies to strip the country of its investment grade, as President Dilma Rousseff struggles to shore up fiscal accounts amid deepening political turmoil. The country’s benchmark stock gauge declined the most in three weeks and the currency weakened after the rating was reduced two steps to Ba2, putting Moody’s grade in line with Standard & Poor’s and one level below Fitch Ratings. The outlook is negative, meaning more downgrades may be coming, Moody’s said in a statement Wednesday. Brazil’s credit metrics have deteriorated "materially" in the past few months and will worsen over the next three years, according to the ratings company, which also cited the negative impact of political gridlock on the government’s efforts to close a budget deficit and undertake structural reforms. The Ibovespa stock gauge dropped 2.7 percent as of 10:10 a.m. in New York as state-controlled companies including Petroleo Brasileiro SA and Banco do Brasil SA tumbled. The real fell 0.9 percent, extending its decline over the past year to 29 percent, the most among the world’s 16 most-traded currencies.
• Can Things Get Any Worse for Russia? (video) You're About to Find Out. Investors who’ve made a fortune in the country say that with oil's plunge, the ruble's collapse, and Putin in power, all bets are off.
• A Nice Glass of Seawater? Drought Forces Australia to Rethink Desalination. On the southeast coast of Australia, a A$5.7 billion ($4.1 billion) processing plant to turn the ocean into a source of drinking water has sat idle since it was built in 2012. That could change soon. The state of Victoria will decide by April whether to switch it on, sucking water from the Bass Strait through an underground tunnel into a complex of more than two dozen buildings in a seaside town south of Melbourne. At the heart of the facility is technology that can remove salt and supply as much as 150 billion liters (40 billion gallons) of water a year, or about a third of the city’s consumption. 
• Guardians of World Economy Hit Logjam of Conflicting Interests. When the Group of 20 declared itself the guardian of the global economy in September 2009, it had the unifying goal of pulling the world out of the worst downturn since the Great Depression. Fast forward to now, and finance chiefs from key industrial and developing economies gathering in Shanghai this week are once again worried about a weak outlook for global growth. The difference this time is that rather than rallying around a shared goal, each member has different needs, which in some cases are putting them in conflict.
• Weidmann Says Any New ECB Measures Mustn't Be Counterproductive. The European Central Bank must be wary of introducing fresh stimulus that could backfire and weaken the transmission of policy to the economy, Governing Council member Jens Weidmann said. “What matters for us is that we don’t produce counterproductive effects,” Weidmann, who heads Germany’s Bundesbank, said in a Bloomberg Television interview in Frankfurt on Wednesday. “If through the effect on, for instance, the stability of banks our measures produce the opposite of what we want then it wouldn’t be smart to embrace them in the first place.” In the face of a deteriorating inflation outlook, ECB policy makers will review their current package of negative interest rates and a 1.5 trillion-euro ($1.7 trillion) bond-buying program when they meet March 9-10. With investors pricing in at least a 10-basis point cut in the deposit rate, currently at minus 0.3 percent, concern is mounting that a squeeze on bank profits will hinder lending. 
• Europe Stocks Drop Second Day as Miners Tumble Most Since August. European stocks declined for a second day as sliding oil prices stoked investor concern about global growth. Miners led the losses, taking their two-day decline to 9.5 percent, the most since August. BP Plc and Royal Dutch Shell Plc fell more than 2.8 percent as oil spent more of the day down after Iran dismissed a proposal by Saudi Arabia and Russia for producers to freeze output. European automakers and banks, the weakest groups this year, were also among the worst performers on Wednesday. The Stoxx Europe 600 Index dropped 2.3 percent for its biggest two-day decline since Feb. 9. Lenders, the most battered among European industries this year, lost 3 percent. The group slumped to a three-year low this month amid worries over bad loans at Italian firms, the impact of a low-rate environment on profits and Deutsche Bank AG’s creditworthiness. Greek and Italian banks fell the most on Wednesday, and Denmark’s Sydbank A/S tumbled 8.4 percent after reporting profit that missed estimates.
• What a Saudi Oil-Supply Freeze Would Really Mean for Markets. Saudi Arabia shot down rumors it might cut oil production, but reaffirmed its commitment to an output freeze that could restrict crude flows to market this summer. With the world’s biggest exporter already pumping near-record volumes, that may not matter. 
• Another Oil Crash Is Coming, and There May Be No Recovery. Superior electric cars are on their way, and they could begin to wreck oil markets within a decade. It’s time for oil investors to start taking electric cars seriously. In the next two years, Tesla and Chevy plan to start selling electric cars with a range of more than 200 miles priced in the $30,000 range. Ford is investing billions, Volkswagen is investing billions, and Nissan and BMW are investing billions. Nearly every major carmaker—as well as Apple and Google—is working on the next generation of plug-in cars. This is a problem for oil markets.  
• U.S. Crude Supplies Rise to Highest Level in 86 Years. (graph)
• Wall St.'s Debt Gain Gives Way to Pain. Helping companies sell debt had been one of Wall Street's brightest businesses in recent years, but that's starting to fade. Corporations are borrowing less, in large part because investors aren't as willing to lend. That means fewer fees for the big banks that help them sell the deals.
• Hedge Fund Cash Flows Back to Bets That VIX at 20 Won't Last. (graph) Hedge funds and investors in exchange-traded notes are plowing money into bets that pay off should last week’s soothing of U.S. stock market turbulence prove temporary. With the Chicago Boards Options Exchange Volatility Index closing below 20 for just the third time this year, a pair of securities that track the gauge have seen combined inflows of $140 million over the last week after losing almost $1 billion to start 2016. Hedge funds hold more long bets on VIX futures that any time since September, data from the U.S. Commodity Futures Trading Commission show. 
• The Biggest Part of the U.S. Economy Is Showing Signs of Cracking.
• Climate Activists Armed With Cameras Push Clinton to Commit. (video) Griffin Sinclair-Wingate was pressed against the edge of the stage after a debate in New Hampshire when he got his crack at Hillary Clinton. "Would you ban the extraction of oil, gas and coal on public lands?" the University of New Hampshire junior asked Clinton in a Feb. 4 exchange captured in blurry video shot on the iPhone tucked in his shirt pocket. "Yeah," Clinton shot back. "That’s a done deal." The four-word statement was the furthest Clinton had gone to embrace the growing "keep it in the ground" anti-fossil fuel movement -- a victory for Sinclair-Wingate and other climate activists who have stalked her on the campaign trail. The video was swiftly uploaded to YouTube, highlighted on Twitter and circulated to the news media.
• Trump or Rubio: Now Place Your Bets. A contrasting view is that Marco Rubio is the candidate who is still set up nicely. He recovered from his disaster in New Hampshire to finish second (albeit a distant second) in South Carolina and Nevada, becoming the obvious challenger to Trump. He has finally won a large number of endorsements, putting him about even with John McCain in 2008 and John Kerry in 2004 as a late-breaking party choice. And, this argument goes, Trump is unlikely to increase his support. If he can't, then outside of his strongest states (and Nevada was one) he is only barely competitive in what will soon be a three-candidate race and not at all competitive in a two-man race.
• Apple(AAPL) Brand Could Become Casualty of FBI Tussle Over iPhone Hack. (video) Apple Inc. is doubly vulnerable after taking a hard-line public stance on encryption. Not only does the company risk a defeat before judges who will decide whether it can legally oppose FBI demands to help it hack a terrorist’s iPhone, but it’s also susceptible to a setback in the court of public opinion. 
• GM(GM), Ford(F) Fall as Morgan Stanley Analyst Cites Recession Risk. General Motors Co. and Ford Motor Co. declined the most in six months after Morgan Stanley analyst Adam Jonas said their profits are more at risk in a recession than the automakers have estimated.
• Wells Fargo's(WFC) Souring Energy Loans Jump 49% as Oil Prices Drop. Wells Fargo & Co. said soured energy loans soared 49 percent in the last three months of 2015, fueled in part by tumbling oil prices. Oil-and-gas nonaccrual loans, which includes those that are delinquent or have been written off, totaled $844 million as of Dec. 31, compared with $566 million at the end of the third quarter, the San Francisco-based bank said Wednesday in its annual regulatory filing. The firm had $76 million of nonaccrual energy loans at the end of 2014.

CNBC:

• Google(GOOG) robot is 'the end of manual labor': VC. (video)
• LaVorgna: Wall Street hopes way too high. (video)

Zero Hedge:

• Google's(GOOG) "SkyNet" Robots Are All Grown Up, And Terrifying. (video) 
• Cable Crashes Below 1.40 For First Time In 7 Years, Brexit Risks Soar As Farage Crushes Cameron. (graph)
• Is This Why Stocks Are Suddenly Surging: NY Fed Cancels Today's POMO Due To "Technical Difficulties". (graph)
• Algos Panic-Buy Crude After Europe Closes. (graph)
• Is The Stock Rally Glass Half Full Or Half Empty? (graph)
• The New "Big Short"? - Australia's Housing Bubble Is "In the Grip Of Insanity". (graph)
• One (Extremely) Important Policy That Bernie Sanders & Donald Trump Agree On.
• "Everything Is Rolling Over" - BofA Watches The Carnage. (graph)
• Crude Spikes On Gasoline Draw & Production Cut (Despite Another Cushing Build). (graph)
• January New Home Sales Collapse Most Since 2009 As Prices Plunge To 2-Year Lows. (graph)
• And Now We Have A Services Recession: Markit Services PMI Crashes Into Contraction.
• Guy 'Bankers-Will-Go-Back-To-Their-Baskets-Like-Dogs' Hands Warns Of "Very, Very Scary Market".
• G-20 Stimulus Hopes Crushed After Jack Lew Says "Don't Expect A Crisis Response", Rally In Jeopardy. (graph)
• "It's All A Short Squeeze" - Goldman Expects A 20% Drop Before Markets Can Rally. (graph)

Business Insider:

• 'A constant drip, drip, drip': A judge just made clear that Hillary's email problems aren't going away anytime soon.
• There is 'a significant risk of the US economy falling into contraction'. 

@PeterLBrandt:

• A private survey index called Minxin shows a worse picture in China than is portrayed by official data.

Telegraph:

• Gerard Lyons: The EU is like the Titanic, and we need to jump off before it sinks.

Deutsche Presse-Agentur:

• Schaeuble Sees Debt Threatening Market Confidence. "Ultimately you reach the point where ever more debt triggers a crisis of confidence," German Finance Minister Wolfgang Schaeuble is quoted as saying in an interview. "Easy money is a path to disaster". Fed "isn't providing clarity" as it sends contradictory signals on rates, he said. Says he'll urge central bank chiefs at G-20 talks in Shanghai his week "to create more stability and reliability" in their communication strategy. Sees high level of global uncertainty. European Union "isn't in the best shape".

Bear Radar

Style Underperformer:

• Large-Cap Value -.7%

Sector Underperformers:

• 1) Steel -2.5% 2) Banks -2.4% 3) Gaming -1.8%

Stocks Falling on Unusual Volume:

• ABCO, CAR, CNL, HAWK, PLKI, DY, MATX, CRH, RLGY, FIT, CLH, SBGI, SF, SLCA, RDUS, ISLE, CM, XLNX, ECOL, LOW, WMS, HSBC, BNS, ADMS, BBL and RDUS

Stocks With Unusual Put Option Activity:

• 1) XPO 2) FEZ 3) WDAY 4) XRT 5) BK

Stocks With Most Negative News Mentions:

• 1) ABCO 2) FIT 3) CMG 4) WFC 5) GM

Charts:

• ETFs Falling on Unusual Volume
• Stocks Falling on Unusual Volume

Bull Radar

Style Outperformer: 

• Small-Cap Growth +.1%

Sector Outperformers:

• 1) Networking +1.8% 2) Gold & Silver +1.8% 3) Telecom +.7% 

Stocks Rising on Unusual Volume: 

• RUBI, DWA, TREX, XXIA, PZZA, ADPT, TX, MASI, FSLR, EXAM, WBMD, VRSK, LAD and MLNX

Stocks With Unusual Call Option Activity: 

• 1) LGF 2) SIRI 3) GME 4) PAA 5) GDXJ

Stocks With Most Positive News Mentions: 

• 1) FSLR 2) TJX 3) XXIA 4) PZZA 5) TGT

Charts:

• ETFs Rising on Unusual Volume
• Stocks Rising on Unusual Volume