Wednesday Watch

Evening Headlines
Bloomberg:  

• China May Face Japan-Like Slump Unless Yuan Weakens, KKR Says. China could be facing the same kind of anemic growth that Japan did in the 1990s unless it moves to weaken the yuan to alleviate the country’s debt burden and fend off deflation, according to KKR & Co., one of the world’s largest private equity firms. The country’s currency interventions have drained cash from the financial system, tightening liquidity further at a time when money is already leaving the country in droves, Henry Mcvey, head of KKR’s Global Macro & Asset Allocation team, said in a research note Tuesday. The tightening of money supply and falling inflation are making it more expensive for companies to repay their debt, ultimately hurting economic expansion, he said. “China cannot ignore the one-two punch of deflation and capital outflows without having to ultimately realign its currency strategy,” said Mcvey. “If it does choose to ignore these items, then we believe GDP growth could stagnate further the way it did in Japan during the 1990s (i.e., high real rates restrain growth amidst too much debt).”
• Is China's Slowdown the Result of a Global Trade War? (video)
• China Miner Zibo Hongda Defaults on Bond, Hurt by Economy Slump. A Chinese mining company defaulted on its bonds, the latest firm to have trouble with financing as an economic slump hurts business. Zibo Hongda Mining Co., which is based in the eastern province of Shandong, said it didn’t raise enough funds to make its full debt payment due March 8, according to a statement posted to the Shanghai Clearing House website. The iron ore miner issued 400 million yuan ($61 million) of notes in 2015 with a coupon rate of 8 percent and had to repay 431.91 million yuan in principal and interest Tuesday.
• The Risky Japan Funds Sparking Financial Regulator Concern. Japan’s financial regulator is concerned that banks and securities companies are selling complex funds that charge high fees to individuals who may not understand the risks, and it’s talking to the firms about whether the sales are appropriate. Funds that bundle investments in assets from Japanese stocks to U.S. high-yield debt with wagers on currencies are sold by the nation’s largest brokerages and banks. Declines of more than 20 percent in emerging-market currencies against the yen in the past year have left owners of so-called double-decker or layered funds with big losses.
• UBS's Strategist Who Forecast Rout Sees Emerging Rally Fizzle. The rally that has almost erased this year’s decline in emerging-market assets probably won’t last as economic growth remains sluggish, according to Bhanu Baweja, a strategist at UBS AG, who correctly predicted the selloff in 2015. “Leading indicators don’t point to a major inflection point,” Baweja, the head of emerging-market cross-asset strategy at UBS, wrote in an e-mailed research note Tuesday. While the pace at which developing-nation economies are weakening has moderated, it’s “more likely than not that we trudge along the bottom for a while rather than see a significant pick-up in growth,” he said. Weak global trade, high debt levels and deterioration in governments’ balance sheets suggest that emerging-market stocks may trail their developed-nation peers by as much as 15 percent over the next two years, Baweja said.
• Why a Recession Could Mean the End of the Euro Zone. (video)
• Won Falls Most in Three Weeks as China Data Damp Global Outlook. South Korea’s won fell the most in three weeks after disappointing Chinese economic data deepened concerns about global growth. China, South Korea’s biggest overseas market, on Tuesday reported exports in February shrank the most since 2009 and imports slumped for the 16th months. South Korean shipments have contracted for 14 straight months, the government said last week. The Kospi index of shares dropped as foreign funds sold more local stocks than they bought for a second day, paring this month’s inflows, exchange data show. The won declined 0.6 percent, the most since Feb. 17, to 1,213.99 a dollar as of 11:23 a.m. in Seoul, according to data compiled by Bloomberg.
• China Stocks Drop as End of Day Rally Unravels on Growth Concern. China’s stocks fell, giving back gains from an end of day rally that was driven by suspected state-backed fund buying. Commodity producers led declines after oil and metal prices slumped. The Shanghai Composite Index slumped 1.9 percent. Jiangxi Copper Co. plunged the most in six weeks to lead miners lower in the wake of an industrial-metals selloff. The gauge erased a loss of 3.3 percent to close higher on Tuesday, led by Industrial & Commercial Bank of China Ltd. and PetroChina Co., which have long been considered as favored targets of government buying because of their large index weighting. The Hang Seng China Enterprises Index retreated 1.4 percent at 10:24 a.m., while the Hang Seng Index dropped 0,.6 percent. The CSI 300 Index declined 1.8 percent, with gauges tracking material and energy stocks sliding at least 3.9 percent for the steepest losses among industry groups.
• Asian Stock Retreat Deepens as Commodity Drop Spurs Haven Demand. Asian stocks extended their decline, with Japanese shares driving losses as renewed concern over the state of the global economy underpinned demand for haven assets, weighing on commodity prices. Mining companies led the regional benchmark down for a second day as Japan’s Topix index fell more than 1 percent. Copper futures extended their drop in the wake of an industrial-metals selloff, while U.S. crude held below $37 a barrel. High-yielding currencies retreated, with the Australian dollar to the Malaysian ringgit slipping at least 0.2 percent. The yen rose a third day against the euro and the dollar as Australian and New Zealand bonds climbed. The MSCI Asia Pacific Index lost 0.8 percent as of 10:03 a.m., headed for its lowest close since March 2 as exporters led the Topix down 1.7 percent.
• China Steel Gloom Prompts Biggest Mills to Doubt Iron Ore Rally. For any emerging bulls out there, China’s top steelmakers’ group has a sobering message: the global iron ore market is grossly oversupplied, demand in China is faltering and there’s a severe glut of steel. “Don’t let wild, short-term price swings distract us from our analysis of the market,” Li Xinchuang, deputy secretary-general of the China Iron & Steel Association, said after iron ore surged on Monday by the most on record. “How can the rally possibly be sustained?”
• DoubleLine’s Gundlach Says S&P Has 2% Upside, 20% Downside. The Standard & Poor’s 500 Index has about 2 percent upside and 20 percent downside, making for a lousy risk-reward trade-off, according to money manager Jeffrey Gundlach. Betting on stocks is a “big losing proposition,” Gundlach said Tuesday during a webcast. The recent rebound is a “bear market rally,” he said. The S&P 500 Index, a benchmark for U.S. stocks, fell the most in two weeks Tuesday, led by a selloff in energy shares, after worsening economic data from Asia reignited concern over the outlook for global growth. Reports showed Japan’s economy and Chinese exports are shrinking, reviving anxiety that monetary policy won’t be enough to support the global economy. Oil inventories are still “through the roof” and demand is too weak to fuel a recovery in energy markets. Bankruptcies are likely to increase in the sector, with more corporate debt facing downgrades, a trend that is also hurting banks. When the defaults come, “recovery rates are going to be highly disappointing” because borrowers are so heavily levered, he said.

Wall Street Journal:

• China, Fighting Money Exodus, Squeezes Business. Trying to slow capital outflow, Beijing makes life tougher for companies and investors. Chinese officials are trying anew to slow an unprecedented money exodus from the country, clamping down on individuals seeking to flee the yuan and making life tougher for companies that need to trade the currency for dollars to do business. China’s foreign-exchange regulator in recent months has deployed a new system to monitor individual purchases of foreign funds and has asked banks to reduce foreign-currency transactions. It has...
• U.S. Officials Propose Test Program Aimed at Lowering Medicare Drug Costs. Goal to see if lowering reimbursements would prompt doctors to choose lower-cost drugs. The Obama administration is proposing a test program to see if lowering reimbursements for drugs administered by some Medicare doctors would prompt them to choose lower-cost, but equally effective, medications.
• Can Trump Start a Trade War? From his first moment in office, he can take the world economy on a wild ride.

Fox News:

• 2016 Election: Live Blog.
• Fox News projects: Trump wins primaries in Mich., Miss.; Clinton wins in Miss. (video) Donald Trump swept to victory Tuesday in delegate-rich primaries in Michigan and Mississippi, Fox News projects, regaining momentum after his stunning march through the primaries was slowed over the weekend – while Hillary Clinton once again found herself faced with the prospect of splitting the night’s contests with rival Bernie Sanders. Trump immediately tried to use his latest wins to sideline the remaining competition. At a press conference at his golf club in Juniper, Fla., he said of his remaining rivals, “They’re pretty much all gone.” Clinton, meanwhile, notched a resounding win over Vermont Sen. Sanders in Mississippi, thanks in part to her overwhelming support from black voters. But she is locked in a surprisingly close battle for the top spot in Michigan, where Sanders leads in early returns.
• Beheadings, imprisonment made 2015 worst year for Christian persecution, report finds.

CNBC:

• Consumers amassed $71B in credit card debt in 2015. Could 2016 be the next 2008 for credit card debt? It's possible, according to new research by CardHub. America's outstanding credit card debt surpassed estimates in 2015, climbing to $917.7 billion, up from a forecast of $900 billion, the credit card comparison website said on Monday. In 2015, consumers amassed around $71 billion in credit card debt, up 24 percent from the previous year. In the fourth quarter alone, consumers racked up $52.4 billion in credit card debts, nearly the cumulative amount of debts owed to credit card companies in 2014, which reached $57.4 billion.

Zero Hedge:

• Gold ETF Holdings Rise For Record 40 Straight Days. (graph)
• Hillary's Scary New Cash Tax.
• Deflation Is Coming To The Auto Industry As Used Car Prices Drop, Off-Lease Deluge Looms. (graph)
• EIA's Dire Oil Forecast: $34 Crude Due To Far More Resilient Production, Oversupply And Lower Demand.
• This 4,000-Year-Old Financial Indicator Says That A Major Crisis Is Looming.
• Never Go Full-Kuroda: NIRP Plus QE Will Be Contractionary Disaster In Japan, CS Warns.
• Crude Chaos As Cushing Inventories Rise For 6th Straight Week. (graph)
• Commodities, Stocks, & Bond Yields Plunge As Super-Short-Squeeze Stalls. (graph)

Business Insider:

• New national poll suggests the GOP race has been shaken up. GOP frontrunner Donald Trump retook the top spot in the latest national NBC News/Wall Street Journal poll on Tuesday — but his competitors are nipping at his heels. Trump led Sen. Ted Cruz of Texas by three points in the poll, 30% to 27%. Ohio Gov. John Kasich came in third at 22%, an 11-point gain over the past month.
• ISIS is making inroads in yet another north African country.
• Tesla(TSLA) isn't disrupting anything
• The number of people who need to be laid off in China is staggering.
• Good luck retiring if the Fed turns to negative interest rates.
• Too many people are pretending to be rich.

@AmYisraelChai16:

• Shipping container prices to Shanghai still dropping. (graph)

The Sun:

• Revealed: Queen backs Brexit as alleged EU bust-up with ex-Deputy PM emerges. EXCLUSIVE: Her Majesty reportedly let rip at Nick Clegg during lunch at Windsor Castle. The 89-year-old monarch firmly told passionate pro-European Mr Clegg that she believed the EU was heading in the wrong direction.

Night Trading 

• Asian equity indices are -1.25% to -.25% on average.
• Asia Ex-Japan Investment Grade CDS Index 149.25 -1.0 basis point. 
• Asia Pacific Sovereign CDS Index 71.5 +2.75 basis points. 
• Bloomberg Emerging Markets Currency Index 69.80 -.13%. 
• S&P 500 futures +.05%. 
• NASDAQ 100 futures +.02%.

Morning Preview Links

Earnings of Note
Company/Estimate 

• (HOV)/-.03
• (KFY)/.51
• (VRA)/.41 

Economic Releases 
10:00 am EST

• Wholesale Inventories MoM for January are estimated to fall -.2% versus a -.1% decline in December.
• Wholesale Sales for January MoM are estimated to fall -.3% versus a -.3% decline in December.

10:30 am EST

• Bloomberg consensus estimates call for a crude oil inventory build of +3,177,780 barrels versus a +10,374,000 barrel increase the prior week. Gasoline supplies are estimated to fall by -1,494,440 barrels versus a -1,468,000 barrel decline prior. Distillate inventories are estimated to rise by +272,220 barrels versus a +2,882,000 gain prior. Finally, Refinery Utilization is estimated to fall by -.2% versus a +1.0% gain prior.

Upcoming Splits 

• None of note

Other Potential Market Movers

• The China CPI report, UK Industrial Production report, $20B 10Y T-Note auction, Bank of Canada rate decision, weekly MBA mortgage applications report, USDA WASDE report, UBS Consumer Conference and the (MGA) investor day could also impact trading today.

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

Stocks Falling into Final Hour on China Bubble Bursting Fears, Oil Decline, Yen Strength, Commodity/Road & Rail Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Lower
  

• Sector Performance: Almost Every Sector Declining
  

• Volume: Around Average

• Market Leading Stocks: Underperforming
  

Equity Investor Angst:

• Volatility(VIX) 18.22 +5.01%

• Euro/Yen Carry Return Index 129.49 -.90%

• Emerging Markets Currency Volatility(VXY) 11.60 -.09%

• S&P 500 Implied Correlation 60.43 +4.26%

• ISE Sentiment Index 94.0 +34.3%

• Total Put/Call .91 +8.33%

• NYSE Arms 1.51 +82.80% 

Credit Investor Angst:

• North American Investment Grade CDS Index 97.48 +3.91%

• America Energy Sector High-Yield CDS Index 1,406.0 -9.32%

• European Financial Sector CDS Index 101.75 +3.65%

• Western Europe Sovereign Debt CDS Index 31.43 +2.48%

• Asia Pacific Sovereign Debt CDS Index 70.89 +3.08%

• Emerging Market CDS Index 342.89 +.93%
  

• iBoxx Offshore RMB China Corporate High Yield Index 124.73 +.11%

• 2-Year Swap Spread 4.5 +.25 basis point
  

• TED Spread 33.25 -3.25 basis points

• 3-Month EUR/USD Cross-Currency Basis Swap -27.0 +1.75 basis points
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 69.94 -.5%
• 3-Month T-Bill Yield .29% +2.0 basis points

• Yield Curve 96.0 -4.0 basis points
  

• China Import Iron Ore Spot $63.63/Metric Tonne -.17%

• Citi US Economic Surprise Index -13.0 -1.2 points

• Citi Eurozone Economic Surprise Index -53.20 +8.6 points

• Citi Emerging Markets Economic Surprise Index -16.80 -5.8 points

• 10-Year TIPS Spread 1.47% -3.0 basis points
• 19.2% chance of Fed rate hike at April 27 meeting, 43.4% chance at June 15 meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating -178 open in Japan 
• China A50 Futures: Indicating -137 open in China

• DAX Futures: Indicating -6 open in Germany

Portfolio: 

• Slightly Lower: On losses in my biotech/medical sector longs
  

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

• Market Exposure: Moved to 25% Net Long

Today's Headlines

Bloomberg:

• China Stock Slump Set to Drag on Growth. China’s tumbling stock market is set to join a trade slump and sluggish factory conditions as a brake on economic growth this quarter. A plunge that has seen the Shanghai Composite Index fall 18 percent this year will reduce first-quarter gross domestic product growth by 0.1 percentage point to 0.3 percentage point, according to the majority of economists surveyed by Bloomberg News this month. "A minor drag from the stock market rout on GDP growth has to be expected," said Frederik Kunze, a Hanover, Germany-based economist at Norddeutsche Landesbank. "We will also see adjustments in the more and more important service sector." That’s because lower trading volumes dent revenue for the nation’s finance sector, which emerged as a key growth driver last year. As that adrenaline shot fades, the economy will be more reliant on the boost offered by increased fiscal support and monetary easing, the latest of which came last week when the central bank lowered the reserve requirement ratio for major banks.
• Breaking Down China's Trade Data. (video)
• China's Drug-Price Cuts Are Hitting Big Pharma Where It Hurts. The world’s largest pharmaceutical companies are facing a roadblock in China as a state-led campaign to slash drug prices has triggered a slowdown in sales growth. One of the biggest problems: China’s government-run health insurance funds, which are struggling to keep up with an ageing population and surging incidence of diseases like cancer or diabetes. As they grapple with tighter budgets and a slowing economy, many of these funds are capping reimbursements to patients and pushing local authorities to negotiate with companies to lower drug prices. More than $115 billion of drugs were sold in China last year, according to researcher IMS Institute for Healthcare Informatics, making it the world’s second largest market after the U.S. China’s pharmaceutical market shrank by 1 percent in dollar terms from October to November, according to Barclays Plc, a sharp contrast with the 17 percent expansion in the second half of 2013. As a result, companies from the U.K.’s GlaxoSmithKline Plc to AstraZeneca Plc and New York’s Pfizer Inc. saw China sales growth weaken last year. In the latest sign of price pressures for the industry, Li Bin, director of the National Health and Family Planning Commission said at a press conference at the National People’s Congress on Tuesday that China has won price cuts of more than 50 percent in national-level bargaining with drug companies on about five kinds of costly imported drugs for illnesses including cancer. The official didn’t specify the names of the drugs or the manufacturers.
• Brazil Stocks Decline as China Trade Report Sends Vale Tumbling. The Ibovespa fell for the first time in seven days as a disappointing trade report out of China, Brazil’s top trading partner, sent Vale SA’s shares tumbling. Vale, a miner of iron ore, contributed the most to the index’s drop after a report showed that China’s imports declined for the 16th straight month and exports slumped by the most in almost six years. Commodities account for about a fifth of the Ibovespa index’s weighting. Tuesday’s slide puts an end to a rally that had sent the Ibovespa to its highest in five months. Before today, Brazilian stocks had surged 18 percent in a little more than a week as traders bet that President Dilma Rousseff was getting closer to being impeached, which could usher in a change in government that many investors say is the only way to shift attention from a sweeping corruption scandal back to the economy and a budget deficit. "China continues to be a source of concern for Brazil,” Ignacio Crespo Rey, an economist at brokerage Guide Investimentos, said from Sao Paulo. “Investors are more cautious and paying a lot of attention to the political scenario.” The Ibovespa fell 0.7 percent to 48,924.73 at 1:35 p.m. in Sao Paulo after earlier swinging between gains and losses. About half of the gauge’s 61 stocks dropped. Vale plunged 11 percent, it’s biggest tumble on a closing basis since October 2008. 
• Banks Face Billions in Collateral Needs Under EU Swap Rules. Europe’s biggest banks will need billions of dollars to meet collateral requirements for derivatives starting this year under the latest version of a key rule that seeks to reduce risk. The standards, which will be phased in from September this year, may require EU buyers and sellers of swaps to set aside between 200 billion euros ($220.5 billion) and 420 billion euros in total once they are fully effective in 2020, three European regulators said on Tuesday in final draft standards. The requirement aims to stiffen standards for swaps contracted directly between traders rather than being settled at clearinghouses. “The overall reduction of systemic risk and the promotion of central clearing are identified as the main benefits of this framework,” the European Banking Authority, European Securities and Markets Authority and European Insurance and Occupational Pensions Authority said in the document.
• Europe's Negative Yields Seep Into Non-Government Bond Sales. The first non-government issuer just got paid to borrow in euros. Berlin Hyp AG sold 500 million euros ($550 million) of three-year covered bonds priced to yield minus 0.162 percent on Tuesday, according to data compiled by Bloomberg. The sale followed the euro area’s first zero-coupon covered bond, sold last month by another German issuer, Landesbank Hessen-Thueringen Girozentrale. 
• Emerging Markets Halt Gain as China Exports Damp Growth Optimism. Emerging-market stocks halted a seven-day advance as the biggest drop since 2009 in Chinese exports underscored shrinking global demand. The MSCI Emerging Markets Index ended its longest streak of gains in 11 months and a gauge of 20 developing-nation currencies retreated from the strongest level this year. Polish stocks fell from a three-month high as investors awaited the European Central Bank’s policy decisions on Thursday. Iron-ore producer Vale SA led Brazilian stocks lower. South Africa’s rand slumped as commodity prices dropped and the country’s current-account deficit widened more than economists forecast. An index of emerging-market bonds fell from the highest level in almost 11 months. The MSCI developing-nation stock gauge fell 0.9 percent to 788.23 at 11:51 a.m. in New York.
• Miners Lead 2nd Day of Europe Stock Slide on Global-Growth Worry. European stocks fell further from a five-week high, dragged down by equities that led the recent rebound, amid renewed worries about the outlook for global growth.Commodity producers slid the most, snapping a seven-day winning streak, followed by carmakers. Gains in those industries have pushed up the Stoxx Europe 600 Index as much as 13 percent since a Feb. 11 low. The benchmark lost 1 percent at the close, after data that showed Chinese exports and Japan’s economy shrank.
• Goldman(GS) Says Commodity Rally a False Start That's Set to Fizzle. Goldman Sachs Group Inc. predicted a rally in commodities from iron ore to gold will falter and forecast copper and aluminum prices will slide as much as 20 percent over the next year. Any increase in raw material prices will prompt more supplies to enter the market, making it difficult for any advance to be sustained, analysts including Jeffrey Currie wrote in a report dated March 7. The bank maintained its bearish outlook for gold, said iron ore’s surge would prove temporary and reiterated that oil will fluctuate between $20 and $40 a barrel. Goldman also said it was a good time to make bets that copper and aluminum would decline. 
• Iron Ore's Rally Stalls as Goldman to Citigroup Forecast Retreat. Iron ore’s rally stalled on Tuesday after a record 19 percent advance a day earlier as banks from Goldman Sachs Group Inc. to Citigroup Inc. together with some of the largest miners said that the surge wasn’t likely to endure. Ore with 62 percent content delivered to Qingdao dropped 0.2 percent to $63.63 a dry metric ton, Metal Bulletin Ltd. data showed. The decline was preceded in Asia by a fall in bellwether futures in Singapore, which lost as much as 12 percent. “There’s clearly what you would describe as an extreme short-covering event going on,” said Wayne Gordon, executive director for commodities and forex at UBS Wealth Management. “The rally is there to be sold because the fundamentals of the market, being supply and demand, do not stack up.”
• U.S. Monetary Policy Increasingly Made in China. No central bank – even the world’s most powerful – is an island. With increasingly interconnected global financial markets, what happens overseas often quickly redounds on the U.S., and vice versa. Here’s the reasoning behind the “Made in China” observation, as laid out by Joachim Fels, global economic adviser for Pacific Investment Management Co. , which oversees $1.43 trillion in assets.
• Republican Race Narrows As Trump’s Rivals Gain: ABC/Post Poll. Trump Has 34% to 25% for Cruz, 18% for Rubio, ABC/Washington Post national poll shows. Each of Trump’s rivals has gained since previous poll. Hillary Clinton beats Bernie Sanders 49% to 42%, the closest it’s been in this survey, according to March 3-6 poll.
• States Starting to Feel Pinch as Revenue Forecasts Weaken: Chart. 
• VIX Faces Challenge From Trading Robots Unleashed by Bats. The dominant gauge of investor fear -- the VIX -- is about to face new competition. Bats Global Markets Inc. is introducing its own volatility benchmark for U.S. stocks called the Bats-T3 SPY Volatility Index, an attempt to muscle in on CBOE Holdings Inc.’s VIX territory. Dubbed SPYIX (pronounced "Spikes") by its creators, the index tracks the price of options linked to the world’s biggest exchange-traded fund, the SPDR S&P 500 ETF Trust. Though they’re calculated in different ways, the indexes are similar enough that the price of the SPYIX should closely resemble the VIX, one of the most closely watched benchmarks in finance.
• Fed Governor Donates to Clinton Even as Bank Guards Independence. At a time when Federal Reserve officials are making the case that monetary policy needs to be non-partisan and independent, a sitting governor has given money to Hillary Clinton. Fed Governor Lael Brainard gave $750 in three contributions to Clinton’s campaign between November and January, according to Federal Election Commission records.
• Dick's Sporting Goods(DKS) Profit Misses Estimates.

Fox News: 

• American tourist reportedly killed in 1 of 3 terror attacks in Israel during Biden visit. (video) An American tourist was stabbed to death in one of three bloody terror attacks that  rocked Israel Tuesday, just as Vice President Biden arrived in Tel Aviv to meet with leaders in an effort to stem Palestinian violence and mend frayed relations with the Jewish state. Palestinian attackers shot and stabbed a dozen policemen and civilians in separate assaults around Israel, continuing near-daily incidents that began in October and have left more than 200 Israelis and Palestinians dead. Two Israeli police officers and 10 civilians were wounded in the attacks and three Palestinian attackers were shot and killed.

CNBC:

• The problem with the commodity bounce: ‘There’s no juice there’. (video)

Zero Hedge:

• Which Countries Have The Highest Default Risk: A Global CDS Heatmap.
• The Price Isn't Right - How Central Banks Are Fixing To Ambush The Casino.
• The Oil Short Squeeze Explained: Why Banks Are Aggressively Propping Up Energy Stocks. (graph)
• Citi(C) Slumps After CFO Forecasts Huge Revenue Drop. (graph)
• Japanese Government Bond Yields Collapse To Record Lows. (graph)
• Why Is A Fed Governor Donating Money To Hillary Clinton?
• NFIB Slams Fed, Obama As Small Business Optimism Crashes To 2 Year Lows. (graph)
• Stocks Tumble From Extreme "Overbought" Levels. (graph)
• Bond Bears Bewildered - The Case For US Treasuries.
• Oil Fundamentals Could Cause Oil Prices To Fall, Fast! (graph)
• An Anti-HFT Success Story: European Exchange Bans Frontrunning Algos, Grows Dramatically. (graph)
• Iran Shows Off "The Power of Velayat", Test Fires More Ballistic Missiles.
• "I'll Go Full Power If There's No Agreement" - Kuwait Breaks OPEC Production Freeze.
•  Are Treasury Shorts About To Scream: 10s, 30s Plunge In Repo, "Fails" Galore.

Business Insider:

• Walmart(WMT) is getting killed in the most important category. 
• Bank of America Merrill Lynch is firing traders.
• Better Business Bureau explains how Trump University briefly achieved an A+ rating. The BBB on Tuesday said Trump U fluctuated from as low as a D- in 2010 to an A+ in 2015. The organization explained that that swing was a function of a decrease in complaints as Trump U was no longer in business. "As the company appeared to be winding down, after 2013, no new complaints were reported," the statement read. "Complaints over three years old automatically rolled off of the Business Review, according to BBB policy. As a result, over time, Trump University's BBB rating went to an A in July 2014 and then to an A+ in January 2015." 
• 'Today' hosts confront Donald Trump: Will you stop doing the pledge that critics compare to a Nazi salute?
• In defiance of US sanctions, Iran just fired off several ballistic missiles.
• 'Trump would lose to Hillary': Mitt Romney rips Trump in Marco Rubio, John Kasich robocalls.

Reuters:

• U.S. may raise Iran missile tests at Security Council -official. The United States is closely following reports that Iran has conducted ballistic missile tests and if they are confirmed will seek an "appropriate response" at the U.N. Security Council, a U.S. official said on Tuesday. The official, speaking on condition of anonymity, said the reported ballistic missile tests would not be considered a violation of the international nuclear deal with Iran but there were "strong indications" the test would be inconsistent with a U.N. Security Council resolution.

La Vanguradia:

• Negative Rates Can Hit Stability, BIS's Caruana Says. Keeping interest rates very low or negative for a long period can negatively affect financial stability, Bank of International Settlements General Manager Jaime Caruana said in an interview. Markets are excessively dependent on central bank actions, he said. At some point, monetary policy will have to normalize and markets overcome resulting volatility, Caruana said.

Economista:

• Volkswagen to Cut Mexico Production by 40%.

Shana:

• Iran's 2017-18 Budget Based on $35-$40 Per Bbl Oil. Forecast for year March 21, 2017 to March 20,2018, Iran's Oil Ministry news service reports, citing Adel Azar, head of Iran's statistical center. 

Bear Radar

Style Underperformer:

• Small-Cap Value -1.6%.

Sector Underperformers:

• 1) Oil Tankers -9.3% 2) Steel -4.8% 3) Oil Service -4.5%

Stocks Falling on Unusual Volume:

• SHAK, VRTS, NX, WING, USLV, MTDR, ICFI, CWEI, PERY, ADUS, ATU, KB, NPTN, PNRA, SA, PEN, E, RIG, FNSR, DBVT, X, ZOES, JBLU, FNHC, MUR, MTSI, GEF and RUBI

Stocks With Unusual Put Option Activity:

• 1) XHB 2) XLK 3) MUR 4) VMW 5) TBT

Stocks With Most Negative News Mentions:

• 1) SAM 2) AN 3) C 4) SWN 5) JBLU

Charts:

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

Bull Radar

Style Outperformer: 

• Large-Cap Growth -.4%

Sector Outperformers:

• 1) Utilities +.7% 2) Software +.5% 3) Restaurants +.2% 

Stocks Rising on Unusual Volume: 

• OMER, URBN, THO, BITA and UNFI

Stocks With Unusual Call Option Activity: 

• 1) URBN 2) OKE 3) GALE 4) SHAK 5) TERP

Stocks With Most Positive News Mentions: 

• 1) CERN 2) WFM 3) URBN 4) SO 5) PRGO

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running +28.4% Above 100-Day Average
• 3 Sectors Rising, 7 Sectors Declining
• 21.6% of Issues Advancing, 76.6% Declining
• 41 New 52-Week Highs, 5 New Lows
• 39.8% of Issues Above 200-day Moving Average
• Average 14-Day RSI 51.5%
• Vix 18.6 +7.0%
• Total Put/Call .73 -13.1%
• TRIN/Arms 2.22 +170.3%