Bull Radar

Style Outperformer:

• Large-Cap Value +.7%

Sector Outperformers:

• 1) Steel +5.8% 2) Banks +1.8% 3) Gaming +1.4%

Stocks Rising on Unusual Volume:

• ZLTQ, KBSF, CTRL, SWIR, SAGE, CLF, FBC, MYGN, SBCF, CC, MBLY, AQMS, SHOP, CRESY, RIO, ON, IDCC, DNB, PCMI, FDC, TEVA, NSP, AAOI, FBC, ACIA, RPD, LITE, NYT, FSS, INFN, VIAV and FNSR

Stocks With Unusual Call Option Activity:

• 1) YUM 2) CIEN 3) MCHP 4) HON 5) OCLR

Stocks With Most Positive News Mentions:

• 1) SAGE 2) NUE 3) CMRE 4) REGN 5) M

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running -3.7% Below 100-Day Average
• 8 Sectors Rising, 2 Sector Declining
• 59.8% of Issues Advancing, 37.1% Declining
• 219 New 52-Week Highs, 5 New Lows
• 61.5% of Issues Above 200-day Moving Average
• Average 14-Day RSI 43.0%
• Vix 11.4 +4.9%
• Total Put/Call .62 -36.7%
• TRIN/Arms .72 -34.8%

Monday Watch

Today's Headlines

Bloomberg:

• China’s Monetary Policy Is Looking Like Alphabet Soup. China’s monetary policy is looking increasingly like an alphabet soup, sowing volatility in markets. So far this year, the People’s Bank of China has boosted rates on three different liquidity facilities, created a new one, and ordered banks to cut lending. Its most high-profile tools -- the benchmark borrowing cost and reserve-requirement ratio -- have been left untouched. Since liberalizing interest rates in 2015, China has been seeking to modernize its monetary toolbox while tackling slower economic growth, currency weakness and swelling debt. This has prompted the central bank to forge an array of new tools -- a process that has sparked bigger swings in the money market as investors try to interpret them, deepening a bond selloff that has driven yields to a 1 1/2-year high.

• China’s Zombie Province Shows What’s Wrong With Its Bond Market. Nowhere are China’s rusted-out industries worse than in Liaoning, a province that’s slumped into outright recession and where officials have admitted to years of inflating fiscal revenue data. Liaoning is also a showcase for how long a road China faces to create a world-class bond market. For all its problems, the district pays little more than its peers to borrow. On the corporate side, authorities’ reluctance to let more insolvent enterprises go under means a limited role for the market, with financiers willing to restructure their debts on the sidelines.

• Singapore's Big Banks' Bad-Loan Woes May Be Getting Worse. The woes of Singaporean energy-services provider Ezra Holdings Ltd. are a stark reminder to the city’s biggest banks of the threat souring oil and gas loans pose to their earnings. A writedown flagged by Ezra recently has refocused attention on the debt-repayment problems marine-services firms are facing, fueling concerns that lenders may have to set aside more money to cover loan losses. Fourth-quarter results due this week from DBS Group Holdings Ltd. and its two biggest rivals may include a 44 percent surge in combined provisions for the period from a year earlier, according to RHB Capital Bhd. “At the end of the day, it’s the issue of provisioning that will weigh down on profitability,” said Leng Seng Choon, an RHB analyst in Singapore.

• Japan’s Economy Expands 1% on Exports, Business Spending. Japan’s economy continued on a moderate growth path during the final quarter of 2016, driven by rising exports and business investment.

• America’s Biggest Creditors Dump Treasuries in Warning to Trump.

• Netanyahu Heads to U.S. Seeking to Reset Ties After Obama Years. The Obama years sprang some unwanted surprises on Israeli Prime Minister Benjamin Netanyahu -- like secret nuclear talks with Iran. This week, in his first White House visit with President Donald Trump, Netanyahu’s priority will be to make sure Israel is kept in the loop and that the two countries’ positions are generally aligned, according to Michael Oren, Israel’s ambassador to the U.S. for much of Barack Obama’s term.

• These Countries Could Be Trump's Next Trade War Targets.

• Asia Set to Extend Global Equity Rally; Yen Slides. Rumors about the demise of reflation trades look to have been at least a little exaggerated. Asian stocks were poised to extend a global rally as investors looked ahead to data that will provide detail on the strength of U.S. consumer prices and speeches from a range of Federal Reserve officials. The yen weakened Monday after the S&P 500 Index climbed to a record high on Friday. Stock investors last week pushed the global index higher for a third week, while Trump’s promise of a “phenomenal” tax plan snapped a six-week losing streak for the Bloomberg Dollar Spot Index that represented its longest-such slump since 2010. The rebound in the latter half of last week saw some of this year’s angst recede after a crescendo of speculation that the so-called Trump reflation trade was withering. New Zealand’s S&P/NZX 50 Index rises 0.2 percent. Futures on Australia’s S&P/ASX 200 Index and the Hang Seng gain 0.2 percent. Contracts on the FTSE China A50 Index added 0.3 percent. Nikkei 225 Stock Average futures slip 0.2 percent. The yen slides 0.3 percent to 113.57 per dollar.

Wall Street Journal:

• Trump Faces Test Over North Korea Missile. White House response could give clues to administration’s approach to foreign-policy challenges.

• Speed Limits on Trump’s Infrastructure Drive: Federal Laws, Rare Species and Nimbys. Environmental regulations and neighborhood opposition routinely bog down projects and will likely constrain the administration’s plan to spend $1 trillion on ‘highways, bridges, tunnels, airports’.

Fox News:

• White House keeps quiet about Flynn amid furor over calls with Russian envoy. (video)

CNBC: 

• Federal Reserve Vice Chair Stanley Fischer cites 'significant uncertainty' about fiscal policy under Trump.

• Few good options in Trump arsenal to counter defiant North Korea.

Zero Hedge:

• The Number 1 Reason Why Trump Is Good For Stocks. (graph)

• Apple's(AAPL) Tim Cook Urges "Massive" Government Crackdown On 'Fake News': "It's Killing People's Minds".

• Three Things Are About To Derail Trump's Fiscal Plan, Goldman Warns.

• Consumer Spending "Pothole" Ahead: IRS Refunds Tumble As New Law Delays Payments.

• Fed 'Insider' Exposes The Evils Of US Monetary Policy Recklessness.

• "Are You Ready For Greed?" Morgan Stanley Asks.

Business Insider:

• Authorities issue dire warnings amid imminent California dam collapse.

• MORGAN STANLEY: Media stocks could soar 25% in 2017.

Telegraph:

• How much longer will Europeans tolerate this disabling experiment?

Night Trading

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

• Asia Ex-Japan Investment Grade CDS Index 104.25 -3.0 basis points.

• Asia Pacific Sovereign CDS Index 29.0 -.25 basis point.

• Bloomberg Emerging Markets Currency Index 71.24 -.04%.

• S&P 500 futures +.16%.

• NASDAQ 100 futures +.11%.

Morning Preview Links

Earnings of Note

Company/Estimate

• (HCP)/.57

• (TEVA)/1.36

• (FLO)/.16

• (NBL)/-.10

• (VNO)/1.31

• (RCII)/-.24 

Economic Releases 

• None of note

Upcoming Splits

• None of note

Other Potential Market Movers

• The China CPI report, Japan Industrial Production report, BIO investor conference and the CSFB Energy Summit could also impact trading today.

BOTTOM LINE: Asian indices are higher, boosted by technology and commodity shares in the region. I expect US stocks to open mixed and to rally into the afternoon, finishing modestly higher. The Portfolio is 100% net long heading into the week.

Weekly Outlook

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

BOTTOM LINE: I expect US stocks to finish the week modestly higher on less European/Emerging Markets/US High-Yield debt angst, oil gains, yen weakness, economic optimism, tax reform hopes and short-covering. My intermediate-term trading indicators are giving neutral signals and the Portfolio is 100% net long heading into the week.

Today's Headlines

Bloomberg:

• U.S. Stocks Gain for Third Week as Policy Promises Whip Up Bulls. U.S. equities rallied to records for a third straight week of gains as a gauge of investor sentiment on U.S. stocks climbed to levels unseen in more than two years and investors assessed promises from President Donald Trump for tax cuts and fiscal spending. Economic data also continued to paint a largely positive picture of the U.S. economy, after yesterday’s unexpectedly low number of Americans filing for jobless claims and as corporations added to one of the best sets of earnings since the financial crisis. The S&P 500 Index added 0.8 percent this week to a record 2,316, bringing the three-week advance to 2 percent, as industrial and consumer discretionary shares led the market. The Dow Jones Industrial Average jumped 1 percent to 20.269. The Nasdaq Composite and Russell 2000 also made new highs. 
• Fischer Says Fed Focused on Goals Amid Trump Policy Uncertainty. Federal Reserve Vice Chairman Stanley Fischer defended post-crisis U.S. banking reforms that Donald Trump’s administration wants to undo and said the central bank is focused on its dual mandate for inflation and jobs amid “significant uncertainty” on fiscal policy. “I don’t think anyone quite knows what’s going to come out of the process which involves both the administration and Congress in the deciding of fiscal policy and a variety of other things.,”’ Fischer said in response to audience questions at a conference Saturday in Coventry, England. “At the moment we are going strictly according to what we see as our responsibility according to law.”

Barron's:

• Had bullish commentary on (M), (ABT), (C) and (IGT).

Zero Hedge:

• Mexicans Vow To Fight Trump By "Jamming US Courts" As Deportations Begin.
• Russian Government Considers Offering Snowden As "Gift" To President Trump, NBC Reports.
• Fischer Admits Fed Is Clueless About What Happens Next.
• North Korea Launches Ballistic Missile, Tests Trump.
• "Panic" Spreads Among Hispanics After Hundreds Of Illegal Immigrants Arrested.
• Barclays: "Significant Change Is Coming To The Fed Over The Next 18 Months".
• Trump Renews Attack On "Broken" Legal System, Says Cost Of Border "Wall" Will Come "Way Down".
• The Reason The Elite Hate Trump So Much: He Is Opposed To The One World Agenda Of The Globalists.
• Amazon(AMZN) Discloses Iranian Transactions That May Have Violated US Sanctions, Warns It May Be "Penalized".
• Trump Will Not Appeal Travel Ban Ruling To Supreme Court, Priebus Denies.
• Le Pen Victory Would Lead To "Massive Sovereign Default", Global Financial Chaos, Economists Warn. (graph)
• FX Traders Have To (Re)Learn A New Skill.
• Trump Says New Immigration Action Coming: "You'll Be Seeing Something Next Week".
• Trump Slump - The 'Soft-To-Hard Data' Transition Is Going The Wrong Way. (graph)
• Weekend Reading: Fed Up. (graph)
• Dead Market Ramping - Stocks Hit Record Highs As Activity Hits Record Low. (graph)

Business Insider:

• Dan Loeb made a nearly $1 billion bet on Wall Street.
• Why some liberals are warming up to Trump's Supreme Court nominee.
• Tsipras warns the IMF and Germany to stop 'playing with fire' over Greek debt.

Reuters: 

• Disney(DIS) hikes some U.S. park ticket prices up to 4.9 percent.

RIA:

• Russia's Novak Sees Chance to Extend Oil Cuts With OPEC. Russia will decide in April or May whether to prolong the deal with OPEC, Energy Minister Alexander Novak tells reporters in Russia's Black Sea resort of Sochi, RIA Novosti state news service reports.

Market Week in Review

• S&P 500 2,317.60 +.89%*

The Weekly Wrap by Briefing.com.

*5-Day Change