Bull Radar

Style Outperformer:

• Small-Cap Growth +.1%

Sector Outperformers:

• 1) Gaming +2.4% 2) Steel +2.0% 3) Coal +1.6%

Stocks Rising on Unusual Volume:

• MBLY, PLSE, SSTK, CMCM, AUPH, TELL, YY, ASMB, KRO, KIRK, TD, IVAC, WLDN, LAZ, INGN, APO, PGEM, LSXMA, ALV, SCWX, BX, CRCM, HUBS, AMBA, VC, AQMS, TGTX and BPMC

Stocks With Unusual Call Option Activity:

• 1) XLV 2) SNAP 3) ALXN 4) WSM 5) INTC

Stocks With Most Positive News Mentions:

• 1) WYNN 2) SCHW 3) RIG 4) COL 5) AMAT

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running -16.0% Below 100-Day Average
• 5 Sectors Rising, 5 Sectors Declining
• 62.4% of Issues Advancing, 34.3% Declining
• 54 New 52-Week Highs, 36 New Lows
• 54.3% of Issues Above 200-day Moving Average
• Average 14-Day RSI 36.6%
• Vix 11.9 +2.0%
• Total Put/Call .84 -3.5%
• TRIN/Arms .80 -17.4%

Monday Watch

Today's Headlines

Bloomberg:

• Draghi Outlook Snaps Euro Interest-Rate Bears Out of Hibernation. Investors are betting that the European Central Bank will start raising rates before the end of its quantitative easing. Forward swaps based on the Euro Overnight Index Average are pricing 10 basis points of rate increase by April next year, compared with less than three at the end of last month. Investors are also betting that the ECB will exit from negative policy rates by January 2020. The ECB may taper its bond purchases further beyond the end of this year as it faces increasing limits on its bond-buying program.

• Schwarzman Sees Donald Trump Dialing Back Criticisms of China. President Donald Trump will likely temper his criticisms of China, including his campaign claim that the country manipulates its currency, one of his top economic advisers said. “I don’t think that there’s going to be issues regarding China as a currency manipulator and some of the other things,” Steve Schwarzman, the chairman of Trump’s strategic and policy forum, said Sunday on CNN.

• Turkey War of Words With Dutch Worsens With New Accusations. A diplomatic spat between Turkey and the Netherlands worsened on Sunday as foreign ministers from both countries exchanged more denunciations. Protests broke out in Rotterdam on Saturday night after Turkish Family Affairs Minister Fatma Kaya was denied entry into her consulate and escorted to the border with Germany. The Dutch say the minister put public order at risk by choosing to sneak into the country after talks on possible campaigning abroad by Turkish officials were abandoned. “An apology won’t suffice,” Foreign Minister Mevlut Cavusoglu said in televised comments from France. “There are steps we’ll take, we’re planning them.”

• China Moves to Make $9 Trillion Domestic Bond Market More Global. The tide may slowly be turning for Chinese bonds. Citigroup Inc. said Tuesday it will include onshore Chinese debt in some of its gauges, while the central bank pledged to create a “more convenient and friendly environment” for foreign investors. This follows a recent measure to allow currency hedging for bonds, a move seen as one of many efforts needed to lower barriers.

• Yen Gains as Central Bank Meetings, Elections Loom. The yen rose and most Asian equity indexes signaled a muted start to trading ahead of an important week for global monetary policy settings, with central banks in Japan, the U.S. and the U.K. all meeting. The euro nudged higher. A stronger yen may weigh on Japanese equities on Monday, while most other major stock gauges pointed to a mixed start. Traders betting on further gains in the dollar will be focusing on the Federal Reserve’s quarterly update on projections for future rate levels. The euro built on gains from Friday, when European Central Bank policy makers were said to have considered their ability to tighten before a bond-buying program comes to an end. The yen slipped 0.1 percent to 114.86 per dollar as of 9:13 a.m. in Tokyo, after gaining as much as 0.2 percent earlier. The euro added 0.2 percent to $1.0690, extending its 0.9 percent surge on Friday. Japan’s Topix was little changed. The gauge jumped 1.2 percent on Friday. Australia’s S&P/ASX 200 Index fell 0.4 percent and New Zealand’s S&P/NZX 50 Index rose 0.3 percent. South Korea’s Kospi advanced 0.5 percent.

• New York Guides `Sanctuary' Cities After Trump Immigration Order. New York Attorney General Eric Schneiderman issued new legal guidance to cities weighing “sanctuary” policies to protect immigrants affected by President Donald Trump’s travel ban. Schneiderman, a Democrat, is seeking to help cities give local police direction on how to handle interactions with federal agents enforcing the “Draconian immigration policies” outlined by the Republican president, according to a statement on Sunday.

Wall Street Journal: 

• Investors Ready for Week of Events That Could Rattle Markets. Expected Federal Reserve rate increase, possible Brexit move could push traders to reverse course in unison.

• Credit Reports to Exclude Certain Negative Information, Boosting FICO Scores. Changes could improve credit scores for millions of consumers, may pose risks for lenders.

• Republicans Pose Growing Challenge to Trump’s Trade Agenda. GOP lawmakers warn that imposing tariffs may result in stiff retaliation.

Fox News:

• Al Qaeda-linked group claims deadly attack in Syrian capital. 

• White House vows plan will offer insurance to every American, downplays upcoming CBO report. (video)

CNBC:

• HHS Sec. Tom Price: ‘Nobody Will Be Worse Off Financially’ Under GOP Health Plan. 

• Trump economic adviser: Fed doing 'good job,' respects independence.

• Trump has created a golden opportunity to buy the dollar: Strategist. (video)

Zero Hedge:

• Turkey Vows "Harsh Retaliation" After Dutch PM Says "Not Apologizing, Are You Nuts".

• Oil Tumbles Below $48 As JPM Warns Of Possible Commodity Liquidations. (graph)

• Hedges Are "Pricing A World Almost Free Of Risk" Says BofA: Here's How To Trade It. (graph)

• Japan Begins QE Tapering: BOJ Hints It May Purchase 18% Less Bonds Than Planned. (graph)

• Gary Cohn: "The Fed Is Doing A Good Job"; Trump "Respects The Powers Of The Fed".

• 50 Million Americans Brace For "Crippling Blizzard" In Northeast.

• Trump, Ryan Warn Of "Bloodbath" If GOP Fails To Pass Healthcare Bill.

• What Does OPEC Do Next?

• Hedge Funds Covered The Most S&P Shorts Since The Election, Sold Most USDJPY In Three Years.

• Putin Spokesman: Russian Ambassador Also Met With Members Of The Clinton Campaign.

• House Intel Panel Demands White House Provide Evidence Of Obama Wiretapping By Monday.

• The 3 Biggest Picture 'Long-Short' Trades In The World. (graph)

• "Who Hit The Brakes?" - Bank Loan Creation Suddenly Tumbles To Five Year Low.

• ACLU Launches National 'Resistance' Training. (video)

• 2016 Debt Binge Produces (Surprise!) 2017 Inflation; Guess What That Means For 2018?

Night Trading

• Asian indices are -.25% to +.5% on average.

• Asia Ex-Japan Investment Grade CDS Index 95.0 -3.5 basis points.

• Asia Pacific Sovereign CDS Index 28.0 -.5 basis point.

• Bloomberg Emerging Markets Currency Index 70.95 +.03%.

• S&P 500 futures -.06%.

• NASDAQ 100 futures -.08%.

Morning Preview Links

Earnings of Note

Company/Estimate

• None of note

Economic Releases
10:00 am EST

• The Labor Market Conditions Index for February is estimated to rise to 106.0 versus 105.9 in January.

Upcoming Splits

• None of note

Other Potential Market Movers

• The Japan Machine Orders report, JPMorgan Aviation/Transportation/Industrials conference and the (SODA) shareholder meeting could also impact trading today.

BOTTOM LINE: Asian indices are mostly higher, boosted by technology and consumer 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 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 lower on profit-taking, European/Emerging Markets/US High-Yield debt angst, less economic optimism, tax reform worries, Fed rate-hike concerns and oil weakness. My intermediate-term trading indicators are giving neutral signals and the Portfolio is 50% net long heading into the week.

Today's Headlines

Bloomberg:

• S&P 500 Rally Pauses as Tumbling Bond, Oil Prices Break Momentum. U.S. equities ended their longest streak of weekly gains in more than a year as slumping oil prices dragged down energy stocks and a selloff in bonds weighed on companies that benefit from investors seeking regular income. Signs of strong growth in the economy weren’t enough to propel stocks higher this week as investors weighed the impact of a potential interest-rate increase by the Federal Reserve next Wednesday. Futures traders now see a hike as a sure thing. With the first-quarter earnings season almost over, stocks lost the boost provided by profits that on average beat Wall Street expectations. The S&P 500 slipped 0.4 percent to 2,372.60 in its first weekly decline since the period ended Jan. 20. The Dow Jones industrial average lost 0.5 percent to 20,902.98. Small-cap stocks in the Russell 2000 Index declined for the third straight week, falling 2.1 percent for the biggest drop this year.

• May Urged to Prepare for `Real' Risk of a No-Deal Brexit. U.K. Prime Minister Theresa May must plan for the “real possibility” that she emerges from two years of Brexit negotiations without a deal, according to a panel of lawmakers. May has warned she is prepared to take Britain out of the European Union with no agreement rather than accept a bad one. That could happen and it would be a “dereliction of duty” not to plan for the consequences, the House of Commons Foreign Affairs Committee said in a report on Sunday.

• Merkel to Warn Trump That U.S. Tax Changes May Spark Retaliation. German Chancellor Angela Merkel will warn U.S. President Donald Trump that a proposed tax overhaul could spark retaliatory measures, including higher tariffs for American companies, according to Der Spiegel magazine. The German government is reviewing its responses to a border-adjustment tax, which would only tax U.S. corporations’ imports and not their exports. Documents for Merkel’s upcoming meeting with Trump cited by Spiegel label the measure a “protective tariff” and say it violates World Trade Organization rules. Responses from Europe’s largest economy could include incrementally higher duties on imports from America and allowing German companies to make their U.S. import tax deductible, thus compensating their competitive disadvantage, according to the report. Eventually, Germany could also lower corporate taxes and social contributions, making itself more attractive to international companies.

• China Trade Minister Looks Forward to Meeting 'Excellent' Ross. China’s new Commerce Minister Zhong Shan said he looks forward to meeting his “excellent” U.S. counterpart Wilbur Ross for a shared mission of increasing cooperation and managing differences between the world’s largest economies. “I noticed that Mr. Ross used to be an excellent entrepreneur, a good negotiator and, I can say, he’s very excellent,” Zhong said at his first press conference as trade minister on Saturday in Beijing. “I’m willing to deal with excellent people, because excellent people are good at thinking strategically for the long term.”

• Turkey's Erdogan Calls Dutch `Fascists' After Minister Grounded. Turkish President Recep Tayyip Erdogan called the Dutch “fascists” after the government of the Netherlands blocked his foreign minister from attending a political rally in the country out of fear of public disorder. Landing rights for the flight of Turkish Foreign Minister Mevlut Cavusoglu were withdrawn, the Dutch Foreign Ministry said Saturday in a statement. The government acted after an invitation to Turks to “participate in a public meeting” with Cavusoglu in Rotterdam put “public order and safety in jeopardy.”

Wall Street Journal

• We Shouldn’t Always Have Paris. The case for pulling out of Obama’s global climate accord.

• GOP Health Plan Risks Backlash From Seniors. Lawmakers are divided over bill’s impact on older people; Democrats see opening.

• What WikiLeaks Really Revealed About the CIA’s Spying Techniques. 

Barron's:

• Had bullish commentary on (BX), (BLL), (ANET) and (NCLH).

• Had bearish commentary on (SNAP).

Fox News:

• Assad: Trump shows nothing 'concrete' in ISIS effort; calls foreign troops 'invaders'. (video)

• Another taxpayer-funded energy company files for bankruptcy. (video)

• Trump, Pence follow ObamaCare replacement rollout with weekend offensive. (video)

CNBC:

• The relentless drone invasion is moving from photography and deliveries to racing. (video)

Zero Hedge:

• Jeff Sessions Asks All Remaining Obama-Appointed U.S. Attorneys To Resign.

• Bill Clinton Warns Divisive Politics Are "Taking The World To The Edge Of Destruction".

• When This All Blows Up... 

• Manhattan Luxury Housing In Freefall: J.Crew CEO Slashes Tribeca Loft Price By Over 40%.

• As Retail Investors Flood Into Stocks, Professionals Are Dumping Speculative Longs. (graph)

• Vitol Warns U.S. Crude Exports Will Grow "A Lot More".

• Restaurant Sales And Traffic Tumble. (graph)

• Widespread AT&T Outages Reported Across The U.S.

• Trump Fires US Attorney Preet Bharara After He Refuses To Quit.

• "Civil War" Breaks Out At White House Over Trade... And Goldman Is Winning.

• Judge Bars Enforcement Of Trump's Revised Travel Ban.

• Bitcoin Crashes Below $1000 After SEC Rejects ETF. (graph)

• GOP Rep Mike Kelly: "Obama Is In Washington For One Reason Only, To Run A Shadow Government".

• March Missile Madness: Odds Of A North Korean WMD Attack In Next Month Tops 60%. (graph)

• US Government Revenues Suffer Biggest Drop Since The Financial Crisis.

• Weekend Reading: All Eyes On The Fed. (graph)

• Dow Suffers Worst Week Of 2017 Amid Credit Carnage, Bond Bloodbath, & Crude Crash. (graph)

Business Insider:

• A hedge fund with big-name backing has suffered another blow.

• Philippine officials: Chinese ships spotted near coast 'very concerning'.

• America has too much debt to achieve 3% growth.

• Americans are scared of sharing the road with self-driving cars, survey shows.

• TRUMP: 2017 was the year Obamacare was 'meant to explode, because Obama won't be here'. Trump's comments echo many prominent Republicans who have said the ACA is "collapsing" or in a "death spiral." Obamacare critics have suggested that the law was intentionally designed to fail to allow Democrats to pass a single-payer healthcare system.

• 'Like a block of cheese with holes in it' — How Mexican cartels will subvert and avoid Trump's border wall.

The Telegraph:

• The real problem is we are all over-taxed.

Etemad:

• Iran Oil Minister Says OPEC Happy With $55-$60/Bbl Crude. Most OPEC members see group's long-term interests best served with "reasonably low prices," citing interview with Oil Minister Bijan Namdar Zanganeh. OPEC produces cheapest oil in the world at $8/bbl, while competitor costs reach $48/bbl. OPEC market share fell to 30% from 50% in past 3 decades because high oil prices worked against the group.

Market Week in Review

• S&P 500 2,369.27 -.72%*

The Weekly Wrap by Briefing.com.

*5-Day Change