Bear Radar

Style Underperformer:

• Small-Cap Value +.4%

Sector Underperformers:

• 1) Social Media -.5% 2) Utilities -.3% 3) Oil Service -.1%

Stocks Falling on Unusual Volume: 

• QUAD, GOV, ALB, TAL, SEMG, SQM, BCC, TTD, MOMO, WBT, AIMT and EGRX

Stocks With Unusual Put Option Activity:

• 1) DKS 2) MNK 3) ALB 4) PANW 5) EXAS

Stocks With Most Negative News Mentions:

• 1) ALB 2) SQM 3) RIOT 4) MDXG 5) MAT

Charts:

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

Bull Radar

Style Outperformer:

• Large-Cap Value +.9%

Sector Outperformers:

• 1) Steel +2.0% 2) Road & Rail +2.0% 3) Computer Hardware +1.7%

Stocks Rising on Unusual Volume:

• VICR, MIC, GRG, SPB, DRNA, THO, BDXA, SPSC, XNCR, CPRT, KNSL, OMER, QCOM, MSG, PANW, TUSK, DIN, GEL, VERI, ACIA, STRP, GLOP, CASA, GTT, INT, HRG, CVA, HPQ, LPNT and CPRT

Stocks With Unusual Call Option Activity:

• 1) AXL 2) NBL 3) RF 4) ALXN 5) WSM

Stocks With Most Positive News Mentions:

• 1) ACHN 2) FINL 3) GTT 4) HPQ 5) CNC

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running -3.5% Below 100-Day Average
• 9 Sectors Rising, 1 Sector Declining
• 54.9% of Issues Advancing, 42.0% Declining
• 73 New 52-Week Highs, 18 New Lows
• 48.8% of Issues Above 200-day Moving Average
• Average 14-Day RSI 46.3%
• Vix 16.3 -1.4%
• Total Put/Call .83 -14.4%
• TRIN/Arms 1.02 +22.1%

Monday Watch

Today's Headlines

Bloomberg:

• Asia Stock Rally Builds as Yen Slips, Bonds Steady. Stocks advanced in Japan, Australia and South Korea and futures on the S&P 500 Index nudged higher following a solid U.S. session on Friday. Powell will speak before the House Financial Services Committee on Tuesday and the Senate Banking Committee two days later to give his Humphrey-Hawkins testimony. The yen retreated ahead of a barrage of upcoming data that may provide clues on Japan’s recovering economy. Japan’s Topix index climbed 0.8 percent as of 9:02 a.m. in Tokyo. Australia’s S&P/ASX 200 Index added 0.5 percent. South Korea’s Kospi index advanced 0.3 percent. Futures on Hong Kong’s Hang Seng Index gained 0.3 percent. Futures on the S&P 500 rose 0.1 percent.

• Five Things You Need to Know to Start Your Day. (video)

• Libya Oil Field Halt Slows Exports, Sending Crude Prices Rising. Libya’s oil exports from the Mellitah terminal will be “modified” after protests disrupted production at the key El-Feel deposit for the first time in two months, putting the OPEC nation’s crude production at risk of a decline again. Crude loadings at Mellitah, the export terminal for El-Feel, will be “modified” after force majeure was declared on deliveries from the deposit on Feb. 23, the state-run National Oil Corp. said in a document obtained by Bloomberg. NOC said Saturday guards at the field were protesting over pay and other benefits. Force majeure is a legal clause protecting a party from liability if it can’t fulfill a contract for reasons beyond its control.

• Bond Traders Step Back From 3% to Watch Powell Navigate Fedspeak. Bond traders came the closest in four years to a 3 percent yield on the 10-year Treasury note. Whether it breaches that level may be determined by how new Federal Reserve Chairman Jerome Powell handles the limelight. Powell, who took over from Janet Yellen this month, will speak before the House Financial Services Committee on Tuesday and the Senate Banking Committee two days later, in what’s known as the Humphrey-Hawkins testimony. It’ll be the first time since Powell was sworn in that bond traders get a chance to parse every word from the new Fed leader, as they did with his predecessors.

Wall Street Journal:

• White House Legal Team Considers Ways Trump Could Testify Before Mueller. Possible options include written answers to special counsel’s questions or limited verbal testimony by president.

• Migrants Are Hot-Button Issue as Italians Prepare to Vote. As March 4 elections approach, debate over immigration divides town of Umbertide—and Italy.

• To Stay on the Land, American Farmers Add Extra Jobs.

• Supreme Court to Decide Fate of Public-Sector Unions. Illinois state worker challenges unions’ ability to collect fees from unwilling employees.

• Firms Reassess Involvement in Gun Industry in Wake of Florida Shooting. Many companies rethink their relationship with gun makers and gun sellers as pressure builds on social media.

• Hidden Profits In the Prescription Drug Supply Chain. Pharmacy benefit managers far more profitable than they seem, which makes them vulnerable to new competitors.

• Trump Set to Promote Trade Hawk Peter Navarro. Economist who helped shape the president’s protectionist campaign platform has clashed with other aides on deficits and multilateral deals.

Fox News: 

• Tourist infected with measles went to New York art museum, area hotels, health officials say. (video)

• Broward Sheriff Scott Israel facing calls for his ouster after Florida school shooting. (video)

CNBC:

• Huawei launches laptop with a hidden camera, in case you’re worried about people spying on you.

• Facebook's(FB) Chris Hughes pushes guaranteed income for the 99%, paid for by the 'One Percent'. (video)

Zero Hedge:

• Lawyers For The DNC Argue That 'Primary Rigging' Is Protected By The First Amendment.

• Bitcoin Slides As Coinbase Informs 13,000 Customers Of Imminent Data Handover To IRS. (graph) 

• A Bond Short-Squeeze Is Coming. (graph)

• Florida Governor Orders Investigation Into Parkland Shooting Response.

• Powell Preview: What Happens When A New Sheriff Comes To Town?

• "Day Of Reckoning" Nears As Goldman Projects A Record $650BN In Stock Buybacks.

• China To Change Constitution, Allowing Xi To Stay In Power Forever.

• In Unexpected Snub, California Democrats Refuse To Endorse Feinstein For Reelection.

• Broward County Sheriff Insists He Was An "Amazing" Leader After Failing To Stop Florida Shooter. (video)

Business Insider: 

• North Korea reportedly willing to conduct talks with US.

• Silicon Valley is so expensive that even Facebook and Apple employees can't afford to live near the office.

• New details emerge on Florida shooting when Jake Tapper and local sheriff go toe-to-toe in marathon interview. (video)

Night Trading

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

• Asia Ex-Japan Investment Grade CDS Index 69.0 -1.25 basis points.

• Asia Pacific Sovereign CDS Index 12.75 unch.

• Bloomberg Emerging Markets Currency Index 75.81 +.13%. 

• FTSE 100 futures +.42%.

• S&P 500 futures -.05%.

• NASDAQ 100 futures -.14%.

Morning Preview Links

Earnings of Note

Company/Estimate

• (AWI)/.68

• (BCC)/.31

• (CPRT)/.39

• (CLVS)/-1.29

• (ESV)/-.27

• (SBAC)/1.61

• (THC)/1.28

Economic Releases
8:30 am EST

• The Chicago Fed National Activity Index for January is estimated to fall to .25 versus .27 in December.

10:00 am EST

• New Home Sales for January is estimated to rise to 650K versus 625K in December.

10:30 am EST

• The Dallas Fed Manufacturing Activity Index for February is estimated to fall to 30.0 versus 33.4 in January.
  

Upcoming Splits

• (BF/A) 5-for-4
  

Other Potential Market Movers

• The Fed's Bullard speaking, BoJ bond purchases, Mobile World Congress, Morgan Stanley Tech/Media/Telecom Conference, JPMorgan High Yield Conference, (CREE) investor day, BofA Merrill Animal Health Summit and the (FTNT) analyst day could also impact trading today.

BOTTOM LINE: Asian indices are mostly higher, boosted by technology and industrial 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. 
• Stocks to Watch Next Week by Seeking Alpha.
• Weekly Economic Calendar by Briefing.com.

BOTTOM LINE: I expect US stocks to finish the week modestly higher on positive earnings outlooks, oil gains, economic optimism, lower long-term rates, less US/European/Emerging Markets debt angst and technical buying. My intermediate-term trading indicators are giving neutral signals and the Portfolio is 100% net long heading into the week.

Today's Headlines

Bloomberg:

• Xi’s Top Economic Aide Plans U.S. Trip Amid Trade Tension. President Xi Jinping’s top economic adviser Liu He will head to the U.S. next week in a sign of an expanded role managing the mounting trade tensions between the governments in Beijing and Washington, said a person familiar with the matter. As President Donald Trump considers harsh tariffs on steel and aluminum imports from China, Liu’s visit could mean yet another mandate for the Harvard-educated adviser whose understanding of the U.S. and ties to local business leaders could help ease friction between the governments.
• SEC Cools a Red-Hot Crypto Market by Picking Up the Telephone. Wall Street’s main regulator has repeatedly warned that the hot new market for initial coin offerings is probably full of fraud. Now it’s found an old-fashioned way to slow it down: picking up the telephone.
• Buffett Says He Needs to Make a ‘Huge’ Deal. “Berkshire’s goal is to substantially increase the earnings of its non-insurance group. For that to happen, we will need to make one or more huge acquisitions,” Buffett, the chairman and chief executive officer of Berkshire Hathaway Inc., said Saturday in his annual letter to shareholders. “Despite our recent drought of acquisitions, Charlie and I believe that from time to time Berkshire will have opportunities to make very large purchases.

Wall Street Journal: 

• Months Before Florida Shooting, 911 Calls Show a Teenager in Crisis. Callers tell of fear of Nikolas Cruz’s behavior and guns fixation in the weeks after he lost his mother.
• How to Raise More Grateful Children. A sense of entitlement is a big problem among young people today, but it’s possible to teach gratitude.
• Coal Jobs Get a Boost—From Exports. U.S. utilities continue switch to natural gas despite pro-coal policies of President Trump.
• White House Unveils ‘Largest Ever’ Set of Sanctions on North Korea. The president says the new actions will ‘further cut off’ sources of revenue and fuel for Pyongyang’s nuclear program.

Barron's:

• Had bullish commentary on (HAL), (EOG), (TWX), (PG), (KO), (APC), (GEL), (TRGP), (SHLX), (NBL) and (PXD).
• Had bearish commentary on .

MarketWatch.com:

• Why a spike in the 10-year Treasury yield to 3% won’t be a death knell for stocks.
• Charts show that Dow 30,000 is still likely.
• The S&P 500 just breached a key line in the sand for technical traders.
• Fed on track for 3 rate hikes in 2018, but 4? No sign in report to Congress.

Fox News: 

• Dems' rebuttal to GOP FISA memo is released; Trump deems it a 'bust'. (video)

CNBC: 

• Lower tax rate fuels record profit for Buffett's Berkshire Hathaway.
• Cancer research breakthrough shows a better way to predict drugs that will work.
• Saudi oil minister hopes OPEC, allies can ease output curbs in 2019.
• Markets watching for a steady hand in Powell as he navigates Congress for the first time.
• The market just woke up after hitting the 'afternoon snooze button' all week. (video)

Zero Hedge:

• FBI Tipster Transcript Leaked: Cruz Will "Get Into A School And Shoot The Place Up": Full Text.
• "Shocked And Outraged": Four Broward Deputies Waited Outside School As Children Were Massacred.
• "There Was A Mistake Made" - FBI's No. 2 Refuses To Provide Details On How Cruz Tips Were Fumbled.
• "CalPERS Is Near Insolvency; It Needs A Bailout Soon" - Former Board Member Makes Stunning Admission.
• US Embassy Moving To Jerusalem On Israel's Independence Day.
• Trump Warns World Of "Very, Very Unfortunate Phase 2" If North Korean Sanctions Fail.
• US Prepares For "Aggressive" High-Seas Crackdown On North Korea Sanctions Violators.
• Millions Of Working-Age Men Will Never Return To The Labor Market, Fed Says.
• American Media's 'Big Bot' Conspiracy Exposed.
• Mexican Gun Control Ensures Cartels Outgun The Good Guys.
• "What Just Hit Us?" - Bay Area Rattled By Unusual Quake Swarm, Trains Delayed.
• Misconduct, Manipulation, Or Malfeasance? - US Regulators Begin Probe Of VIX Funds.
• LA Has Criminalized Poverty By Making It Illegal To Sleep In Cars And RVs.
• Meet Liu He - The Hyper-Interventionist Frontrunner To Lead China's Central Bank.
• It's Not Just The Homicides: Commercial Robberies In Baltimore Are Up 88%.
• Berkshire Owns $100 Billion In T-Bills: More Than China And The UK.
• Florida Shooting Survivor Doubles Down: CNN's Entire Townhall Was Scripted.
• Trump Wants "Harshest" Import Tariffs: 24% On Steel, 10% On Aluminum.
• Weekend Reading: Tax Reform Doing Exactly What We Expected.
• Bonds Break 7-Week Losing Streak As Fed Balance Sheet Tumbles Most In 6 Years. (graph)

Business Insider:

• Dropbox finally filed for its IPO — and it lost $111 million on revenue of $1.1 billion last year.
• Here are Warren Buffett's 15 biggest stock investments.
• Here are all the brands that have cut ties with the NRA following gun-control activists' boycotts.
• The 57 best photos of the Winter Olympics so far.
• Vaping instead of smoking still exposes you to toxic metals like lead — here's how worried you should be.
• UBS found a surprising driver of stock market returns — and these 15 stocks could be set to benefit.
• Teens are watching a surprising amount of hardcore porn — and parents need to start talking to them about it.