Bull Radar

Style Outperformer:

• Mid-Cap Growth +.7%

Sector Outperformers:

• 1) Defense +1.9% 2) Software +1.2% 3) Retail +1.2%

Stocks Rising on Unusual Volume:

• PHH, AAXN, ETSY, NMIH, FDX, TPC, PEN, PZZA, NCLH, HLF, PRAA, TNET, VEEV, SBT, TUSK, WBAI, TJX, TIVO, UNVR, APEI, SYNH, HZNP, KAR, NEWM, HSKA, FPRX, CHS, RTRX, RSPP, PEN, ATSG, RP, CWH, EVHC, CSU, CASA, CNX, UBNT, EVH, PRIM, MTZ and CLH

Stocks With Unusual Call Option Activity:

• 1) NCLH 2) ETSY 3) DISCA 4) PZZA 5) FTR

Stocks With Most Positive News Mentions:

• 1) ETSY 2) BKNG 3) AAXN 4) TJX 5) TPC

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running +7.2% Above 100-Day Average
• 10 Sectors Rising, 0 Sectors Declining
• 52.9% of Issues Advancing, 43.3% Declining
• 33 New 52-Week Highs, 61 New Lows
• 46.5% of Issues Above 200-day Moving Average
• Average 14-Day RSI 44.7%
• Vix 17.7 -4.9%
• Total Put/Call .90 -13.5%
• TRIN/Arms 1.37 -35.7%

Wednesday Watch

Evening Headlines

Bloomberg:

• Stocks Sell-Off to Reach Asia on Hawkish Powell. Futures on equity indexes in Japan and Hong Kong dropped, and Australian equities opened weaker after the S&P 500 Index slipped 1.3 percent. Ten-year Treasury yields climbed back up to 2.90 percent. China’s manufacturing PMI data for February will be a closely watched piece of data due out Wednesday, as investors move on from Powell’s perceived hawkishness. Futures on Japan’s Nikkei 225 Stock Average slid 1 percent. Australia’s S&P/ASX 200 Index fell 0.3 percent. Futures on Hong Kong’s Hang Seng Index declined 1 percent. S&P 500 futures contracts were up 0.1 percent as of 8:13 a.m. in Tokyo.

• Five Things You Need to Know to Start Your Day.

• China to Crack Down on Cryptocurrency Trading Loophole. (video) China is opening a new front in its battle against cryptocurrencies, targeting platforms that allow the nation’s investors to trade digital assets on overseas exchanges, people familiar with the matter said.

Wall Street Journal:

• Trump Aide Kushner Loses Top-Secret Security Clearance. Jared Kushner, president’s son-in-law, had his security clearance downgraded as part of White House chief of staff John Kelly’s push to tighten control of classified information.

• Why ‘Deaths of Despair’ May Be a Warning Sign for America - Moving Upstream. Two Princeton economists share their provocative theory in this episode of Moving Upstream.

• U.N. Report Links North Korea to Syrian Chemical Weapons. Syrian conflict proves to be a boon for North Korea, undercutting U.S. pressure campaign.

MarketWatch.com:

• 4 financial-market takeaways from Fed chief Jerome Powell’s debut.

• Young single Americans are tired, confused and scared about dating during #Metoo.

Fox News:

• Supreme Court rules that detained immigrants don't get automatic bond hearings. (video)

CNBC:

• Why March could be a better month for stocks, but there is a warning.

• Amazon(AMZN) buys smart doorbell maker Ring for a reported $1 billion. (video)

• Chinese manufacturing expanded less than expected in February.

• Stocks making the biggest moves after hours: Etsy, e.l.f. Beauty, Express Scripts, Celgene & more.

• Stocks making the biggest moves after hours: Etsy, e.l.f. Beauty, Express Scripts, Celgene & more.

• Papa John's(PZZA) will no longer be the official pizza of the NFL.

• Bill Gates: Cryptocurrency is ‘super risky’ over the long-term.

Zero Hedge:  

• News Agencies Sue For External Parkland Massacre Video Footage, Ignore Internal Inconsistencies. 

• Japanese, Chinese Data Disaster Crushes 'Global Synchronous Recovery' Narrative. (graph)

• Just Put The Avocado-Toast Down! - Millennials "Will Be The Fattest Generation On Record".

• Libor-OIS Blows Out As Libor Rises Above 2% For The First Time In 10 Years. (graph)

• Foreign Officials Discussed How To Manipulate "Naive" Jared Kushner.

• WTI/RBOB Extend Losses After Crude Inventory Build. (graph)

• 'Hawkish' Powell Sinks Stocks & Bonds As VIX Curve Re-Inverts. (graph)

Night Trading 

• Asian equity indices are -1.0% to -.25% on average.

• Asia Ex-Japan Investment Grade CDS Index 68.0 +1.25 basis points. 

• Asia Pacific Sovereign CDS Index 12.75 unch.

• Bloomberg Emerging Markets Currency Index 75.36 -.06%.

• FTSE 100 futures -.46%.

• S&P 500 futures +.05%.

• NASDAQ 100 futures +.06%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (ADI)/1.28

• (CHS)/.09

• (FSS)/.20

• (LOW)/.87

• (ODP)/.07

• (RDC)/-.30

• (SSYS)/.15

• (TJX)/1.27

• (VRX)/.96

• (DDD)/.02

• (CTRP)/.16

• (ITRI)/.93

• (LB)/2.05

• (MNST)/.37

• (MYL)/1.41

• (CRM)/.34

• (UHS)/1.83

Economic Releases
8:30 am EST

• 4Q Personal Consumption is estimated to fall to +3.6% versus a prior estimate of a +3.8% gain.

• 4Q GDP Annualized QoQ is estimated to rise +2.5% versus a prior estimate of a +2.6% gain.

• 4Q GDP Price Index is estimated at +2.4% versus a prior estimate of +2.4%.

• 4Q Core PCE QoQ is estimated to rise +1.9% versus a prior estimate of a +1.9% gain.
  

9:45 am EST

• The Chicago Purchasing Manager for February is estimated to fall to 64.0 versus 65.7 in January.
  

10:00 am EST

• Pending Home Sales MoM for January is estimated to rise +.5% versus a +.5% gain in December.
  

10:30 am EST

• Bloomberg consensus estimates call for a weekly crude oil inventory gain of +2,232,900 barrels versus a -1,616,000 barrel decline the prior week. Gasoline supplies are estimated to rise by +346,600 barrels versus a +261,000 barrel gain the prior week. Distillate inventories are estimated to fall by -979,200 barrels versus a -2,422,000 barrel decline the prior week. Finally, Refinery Utilization is estimated to fall by -.27% versus a -1.7% decline prior.

Upcoming Splits

• None of note

Other Potential Market Movers

• The Fed Chair Powell's testimony to House, China Manufacturing/Non-Manufacturing PMI reports, Eurozone CPI report, weekly MBA Mortgage Applications report, BofA Merrill Ag/Chemicals conference, (HON) investor conference, Piper Energy Conference, Citi Asset Managers/Broker Dealer/Exchanges Conference, BofA Merrill Power/Gas/Solar Conference and the Wells Fargo Real Estate conference could also impact trading today.

BOTTOM LINE:  Asian indices are lower, weighed down by industrial and commodity shares in the region. I expect US stocks to open mixed and to weaken into the afternoon, finishing modestly modestly lower.  The Portfolio is 50% net long heading into the day.

Stocks Falling into Final Hour on Higher Long-Term Rates, Emerging Markets Debt Angst, Oil Decline, Homebuilding/Road & Rail Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Lower
  

• Sector Performance: Most Sectors Declining
  

• Volume: Above Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 18.31 +16.1%

• Euro/Yen Carry Return Index 136.92 -.20%

• Emerging Markets Currency Volatility(VXY) 8.10 -.49%

• S&P 500 Implied Correlation 40.08 +11.7%

• ISE Sentiment Index 48.0 -38.46%
  

• Total Put/Call 1.0 +8.7%

• NYSE Arms 1.44 +85.45%

Credit Investor Angst:

• North American Investment Grade CDS Index 54.45 +1.35%
  

• America Energy Sector High-Yield CDS Index 366.0 +.77%

• European Financial Sector CDS Index 53.29 -2.26%

• Italian/German 10Y Yld Spread 132.75 -3.75 basis points
  

• Asia Pacific Sovereign Debt CDS Index 12.65 -.35%

• Emerging Market CDS Index 119.81 +2.78%
  

• iBoxx Offshore RMB China Corporate High Yield Index 147.82 -.04%

• 2-Year Swap Spread 28.25 +1.5 basis points

• TED Spread 30.0 -2.25 basis points

• 3-Month EUR/USD Cross-Currency Basis Swap -31.25 -.25 basis point

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 75.42 -.60%
• 3-Month T-Bill Yield 1.65% +1.0 basis point
  

• Yield Curve 64.25 +1.25 basis points

• China Iron Ore Spot 78.17 USD/Metric Tonne -.56%

• Citi US Economic Surprise Index 33.50 -4.2 points

• Citi Eurozone Economic Surprise Index 4.90 +5.2 points

• Citi Emerging Markets Economic Surprise Index 7.20 +2.8 points

• 10-Year TIPS Spread 2.13 -1.0 basis point
  
• 100.0% chance of Fed rate hike at May 2 meeting, 100.0% chance at June 13 meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating -139 open in Japan 
• China A50 Futures: Indicating -78 open in China

• DAX Futures: Indicating -38 open in Germany

Portfolio: 

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

• Disclosed Trades: Added to my (IWM)/(QQQ) hedges and to my emerging markets shorts

• Market Exposure: Moved to 50% Net Long

Today's Headlines

Bloomberg:

• Five Charts to Help You Understand Tuesday's U.S. Economic Data.

• Options Bears Are Backing Away From S&P 500 Fund. While the S&P 500 Index’s on-again, off-again recovery from this month’s slump is a sign of investors’ indecision about whether it’s safe to move back into stocks, the options market is sending a clearer signal. The cost of protecting against declines in the biggest exchange-traded fund that tracks the U.S. equity benchmark has fallen hard and fast as stocks clawed back their losses from the Feb. 8 low.

• U.S. Consumer Confidence Is at 17-Year High.

• ProShares Slashes Leverage on Surviving Volatility Products. After this month’s volatility earthquake blew up a number of exchange-traded products linked to Wall Street’s fear gauge, an issuer of similar funds is trying to prevent any aftershocks. ProShares Advisors announced changes to its investment objectives to reduce leverage on its Short VIX Short-Term Futures exchange-traded fund (ticker SVXY) and Ultra VIX Short-Term Futures ETF (ticker UVXY). The former, which allowed investors to bet against a rise in volatility, is now aiming to deliver returns equal to one-half the inverse move of the S&P 500 VIX Short-Term Futures Index. Previously, the product had sought to be a perfect mirror image each session.

Wall Street Journal:

• Fed’s Powell Says His Economic Outlook Has Improved. Central-bank chief sees ‘further gradual increases’ in interest rates.

• In Digital Age, Defendants Can Lose Even When They Win. Courts are faulting the search, but allowing the information, as case law lags behind technology.

• Dividends Climb Amid Rising Competition From Bonds. More than a fifth of the S&P 500 have boosted their payouts this year, but higher bond yields threaten to diminish the allure of high-dividend stocks.

• Germany Paves Way for Diesel Ban, Dealing Blow to Auto Makers. Court allows major German cities to ban older diesel vehicles.

• Goldman Sachs(GS), Adviser to the Elite, Wants to Be Your Local Banker. Under its Marcus brand, the Wall Street powerhouse is planning to sell insurance, mortgages and car loans, consumer businesses it once disdained.

MarketWatch.com:

• Bitcoin and ether are both bubbles, says Goldman investment chief.

• Charting a bullish market backdrop as February volatility spike fades. (graph)

Fox News:

• One state pursues 'end of ObamaCare,' setting stage for new fight. (video)

• Carjacking suspect shot dead by man with concealed weapon in Wisconsin, police say. (video)

CNBC:

• Mueller moves to drop more than 20 criminal counts against former Trump campaign official Rick Gates.

• Walgreens(WAG) and AmerisourceBergen(ABC) deal talks have cooled as takeover looks unlikely.

• Macy's(M) ended last year on a high note and takes that momentum into 2018.

• Powell: Fed members will be taking another look at rate projections. (video)

• The market turmoil of the last month has been good for JP Morgan(JPM).

• This smartphone cuts off your camera and microphone so no spy agencies can watch you.

• Comcast challenges Murdoch's Fox with $31 billion offer to buy broadcasting group Sky.

• Apple's(AAPL) surprising cobalt move signals a controversial buy on metal commodities.

Zero Hedge:

• Trump Strikes "Informal" Deal For New Air Force One, Saving Taxpayers $1.4 Billion.

• Drudge: "Trump Names Campaign Manager, Running For Reelection In 2020".

• Atlanta Fed GDP Forecast Plunges Below Consensus, Growth Halved In A Month.

• Fed Chair Admits "US Is Not On A Sustainable Fiscal Path".

• Gun Sales Surge After Florida School Shooting.

• Stocks Sink As 'Hawkish' Powell "Sees Some High Prices", Raises Economic Assessment.

• Consumer Confidence Surges To 2000 Highs But Stock Market Hope Plunges. (graph)

• Wholesale Inventories Build Most In 3 Years, Signal Q1 GDP Boost. (graph)

• Powell Hawkish Highlights: Ignore Recent Volatility, Gradual Rate Hikes Will Continue.

• Durable Goods Orders Tumble In January. (graph)

• Trump Tweets: Russia Probe Is A "Witch Hunt" With "No Evidence Of Collusion".

• Merkel Finally Acknowledges German "No-Go" Zones, Vows To Eliminate.

Business Insider:

• How to use Vero, the No. 1 social media app on the App Store right now that millennials are saying will kill Instagram.

• Walmart(WMT) is releasing 4 new clothing brands — and they look a lot like the apparel startups it's spent millions acquiring.