Bear Radar

Style Underperformer:

• Large-Cap Value +.1%

Sector Underperformers:

• 1) Oil Service -2.2% 2) Coal -2.1% 3) Banks -1.7%

Stocks Falling on Unusual Volume:

• CONN, PBYI, CXRX, SNX, ALDR, PJT, MDVN, ALE, HBHC, CIT, OKSB, NVS, BBH, STWD, SONC, SCHN, SPKE, PB, GWPH, WEX, CALM, NTES, CMA, SM, ARI, PJT and CONN

Stocks With Unusual Put Option Activity:

• 1) XLI 2) RCL 3) RH 4) COF 5) JNPR

Stocks With Most Negative News Mentions:

• 1) CMG 2) MDVN 3) CALM 4) MU 5) SWKS

Charts:

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

Bull Radar

Style Outperformer: 

• Small-Cap Growth +.8%

Sector Outperformers:

• 1) Hospitals +2.1% 2) Gold & Silver +1.7% 3) Homebuilders +1.7% 

Stocks Rising on Unusual Volume: 

• CNL, WATT, HIMX and AMBA

Stocks With Unusual Call Option Activity: 

• 1) GIS 2) NAVI 3) RTN 4) WWAV 5) PAGP

Stocks With Most Positive News Mentions: 

• 1) AMBA 2) MCK 3) CMTL 4) FB 5) KO

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running -16.9% Below 100-Day Average
• 4 Sectors Rising, 6 Sectors Declining
• 47.6% of Issues Advancing, 49.4% Declining
• 81 New 52-Week Highs, 9 New Lows
• 43.1% of Issues Above 200-day Moving Average
• Average 14-Day RSI 45.4%
• Vix 15.4 +.9%
• Total Put/Call 1.66 +102.4%
• TRIN/Arms 1.81 +48.6%

Tuesday Watch

Evening Headlines
Bloomberg:

• The Credit Card Loophole That Gets Around China's Capital Curbs. More than 800. That’s how many times Hong Kong insurance agent Raymond Ng swiped the credit cards of a mainland Chinese client buying HK$28 million ($3.6 million) worth of insurance policies in the city earlier this month. Dozens, maybe more. That’s how many other agents are using similar tactics as a way around new restrictions on insurance policy purchases by mainlanders that are often used to evade capital controls and get their money out of China, according to interviews with five Hong Kong agents working for Prudential Plc, AIA Group Ltd. and two smaller insurance companies. “There are always ways around new restrictions,” said Ng, 30, who started selling insurance and investment products to mainland Chinese four years ago, declining to allow his company’s name to be used. "Chinese customers are accelerating the pace of moving assets outside China, especially through insurance products."
• China Pushes Big State Companies to Leave Overcrowded Beijing. Beijing may be pulling in the welcome mat for many of the country’s biggest state-owned companies, including some that have had their headquarters in the capital for decades, setting off a scramble among other cities competing to lure them away. The plan -- part of President Xi Jinping’s blueprint to reinvigorate the economy -- aims to move the main offices of state firms that have no core business in Beijing, according to two people familiar with the discussions. The relocations would help reduce traffic congestion, pollution and overcrowding in the capital as well as reinvigorate other first- and second-tier cities on the receiving end, such as Shenzhen, Tianjin, Wuhan and others, according to the people who asked not to be identified because the discussions were private.
• The Most China-Dependent Economy Isn't So Keen on Chinese Money. Australia, the developed world’s most China-reliant economy, offers a natural destination for billions of dollars of investment from its largest trading partner. There’s just one hurdle -- the Australians themselves.
• Central Bank Interventions Are Fraught With Peril: Roach. (video)
• Asia Stocks Fall as Japan Goes Ex-Dividend, Pharma Shares Slide. Asian stocks fell for the first time in three days as health-care companies led losses and more than two-thirds of the companies in Japan’s Topix index traded without the right to the next dividend. The MSCI Asia Pacific Index slipped 0.4 percent to 127.55 as of 9:01 a.m. in Tokyo. The gauge is up 7.1 percent since the start of March, on course for the best month since October. The Topix slid 0.8 percent. 
• Oil Trades Near $39 as U.S. Crude Stockpiles Seen Expanding Glut. Oil traded near $39 a barrel before weekly U.S. government data forecast to show increasing crude stockpiles kept supplies at the highest level in more than eight decades. Futures were little changed in New York after slipping 0.2 percent Monday. Inventories probably rose by 3 million barrels last week, according to a Bloomberg survey before an Energy Information Administration report Wednesday.
• Buffett's Wells Fargo(WFC) Stake Hits Level Requiring Fed Review. Warren Buffett’s holding in Wells Fargo & Co. reached 10 percent, a level that triggers a Federal Reserve review and could prevent him from buying more shares until he receives regulatory approval. The billionaire investor’s stake reached that threshold because Wells Fargo has been buying back stock, according to a regulatory filing Monday. The document said the holding is about 506 million shares, the same as on Dec. 31 when it accounted for 9.9 percent.

Wall Street Journal:

• FBI Opens San Bernardino Shooter’s iPhone; U.S. Drops Demand on Apple(AAPL). Move delays a high stakes showdown between Washington, Silicon Valley. The Justice Department filed court papers Monday saying it had cracked the iPhone of a San Bernardino, Calif., terrorist, seeking to drop its legal case to force Apple Inc. to help them unlock it.
• Chinese Bidder for Starwood Has Mysterious Ownership Structure. Beijing’s Anbang, locked in a bidding war with Marriott over Starwood Hotels, has a complicated web of investors that is difficult to unravel.
• Hillary & Bernie, Tax Fantasists. Soak-the-rich proposals ignore history and wouldn’t raise nearly enough money to fund big spending plans. Here is a question to ask Hillary Clinton and Bernie Sanders: What is the best tax rate to impose on high-income earners to ensure there is enough government revenue to pay for your trillion-dollar promises to voters?

Fox News:

• Bloody tide: Terror deaths increased 8-fold since 2010, says study. (video) The deadly toll of terrorism around the globe has jumped nearly 800 percent in the past five years, according to an exhaustive new report that blames the alarming expansion of Islamist groups across the Middle East and Africa. The nonprofit Investigative Project on Terrorism found that an average of nearly 30,000 people per year have been killed by terrorists since 2010, when terrorism's death toll was 3,284. The authors of the study, which tabulated the numbers through the end of 2015, say that the exponential increase shows two troubling trends: More attacks are happening, and they tend to be deadlier than ever.
• Sanders swings for the fences after caucus sweep, makes play for New York. (video) Bernie Sanders, despite facing persistently long odds to overtake Hillary Clinton in the Democratic primary delegate battle, quickly is moving to build on his momentum from a weekend caucus sweep -- looking to take the fight to the front-runner in New York, Wisconsin and beyond.
• ObamaCare may force employers to pull the plug on millions of health plans, CBO report finds. (video) In the latest report to undercut President Obama's "If you like your health care plan, you can keep it" promise, the Congressional Budget Office projects millions of workers will leave employer-sponsored health plans over the next decade because of ObamaCare. 

CNBC:

• 'Cautious' on Tesla(TSLA) despite Model 3 launch: Expert. (video) Tesla Motors' launch of a cheaper car this week will fail to negate the electric automaker's existing problems, one analyst contended Monday. "I think there are a lot of reasons to be really cautious," said Colin Langan of UBS on CNBC's "Closing Bell."
• Study of Theranos Medical Tests Finds Irregular Results. Finger blood tests from Theranos, the medical start-up, produced more irregular results than conventional tests offered by the nation's two largest clinical laboratories, researchers reported Monday in the first published independent assessment of the company's tests. 

Zero Hedge:

• Japanese Retail Sales Plunge Most Since 2010. (graph)
• With Hillary Clinton's Email Lies Unravelling, 147 FBI Agents Are On Her Heels.
• Saudis To "Modernize" Economy As Interbank Rates Surge & Money Supply Collapses At Record Pace. (graph)
• US Drops Case Against Apple After FBI Successfully Hacks Terrorist's iPhone.
• U.S. Lifted The Crude Oil Export Ban, And Exports Went... Down.
• 2015 Ends With a Stratospheric P/E Multiple Of 23x. (graph)
• Stocks Shrug Off Dismal Data, Shootings, Bomb Alerts, And Viruses To Close Unchanged. (graph)

Business Insider:

• Congress just fired a shot against its next drug-pricing target, and its shares took a hit.
• The global cost of terrorism is at an all-time high.

Reuters:

• Brazil party set to abandon Rousseff, making impeachment more likely. Brazil's largest party will decide on Tuesday to break away from President Dilma Rousseff's floundering coalition, party leaders said, sharply raising the odds that the country's first woman president will be impeached amid a corruption scandal.

Telegraph:

• Barclays warns of a "rush for the exits" on commodities. Analysts at Barclays have warned of a “rush for the exits” as investors back away from commodities, resulting in price levels for oil and copper dropping as much as 25pc. A note issued by the bank said that although investors have been attracted to commodities as one of the best performing assets so far in 2016, returns are unlikely to be sustained in the second quarter of the year. “This could make commodities vulnerable to a wave of investor liquidation that we estimate could, in a worst case scenario, knock as much as 20-25% from current price levels,” the note said. This would take the price of oil back to the low $30s and copper to the low $4,000s, the analysts said.
• A 'perfect storm' is brewing over the most important part of the UK economy

Night Trading 

• Asian equity indices are -.50% to +.25% on average.
• Asia Ex-Japan Investment Grade CDS Index 152.75 -1.0 basis point. 
• Asia Pacific Sovereign CDS Index 58.75 +.5 basis point. 
• Bloomberg Emerging Markets Currency Index 71.47 +.03%. 
• S&P 500 futures +.18%. 
• NASDAQ 100 futures +.18%.

Morning Preview Links

Earnings of Note
Company/Estimate 

• (CONN)/.32
• (LEN)/.52
• (MKC)/.69
• (PLAY)/.43
• (RH)/.18
• (SONC)/.16
• (VNCE)/.00

Economic Releases  
9:00 am EST

• S&P/CS 20 City MoM SA for January is estimated to rise +.7% versus a +.8% gain in December.     

10:00 am EST

• Consumer Confidence for March is estimated to rise to 94.0 versus 92.2 in February. 

Upcoming Splits 

• None of note

Other Potential Market Movers

• The Fed's Yellen speaking, Fed's Williams speaking, Fed's Kaplan speaking, $34B 5Y T-Note auction, US weekly retail sales reports and the (MMM) investor day could also impact trading today.

BOTTOM LINE: Asian indices are mostly lower, weighed down by commodity 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 50% net long heading into the day.

Stocks Slightly Higher into Final Hour on Central Bank Hopes, Less European/Emerging Markets Debt Angst, Yen Weakness, Retail/Homebuilding Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: About Even
  

• Sector Performance: Mixed
  

• Volume: Light

• Market Leading Stocks: Underperforming
  

Equity Investor Angst:

• Volatility(VIX) 15.1 +2.37%

• Euro/Yen Carry Return Index 132.66 -.54%

• Emerging Markets Currency Volatility(VXY) 11.79 +.26%

• S&P 500 Implied Correlation 55.16 -1.25%

• ISE Sentiment Index 91.0 unch.

• Total Put/Call .82 -21.15%

• NYSE Arms 1.20 +43.40% 

Credit Investor Angst:

• North American Investment Grade CDS Index 82.63 -1.04%
  

• America Energy Sector High-Yield CDS Index 1,431.0 -4.65%

• European Financial Sector CDS Index 95.90 +.79%

• Western Europe Sovereign Debt CDS Index 27.06 -.79%

• Asia Pacific Sovereign Debt CDS Index 58.70 +.67%

• Emerging Market CDS Index 292.70 -1.62%
  

• iBoxx Offshore RMB China Corporate High Yield Index 126.51 +.06%

• 2-Year Swap Spread 9.25 -1.75 basis points
  

• TED Spread 34.75 +1.25 basis points

• 3-Month EUR/USD Cross-Currency Basis Swap -21.50 +.5 basis point
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 71.44 +.31%
• 3-Month T-Bill Yield .27% -1.0 basis point
  

• Yield Curve 100.0 -3.0 basis points
  

• China Import Iron Ore Spot $55.75/Metric Tonne -1.08%

• Citi US Economic Surprise Index -4.90 +5.8 points

• Citi Eurozone Economic Surprise Index -32.90 unch.

• Citi Emerging Markets Economic Surprise Index -11.50 +4.9 points

• 10-Year TIPS Spread 1.56% -2.0 basis points
• 38.0% chance of Fed rate hike at June 15 meeting, 49.1% chance at July 27 meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating -154 open in Japan 
• China A50 Futures: Indicating +34 open in China

• DAX Futures: Indicating n/a open in Germany

Portfolio: 

• Slightly Higher: On gains in my medical/retail sector longs
  

• Disclosed Trades: None

• Market Exposure: 50% Net Long

Today's Headlines

Bloomberg: 

• Belgium Hunts Third Airport Bomber as Death Toll Increases. Belgian police, trying to identify a suspect seen with two suicide bombers at the Brussels airport, released video footage of the unknown man in an appeal for information about him as the death toll increased in last week’s terrorist attacks. Another suspect, whom Belgian media had reported may have been the third bomber at the airport, was released from custody on Monday, the federal prosecutors office in Brussels said. The clues that led to the arrest of this suspect -- identified as Faycal C. -- were not supported by further investigation, according to a statement. The surveillance-camera video posted on the website of the federal police on Monday shows a man in a white jacket and wearing a hat and glasses, pushing a luggage cart next to the two bombers who blew themselves up in the March 22 assaults. The video, about 30 seconds long, includes a slowed-down segment and close-ups of the man’s head. The other two airport attackers have been identified as Ibrahim El Bakraoui, who was deported from Turkey last year on suspicions of planning to cross to Syria, and Najim Laachraoui, who was also sought in connection with the Paris attacks in November. The suicide blasts ripped through the departures hall at the airport in Zaventem. Officials there are testing repair work and temporary arrangements before making a decision on when to re-open the terminal to passengers, even on a partial basis.
• China Stocks Fall as Property Curbs Overshadow Industrial Profit. China’s stocks fell as property developers slumped after some of the nation’s biggest cities introduced real-estate curbs, overshadowing a rebound for industrial companies’ profits. The Shanghai Composite Index slipped 0.7 percent, erasing a gain of as much as 1 percent. Poly Real Estate Group Co. and Gemdale Corp. led declines for developers. Shenzhen joined Shanghai in introducing measures late last week to tame soaring real-estate prices, including increasing down-payment requirements. Industrial profits broke a seven-month losing run to climb 4.8 percent in the January-February period. Property prices in the largest Chinese cities have begun to diverge severely from values in less-populated areas, spurring People’s Bank of China Governor Zhou Xiaochuan to warn lenders this month about increased credit risk from this trend. Shenzhen will also limit local residents to purchases of two homes, while Shanghai will tighten approval criteria for non-resident homebuyers and ban unregulated lending. “Developers are facing some headwinds as these measures are likely to cause immediate negative impact on the demand side,” said Wu Kan, a fund manager at JK Life Insurance in Shanghai. 
• Copper Processing Fees in China Tumble. (video)
• Red Meat, It's What's for Dinner Again as Beef Prices Tumble. Beef is making a comeback. After decades of diners shunning steaks and burgers for healthier protein options such as chicken and turkey, Americans will eat an estimated 54.3 pounds of the red meat this year -- the first increase since 2006 and almost half a pound more per person than in 2015, according to data from the U.S. Department of Agriculture. Cheaper prices are spurring discounts and new menu items at restaurant chains, including Chili’s and Wendy’s Co. Protein-centric diets such as the Paleolithic, or Paleo, and Autoimmune Protocol that eliminate grains and sugar also are fueling the shift. In February, a pound of uncooked ground beef retailed for $4.38, about 7 percent below a year ago, according to data from the Bureau of Labor Statistics.
• Valeant(VRX) CEO Pearson Subpoenaed to Testify at Senate Hearing.

Wall Street Journal:

• Starwood Gets Higher Offer From Anbang-led Group, Threatening Marriott Deal. Latest bid values hotelier at $14 billion; Marriott pact offers $13.6 billion in cash and stock.

Fox News:

• The women marked for death by Islamic fatwa face threats with fear, courage. (video) Twenty-seven years ago, Iran’s Ayatollah Khomeini called for the death of a British author, giving new fame to Salman Rushdie and infamy to the term “fatwa.” Rushdie, whose “The Satanic Verses” had been deemed offensive to Muslims, remains threatened by the Islamic decree, but six American women who lack the resources of a best-selling author also have been marked for death by Muslim leaders. Some have been driven from their homes and jobs and even forced to live the rest of their lives in hiding, with little hope that the fatwa will be lifted. “It is not safe, of course, not even in the West, for anyone who has a fatwa of death issued against them,” Nonie Darwish told FoxNews.com.

CNBC:

• Buyback fuel for the bull market is losing steam. (video) Stock buybacks, which have helped power the 7-year-old bull market, are showing their first signs of retreat in at least three years. Share repurchases decreased 3.4 percent in the fourth quarter from the previous three-month period and are tracking at a 21-month low in March, according to respective data from S&P Dow Jones Indices and TrimTabs.

Zero Hedge:

• YTD Corporate Default Jump To Highest Since 2009. (graph)
• Is This Fed President An Idiot? Read These Two Headlines And Decide.
• California Says To Hell With Economics, Will Hike Minimum Wage To $15/Hour. 
• WTF Chart Of The Day: Without "Pajama Traders", Stocks Have Gone Nowhere In 11 Years. (graph)
• Q1 GDP Crashes To 0.6%: Latest Atlanta Fed Estimate. (graph)
• If There Were Truly Growth, Home Builders Would Be Very Busy. (graph)
• Dallas Fed Respondent Sums It Up: "Anyone Saying We're Not In Recession Is Peddling Fiction". (graph)
• February Pending Home Sales Surge By Most On Record Amid Midwest Miracle. (graph)
• How Stupid Do You Have To Be To Let This Happen?
• One Third Of Q1 Economic Growth Was Just "Revised" Away.
• 23% Of Americans In Their Prime Working Years Are Unemployed.
• Fidel Castro Slams "Illustrious Visitor" Obama's "Honeyed Words", Cuba "Needs No Gifts From The Empire".
• January Spending Surge "Revised" Away, Pushing Savings Rate To Highest Since 2012; Personal Income Slides. (graph)
• These Are The Oil Producers That May (Or May Not) Attend Next Month's "Farcical" OPEC Meeting.
• China Beige Book Reveals Employment Plunges To 4-Year Low, Capex Worst In History. (graph)

Business Insider:

• Conservative radio host firebombs Donald Trump in brutal interview. Wisconsin radio host Charlie Sykes grilled GOP presidential frontrunner Donald Trump in a tough Monday-morning interview on Trump's treatment of Heidi Cruz and other instances of sexism.
• 147 FBI agents are reportedly involved in the Hillary Clinton email investigation — here's how the scandal took root.
• Fidel Castro writes 1,500-word letter ripping into Obama after historic visit.
• 'An incredible circumstance': Ted Cruz is suddenly consolidating the GOP establishment.
• Tensions are mounting between Russia, China, and Japan in the Pacific.
• North Carolina's transgender bathroom law is already being challenged in court.

The Telegraph:

• Can anything stop Japan from falling into the abyss? The country’s annual Spring time assault on wages seems to have passed with little more than a whimper this year despite being billed as one of the most anticipated economic events in Japan’s recent history. Translating as “spring wage offensive”, Shunto marks the annual Japanese ritual of wage bargaining between business groups and labour unions.