Bull Radar

Style Outperformer:

• Mid-Cap Growth +.5%

Sector Outperformers:

• 1) Energy +1.6% 2) Restaurants +1.0% 3) Gaming +.9%

Stocks Rising on Unusual Volume:

• ARNA, STC, SRI, MULE, PAR, ORBK, HQY, CACI, TKR, DOV, CTRN, CYBE, NEWA, SGH, KLAC, OSB, IIVI, BGNE, FND, FNF, ADBE, GGAL, NOW, REDU and CEO

Stocks With Unusual Call Option Activity:

• 1) MULE 2) EXAS 3) KBR 4) FB 5) HYG

Stocks With Most Positive News Mentions:

• 1) ARNA 2) SRI 3) OLED 4) CTRN 5) HQY

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running -22.0% Below 100-Day Average
• 7 Sectors Rising, 3 Sectors Declining
• 51.6% of Issues Advancing, 43.9% Declining
• 22 New 52-Week Highs, 58 New Lows
• 45.6% of Issues Above 200-day Moving Average
• Average 14-Day RSI 45.7%
• Vix 18.5 -3.0%
• Total Put/Call 1.17 +14.7%
• TRIN/Arms 1.19 -37.4%

Tuesday Watch

Evening Headlines

Bloomberg:

• Pierre Moscovici Is Confident Trade Melodrama Can Be Prevented at G-20. The world’s financial elite is striving to find common ground with U.S. officials on stressing the importance of global trade, according to the European Union’s commissioner of economic affairs. Deputy finance ministers and central bankers are currently negotiating a communique all Group of 20 nations can agree on, Pierre Moscovici said in an interview with Bloomberg Television. This is despite Treasury Secretary Steven Mnuchin telling his counterparts that the U.S. stands by its policies to defend its own economic interests. “Nobody wants to enter into a trade war -- everybody is looking for a way to bridge the gap and find common tunes, especially on trade,” Moscovici said in Buenos Aires. “Protectionism is never the answer.”

• Analysts Now Expect the Bank of England to Hike Interest Rates in May.

• Australian Rates Unlikely to Move ‘Anytime Soon,’ Morrison Says.

• Stocks Drop in Asia as Tech Rout Adds to Pressures. Equities fell from Japan to Australia and technology stocks were the biggest drag on the MSCI Asia Pacific Index. U.S. shares slumped as the best performing sector this year was roiled by reports of a Facebook Inc. data breach and Apple Inc. efforts to develop its own screens. After the bell, Oracle Corp. reported sales that underwhelmed investors and Nasdaq futures remained lower. Currencies were steady along with 10-year Treasury yields. Japan’s Topix index fell 0.7 percent and the Nikkei 225 Stock Average slid 0.9 percent as of 10:37 a.m. in Tokyo. Australia’s S&P/ASX 200 Index dropped 0.5 percent.South Korea’s Kospi index fell 0.3 percent. Hong Kong’s Hang Seng Index retreated 0.8 percent. Shanghai Composite Index was down 0.5 percent. Futures on the S&P 500 Index were flat and Nasdaq contracts lost 0.3 percent.

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

• Four Charts That Show the Tech-Stock Tumble May Not Last Long. (graph)

• Yellen Says Gradual Fed Rate Hikes Are Needed to Prevent Overheating.

• New York, Get Ready for Another Snow-Dumping Nor'easter.

Wall Street Journal:

• Facebook(FB) Is Pummeled by User-Data Blowback. Prospects of tighter regulation sends social-network company’s shares plunging.

• Life Support for ObamaCare. Republicans are caught between Democrats and the health insurers.

• Austin’s ‘Serial Bomber’ Gets More Sophisticated. Fourth explosion triggered by tripwire; white men hurt in blast, and theory fades that crimes are racially motivated against blacks, Hispanics.

MarketWatch.com:

• Zuckerberg saved tens of millions of dollars by selling Facebook stock ahead of Monday’s decline.

• U.S. gasoline demand hits a record in March, climbs to ‘typical’ summer levels.

Fox News:

• Are some states headed for Splitsville? Movement grows to allow sections of states to break away.

CNBC:

• Tax reform 'phase 2' rollout could come as early as April 15, conservative GOP Rep. Meadows says.

• Biggest risk to the market? Democrats, says investor Marc Lasry.

• Oracle(ORCL) falls on mixed earnings results.

• Atlanta activists: We don’t want Amazon HQ2 here.

• Stocks making the biggest moves after hours: BlackBerry, Oracle & Opiant.

• Californians fed up with housing costs and taxes are fleeing state in big numbers.

Zero Hedge:  

• Obama's Former Campaign Director Makes Bombshell Claim: Facebook(FB) Was "On Our Side".

• Six Things We Can Learn About US Plutocracy By Looking At Jeff Bezos.

• It's Time To Protect Yourself (And Your Friends) From Facebook(FB).

• At $21 Trillion, The National Debt Is Growing 36% Faster Than The US Economy. (graph)

• "The Enemy Of My Enemy..." - Google Partners With Retailers To Challenge Amazon.

• Trump Set To Unleash $60bn China Tariffs On Friday.

• Aramco Kills Massive Offshore IPO, Will Only Offer Shares Domestically.

• What Excites Millennials? A Stock Market Crash!

• The FBI's Blood Feud: "This Is Going To Get A Lot Uglier Before It's Over".

• DeFANG'd: Dow Dumps Into Red For 2018 As Techs Tumble. (graph)

Business Insider:

• The CEO of Cambridge Analytica was secretly filmed offering to entrap politicians with bribes and sex workers.

• Self-driving cars could face a 'huge setback' after the tragic death of a woman struck by an autonomous Uber.

• 19-year-old college rugby player found dead after he went missing in Bermuda during a team trip.

Night Trading 

• Asian equity indices are -.75% to -.25% on average.

• Asia Ex-Japan Investment Grade CDS Index 66.75 +1.25 basis points. 

• Asia Pacific Sovereign CDS Index 12.0 +.5 basis point.

• Bloomberg Emerging Markets Currency Index 74.92 +.02%.

• FTSE 100 futures +.35%.

• S&P 500 futures -.06%.

• NASDAQ 100 futures -.35%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (DLTH)/.54

• (PLCE)/2.49

• (FDX)/3.12

• (SCS)/.16

Economic Releases

• None of note

Upcoming Splits

• None of note

Other Potential Market Movers

• The UK PPI/CPI reports, German ZEW Index, weekly US retail sales reports, Oppenheimer Healthcare Conference, BofA Merrill Industrials Conference and the (GOOG) new product event could also impact trading today.

BOTTOM LINE:  Asian indices are lower, weighed down by technology and commodity shares in the region. I expect US stocks to open mixed and to weaken into the afternoon, finishing modestly lower.  The Portfolio is 25% net long heading into the day.

Stocks Falling Substantially into Final Hour on Mueller Investigation Worries, Trade War Fears, Less Economic Optimism, Tech/Energy Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Lower
  

• Sector Performance: Almost Every Sector Falling
  

• Volume: Below Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 21.47 +35.9%

• Euro/Yen Carry Return Index 136.34 -.5%

• Emerging Markets Currency Volatility(VXY) 7.92 +.76%

• S&P 500 Implied Correlation 44.89 +4.37%

• ISE Sentiment Index 57.0 -28.75%
  

• Total Put/Call 1.04 +8.3%

• NYSE Arms 1.51 +100.3%

Credit Investor Angst:

• North American Investment Grade CDS Index 55.17 +2.4%
  

• America Energy Sector High-Yield CDS Index 407.0 +1.84%

• European Financial Sector CDS Index 53.53 +3.60%

• Italian/German 10Y Yld Spread 139.5 -1.75 basis points
  

• Asia Pacific Sovereign Debt CDS Index 11.97 +5.46%

• Emerging Market CDS Index 124.14 +4.72%
  

• iBoxx Offshore RMB China Corporate High Yield Index 148.51 +.07%

• 2-Year Swap Spread 30.25 -2.0 basis points

• TED Spread 41.0 +.5 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -19.75 -2.75 basis points

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 74.91 -.14%
• 3-Month T-Bill Yield 1.76% -1.0 basis point
  

• Yield Curve 54.75 -.75 basis point

• China Iron Ore Spot 64.85 USD/Metric Tonne -.38%

• Citi US Economic Surprise Index 42.1 -3.7 points

• Citi Eurozone Economic Surprise Index -32.80 -1.1 points

• Citi Emerging Markets Economic Surprise Index 38.90 -.4 point

• 10-Year TIPS Spread 2.08 -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 -430 open in Japan 
• China A50 Futures: Indicating -106 open in China

• DAX Futures: Indicating -37 open in Germany

Portfolio: 

• Slightly Lower: On losses in my biotech/medical/tech sector longs

• Disclosed Trades: Added to my (IWM)/(QQQ) hedges

• Market Exposure: Moved to 25% Net Long

Today's Headlines

Bloomberg:

• Trump Prohibits U.S. Purchases of Venezuelan Cryptocurrency. President Donald Trump banned U.S. purchases of a cryptocurrency the Venezuelan government is rolling out, as part of a campaign to pressure the government of President Nicolas Maduro. Trump issued an order on Monday prohibiting U.S. citizens from engaging in transactions using the oil-backed currency, called the Petro. He authorized Treasury Secretary Steven Mnuchin to issue any necessary regulations to enforce his order. Maduro created the currency to try to salvage his country’s failing economy, where inflation is estimated to spiral to 13,000 percent this year.

• Bitcoin Bust Reminds Morgan Stanley of Nasdaq Crash, But Faster. (video) There have been three waves of weakness since Bitcoin peaked in December, with prices falling between 45 percent and 50 percent each time, before rebounding. The Nasdaq’s bear market from 2000 had five price declines, averaging a similar 44 percent. The bear market also looks similar on the way up. There have been two Bitcoin bear market rallies of 43 percent on average, while the Nasdaq bear market rallies averaged 40 percent.

• G-20 Draft Says Crypto Assets Lack Sovereign Currency Traits.

• China’s ‘Epic’ Debt Load Means Big Task for New Governor: Chart. (graph)

• Saudis Ease Sacrifice of OPEC Oil Cut With Record Fuel Exports. While the kingdom kept crude output below an OPEC-agreed cap, its shipments of diesel, gasoline and other fuels surged by 27 percent to a record 1.912 million barrels a day in January, according to data from the Joint Organisations Data Initiative in Riyadh. It means the country’s total oil shipments overseas exceeded those in October 2016, the reference month for a deal with OPEC and other producers to curb pumping.

• John Paulson’s Merger Arbitrage Fund Plunged at the Start of the Year. (video) Paulson is now re-focusing his firm on his founding strategy -- merger arbitrage -- despite some disastrous returns in recent years. The Paulson Partners Enhanced fund, which uses borrowed money to double down, sunk 23 percent in the first two months of 2018, according to a person familiar with the matter, after plunging about 70 percent over the past four years.

• Merrill Insiders Get $83 Million in SEC Whistle-Blower Awards. Three Merrill Lynch insiders will get more than $83 million from the U.S. Securities and Exchange Commission -- the biggest-ever payouts -- for providing information that helped the agency bring a 2016 case against Bank of America Corp., their attorney said Monday.

• ‘Netflix(NFLX) for Oil’ Setting Stage for $1 Trillion Battle Over Data. A battle for big data is brewing in the oil patch. The service companies that map underground pockets of oil, drill the wells and lift crude from miles below are generating vast new amounts of data they never before realized could be valuable. But their exploration customers are essentially saying hands off to anything coming out of their wells, including the streams of zeros and 1s.

Wall Street Journal:

• Trump Steps Up Attacks on Mueller Investigation. President also jabs at former FBI deputy director Andrew McCabe.

• The Last Americans in North Korea: Christian Missionaries. Their presence has sharpened debate over whether gifts of food and medicine promote goodwill or allow Kim Jong Un’s regime to divert spending to its nuclear arms program.

• European Union Pledges to Probe Facebook’s Handling of User Data. EU’s justice chief to discuss concerns that data was misused for political purposes with U.S. officials this week.

• VW Plans $340 Million Expansion at Tennessee Plant. Auto maker plans to manufacture a new sport-utility vehicle at the plant, as part of an increased bet on SUVs.

• Death of the Mall? Greatly Exaggerated, Says Big Money. Simon Property has joined the real-estate industry titans betting that mall stocks have gotten too cheap.

• Cronyism Allegations Chip Away at Support for Japan’s Abe. Japanese prime minister has been accused of helping a school operator secure a cut-price land deal.

MarketWatch.com:

• 5 things to watch from the Fed decision.

• KLA-Tencor(KLAC) to acquire Orbotech in deal with equity value of about $3.4 billion.

• Why the case for betting against Facebook(FB) is ‘building fast’.

Fox News:

• Cops: 4 Austin bombings show 'similarities,' work of 'serial bomber'. (video)

CNBC:

• Goldman Sachs: Stick with growth stocks like Netflix(NFLX), Amazon(AMZN) and Micron(MU).

• Coming soon to 2,000 Walmart(WMT) stores: Handy's workers to install that TV you bought.

• Crisis manager questions why Trump's use of social media data is 'sleazy' and Obama's 'innovative'.

• Macy's(M) to add mobile checkout to all stores by year's end.

• Data leak 'another indication of systemic problems at Facebook' so sell the stock, analyst says.

• People with massive student debt hope Trump will let them declare bankrupty.

Zero Hedge:

• 74% Of Americans Believe The "Deep State" Is Running The Country.

• Government Shutdown Odds Hit 25% As GOP Unveils $1.2 Trillion Spending Bill.

• Market Breaks As Tech Tumbles After G-20 Comments.

• Hedge Fund Suffer Worst Month Since January 2016, Greenlight Dead Last. (graph)

• "Total Witch Hunt" - Trump Slams Mueller's Bias As Probe Pivots To Obstruction.

• 'Death Cross' Strikes European Stocks As Dead-Cat-Bounce Dies. (graph)

• Cable Spikes Above 1.40 On "Brexit Breakthough".

• Goldman Throws Up On Tesla(TSLA), Warns Deliveries Will Decline, Miss Guidance.

• Facebook(FB) Tumbles Over "Systemic Problems" In Data Breach, Drags Nasdaq Lower.

• Austin Rocked By Fourth Explosion In Less Than Two Weeks, Two Seriously Injured.