Monday Watch

Today's Headlines

Bloomberg:

• U.K. Government to Offer Vision on Brexit as Divisions Rage. Divisions over Brexit were on display again on Sunday. International Development Secretary Penny Mordaunt said a series of speeches planned by Prime Minister Theresa May and other Cabinet ministers in the coming weeks would offer a vision of the sort of relationship the government is seeking with the European Union.

• Asia Stocks Rise With S&P Futures; Dollar Declines. Investors got a reprieve from the recent turmoil with Asian stocks recovering from their worst weekly rout since 2011 as volatility swept global markets. The dollar declined against most major peers. Equity benchmarks rose in Hong Kong, China and South Korea after the S&P 500 Index jumped on Friday and the futures extended gains in Asia at the start of the week. Australian banks dragged the benchmark there down at the start of a sweeping inquiry into the nation’s financial system. Japan is closed for a holiday. Oil maintained losses. Hong Kong’s Hang Seng Index rose 0.5 percent. The Shanghai Composite Index added 0.3 percent. The S&P/ASX 200 Index declined 0.6 percent. South Korea’s Kospi index gained 0.9 percent. Futures on the S&P 500 advanced 0.5 percent as of 11:01 a.m. in Tokyo. The underlying gauge climbed 1.5 percent Friday. The MSCI Asia Pacific Index excluding Japan gained 0.7 percent.

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

• Volatility’s Awakening Spurs Record Long Position in VIX Futures. Bets on market tranquility that blew up in spectacular fashion helped spark a record shift in the futures market. The weekly commitment of traders report shows non-commercial positioning in VIX futures contracts spiked to a record net long of 85,818 contracts as of Feb. 6.

• When Will It End? Bloodied Traders Seeking Clues. Thanks to analyst earnings upgrades, a measure known as the PEG ratio -- which takes into account future growth -- just fell below its historic average for the first time since 2012, according to Yardeni Research data that goes back to 1985. That’s not enough to convince James Investment Research’s Brian Culpepper to warm up to stocks. His funds have been cutting holdings this year.

• What If the World's Richest Paid for Government Spending?

Wall Street Journal: 

• New Tax Law Haunts Companies That Did ‘Inversion’ Deals. Tax experts and companies say law will reduce advantages of corporate relocations.

• Bitcoin Mania Triggers Miner Influx to Rural Washington.

• Comcast Considers Reviving Pursuit of Fox After Higher Bid Was Rejected. Cable giant’s offer for Fox’s entertainment assets was in the low $60 billions, exceeding Disney’s winning offer.

• It’s a Bad Time to Build Ships—Unless They Are Cruise Ships. Business is booming for two European ship builders that have cornered the market for cruise ships. 

• Experimental Drug Promises to Kill the Flu Virus in a Day. Even if drug lives up to claim, it likely won’t be available in U.S. until next year at earliest.

• Nostalgic for the Atari-Era Arcade? Millennial Gamers Are Reinventing It. Though arcades all but disappeared years ago, crowds are gathering at special events to play artist-created games inspired by 1980s classics. Here’s how to get in on the action.

• Israel Vows More Aggression to Stop Iranian Military Expansion in Syria. Reaction after fighter jet is shot down shows how competing aims of Iran and Israel could lead to a war.

MarketWatch.com:

• This stock-market selloff is creating a rare opportunity to buy Apple on the cheap.

• Italian cryptocurrency exchange BitGrail says $170 million in Nano tokens missing.

Barron's:

• Had bullish commentary on (AAPL), (DAL), (SBUX), (VZ), (TSM), (DHI), (BABA), (NEE) and (AEP). 

• Had bearish commentary on (WFC), (SNAP) and (TWTR).

Fox News:

• Democrats ought to worry about the midterm elections.

• Russian plane with 71 aboard crashes outside Moscow, no reports of survivors.

• CNN slammed for glowing puff piece about Kim Jong Un's sister at Olympics. (video)

CNBC: 

• Trump administration's $200 billion infrastructure plan to be unveiled Monday, will include a mix of grants and loans.

• Bull market looks safe for now as fewer than half of corrections deepen into full-blown bears.

• Market drop is a ‘welcome correction’ for the IMF, says Christine Lagarde.

• Most teens can't afford a virtual reality headset, so they're going to VR arcades instead.

Zero Hedge:       

• Dow Futures +200, Run Friday Stops As The Dollar Sinks.

• White House Official: Schiff Intentionally Sabotaged Democratic Rebuttal To FISA Memo.

• White House Will Release Promised $1.5 Trillion Infrastructure Plan Monday.

• Equifax Data Breach Larger Than Disclosed, Congress Slams For Hiding From Public".

• Hulu Falls Deeper Into The Red After Burning Nearly $1 Billion In 2017.

• Israel "Preparing For War In North", Boosts Air Defenses; Warns Iran.

Business Insider: 

• 2 Ohio police officers were shot and killed responding to a 911 hang-up call.

• ALLIANCEBERNSTEIN: Here are 17 stocks you might want to buy when the stock market gets rocky.

• Coastal California has a reputation as a leader in green energy — but only the rich are benefiting.

Yonhap News:

• LG's OLED TV sales exceed 14,000 units in Jan. LG Electronics Inc. said Monday its domestic sales of high-end organic light-emitting diode (OLED) TVs surpassed the 14,000 unit mark last month. The sales figure means that the South Korean tech giant sold one OLED TV every three minutes last month. In comparison, LG Electronics sold about 5,000 units of OLED TVs in January 2017. The growth of OLED TVs was driven by sales of large-sized TVs, including 65-inch models, the company said.

Night Trading

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

• Asia Ex-Japan Investment Grade CDS Index 75.5 -.25 basis point.

• Asia Pacific Sovereign CDS Index 13.75 +1.0 basis  point.

• Bloomberg Emerging Markets Currency Index 74.90 +.15%. 

• FTSE 100 futures +1.46%.

• S&P 500 futures +.61%.

• NASDAQ 100 futures +.40%.

Morning Preview Links

Earnings of Note

Company/Estimate

• (CNA)/.82

• (DO)/-.04

• (L)/.71

• (DNB)/3.04

• (VECO)/.09 

• (VNO)/.80

• (VIPS)/1.33

Economic Releases
2:00 pm EST

• The Monthly Budget Deficit for Jan. is estimated to fall to $50.0B versus $51.3B in Dec.
  

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The President Trump's infrastructure plan release, Japan CPI report, CSFB Energy Summit and the BIO investor conference 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 modestly higher and to maintain gains into the afternoon.  The Portfolio is 75% net long heading into the week.