Friday Watch

Evening Headlines 
Bloomberg:  

• Asia Currencies Set for Worst Week Since August on China Concern. Asian currencies headed for the worst weekly loss in six months as signs of a deeper economic slowdown in China and the Federal Reserve’s support for tapering asset purchases weighed on emerging markets. South Korea’s won led the declines as a gauge of manufacturing in China, the nation’s biggest export market, fell to a seven-month low. Thailand’s baht was set for its steepest five-day drop of 2014 as anti-government protests turned deadly, while violence in Ukraine also damped sentiment. Fed policy makers backed further stimulus cuts at their January review, the minutes of the meeting showed, a program that drove capital into developing countries. 

• Offshore Yuan Set for Worst Week Since 2011 on Growth Concerns. The yuan was set for its biggest weekly slide since September 2011 in offshore trading after China manufacturing data added to signs of a slowdown in the world’s second-largest economy. The yuan dropped 0.23 percent today to 6.0818 per dollar as of 12:41 p.m. in Hong Kong, extending this week’s loss to 0.77 percent, based on data compiled by Bloomberg. The currency fell 0.09 percent to 6.0886 in Shanghai, according to China Foreign Exchange Trade System prices, after the People’s Bank of China cut the daily reference rate by 0.05 percent to a two-month low of 6.1176. The offshore yuan is the worst performer in February among 12 Asian exchange rates tracked by Bloomberg. 

• Vicious Cycle Seen as Ore Pile Evokes Steel Bust: China Credit. China’s record imports of iron ore and copper, driven by traders who use them as loan collateral, risk repeating the vicious cycle of repayment difficulties and falling prices already seen in the steel-trading market. Xiao Jiashou, known as the “steel-trading king” in Shanghai, had his assets frozen as China Minsheng Banking Corp. sues for money owed. Lenders seeking repayment are finding irregularities, including the same pile of materials used as collateral for multiple borrowings, China International Capital Corp. said. Money-market costs have surged, with the benchmark three-month Shanghai Interbank Borrowing rate jumping to 5.6 percent yesterday from 3.89 percent in June 2013.

• Venezuelans Prepare for More Protests as Lopez Jailed. Venezuelan protesters prepared for another night of confrontations with National Guard troops and armed groups as opposition leader Leopoldo Lopez was ordered held at a military prison outside Caracas. People were gathering in public plazas and major intersections of Caracas, dragging piles of trash into the streets, which they burn to block roads. As government helicopters flew overhead, President Nicolas Maduro addressed the nation in front of the presidential palace, saying a sixth person was killed this week and vowing to bring people attacking transport workers to justice. 

• China’s Stocks Fall Most in Six Weeks on Sinopec Drop, Economy. China’s stocks fell the most in six weeks as China Petroleum & Chemical Corp. (600028) dropped after the biggest rally since 2009 and a manufacturing slowdown fueled concerns the economic expansion is weakening. China Petroleum, known as Sinopec, slid 1.4 percent after Jefferies Group LLC downgraded the Hong Kong-listed shares. PetroChina, the largest oil producer, retreated 3.9 percent. Citic Securities Co. (600030) led declines for brokerages after the Standard reported Sinolink Securities Co. and Tencent Holdings Ltd. cut commission fees for their online stock-trading service. The Shanghai Composite Index (SHCOMP) fell 1.2 percent to 2,113.88 as of 1:11 p.m., extending a 0.2 percent loss yesterday after a preliminary manufacturing index by HSBC Holdings Plc and Markit Economics fell to a seven-month low.

• Asian Stocks Rise After U.S. Manufacturing Gauge Climbs. Asian stocks rose, with the regional benchmark index rebounding from its biggest drop in two weeks, after a larger-than-forecast climb in a measure of U.S. manufacturing tempered concern about global growth. Samsung Electronics Co., which will unveil a high-end Galaxy phone next week, advanced 3 percent in Seoul. Toyota Motor Corp. (7203) climbed 1.5 percent amid a rally in Japanese shares as the yen weakened against the dollar. National Australia Bank Ltd. lost 2 percent in Sydney after the country’s biggest lender by assets flagged a possible increase in provisions at its British operations. The MSCI Asia Pacific Index gained 1 percent to 137.05 as of 12:11 p.m. in Hong Kong, extending this week’s advance to 1.3 percent.

• China's Iron Ore Stockpiles to Stymie Aussie Rally, Insight Says. The Australian dollar's rally this month will be short-lived as demand for its chief export wanes with China stockpiling record amounts of iron-ore, according to Insight Investment Management Ltd.

• China Iron Ore Makes Insight Aussie Bear; Deutsche Bank Sees 60s. The Australian dollar’s rally this month will be short-lived as demand for the nation’s chief export wanes with China stockpiling record amounts of iron-ore, according to Insight Investment Management Ltd.

Wall Street Journal: 

• Dozens Dead in Ukraine as Fresh Violence Flares in Kiev. Ukrainian Capital Plummets into Renewed Bloodshed. Ukraine slid deeper into turmoil Thursday as dozens of protesters were killed amid pitched battles in the center of the capital. President Viktor Yanukovych, under heavy Western pressure to call early elections, reached out to Russia as his grip on parts of the country appeared to weaken. As sirens wailed through Kiev's narrow streets, top European diplomats shuttled between Mr. Yanukovych and opposition leaders late into the night, pushing for fresh elections to pull the country back from the brink. 

• Noonan: Whose Side Are We On? America can take a clear stand without intervening in Ukraine.  

• Deadly Clashes in Ukraine: Streaming Coverage.

• Citigroup(C), Morgan Stanley(MS), J.P. Morgan(JPM) Poised for Another Windfall on Energy Future Holdings. Three investment banks — Citigroup , Morgan Stanley, and J.P. Morgan — could earn up to $300 million in fees, if they provide bankruptcy financing to Energy Future Holdings, the company formerly known as TXU.

Fox News: 

• Obama under pressure to wield more than 'rhetoric' in Ukraine crisis. President Obama is being pressed to act quickly on the crisis in Ukraine amid accusations that his administration is straddling the fence, as dozens more people were killed Thursday in clashes on the streets of Kiev.

CNBC:

• Youth unemployment in China: A crisis in the making. Youth unemployment has created "a generation at risk" according to the International Labor Organization, with worldwide youth unemployment forecast to rise to 12.8 percent by 2018. But these headline figures do not necessarily tell the real story given the discrepancies among different parts of the world.

• Fed taper 'predictable, unavoidable': OECD Secretary. A tapering of U.S. monetary policy is both predictable and unavoidable, Angel Gurría, secretary-general at the Organisation for Economic Co-operation and Development said on Friday.

Zero Hedge: 

• Here Is How High Frequency Trading Hurts Everyone.

• UBS On Goldilocks Hope And Emerging Market Vulnerabilities.

• Goldman's(GS) Swirlogram Posts Worst Reading In Over A Year.

• The Rental Bubble Is Also Bursting.

• Obama Administration Embeds "Government Researchers" To Monitor Media Organizations.

• "The Pig In The Python Is About To Be Expelled": A Walk Thru Of China's Hard Landing, And The Upcoming Global Harder Reset. (graph)

• Meanwhile, In Saudi Arabia...

Business Insider: 

• Madoff Said JPMorgan Executives Knew Of His Ponzi Scheme For Years.

• VENEZUELAN PROTESTER: We Have Reached The Point Of No Return.

• 17 Photos From The Massive Protests That Have Swept Venezuela.

• Bill Ackman's $1 Billion Herbalife Short Is Pershing Square's Worst Bet Ever.

Reuters: 

• RBS to retrench in investment banking, cut 30,000 jobs: FT. Royal Bank of Scotland (RBS.L) is expected to announce its withdrawal from many investment banking activities as well as much of its international business in a move that is expected to reduce staff numbers by at least 30,000 over the next three to five years, the Financial Times reported on Thursday. 

• World risks era of slow growth, high unemployment-OECD. Sweeping reforms are urgently needed to boost productivity and lower barriers to trade if the world is to avoid a new era of slow growth and stubbornly high unemployment, the OECD warned on Friday. 

• Illinois leads multistate probe of Sallie Mae's student loan practices. SLM Corp, better known as Sallie Mae, faces a multistate probe led by Illinois into its student loan practices, a spokeswoman for Illinois Attorney General Lisa Madigan said on Thursday. 

• Agrium(AGU) profit falls 72 pct as fertilizer prices drop. Canadian fertilizer company Agrium Inc reported a 72 percent decline in quarterly profit on Thursday as crop nutrient prices fell and nitrogen sales volumes weakened. 

• Priceline(PCLN) profit tops estimates as bookings rise. Priceline.com, the online travel agency known for its name-your-own-price auctions, posted a higher-than-expected quarterly profit on Thursday, boosting shares in extended trading. 

• U.S.-based stock funds attract $11 bln over week -Lipper.

• HP's(HPQ) first-quarter revenue falls less than expected. Hewlett Packard Co's quarterly revenue fell a less-than-expected 1 percent, as it grapples with rapidly slackening PC demand and battles to win business from enterprises in an uncertain economic environment.

Telegraph:

• Financial crisis threatens Russia as Ukraine spins out of control. Russia faces the choice of large losses from a default or the ever rising costs of propping up Ukraine's economy. 

China Securities Journal:

• China's Investment Growth May Slow on Overcapacity. China's investment growth may slow to about 18% because of overcapacity in manufacturing industry, declining real estate and infrastructure investment, citing Yu Bin, head of the macroeconomic department at the State Council's Development Research Center. A "noticeable" increase in China's export growth this year would be difficult to attain because the market share of labor-intensive and industrial products is declining, the report cites Yu as saying.

Evening Recommendations

• None of note

Night Trading

• Asian equity indices are -.25% to +1.25% on average.

• Asia Ex-Japan Investment Grade CDS Index 136.0 +.75 basis point.

• Asia Pacific Sovereign CDS Index 105.0 +.25 basis point.

• FTSE-100 futures +.53%.

• S&P 500 futures +.33%.

• NASDAQ 100 futures +.28%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (DDD)/.20

• (BSFT)/.42

• (FRO)/-.12

• (HMSY)/.24

• (IRM)/.22

• (NRG)/.17

• (SUP)/.23

Economic Releases
10:00 am EST

• Existing Home Sales for January are estimated to fall to 4.68M versus 4.87M in December.

Upcoming Splits

• None of note

Other Potential Market Movers

• The Fed's Bullard speaking, UK Retail Sales and the (ESRX) investor meeting 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 weaken into the afternoon, finishing mixed. The Portfolio is 50% net long heading into the day.

Stocks Higher into Final Hour on Less Emerging Markets Debt Angst, Yen Weakness, Short-Covering, Biotech/Transport Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Higher
  

• Sector Performance: Most Sectors Rising
  

• Volume: Below Average

• Market Leading Stocks: Performing In Line

Equity Investor Angst:

• Volatility(VIX) 14.62 -5.68%

• Euro/Yen Carry Return Index 146.47 -.08%

• Emerging Markets Currency Volatility(VXY) 8.89 +1.72%

• S&P 500 Implied Correlation 52.63 -2.82%

• ISE Sentiment Index 129.0 +46.59%

• Total Put/Call .86 -3.37%

• NYSE Arms .65 -49.78% 

Credit Investor Angst:

• North American Investment Grade CDS Index 64.76 -2.16%

• European Financial Sector CDS Index 91.98 +2.93%

• Western Europe Sovereign Debt CDS Index 53.0 +.65%

• Asia Pacific Sovereign Debt CDS Index 104.86 +.10%

• Emerging Market CDS Index 329.02 -4.2%

• China Blended Corporate Spread Index 356.92 +.16%

• 2-Year Swap Spread 14.0 +.5 basis point

• TED Spread 19.0 +.75 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -5.0 +.25 basis point

Economic Gauges:

• 3-Month T-Bill Yield .05% unch.

• Yield Curve 243.0 +1.0 basis point

• China Import Iron Ore Spot $122.90/Metric Tonne -.81%

• Citi US Economic Surprise Index -6.50 -2.5 points

• Citi Emerging Markets Economic Surprise Index 15.80 -3.2 points

• 10-Year TIPS Spread 2.14 -1.0 basis point

Overseas Futures:

• Nikkei Futures: Indicating +118 open in Japan

• DAX Futures: Indicating +1 open in Germany

Portfolio: 

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

• Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges

• Market Exposure: Moved to 50% Net Long

Today's Headlines

Bloomberg:

• Ukraine Engulfed by Deadly Clashes as EU Seeks Peace Deal. Deadly clashes engulfed Ukraine’s capital for the second time this week as European Union negotiators held hours of talks with President Viktor Yanukovych and his rivals to try to end the bloodshed. A truce agreed on last night was shattered this morning as skirmishes broke out at the protest camp on Independence Square. While the Health Ministry reported seven killed, including two policemen, the opposition Svoboda party said more than 60 were dead. EU foreign ministers were locked in talks for most of the day as police were given the green light to fire live rounds. 

• Kiev Chaos Jumps Borders as Markets Teeter: East Europe Credit. Markets from Hungary to Poland and Russia are suffering contagion from the violence rocking Ukraine’s capital, sending bond yields higher and currencies lower as the turbulence afflicting developing nations deepens. Hungary’s forint weakened for a third day today, while Russia’s ruble rebounded from an all-time low. The yield on Poland’s 10-year bond was little changed after climbing the most in a week. Ukraine’s debt due in June gained, sending the rate to 33 percent at 12:44 p.m. in Kiev after it jumped 19 percentage points to a record 42 percent yesterday.

• Euro-Area Recovery Loses Pace as Manufacturing Weakens: Economy. The euro-region recovery showed signs of cooling this month, with weaker-than-forecast manufacturing and services keeping pressure on the European Central Bank to loosen policy. The factory gauge for the euro region unexpectedly slipped to 53 from 54 in January, while the services measure rose less than estimated to 51.7 from 51.6, Markit Economics said today. A composite gauge fell to 52.7 from 52.9.

• Europe Stocks Little Changed as Stoxx 600 Trims Loss. European stocks closed little changed, trimming losses in the final minutes of trading, after data showed Chinese manufacturing shrank for a second month and Federal Reserve minutes signaled stimulus cuts will continue. BAE (BA/) Systems Plc plunged the most since October 2008 after predicting profit will drop as much as 10 percent this year. Randstad (RAND) Holding NV tumbled 11 percent after reporting quarterly results that missed estimates. TUI AG dropped 5.4 percent after one of its largest shareholders sold a 15.7 percent stake in the company. Technip SA rallied the most since July 2009 after saying its profit margin will increase next year. The Stoxx Europe 600 Index slid less than 0.1 percent to 334.78, paring a loss of as much as 1.1 percent.

• Copper Falls to One-Week Low on China Factory Data, Fed.

• Nigeria’s Boko Haram Kill 47 in Attack on Northeastern Town. At least 47 people were killed by suspected Boko Haram Islamists in the northeastern Nigerian town of Bama yesterday, a police official said. Bama is 130 kilometers (81 miles) from Maiduguri in Borno State. “The local government secretariat, the state low-cost housing estate, schools and several other buildings” were destroyed, Lawal Tanko, a police spokesman, said in an interview yesterday. “We have had 47 dead recorded, while several persons were confirmed injured, some already in the hospitals there.”

• Declawing Speed Traders Is Goal of Stock Market Revamp Proposal. The only way to mitigate the negative effects of high-speed traders is to redesign a key part of how financial markets operate, according to the University of Chicago’s Eric Budish. 

• Facebook(FB) Values WhatsApp Like Miracle Drug: Real M&A. Facebook Inc. (FB)’s $19 billion purchase of WhatsApp Inc. is valuing the text-messaging service at a multiple investors currently only bestow on companies developing life-saving drugs. Based on a goal of reaching 1 billion WhatsApp subscribers, Facebook is buying the mobile application for about 19 times estimated sales, according to data compiled by Bloomberg. The only U.S. companies that fetch such lofty valuations are drugmakers that are developing treatments for cancer, Crohn’s disease and other ailments, the data show.

• Wal-Mart Forecast Trails Estimates as Economy Hurts Sales. Wal-Mart Stores Inc., the world’s largest retailer, forecast profit this year that trailed analysts’ estimates as the sluggish U.S. economy and government benefit cuts threaten to restrain sales. Profit per share in the year through January 2015 will be $5.10 to $5.45, the Bentonville, Arkansas-based company said today in a statement. The average of 28 analysts’ estimates compiled by Bloomberg was $5.55 a share.

Wall Street Journal: 

• Deadly Clashes in Ukraine: Streaming Coverage.

ZeroHedge: 

• The "Ukraine Situation" Explained In One Map.

• Will Consumer Credit Drive The Next Economic Boom?

• Caracas Is Burning As Maduro Warned May Face Military Coup.

• Dozens Killed In Ukraine's (Not Quite) Civil War, White House Outraged Again.

• NSA's Spying Program Set To Become Even Bigger.

• European Consumer Confidence Plunges; Misses By Most In 30 Months. (graph)

• Philly Fed Plunges To 1 Year Low; Misses By Most Since Aug 2011. (graph)

• Caterpillar(CAT) Global Retail Sales Decline For 14th Consecutive Month. (graph)

Telegraph:

• France is looking straight down the barrel of a deflation shock.

Bear Radar

Style Underperformer:

• Large-Cap Growth +.47%

Sector Underperformers:

• 1) REITs -.55% 2) Oil Service -.44% 3) Computer Hardware -.30%

Stocks Falling on Unusual Volume:

• KYN, CONN, HAWK, EIG, GDP, PPO, WAC, FCN, BJRI, TAC, GWPH, MIC, CSGP, ASPS, PBPB, RESI, LGCY, CYBX, SM, OIS, YNDX, CCOI, PRLB, TILE, ACHC, DNR, CLMT, UPL, DXCM, OCN, TRS, HMSY, KYN, AB, RESI, TFM, HOS and CCC

Stocks With Unusual Put Option Activity:

• 1) EBIX 2) EWA 3) EWJ 4) RRC 5) CONN
  

Stocks With Most Negative News Mentions:

• 1) TSCO 2) OCN 3) FB 4) EQY 5) AAPL
  

Charts:

• ETFs Falling on Unusual Volume

• Stocks Falling on Unusual Volume

Bull Radar

Style Outperformer:

• Small-Cap Growth +.49%

Sector Outperformers:

• 1) Gold & Silver +2.29% 2) Gaming +1.96% 3) Airlines +1.53%
  

Stocks Rising on Unusual Volume:

• ELOS, RPTP, PRAA, AWAY, ICLR, RBCN, PWR, CAR, AVG,  BAS, TRN, ARRS, PDCE, TRAK, JACK, TSLA, ALLE, DAN, CROX, HTZ, BMRN, PGTI, IDCC and BLOX

Stocks With Unusual Call Option Activity:

• 1) SWKS 2) COG 3) RRC 4) AWAY 5) CONN

Stocks With Most Positive News Mentions:

• 1) LMT 2) KO 3) FB 4) GMCR 5) DTV
  

Charts:

• ETFs Rising on Unusual Volume 

• Stocks Rising on Unusual Volume

Thursday Watch

Evening Headlines 
Bloomberg: 

• Japan Trade Deficit Swells to Record as Import Costs Surge. Japan’s trade deficit widened to a record in January as surging import costs weigh on Prime Minister Shinzo Abe’s campaign to drive a sustained recovery. The 2.79 trillion yen ($27.3 billion) shortfall reported by the Ministry of Finance in Tokyo today exceeded the 2.49 trillion yen median estimate in a Bloomberg News survey of 28 economists.

• BOJ Stimulus Impotence Threatens Inflation Aim: Chart of the Day. The Bank of Japan is getting less and less bang for its yen as it expands monetary-stimulus programs aimed at boosting annual inflation to 2 percent. The CHART OF THE DAY shows the so-called money multiplier fell in January to the lowest since 2003, when data became available, signaling the amount of money in the economy dropped relative to funds provided by the BOJ. The ratio of outstanding bank lending to customer deposits is also tracked as it holds near an all-time low. The lower panel shows the yield on Japan’s 10-year government note struggled to maintain gains since dropping to a record 0.315 percent on April 5, the day after the BOJ expanded monthly bond purchases. 

• Japan’s Penny-Pinching Beer Drinkers Show Challenge to Abenomics. Brewers in Japan face an April sales tax increase, stagnant wages and an aging population, the same challenges Abe’s monetary easing and stimulus spending must overcome to sustain a recovery.

• China Factory Gauge Falls to 7-Month Low Amid Financial Risk. A Chinese manufacturing index fell to the lowest level in seven months, adding to challenges for Communist Party officials grappling with risks to the financial system from trust defaults and soured loans. The preliminary February reading of 48.3 for a Purchasing Managers’ Index released today by HSBC Holdings Plc and Markit Economics compares with January’s final figure of 49.5 and the 49.5 median estimate in a Bloomberg News survey of 17 economists.

• Singapore’s Soaring Land Prices ‘Suicidal’ for Developers.

• Yellen Leads Fed Damned Every Way by Emerging Market Angst. Janet Yellen is discovering that when it comes to providing monetary stimulus, the Federal Reserve is damned by emerging markets when it does and damned when it doesn’t. 

• Asian Stocks Drop With Aussie on China PMI; Copper Slides. Asian stocks declined, with the benchmark regional index dropping from the highest in a month, Australia’s dollar weakened and copper slid as a private index on China’s manufacturing dropped to a seven-month low. South Korea’s won led emerging-market currencies lower. The MSCI Asia Pacific Index fell 1.1 percent by 12:15 p.m. in Tokyo.

• Gold Is Seen Losing Stigma by UBS as 2014 Forecasts Increased.

• Rubber Bear Market Boosts Bridgestone as Inventory Swells. Rubber’s bear market is poised to deepen as the global supply glut stretches into a fourth year and stockpiles in China swell, cutting costs for tiremakers. Futures on the Tokyo Commodity Exchange, the international benchmark, will drop as much as 15 percent to 200 yen a kilogram ($1,956 a metric ton) in 2014 from yesterday’s settlement, according to the median of 15 estimates compiled by Bloomberg News. That’s 63 percent below the record high set in 2011.

• Copper Falls Most in a Week on China Manufacturing Data. Copper dropped by the most in a week, leading industrial metals lower, after a manufacturing gauge for China declined more than estimated, damping demand prospects in the world’s biggest user of metals. The contract for delivery in three months on the London Metal Exchange retreated as much as 0.7 percent to $7,134.25 a metric ton, the biggest loss since Feb. 13, and was at $7,139.75 at 11:38 a.m. in Tokyo. Copper has fallen 3 percent this year, extending a 7.2 percent slump last year.

Wall Street Journal: 

• Truce Declared in Ukraine in Wake of Deadly Violence. President Says Negotiations to Begin to Halt Bloodshed. President Viktor Yanukovych bowed to pressure from the West and a widening rebellion at home by agreeing Wednesday to a truce with demonstrators who spent the day staring down riot police across a smoldering no-man's-land in the center of the capital. The move away from confrontation came as the U.S. and Europe—blindsided by the violence that left at least 25 people dead—edged toward imposing sanctions on Ukrainian officials they deem responsible for the crackdown.

• Deadly Clashes in Ukraine. Streaming Coverage:

• U.S. Feels Putin's Sharp Elbows in Ukraine. Obama Learning Moscow Will Go to Great Lengths to Protect Interests in World Hot Spots.

• NSA Weighs Retaining Data for Suits. Rule That Evidence Can't Be Destroyed Would Lead to Expansion of Controversial Phone Program. 

• Fed Puts Rate Increase on the Radar.  Move Before 2015 Remains Unlikely, but Meeting Minutes Suggest Some Inflation Hawks Are Circling. 

• McNider and Christy: Why Kerry Is Flat Wrong on Climate Change. It was the scientific skeptics who bucked the 'consensus' and said the Earth was round. 

MarketWatch.com:

• Citi economic surprise indicator takes a plunge into the negative. Citi economic surprise indicator takes a plunge into the negative. The Citi Economic Surprise Index for the U.S. hit negative 4 on Wednesday, after touching zero on Tuesday for the first time since early November, according to Citi. It notched a recent peak of 72.7 on Jan. 15.

CNBC:

• Market showing signs of fatigue as traders ignore data.

Zero Hedge: 

• China Manufacturing PMI Misses, Tumbles To 7-Month Low. (graph)

• Tesla(TSLA): When Just GAAP Revenues Are Not Enough, Unleash The Non-GAAP.

• Facebook(FB) Blows $16 Billion On SnapChat Competitor WhatsApp; Stock Tanks.

• Venezuelan Protesters Sum It All Up (In One Banner).

• GE(GE) Sues IRS For $658 Million Tax Refund.

• Does The Trail Of Dead Bankers Lead Somewhere? 
• The Chinese Dominoes Are About To Fall: Complete List Of Upcoming Trust Defaults.

Business Insider: 

• Billionaire Investor Ken Griffin Just Made The Largest Donation Ever To Harvard University.

• A Nebraska Judge Just Threw A Potentially Huge Wrench Into The Keystone Pipeline Permit Process.

• John Hussman Discusses The Ominous 'Three Peaks And A Domed House' Stock Market Formation.

• A Bunch Of People Say They Are Ditching WhatsApp Now That Facebook(FB) Is Buying It.

NBC: 

• Homeland Security Alerts Airlines to Possible Shoe-Bomb Threat. The Department of Homeland Security on Wednesday told airlines about a potential new shoe-bomb threat and urged them to pay extra attention to flights from overseas into the United States.

Reuters:

• Appropriate to refresh U.S. Fed's longer-term 'exit strategy' -Williams. The U.S. Federal Reserve should update its longer-term "exit strategy" for winding down its swollen balance sheet to reflect changes in the plan since it was published in 2011, a top Fed policymaker said on Wednesday. 

• Japan manufacturing mood down, seen sliding further -Reuters Tankan. Sentiment at Japanese manufacturers slipped in February for the first time in five months and is seen sliding further, a Reuters poll showed, a worrying sign the economy may be ill-equipped to cope with a planned sales tax hike in April without further stimulus. Companies also voiced concern about weak shipments to China and risks from emerging market economies which are key markets for Japanese goods.

• Tesla(TSLA) gives strong 2014 outlook, shares jump 12 percent. Tesla Motors Inc (TSLA.O), led by billionaire entrepreneur Elon Musk, posted better-than-expected fourth-quarter results on Wednesday and said deliveries of its Model S electric sedan would surge more than 55 percent this year. Tesla shares jumped 11.8 percent to $216.41 in extended trade following the announcement.

Evening Recommendations

•  None of note
  

Night Trading

• Asian equity indices are -1.25% to +.25% on average.

• Asia Ex-Japan Investment Grade CDS Index 135.75 +3.75 basis points.

• Asia Pacific Sovereign CDS Index 104.75 +3.0 basis points.

• FTSE-100 futures -.67%.

• S&P 500 futures -.36%.

• NASDAQ 100 futures -.31%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (PWR)/.43

• (DTV)/1.29

• (WMT)/1.59

• (WBMD)/.24

• (JWN)/1.34

• (VMI)/2.66

• (ESRX)/1.12

• (MHK)/1.75

• (PCLN)/8.29

• (GRPN)/.02

• (INTU)/.02

• (HPQ)/.84

• (NEM)/.44

• (PSA)/2.02

Economic Releases
8:30 am EST

• The Consumer Price Index for January is estimated to rise +.1% versus a +.3% gain in December.

• The CPI Ex Food & Energy is estimated to rise +.1% versus a +.1% gain in December.

• Initial Jobless Claims are estimated to fall to 335K versus 339K the prior week.

• Continuing Claims are estimated to rise to 2970K versus 2953K prior.

8:58 am EST

• The Markit US PMI Preliminary for February is estimated at 53.6.

10:00 am EST

• The Philly Fed for February is estimated to fall to 8.0 versus 9.4 in January.

• The Leading Index for January is estimated to rise +.4% versus a +.1% gain in December.

11:00 am EST

• Bloomberg consensus estimates call for a weekly crude oil inventory build of +2,111,000 barrels versus a +3,267,000 barrel gain the prior week. Gasoline supplies are estimated to fall by -578,000 barrels versus a -1,853,000 barrel decline the prior week. Distillate supplies are expected to fall by -2,111,000 barrels versus a -731,000 barrel decline the prior week.

Upcoming Splits

• None of note

Other Potential Market Movers

• The BoJ Minutes, Eurozone Manufacturing PMI, weekly EIA natural gas inventory report, Bloomberg Economic Expectations Index for February, weekly Bloomberg Consumer Comfort Index and the (MCRS) Investor Meeting could also impact trading today.

BOTTOM LINE: Asian indices are mostly lower, weighed down by technology and industrial 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.