Thursday Watch

Evening Headlines
Bloomberg:  

• China Inflation Fastest Since Mid-2014 as Food Prices Jump. China’s consumer price rose the most since mid-2014 in February as food costs jumped amid the week-long Lunar New Year holidays, where millions binge on roast pork, duck, seafood and veggies. The consumer-price index rose 2.3 percent in February from a year earlier, up from 1.8 percent in January, as food prices surged 7.3 percent. Raising question marks over the durability of that pickup, non-food prices moderated from a month earlier to a 1 percent increase and services inflation slowed. The producer-price index fell 4.9 percent, narrowing from a 5.3 percent decrease in January, extending declines to a record 48 months.
• Japanese Utilities Plunge After Court Injunction on Reactors. (video) Kansai Electric Power Co. led a tumble by Japanese power utilities after a court injunction prevented the company from operating two of its nuclear reactors, threatening the country’s slow return to atomic power five years after the Fukushima disaster. Kansai Electric, Japan’s second-largest power utility, dropped as much as 17 percent to 1,023 yen in Tokyo and was trading at 1,035 yen at 10:04 a.m., headed for the biggest drop since 1974. The 20-member Topix Electronic Power & Gas Index slumped 5.4 percent, compared with a 0.8 percent rise in the broader index.
• Korea Holds Rate at Record Low Amid Debt, Capital Outflows. (video) The Bank of Korea held the benchmark interest rate unchanged for a ninth month amid concern that another cut could aggravate risks from rising debt levels and capital outflows. The decision to keep the seven-day repurchase rate at a record low 1.5 percent was forecast by 11 of 18 economists in a Bloomberg survey. The remaining seven expected a 25 basis-point cut. DBS Group, HSBC Holdings and Goldman Sachs Group were among those who forecast no change Thursday but expect a move next quarter.
• Draghi Marks a Year of QE With Suspense of `No Limits' Stimulus. A year and a day since the European Central Bank started its unprecedented bond-buying program, adding to an ultra-loose monetary policy that includes negative interest rates, President Mario Draghi is still struggling. Investors and economists predict yet more stimulus will be announced on Thursday to stave off deflation in the euro area. The rate decision is due at 1:45 pm. in Frankfurt, with Draghi holding a media briefing 45 minutes later. Here are five things to watch for:
• China's Stocks Drop for Second Day After Inflation Accelerates. China’s stocks fell for a second day, led by banks and commodity producers, after data showed inflation accelerated last month. The Shanghai Composite Index slid 0.8 percent as of 10:11 a.m. The benchmark gauge pared losses in the last half hour of trading on Wednesday on speculation state-backed funds were repeating a recent pattern of intervening to prop up the market. Industrial & Commercial Bank of China Ltd. and PetroChina Co., long considered to be targets of government buying, slumped more than 1 percent. The consumer-price index rose 2.3 percent in February from a year earlier, compared with the forecast for a 1.8 percent gain.
• Asian Stocks Head for First Gain This Week on Stimulus Outlook. Asian stocks climbed for the first day this week amid speculation central banks will provide additional stimulus to bolster global economic growth. The MSCI Asia Pacific Index gained 0.4 percent to 125.51 as of 9:04 a.m. in Tokyo, halting three days of losses.
• Once-Treasured Pipelines Facing a `Culling' as Drillers Go Bust. For years, the pipeline partnerships that kept America’s shale oil and natural gas flowing were the darlings of the energy investment world, thanks to their high payouts and dependable, long-term contracts. Not anymore. The Alerian MLP Index, tracking 49 of these master limited partnerships including Enterprise Products Partners LP, Energy Transfer Partners LP and Williams Partners LP, is off to its worst start of a year ever. And that’s after plunging 37 percent in 2015 because of the collapse in oil prices and investors’ concerns that the partnerships can’t sustain their payouts. A judge’s decision on Tuesday allowing a bankrupt driller to reject its pipeline contracts dealt yet another blow to the midstream companies that have been banking on their upstream customers keeping up payments to weather the worst energy industry downturn in decades. Now analysts and investors are projecting a “culling” of these once-treasured partnerships, with the smaller ones targeted as the first to go under.
• Don't Let Rally Fool You: Commodity Firms Face Debt Cliff. (video)
• Are There Hiccups on the Horizon for the Housing Market? (video)
• When Trump Steaks at a Trump Event Aren’t Really ‘Trump Steaks’. When Republican presidential front-runner Donald Trump showed off a pile of beautifully marbled steaks atop a butcher board at a Tuesday campaign event, he called them “Trump steaks.” That’s true in the sense that they were steaks, and they were on a Trump property. But they weren’t steaks from Trump’s fabled, now defunct, Trump Steaks business. They were from Bush Brothers Provision Co., a West Palm Beach, Florida, purveyor that counts Trump-affiliated properties among its customers, said John Bush, whose family owns the company. Photographs posted on Twitter showed plastic wrapping on the meat at the televised event where Trump celebrated primary victories in Michigan and Mississippi. The packaging matched that used by Bush Brothers, Bush said.

Wall Street Journal: 

• Eighth Democratic Presidential Debate – Live Coverage. 
• Forget the ‘Greenspan Put’; Fear the ‘Yellen Call’. A stronger market might be all the Federal Reserve needs to get back to raising rates. Before investors get too comfortable with the rebound in share prices, they should beware the “Yellen call.” That is the opposite of the so-called Greenspan put that investors once thought underpinned share prices. And while that was supportive, the Yellen call is likely to keep stocks in check for some time.
• Hillary’s Michigan Droop. Bernie Sanders’s upset shows Clinton’s campaign weakness. Progressive journalists and other sophisticates are gloating about the turmoil Donald Trump has fomented within the Republican Party, and they’d better enjoy the feeling while it lasts. Hillary Clinton’s thunderclap defeat in the Michigan primary shows the Democrats are saddled with a weak candidate who has a sack load of political liabilities as heavy as Mr. Trump’s.
• The Polls Trump Hasn’t Won. He says that he will beat Hillary, yet guess who is the only GOP contender trailing her. The rules of political proportionality can be kind, as they were Tuesday to Sen. Bernie Sanders.

Fox News:

• Sanders camp sees opportunity as Southern state voting wraps. (video) Bernie Sanders is showing no signs of slowing down after pulling off an upset victory in Michigan and sees an opportunity ahead to gain ground, as his campaign suggests one of Hillary Clinton’s biggest built-in advantages is about to become irrelevant. To date, Clinton’s “firewall” of Southern states has delivered her a string of victories, most recently in Mississippi. Across the Deep South, black voters who make up a majority of the Democratic primary electorate there went overwhelmingly for Clinton.

Zero Hedge:

• China Food Inflation Explodes To 4 Year Highs As Producer Prices Slump For 47th Straight Month.
• This Is Jeff Gundlach's Favorite (& Scariest) Chart. (graph)
• China's Gamblers Ditch The Burst Stock Bubble, Return To Macau's Casinos. (graph)
• What Happens Next: These Six Catalysts Will Determine If The Market Surges Or Crashes.
• How To Trade Tomorrow's ECB Meeting.
• Deutsche Bank Goes "Searching For Liquidity;" Can't Find Any.
• The Sabine Slam: Court Decision Threatens Midstream Sector. (graph)
• "Dust Off The Tail-Risk Hedges" MKM Warns US Equities Are Entering A "High Volatility Regime". (graph)
• "Some Folks Were Test-Firing Nuclear Missiles..."
• Kiwi Plunges As New Zealand Announces "Surprise" Rate Cut, Warns On China. RBNZ SAYS DRAMATIC BUILD-UP IN CHINA CORPORATE DEBT TO "ENORMOUS" LEVEL. RBNZ SAYS CHINA BUILDING AND MANUFACTURING SECTORS "VERY MUCH UNDER STRESS. RBNZ SAYS CHALLENGE WITH CHINA IS IT IS BUILDING UP A NUMBER OF SERIOUS IMBALANCES.
• The "Smart Money" Is Quietly Getting Out Of Dodge: Sells For A Sixth Straight Week As Buybacks Soar. (graph)
• "Are You Not Entertained" By This Close: Dow Back At 17K After Last Minute VIX Slam. (graph)

Business Insider:

• Jorge Ramos confronts Hillary Clinton: Would you drop out of the race if you get indicted?
• A new poll shows John Kasich vaulting ahead of Donald Trump in a must-win state.
• The Obama administration is pushing Medicare doctors to use cheaper drugs.
• Top pollster: 'I have never seen anything like' what happened in Michigan. He was referring to the result in the state that stunned the collective political world on Tuesday night. Sen. Bernie Sanders, down in public polls by more than 20 points to Hillary Clinton in the state, stormed to an upset win over the former secretary of state.
• The Wall Street legend made famous in 'Liar's Poker' has died — here are the most iconic scenes from the book.
• Oil's technicals and fundamentals are predicting different things.

Reuters:

• Valeant(VRX) gives Pershing Square 1 board seat, adds 2 other directors. Embattled Valeant Pharmaceuticals International Inc said on Wednesday it has added a representative from shareholder Pershing Square Capital Management to its board of directors as well as two other new directors. 
• Nasdaq(NDAQ) to buy ISE options exchange from Deutsche Boerse. Nasdaq Inc (NDAQ.O) said on Wednesday it would buy U.S. options exchange operator International Securities Exchange for $1.1 billion from Deutsche Boerse AG (DB1Gn.DE), the latest deal to emerge from a spate of exchange merger talks. ISE operates three electronic options exchanges which together account for more than 15 percent of U.S. volume, while Nasdaq operates another three. Combined, Nasdaq would command more than 40 percent of the market, extending its lead as the No. 1 U.S. options exchange operator.

Telegraph:

• Britain warned it wields no power in German dominated EU. Britain has little or no say over decisions made in a European Union increasingly dominated by German interests, Iceland’s prime minister has said. A leader of non-EU member state, Iceland’s Sigmundur Gunnlaugsson warned larger member states like the UK wield “diminishing power” in institutions still under the sway of the Franco-German alliance. 
• How a Brexit could save Europe from itself. It is those who love Europe, its diversity, its history and its humanity who should be the most enthusiastic about Brexit. A paradox? Not at all. The European Union, as currently constituted, has run out of road. It is doomed to fail, sooner or later, with catastrophic consequences for our part of the world, and the only way forward is for one major country to break ranks and show that there can be a better alternative consistent with Europe’s core enlightenment values.

21st Century Business Herald:

• Shanghai Studies Tightening Home Purchase Limits. Shanghai authorities held a meeting on Tuesday to discuss the effect of stricter home purchase policies on stabilizing the real estate market and cracking down on speculative investment, citing a person who attended the meeting. Regulators at the meeting recommended tighter mortgage policy for 2nd-home buyers, differentiated transaction taxes and enhanced scrutiny over leveraged financing, according to another report.
• PBOC's Pan Says P2P Lender Regulation Needed. Regulation of peer-to-peer lending platforms is needed because of past problems, citing PBOC Deputy Governor Pan Gongsheng. Internet finance is fast developing and may amplify financing risks, Pan said.

Night Trading 

• Asian equity indices are -.50% +.75% on average.
• Asia Ex-Japan Investment Grade CDS Index 145.75 -3.5 basis points. 
• Asia Pacific Sovereign CDS Index 68.75 -2.75 basis points. 
• Bloomberg Emerging Markets Currency Index 70.38 +.03%. 
• S&P 500 futures +.19%. 
• NASDAQ 100 futures +.16%.

Morning Preview Links

Earnings of Note
Company/Estimate 

• (CSIQ)/.73
• (CBK)/-.14
• (DG)/1.26
• (PRTY)/.75
• (ASPS)/1.03
• (FNSR)/.22
• (TFM)/.48
• (ULTA)/1.54
• (PAY)/.46
• (ZUMZ)/.50

Economic Releases 
8:30 am EST

• Initial Jobless Claims for last week are estimated to fall to 275K versus 278K the prior week.
• Continuing Claims are estimated to fall to 2250K versus 2257K prior.

12:00 pm EST

• 4Q Household Change in Net Worth.

2:00 pm EST

• The Monthly Budget Deficit for February is estimated at -$196.3B versus -$192.4B in January.

Upcoming Splits 

• None of note

Other Potential Market Movers

• The ECB rate decision, Mario Draghi press conference, $12B 30Y T-Bond auction, Bloomberg March US Economic Survey, weekly Bloomberg Consumer Comfort Index, weekly EIA natural gas inventory report, Susquehanna Semi/Storage/Tech conference, JPMorgan Gaming/Lodging/Restaurant/Leisure conference, (AKAM) general meeting, (AXP) investor day and the (UTX) analyst meeting could also impact trading today.

BOTTOM LINE: Asian indices are mostly higher, boosted by consumer 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 Modestly Higher into Final Hour on Central Bank Hopes, Oil Bounce, Yen Weakness, Energy/Gaming 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) 18.63 -.21%

• Euro/Yen Carry Return Index 130.32 +.57%

• Emerging Markets Currency Volatility(VXY) 11.69 +.69%

• S&P 500 Implied Correlation 61.08 +.96%

• ISE Sentiment Index 94.0 unch.

• Total Put/Call .94 -4.08%

• NYSE Arms 1.40 -21.63% 

Credit Investor Angst:

• North American Investment Grade CDS Index 96.91 -1.25%

• America Energy Sector High-Yield CDS Index 1,409.0 +.19%

• European Financial Sector CDS Index 98.37 -3.32%

• Western Europe Sovereign Debt CDS Index 30.32 -3.52%

• Asia Pacific Sovereign Debt CDS Index 68.81 -3.90%

• Emerging Market CDS Index 336.26 -3.02%
  

• iBoxx Offshore RMB China Corporate High Yield Index 124.72 -.01%

• 2-Year Swap Spread 5.0 +.5 basis point
  

• TED Spread 32.5 -.75 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -27.0 unch.
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 70.36 +.68%
• 3-Month T-Bill Yield .30% +1.0 basis point

• Yield Curve 99.0 +3.0 basis points
  

• China Import Iron Ore Spot $58.02/Metric Tonne -8.82%

• Citi US Economic Surprise Index -12.80 +.2 point

• Citi Eurozone Economic Surprise Index -55.20 -2.0 points

• Citi Emerging Markets Economic Surprise Index -17.30 -.5 point

• 10-Year TIPS Spread 1.51% +4.0 basis points
• 19.4% chance of Fed rate hike at April 27 meeting, 46.8% chance at June 15 meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating +88 open in Japan 
• China A50 Futures: Indicating -133 open in China

• DAX Futures: Indicating -29 open in Germany

Portfolio: 

• Slightly Lower: On losses in my biotech sector longs and emerging market shorts
  

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

• Market Exposure: Moved to 50% Net Long

Today's Headlines

Bloomberg:

• The China Intervention Trade Is Back as State Funds Battle Bears. (video) The Chinese stock market has once again turned into a battleground for bearish investors and state-directed funds determined to spark a rally. During each of the past six days, the Shanghai Composite Index has recorded intraday losses before recovering to end the trading session higher, with suspected intervention targets including Industrial & Commercial Bank of China Ltd. and PetroChina Co. leading the rebound. After dropping as much as 3.1 percent on Wednesday, the benchmark gauge pared its loss to 1.3 percent at the close as ICBC jumped. The resumption of afternoon rallies, a common occurrence during the height of the government’s market rescue campaign in July, has presented traders with a quandary: Worsening economic data suggest stocks should fall, but state intervention provides an opportunity to profit from short-term gains. It’s yet another sign of how government meddling has undermined the leadership’s own pledge to increase the role of market forces in the world’s second-largest economy. “Near-term data like trade is negative, and so there is selling pressure,” said Francis Cheung, a senior strategist at CLSA Ltd. in Hong Kong. “The government is supporting the market for the NPC, so when it ends, we could see a pullback.”
• Draghi Stimulus Fails in Stock Market as Swings Match 2008. Mario Draghi is having no success convincing stock investors that the European Central Bank has the firepower to reignite growth. While all economists in a Bloomberg survey expect the central bank to cut interest rates when policy makers meet Thursday, and 73 percent project them to boost the amount of money put into the financial system through bond purchases, fund managers aren’t optimistic about a post-decision equity rally. In the first year of quantitative easing, the Euro Stoxx 50 Index fell 17 percent, and volatility reached levels not seen since 2008. The gauge has dropped in each month but one following an ECB meeting since April.
• Draghi Has Banking Chiefs Bemoaning ECB's Negative-Rate Push. (video) The euro area’s bankers, battered by falling trading revenue and weak profitability, are predicting more pain as the European Central Bank gets ready to lower interest rates further into negative territory. While lenders managed over the past 18 months to counter the impact of the ECB’s push below zero, executives said a deeper descent threatens to upend banking’s centuries-old model of safeguarding deposits and charging interest on loans. In a world of subzero rates, depositors are charged and credit is almost free, with the goal of spurring economic growth and inflation. “We can cope with the current interest-rate environment or even a bit lower,” Gerrit Zalm, chief executive officer of ABN Amro Group NV, said in an interview in Shanghai last week. “But if we were really going into the very negative interest-rate environment, a lot of banks including us will have a difficult period.”
• French Banks Suffer Most as Lending Squeezed by ECB Rates: Chart. French banks are suffering more than their counterparts as the European Central Bank squeezes rates. New-business mortgage spreads have narrowed more than those in Ireland, Italy and Spain, according to Bloomberg Intelligence. With almost three-quarters of economists in a Bloomberg survey forecasting the ECB to expand monthly bond purchases on Thursday, and all but one predicting the deposit rate cut further below zero, pressure is set to increase further. 
• Bank of France Cuts Growth Forecast as Business Confidence Falls. The Bank of France said growth this quarter will be weaker than previously anticipated and confidence among manufacturers fell the most in three years. Sentiment among factory executives dropped to 98 in February from 101 in January, its biggest decline since January 2013, according to a monthly survey from the central bank. As a result, the economy will expand 0.3 percent this quarter instead of 0.4 percent, it said on Wednesday. The drop in confidence is a significant indication that a slowdown in emerging-market economies such as China and Brazil is spilling over into Europe and may threaten France’s first real recovery since President Francois Hollande came to power in May 2012.
• Negative Rate Extremes Have Watchdog Predicting More Bank Fees. Banks in Denmark have so far made a point of shielding their retail depositors from negative interest rates. But more than 3 1/2 years into the policy (and with central bank Governor Lars Rohde signaling rates may not go positive until 2019) “something has to give,” according to Jesper Berg, the director general of the Financial Supervisory Authority in Copenhagen. For Berg, the most likely scenario is that banks start charging more fees. “Clearly, the longer it lasts,” the greater the “need to find other solutions,” he said in an interview.
• Iran Tests Ballistic Missiles for Second Day in Row. Iran tested two ballistic missiles carrying markings calling for Israel’s destruction, hours after Washington said it would investigate whether an earlier launch violated United Nations Security Council resolutions. The test on Wednesday and its bellicose message coincided with a trip by U.S. Vice President Joe Biden to Israel, where he assured Prime Minister Benjamin Netanyahu that the Obama administration would take action against any Iranian violation of the nuclear accord with world powers signed in July.
• European Stocks Advance as ECB Meeting Looms; Prudential Climbs. (video) European shares advanced for the first day in three as investors speculated on further stimulus from the European Central Bank when it meets tomorrow. Prudential Plc led insurers higher with a 2.9 percent advance after reporting a jump in profit. Glencore Plc paced miners higher, while gains in oil helped energy shares rebound from their deepest selloff in two weeks. Burberry Group Plc fell 6.7 percent after people familiar with the matter said that HSBC Holdings Plc’s disclosure that it held 5 percent of the fashion retailer’s shares was part of a series of trades rather than a single bidder building a stake. The Stoxx 600 added 0.5 percent to 339.14 at the close of trading, paring gains in afternoon trade after earlier rising as much as 1.3 percent. 
• Siemens Cuts 2,500 Mostly German Jobs Amid Commodities Slump. "Plunging demand in raw materials markets has led to a significant intensification of competition, particularly in Asia,” Jürgen Brandes, head of Siemens’s process industries and drives division, said in the statement.
• Freeport(FCX) Says Copper Cuts Not Enough to End Surplus in 2016. Copper-output cuts spurred by lower prices aren’t enough to end a surplus this year and demand won’t catch up with supply until 2017, according to a senior official at Freeport-McMoRan Inc., the largest publicly traded producer of the metal. Around 700,000 metric tons of supply will have been removed in about the year through mid-2016 as prices sank to a six-year low, according to Javier Targhetta, a senior vice president of marketing and sales. Still, new supplies from mines added this year mean a glut won’t be completely wiped out in 2016, he said in an interview Tuesday.
• Iron Ore Drops Back After `Surprising Blip' That Notched Record. Iron ore dropped on Wednesday, eroding Monday’s record surge, amid a revival in concern that global supply is outpacing demand. Ore with 62 percent content delivered to Qingdao fell 8.8 percent to $58.02 a dry metric ton, according to e-mailed data from Metal Bulletin Ltd. The price dipped 0.2 percent on Tuesday after Monday’s 19 percent rally to the highest since June. The retreat was preceded by losses on futures in Singapore and China. The global iron ore market remains grossly oversupplied, demand in China is faltering and there’s a severe glut of steel, according to Li Xinchuang, deputy secretary-general of the China Iron & Steel Association. Li, whose group represents the top mills in the country that makes half of the world’s steel, said that the recent gains probably won’t last.
• Don't Let Rally Fool You: Commodity Firms Still Face Debt Cliff. (video) If you think commodity producers are out of the woods as markets rally, here’s a reality check: many are still grappling to contain debt. Another year of belt-tightening hasn’t kept pace with an earnings slump after prices collapsed. One gauge of leverage among mining, energy and agriculture companies continued to rise in the fourth quarter and is more than double year-earlier levels. While raw materials have rebounded in the past month, they are still well below levels of even two years ago -- 26 percent in the case of copper and 62 percent for crude. To end the gluts that sank prices, companies ought to be cutting more output, but many are still so deeply in debt that they need to keep churning out cash to stay above water. “I call it the commodity conundrum,” said Jessica Fung, a commodities analyst with BMO Nesbitt Burns Inc. in Toronto. “Cutting production is absolutely the last resort for any company because you’re basically shutting down your revenue generation. And then what?”
• Art Market Rally Halts, Sales Fall for First Time Since 2012. It’s official: The bull market for art is taking a breather. Global art sales fell 7 percent last year to $63.8 billion, led by a slowdown in Asia and weaker demand for postwar and contemporary art, the European Fine Art Foundation said in its annual art market report on Wednesday. It’s the first decline since 2012, when purchases fell 12 percent.The market for art is cooling as financial markets show signs of weakening after a seven-year bull run that pushed prices for many risk assets to records.

Wall Street Journal:

• Carly Fiorina Endorses Ted Cruz, Says Donald Trump Must Be Defeated. (video) Mrs. Fiorina, a former Hewlett-Packard Co. CEO, told a crowd at a Cruz rally that she voted for the Texas senator during Virginia’s March 1 primary and urged Republicans to rally behind him. “We’re going to have to beat Donald Trump at the ballot box,” Mrs. Fiorina said. “And the only guy who can beat Donald Trump is Ted Cruz.” Mrs. Fiorina stressed Mr. Cruz’s electability, saying he “won, over and over and over again,” Mrs. Fiorina said. She added: “It is time to unite behind Ted Cruz.”
• $lammed by ObamaCare. My Bronze plan’s monthly premium jumped $194 this year. I never thought I’d look forward to Medicare, but I do now.

MarketWatch.com:

• 5 things to watch for at Thursday’s key ECB meeting.

Zero Hedge:

• Forget "Ghost Cities", China Turns To "Ghost Screenings" To Boost Box Office.
• Famed Short Seller Muddy Waters Says It's Just A "Dead Cat Bounce". (graph)
• Chevron(CVX) Protects Dividend, Slashes Another 36% Off Spending.
• Former Fed President: "We Injected Cocaine And Heroin Into The System To Create A Wealth Effect". (video)
• Where Have We Seen This Before: Hungary Central Bank Will Prop Up Economy By Boosting Stock Market.
• Despite Record Cushing Inventory, Oil Jumps To $38 On Biggest Gasoline Draw In A Year. (graph)
• The 30-Year Line In The (Oil) Sand. (graph)
• Wholesale Trade "Gap" Reaches Record High As Sales Tumble, Inventories Rise. (graph)
• On The Seven Year Anniversary Of "The Most Hated Bull Market Ever" - How We Got Here. (graph)
• "Output Freeze A Joke", China Demand To Fall, And Other News That Should Be Moving Oil.

Washington Examiner:  

• Clinton crushes Trump in new national poll. Despite assuring Republicans he would beat Democratic presidential front-runner Hillary Clinton "very easily" in the general election, Donald Trump trails the former secretary of state by almost 10 points in a new poll released Wednesday. According to the latest ABC News/Washington Post poll of registered voters, Clinton would edge Trump 50-41 percent if the two candidates went head-to-head in November. The former first lady has expanded her lead over Trump by six points since September. Trump, the thrice-married billionaire who's been heavily criticized for his treatment of women, trails Clinton by 21 percentage points among women voters in the same poll, although he leads her by 5 percent among men. While three-quarters of Republican respondents would support Trump as their party's nominee, 86 percent of Democrats would support Clinton as theirs. Clinton also outperformed Trump among independents, 48 to 39 percent, and voters under the age of 40, and was consistently rated the more trusted candidate on handling the economy, terrorism, immigration and dealing with international crises. On immigration, an issue Trump has made central to his campaign, Clinton leads him by 19 percentage points as the more trusted candidate.

TheBlaze:

• ‘Are You Proud of That?’: Cokie Roberts Confronts Trump on His Discourse’s ‘Effect on Children’. ABC News political commentator Cokie Roberts asked Republican presidential front-runner Donald Trump Wednesday if he was “proud” of a political environment in which school children taunt each other about getting deported — an environment for which his campaign is allegedly responsible. “There’ve been incidents of children, of white children, pointing to their darker-skinned classmates and saying ‘You’ll be deported when Donald Trump is president.’ There have been incidents of white kids at basketball games holding up signs to teams which have Hispanic kids on them saying ‘We’re going to build a wall to keep you out.’ Are you proud of that? Is that something you’ve done in American political and social discourse that you’re proud of?” Roberts asked during a segement on MSBNC’s “Morning Joe.”

@epomboy:

• Wholesale Inventories/Sales Ratio: Nondurable Goods highest on record. (graph)

Telegraph: 

• Barack Obama to skip Nancy Reagan's funeral in favour of South by Southwest festival. Barack Obama will attend SXSW, a music and tech festival in Austin, rather than attend Nancy Reagan's funeral.

Bear Radar

Style Underperformer:

• Large-Cap Growth +.1%.

Sector Underperformers:

• 1) Biotech -1.5% 2) Steel -1.0% 3) Banks -.3%

Stocks Falling on Unusual Volume:

• TRU, BPT, PLNT, PEN, WCG, SCMP, JCOM, RNG, SHAK, CMG, VRTS, LMOS, PRSC, OMF, QURE, PMC, UBIO, NSTG, NVO, ERIE, YELP, OPHT, ULTA, REGN, CBPO and EDIT

Stocks With Unusual Put Option Activity:

• 1) COG 2) XME 3) BTU 4) CMG 5) SHAK

Stocks With Most Negative News Mentions:

• 1) YELP 2) CMG 3) GRPN 4) SUNE 5) MON

Charts:

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

Bull Radar

Style Outperformer: 

• Mid-Cap Value +.4%

Sector Outperformers:

• 1) Gaming +2.7% 2) Energy +2.0% 3) Disk Drives +1.4% 

Stocks Rising on Unusual Volume: 

• ATSG, BUFF, VRA, RDUS, QEP, SA, CVRR, TTS, AMED, LGIH, ADRO and EXPR

Stocks With Unusual Call Option Activity: 

• 1) FE 2) ARO 3) XLU 4) DG 5) KO

Stocks With Most Positive News Mentions: 

• 1) BUFF 2) PFE 3) PSX 4) CVX 5) CTSG

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running +7.1% Above 100-Day Average
• 3 Sectors Rising, 7 Sectors Declining
• 62.2% of Issues Advancing, 35.1% Declining
• 61 New 52-Week Highs, 5 New Lows
• 36.0% of Issues Above 200-day Moving Average
• Average 14-Day RSI 48.2%
• Vix 18.5 -.9%
• Total Put/Call .86 -12.2%
• TRIN/Arms 1.17 -33.4%