Bear Radar

Style Underperformer:

• Large-Cap Value -1.8%

Sector Underperformers:

• 1) Robotics -2.8% 2) Banks -2.6% 3) Oil Service -2.4%

Stocks Falling on Unusual Volume: 

• PRTA, WFC, GOLD, RYAAY, CORT, RBC, AMAG, YRCW, KKR, CARA, CY, ARNC and MCY

Stocks With Unusual Put Option Activity:

• 1) HBI 2) CTL 3) BTU 4) SLCA 5) EVHC

Stocks With Most Negative News Mentions:

• 1) KOS 2) CHK 3) WFC 4) JNJ 5) TRNC

Charts:

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

Bull Radar

Style Outperformer:

• Mid-Cap Growth -1.0%

Sector Outperformers:

• 1) Steel +.4% 2) Coal +.3% 3) Software unch.

Stocks Rising on Unusual Volume:

• CASA, BG, TGTX, MINI, GLOP, ENVA, ASH, KEX, XL, NOW, HX, EMN, RHT, AMZN, CIT, GOOS, ALB, OPY, HAYN, AAPL, DECK, NFG, XNCR and CHD

Stocks With Unusual Call Option Activity:

• 1) HBI 2) BTU 3) SLCA 4) ARRY 5) AMBA

Stocks With Most Positive News Mentions:

• 1) B 2) EMN 3) ADSK 4) CIT 5) MINI

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running +45.2% Above 100-Day Average
• 1 Sector Rising, 9 Sectors Declining
• 24.1% of Issues Advancing, 72.6% Declining
• 4 New 52-Week Highs, 207 New Lows
• 54.6% of Issues Above 200-day Moving Average
• Average 14-Day RSI 42.1%
• Vix 19.1 +9.7%
• Total Put/Call .65 -26.1%
• TRIN/Arms 1.13 -20.6%

Monday Watch

Today's Headlines

Bloomberg:

• Asian Demand for 16,000 Planes Spells Jackpot for Airbus, Boeing(BA). The rapid growth of mainland Chinese carriers and the entry of many budget operators has meant billions of dollars in orders for the aircraft makers. At the Singapore Airshow this week, top officials from Airbus SE Chief Executive Officer Tom Enders to Boeing Co.’s vice president of marketing Randy Tinseth are due to outline their plans to capture that boom.

• Global Equity Rout Deepens as Rate Fears Grow. Asian equities fell with Dow Jones Industrial Average futures tumbling almost 1 percent as the biggest rout for global stocks in two years and surging government bond yields kept investors questioning the speed of monetary policy tightening. The dollar extended gains. Equity indexes in Australia and New Zealand sank at least 1 percent, while futures on the S&P 500 Index were 0.7 percent lower and losses were expected in Japan and Hong Kong. The gauge of U.S. shares tumbled 2.1 percent Friday and the 10-year Treasury yield rose above 2.85 percent following solid jobs data showing rising wages and a hint from Dallas Fed President Robert Kaplan that the Federal Reserve may need to lift interest rates more than three times this year. Futures on Japan’s Nikkei 225 Stock Average sank 1.4 percent in late Friday trading in Chicago. Australia’s S&P/ASX 200 Index dropped 1.3 percent and New Zealand’s S&P/NZX 50 Index sank 1.5 percent. Contracts on Hong Kong’s Hang Seng Index declined 1.3 percent. The MSCI Asia-Pacific Index fell 0.3 percent.

• Five Things You Need to Know to Start Your Day.

• Broadcom Said to Plan $120 Billion Qualcomm(QCOM) Bid, Reuters Says. Broadcom Ltd. plans to raise its hostile takeover offer for semiconductor rival Qualcomm Inc. to about $120 billion from $105 billion, Reuters reported, citing people familiar with the deal that it didn’t identify.

• Selloff Ignites Unprecedented Hedging as VIX Options Hit Record. (video)

Wall Street Journal:

• New Immigration Bill Would Omit Trump’s More Contentious Proposals. Republican Sen. John McCain, Democratic Sen. Chris Coons say they will propose path to citizenship for DACA participants, but no wall.

• Companies Everywhere Copied Japanese Manufacturing. Now the Model Is Cracking. Concepts celebrated in business publications world-wide have been tarnished by a string of scandals.

• Memo’s Release Escalates Clash Over Russia Probe; Trump Says It ‘Totally Vindicates’ Him. Release comes after the FBI expressed ‘grave concerns’ over the accuracy of the document.

• Despite Market Turmoil, Corporate Earnings Shine Bright. With about half of the companies in the S&P 500 having reported results, 80% have beat revenue expectations.

• As Stock-Market Rout Spreads, Investors Fear Markets Falling in Lockstep. Some investors worry that markets moving in tandem raise the chances of a more severe selloff than what still-positive fundamentals would warrant.

• Bitcoin’s Crashing? That Won’t Stop Arbitrage Traders From Raking in Millions. Cryptocurrency arbitrageurs cash in on wide price disparities between exchanges.

• Rent Controls, a Bane of Landlords, Are Gaining Support as Costs Soar. Movement finds momentum as price pressures rise in urban areas, tax incentives for ownership wane. 

• Banks Raise Oil Forecasts but See Risks. Rebalancing in crude supply pushes prices to multi-year highs but some analysts question how long the rally will last.

Fox News: 

• Schumer urges Trump to allow Dems' 'FISA memo' to also be released.

CNBC:

• Harley-Davidson(HOG) tries to regain its coolness factor.

• Castlight Health CEO warns Jeff Bezos that health tech is a 'tough business'.

• Making a crypto utopia in Puerto Rico.

Zero Hedge:     

• Two Dead, 70 Injured In South Carolina Amtrak Train Collision.

• "An Organized Effort By Republicans To Obstruct": Democrats Draft Talking Points To Refute FISA Memo.

• Hamas Leader Warns War With Israel Will Erupt "Within Days".

• Turkey Warns US Troops In Northern Syria May Be Targeted By Its Army.

• Match.com Dating Site Is Reporting Fake Active-User Numbers. 

Business Insider:

• 12 smart home gadgets that practically clean the house for you.

Night Trading

• Asian indices are -1.25% to -1.75% on average.

• Asia Ex-Japan Investment Grade CDS Index 67.5 +3.0 basis points.

• Asia Pacific Sovereign CDS Index 11.75 +.25 basis  point.

• Bloomberg Emerging Markets Currency Index 75.89 -.04%.

• S&P 500 futures -.42%.

• NASDAQ 100 futures -.35%.

Morning Preview Links

Earnings of Note

Company/Estimate

• (BMY)/.67

• (HES)/-.92

• (ON)/.37

• (SYY)/.65

• (BMI)/.24

• (FN)/.70

• (FTNT)/.29

• (OCLR)/.12

• (NOV)/-.04

• (SWKS)/1.91

Economic Releases
10:00 am EST

• The ISM Non-Manufacturing Composite for January is estimated to rise to 56.5 versus 55.9 in December.
  

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Eurozone PMI report and the Eurozone retail sales report could also impact trading today.

BOTTOM LINE: Asian indices are 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 50% net long heading into the week.

Weekly Outlook

• Wall St. Week Ahead by Reuters. 
• Stocks to Watch Next Week by Seeking Alpha.
• Weekly Economic Calendar by Briefing.com.

BOTTOM LINE: I expect US stocks to finish the week mixed as positive earnings outlooks, yen weakness and economic optimism offset lower energy prices, technical selling and rising long-term rates. My intermediate-term trading indicators are giving neutral signals and the Portfolio is 50% net long heading into the week.

Today's Headlines

Bloomberg:

• Wells Fargo(WFC) Hit With Unusual Ban on Growth in Yellen's Final Act. After markets closed on her final workday in office, Federal Reserve Chair Janet Yellen delivered a blow to one of the nation’s largest banks: Wells Fargo & Co. won’t be allowed to grow until it cleans up. Fed officials said the San Francisco-based lender’s pattern of consumer abuses and compliance lapses called for an unprecedented sanction. Until Wells Fargo addresses shortcomings in areas including internal oversight, it can’t take any action that would boost total assets beyond their level at the end of 2017, without the Fed’s permission. The bank said after-tax profit in 2018 would be reduced by $300 million to $400 million and its stock slumped in late trading Friday. “This is akin to the last scene in ‘The Godfather,”’ said Isaac Boltansky, an analyst at Compass Point Research & Trading. “Chair Yellen decided to handle unfinished business on her way out the door.”

• Bitcoin Ban Expands Across Credit Cards as Big U.S. Banks Recoil. (video) A growing number of big U.S. credit-card issuers are deciding they don’t want to finance a falling knife. JPMorgan Chase & Co., Bank of America Corp. and Citigroup Inc. said they’re halting purchases of Bitcoin and other cryptocurrencies on their credit cards. JPMorgan, enacting the ban Saturday, doesn’t want the credit risk associated with the transactions, company spokeswoman Mary Jane Rogers said. Bank of America started declining credit card transactions with known crypto exchanges on Friday. The policy applies to all personal and business credit cards, according to a memo. It doesn’t affect debit cards, said company spokeswoman Betty Riess. And late Friday, Citigroup said it too will halt purchases of cryptocurrencies on its credit cards. 

• Hedge Funds Bet Bitcoin's Pain Isn't Over on Cboe Futures Market. (video) Hedge funds are wagering that Bitcoin’s free-fall will keep going. Leveraged funds, which include hedge funds, held 2,974 short positions in Cboe Global Markets Inc.’s Bitcoin futures as of Tuesday, a fivefold jump from the prior week. Long bets dropped to 895 contracts, down 22 percent from a week earlier, according to weekly data released Friday by the U.S. Commodity Futures Trading Commission.

• As Trump Cuts Taxes, Chevron(CVX) CEO Tells World: Now It's Your Turn.

• U.S. Stock Volatility Spikes to Highest Since Election Day 2016. (video)

• How Worried Should You Be? Traders Confront Inflation's Reality.

Wall Street Journal: 

• A Reckoning for the FBI. The House memo reveals disturbing facts about the misuse of FISA.

• Inside the FBI Life of Peter Strzok and Lisa Page, as Told in Their Text Messages. Exchanges between agent and lawyer show dedication to bureau—but no hesitation to criticize colleagues and Trump.

• States Look at Establishing Their Own Health Insurance Mandates. Congressional repeal of Obamacare’s individual mandate leaves a number of lawmakers examining replacement measures.

• Ahead of Super Bowl, Poll Shows NFL Is Losing Its Core Audience. Adults who report following the NFL closely have dropped 9% since 2014, the poll finds. Just 51% of men aged 18 to 49 say they follow the NFL closely, down from 75% four years ago.

• Trudeau Says Canada’s ‘Not Going to Take Any Old Deal’ in Nafta Talks. Foreign minister has said there remain ‘significant gaps’ in negotiations over U.S. demands.

MarketWatch.com:

• Fed’s Williams tries to ease market fears the central bank will turn aggressive on rate hikes.

Fox News: 

• Trump, GOP upbeat about turn in midterm numbers, vow to use Pelosi 'crumbs' comment on stump. (video)

• Trump's SOTU speech gets strong public support, journalists still hate him, and other outrageous media fiascos. (video)

• Nunes tells Fox News memo was released out of public obligation. (video)

CNBC: 

• High levels of cellphone radiation linked to tumors in male rats: US study.

• This chart shows what tends to happen to markets after a big plunge in the Dow like this.

• US House sets Tuesday vote on bill to avoid government shutdown.

• Amazon's(AMZN) cloud is big enough to be the fifth-largest business software company in the world.

• Look out ahead: more U.S. dollar weakness to come, says currency expert. (video)

Zero Hedge:

• Nunes: FISA Memo Just "Phase One," Now Targeting State Department In "Phase Two".

• GOP Reps Seek Criminal Prosecution Of FBI, DOJ Officials For "Full Throated" Illegal Misconduct And "Treason".

• Welcome To Bitcoin's "Trough Of Disillusionment". Translation: if we can find new suckers to bring in fresh cash, we can keep this ponzi going long enough for us to exit.

• The FISA Memo, Obama, And The Election that Almost Wasn't.

• Up In Arms: German Small Arms Ownership Soars 85% In Under 2 Years.

• "Disappointed" Yellen Warns Investors "Be Careful", But "Don't Label It A Bubble".

• Russian Fighter Jet Shot Down By Syrian Rebels, Pilot Killed.

• Wells Fargo(WFC) Crashes After Fed's Shocking Crackdown Bans Bank From Growing.

• FISA Memo Released: Here's What It Says.

• The Fragile Generation.

• Algorithms Are Fine - Until Governments Use Them Against Us.

• Amazon(AMZN) Patents Ultrasonic Tracking Wristbands To Control Workers.

• Nine Reasons Why Globalization Can't Be Permanent.

• "Dr. Doom" Nouriel Roubini Says Bitcoin Is The "Biggest Bubble In Human History".

• Political Correctness Serves Only The Ruling Elite.

• Weekend Reading: Did The Market Just Get 'Woke'?

• Turmoil: Dow's Biggest Point Rout Since Lehman; Bonds, Bitcoin Crash.

Business Insider:

• RED announced its $1,200 smartphone is coming this summer — take a look at all its futuristic technologies.

• Confidential UN report says North Korea earned $200 million from banned exports, supplied weapons to Syria and Myanmar.

• Trump's new nuclear doctrine will keep some Obama policies — but it turns up the pressure on Russia.

• Apple's(AAPL) making more money off the iPhone — even as it sold fewer of them.

• 5 tech industry moguls who raise their kids nearly tech-free.

• China has a supermarket unlike anything in the US — and it has 2 major advantages over Amazon Go.