Today's Headlines

Bloomberg:

• U.S. ‘Hopeful’ of New Nafta Deal in Near Future, Lighthizer Says. (video)
• Early China Indicators Show Outlook Undimmed by Trade Tension.
• Quant Style Crash That Strategists Warned About Finally Arrives.
• Health Care M&A Booming in Busiest Start in More Than a Decade. (video)
• Tech Stocks Fear Premium Just Jumped to a 13-Year High.

Wall Street Journal:

• In Politics vs. Tech Profits, Investors Are the Losers. The market is waking up to risks, and economic realities, facing once-highflying stocks.
• Why Are States So Strapped for Cash? There Are Two Big Reasons. The proportion of state and local tax revenues dedicated to Medicaid and public pensions is the highest since the 1960s.

Fox News: 

• Despite media narrative, study says teenagers made up just 10 percent of March for Our Lives crowd.

CNBC:

• Big Pharma's billion-dollar scramble to invest in start-ups to fuel innovation.
• Tim Cook on Facebook's(FB) data leak scandal: 'I wouldn't be in this situation'.
• Bitcoin is nearing a 'death cross' on the charts. Here’s what it means.
• Oil sinks 1.3%, settling at $64.38, as US crude stockpiles rise and geopolitical risk fades. (video)
• Democrats bet on moderates, military veterans to win in GOP House districts, but the strategy faces big tests as the left pushes more liberal stances.

Zero Hedge:

• Tesla(TSLA) Bonds, Stock In Freefall As Company Pleads Ignorance Over Fatal Crash.
• WTI/RBOB Pump'n'Dump After Huge Cushing Build, Record Crude Production. (graph)
• FANG Stocks In Freefall; Amazon Plunges On Trump Retaliation Fears. (graph)
• Pending Home Sales Tumble Year-Over-Year. (graph)
• Q4 GDP Revised Sharply Higher To 2.9% As US Economy Grew 2.3% In 2017. (graph)
• "If We Build It...?" - Wholesale Inventories Surge Most In 5 Years. (graph)
• Goldman Slashes iPhone Sales Estimates Due To "Demand Deterioration".
• Facebook(FB) Changes Privacy Tools, Allowing Users To Delete Data.
• "Want To Freak Yourself Out?" Here Is All The Personal Data That Facebook/Google Collect.

Business Insider:

• Trump keeps backing down from his worst impulses — and it could be great news for the economy.
• Wealthy shoppers are going crazy over this jacket that costs $90 on Amazon — and it should terrify Canada Goose(GOOS).
• A vape pen with twice the nicotine of comparable devices is taking over high schools — and adults are frightened.

Bear Radar

Style Underperformer:

• Mid-Cap Growth -.4%

Sector Underperformers:

• 1) Gold & Silver -2.0% 2) Semis -1.7% 3) Oil Service -1.5%

Stocks Falling on Unusual Volume: 

• CXO,TSLA, SCVL, SGH, EEFT, AXGN, NFLX, TWOU, SQ, AMZN, RHT, SHOP, PTCT and SINA

Stocks With Unusual Put Option Activity:

• 1) EMB 2) BBT 3) STI 4) PTLA 5) NOW

Stocks With Most Negative News Mentions:

• 1) TSLA 2) AMZN 3) RIOT 4) GERN 5) SLDB

Charts:

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

Bull Radar

Style Outperformer:

• Small-Cap Value +.3%

Sector Outperformers:

• 1) Pharma +1.9% 2) REITs +1.7% 3) Retail +1.1%

Stocks Rising on Unusual Volume:

• RSPP, IEFA, LHO, SHPG, RH, LULU, GRFS, EFAV, EGN, QIQI, EZU, OMN, ANAB, PEB, SGMO, KTOS, DRH, SNN, INOV, RYAM, FB, LZB, TWTR, DXCM, PLT and MPW

Stocks With Unusual Call Option Activity:

• 1) RH 2) FINL 3) RHT 4) VMW 5)LYB

Stocks With Most Positive News Mentions:

• 1) LULU 2) RH 3) JEC 4) RAD 5) QIWI

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running +11.1% Above 100-Day Average
• 6 Sectors Rising, 5 Sectors Declining
• 58.6% of Issues Advancing, 37.6% Declining
• 13 New 52-Week Highs, 79 New Lows
• 37.2% of Issues Above 200-day Moving Average
• Average 14-Day RSI 41.7%
• Vix 23.1 +2.4%
• Total Put/Call 1.37 +28.0%
• TRIN/Arms 1.35 -12.0%

Wednesday Watch

Night Trading 

• Asian equity indices are -1.5% to -.75% on average.
• Asia Ex-Japan Investment Grade CDS Index 78.75 +.25 basis point. 
• Asia Pacific Sovereign CDS Index 13.25 unch.
• Bloomberg Emerging Markets Currency Index 75.38 +.09%.
• FTSE 100 futures -.64%.
• S&P 500 futures unch.
• NASDAQ 100 futures -.14%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (BB)/.01
• (WBA)/1.54
• (GME)/1.98
• (PVH)/1.47

Economic Releases

8:30 am EST

• 4Q GDP Annualized QoQ is estimated to rise +2.7% versus a prior estimate of a +2.5% gain. 
• 4Q Personal Consumption is estimated to rise +3.8% versus a prior estimate of a +3.8% gain.
• The 4Q GDP Price Index is estimated to rise +2.3% versus a prior estimate of a +2.3% gain.
• The Core PCE QoQ is estimated to rise +1.9% versus a prior estimate of a +1.9% gain.
• Advance Goods Trade Balance for February is estimated at -$74.4B versus -$75.3B in January.
• Wholesale Inventories MoM for February is estimated to rise +.5% versus a +.8% gain in January.

10:00 am EST

• Pending Home Sales MoM for February is estimated to rise +2.0% versus a -4.7% decline in January.

10:30 am EST

• Bloomberg consensus estimates call for a weekly crude oil inventory gain of +146,420 barrels versus a -2,622,000 barrel decline the prior week. Gasoline supplies are estimated to fall by -2,159,830 barrels versus a -1,693,00 barrel decline the prior week. Distillate supplies are estimated to fall by -1,947,080 barrels versus a -2,022,000 barrel decline the prior week. Finally, Refinery Utilization is estimated to fall by -.25% versus a +1.7% gain prior.

Upcoming Splits

• (BRO) 2-for-1

Other Potential Market Movers

• The Fed's Bostic speaking, Japan Retail Trade report, weekly MBA Mortgage Applications report, $29B 7Y T-Note auction, CIBC Retail/Consumer Conference, BofA Merrill Auto Summit, JPMorgan Energy Infra Conference, (AMBA) Analyst Day and the (ADSK) Investor Day 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 25% net long heading into the day.

Stocks Close Substantially Lower on Less Economic Optimism, Earnings Concerns, Oil Decline, Tech/Biotech Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Lower
  

• Sector Performance: Most Sectors Declining
  

• Volume: Around Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 22.8 +8.4%

• Euro/Yen Carry Return Index 136.24 -.31%

• Emerging Markets Currency Volatility(VXY) 8.08 +1.6%

• S&P 500 Implied Correlation 50.11 +7.3%

• ISE Sentiment Index 133.0 +41.5%
  

• Total Put/Call 1.0 -14.5%

• NYSE Arms 1.48 +188.6%

Credit Investor Angst:

• North American Investment Grade CDS Index 67.14 +2.12%
  

• America Energy Sector High-Yield CDS Index 443.0 -.26%

• European Financial Sector CDS Index 66.90 -2.69%

• Italian/German 10Y Yld Spread 138.75 +3.75 basis points
  

• Asia Pacific Sovereign Debt CDS Index 13.20 -.75%

• Emerging Market CDS Index 144.37 +.79%
  

• iBoxx Offshore RMB China Corporate High Yield Index 148.60 +.01%

• 2-Year Swap Spread 28.0 -5.0 basis points

• TED Spread 51.5 -4.25 basis points

• 3-Month EUR/USD Cross-Currency Basis Swap -4.25 +3.0 basis points

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 75.29 -.13%
• 3-Month T-Bill Yield 1.75% +1.0 basis point
  

• Yield Curve 50.75 -6.0 basis points

• China Iron Ore Spot 63.55 USD/Metric Tonne +.41%

• Citi US Economic Surprise Index 46.2 -.6 point

• Citi Eurozone Economic Surprise Index -57.50 -1.3 points

• Citi Emerging Markets Economic Surprise Index 33.0 -1.6 points

• 10-Year TIPS Spread 2.07 -1.0 basis point
  
• 77.4% chance of Fed rate hike at June 13 meeting, 78.8% chance at August 1 meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating -577 open in Japan 
• China A50 Futures: Indicating -153 open in China

• DAX Futures: Indicating -130 open in Germany

Portfolio: 

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

• Disclosed Trades: Added to my (IWM)/(QQQ) hedges and to my emerging markets shorts

• Market Exposure: Moved to 25% Net Long