OVERNIGHT MARKETS AND NEWS

Mar E-mini S&Ps (ESH18 -0.74%) this morning are down sharply by -0.95% and European stocks are down -0.33% as global stocks slide on concern over U.S. trade policies. The resignation late yesterday of President Trump’s economic adviser, Gary Cohn, a free-trade proponent, has bolstered concern President Trump will go ahead with his planned tariffs on aluminum and steel imports. Also, people with knowledge of the matter said the Trump administration is considering restrictions on Chinese investments in the U.S. along with tariffs on a broad range of Chinese imports to punish China for its alleged theft of intellectual property. Weakness in energy stocks is another negative for the overall market with Apr WTI crude oil (CLJ18 -0.51%) down -0.89% after API data late Tuesday showed U.S. crude inventories rose +5.66 million bbl last week. Asian stocks settled mostly lower: Japan -0.77%, Hong Kong -1.03%, China -0.55%, Taiwan -0.36%, Australia -1.01%, Singapore -1.18%, South Korea +0.22%, India -0.85%.

The dollar index (DXY00 +0.02%) is down -0.02% at a 2-week low on concern President Trump will ramp up his protectionist trade policies. EUR/USD (^EURUSD) is up +0.02% at a 2-week high. USD/JPY (^USDJPY) is down -0.36%.

Jun 10-year T-note prices (ZNM18 +0.21%) are up +8 ticks.

Fed Governor Brainard said stronger global growth and “very substantial” U.S. fiscal stimulus “do give me greater confidence in the outlook for inflation.” She added, “a couple of years ago, strong headwinds sapped the momentum of the recovery and weighed down the path of policy. Today, with headwinds shifting to tailwinds, the reverse could hold true.”

Eurozone Q4 GDP was left unrevised at +0.6% q/q and +2.7% y/y.

The Japan Jan leading index CI fell -1.8 to an 8-month low of 104.8, weaker than expectations of -0.9 to 106.5. The Jan coincident index fell -5.7 to a 1-year low of 114.0, weaker than expectations of -4.9 to 115.3.

U.S. STOCK PREVIEW

Key U.S. news today includes: (1) weekly MBA mortgage applications (previous +2.7% with purchase sub-index +6.2% and refi sub-index -1.2%), (2) NY Fed President Dudley (voter) speaks in Puerto Rico, (3) Atlanta Fed President Raphael Bostic (voter) speaks on the economic outlook in Fort Lauderdale, Florida, (4) Feb ADP employment (expected +200,000, Jan +234,000), (5) revised Q4 non-farm productivity (expected unrevised at -0.1%) and revised Q4 unit labor costs (previous +2.0%), (6) Jan trade balance (expected -$55.1 billion, Dec -$53.1 billion), (7) EIA weekly Petroleum Status Report, (8) Fed Beige Book, (9) Jan consumer credit (expected +$18.0 billion, Dec +$18.447 billion).