“You cannot ignore the market – ignoring a source of investment opportunities would obviously be a mistake – but you must think for yourself and not allow the market to direct you.” — Seth Klarman

1. World stocks recover as Putin downshift tensions — Global equity markets recovered from sharp losses early in the week in what could be interpreted as a de-escalation of tensions by the Russian as some military units are back to their bases after a surprise training exercise. Some of the drills took place near the border with Ukraine, exacerbating fears about a possible Russian invasion of its neighbor.
2. Obama looks to expand tax break for the low-paid — President Obama is due to propose expanding the Earned Income Tax Credit to 13.5M childless workers when he unveils his annual $1.014T budget plan today. The 10-year $60B cost would be met by closing two tax loopholes for some self-employed professionals and investment-fund managers. Obama also wants to spend $302B on highways, bridges and transit projects, and increase the minimum wage.
3. China maintains growth goal of 7.5% — Reuters, in an address to the annual meeting of the National People’s Congress, Chinese Premier Li Keqiang reiterated his commitment to reform to make growth more sustainable to the goal of 7.5%. The government main goals were to focus on reforming the economy and reining in the ‘shadowing banking’ system.
4. Ukraine Crisis Pressures U.S. on Gas Exports — WSJ, the crisis in Ukraine has sparked renewed calls among Republicans and energy state Democrats for an easing of restrictions on foreign sales of natural gas. Russia supplies Europe with 30% of its gas, so there are those who are wary of imposing major sanctions on the country. Increasing U.S. gas exports could reduce that reliance and give the West a freer hand in dealing with Russia, particularly in the long term.
5. Histical Bull Markets — courtesy of BIG, and PensionPartners, the tables below provide an update of where the current bull market stands in comparison to prior bull markets in terms of duration and magnitude. The S&P500 is less than three weeks away from taking out the 1982 – 1987 period as the fifth longest bull market of all time.


6. China suffers first corporate-bond default — Bloomberg, China’s onshore bond market experienced its first default as a solar-cell maker failed to pay full interest on its bonds. The number of Chinese companies whose debt is double their equity has surged since the global financial crisis, suggesting this first onshore bond default won’t be the nation’s last. Publicly traded non-financial companies with debt-to-equity ratios exceeding 200 percent have jumped 57 percent since 2007.

The week ahead — Economic data from Econoday.com: