“I measure what’s going on, and I adapt to it. I try to get my ego out of the way. The market is smarter than I am so I bend.” – Martin Zweig

1. Apple is Developing MicroLED Screens — Apple has made a “significant investment in the development of next-generation MicroLED screens” at a facility near its California headquarters, but consumers will “probably have to wait a few years before seeing the results.” MicroLED screens use different light-emitting compounds than the current OLED displays and promise to make future gadgets slimmer, brighter and less power-hungry. Its move into displays has the long-term potential to hurt a range of suppliers, from screen makers like Samsung Electronics Co., Japan Display Inc., Sharp Corp. and LG Display Co. to companies like Synaptics Inc. that produce chip-screen interfaces.
2. France Expects EU Tariff Exemption — the EU is expected to obtain a full exemption from new U.S. steel and aluminum tariffs that are due to kick in on March 23, according to French finance minister Bruno Le Maire. The European Commission has said that, if the bloc is not exempted, it could set duties of 25% on a range of U.S. products, whose annual imports to the EU are worth €2.8B.
3. U.S. Air Force to Test Fighter-Mounted Laser — the U.S. Air Force is set to begin testing a laser this summer that will be mounted on an F-15 warplane. With an output of about 50 kilowatts, the system will review abilities to zap drones or cruise missiles. The Pentagon awarded the $26M contract to Lockheed Martin (NYSE:LMT) last year for the laser program called SHiELD (Self-protect High Energy Laser Demonstrator).
4. Saudi Crown Prince meets with Lockheed, Boeing — Saudi Crown Prince Mohammed bin Salman will meet with officials from Boeing (NYSE:BA) and Lockheed Martin (NYSE:LMT) as part of a trip across the U.S. that could see $35B in deals signed. It follows Salman’s visit to the U.K., where Riyadh inked a military equipment MOU with the British government for 48 Typhoon jets from BAE Systems (OTCPK:BAESY).
5. Fed Raises Rates, Steepens Path of Hikes as Outlook Strengthens— the Federal Reserve raised rates for a sixth time since the policymaking Federal Open Market Committee began raising rates off near-zero in December 2015. “The economic outlook has strengthened in recent months,” the committee said in its post-meeting statement, a sentence that had not been in previous releases. Fed officials also raised their forecast for 2017 GDP growth from 2.5 percent in December to 2.7 percent, and increased the 2018 expectation from 2.1 percent to 2.4 percent.
6. Trump’s Plan to Impose Stiff Tariffs on China — President Trump signed a memorandum “targeting China’s economic aggression.” Tariffs on Chinese imports worth as much as up to $60B could be unveiled, stoking fears of a global trade war. Beijing noted it will take measures against the 128 U.S. products in two stages – that cover about $3B and $1.9B, respectively – if it cannot reach an agreement with Washington. Legal action under WTO rules will also be considered.
7. Trump Fired National Security Adviser McMaster, Replaced with John Bolton — President Trump has named John Bolton as his new national security adviser, succeeding Lt. Gen. H.R. McMaster. The move follows fresh appointments to the roles of national economic advisor and Secretary of State. Bolton was the former U.S. ambassador to the United Nations under President George W. Bush.

The week ahead — Economic data from Econoday.com:

“when the facts change, you must change your mind” – unknown

1. China Scraps Presidential Term Limits, Clearing Way for Xi’s Indefinite Rule — China’s parliament voted to repeal presidential term limits, allowing President Xi Jinping to keep power indefinitely in a formal break from succession rules set up after Mao Zedong’s turbulent rule. The votes gives Xi more time to enact plans to centralize party control, increase global clout and curb financial and environmental risks. It comes after the U.S. reportedly asked China to import more cars, aircraft, soybeans and natural gas as part of a plan to cut its bilateral trade deficit by $100B and avoid placing tariffs on Chinese imports.
2. Trump Issues Order to Block Broadcom Takeover of Qualcomm — President Trump has issued an order to block Broadcom’s (NASDAQ:AVGO) hostile takeover of Qualcomm (NASDAQ:QCOM). The order states “There is credible evidence that leads me to believe that Broadcom … through exercising control of Qualcomm … might take action that threatens to impair the national security of the United States,” .
3. Democrat Conor Lamb Apparent Winner of Pennsylvania Special Election — Democrat Conor Lamb is the apparent winner of a House seat in Pennsylvania’s 18th congressional district, a region President Trump won by 20 percentage points in 2016. The election was watched nationwide as a sign of political tides eight months ahead of congressional elections.
4. Facebook, Google Cracks Down on Crypto Advertising — following a similar hard-line approach taken by Facebook (NASDAQ:FB), Google (GOOG, GOOGL) will ban crypto-related advertising starting in June, including ICOs, wallets, and trading advice across any of its platforms. Google’s director of sustainable ads stated “We don’t have a crystal ball to know where the future is going to go with cryptocurrencies, but we’ve seen enough consumer harm or potential for consumer harm,” .
5. GE Begins Flight Trials for World’s Largest Jet Engine — General Electric has begun flight trials of the world’s largest jet engine after several delays caused by technical problems. The GE9X will power the Boeing (NYSE:BA) 777-9 and 777-8, which are scheduled to enter service in 2020 and 2022, respectively. Despite the problems, GE feels “very confident” it will meet a 2019 target date for safety certification, said spokeman.
6. Ford Sets Aggressive Hybrid Timetable — Ford (NYSE:F) announced it’s going all-in on hybrids. 75% of its lineup will be replaced in the hybrid push, while the automaker will add four new trucks and SUVs. The news comes as UBER discusses the possibility of installing its self-driving systems in Toyota (NYSE:TM) minivan models, expanding its partnerships with outside companies.

The week ahead — Economic data from Econoday.com:

“Be fearful when others are greedy and be greedy when others fearful.” — Warren Buffett

1. China Sets Growth Target at ‘about 6.5%’ — China’s National People’s Congress has officially kicked off with over 3,000 lawmakers descending on Beijing, where the country’s rubber-stamp parliament is expected to eliminate the two-term limit for the presidency. Continuing a campaign to reduce risks in China’s financial system, Premier Li Keqiang also set a target for economic growth for 2018 at “about 6.5%,” a slight recalibration from last year’s objective of “around 6.5% or higher if possible.”.
2. Senate to Vote on Dodd-Frank Rollback — Senate Majority Leader Mitch McConnell has filed a motion to have a procedural vote on a bill, sponsored by Senate Banking Committee Chairman Mike Crapo, that would roll back key regulations of Dodd-Frank. The measure spikes the asset level at which a bank becomes “systemically important” from $50B to $250B, freeing dozens of regional banks from stringent rules like additional capital buffers and stress tests.
3. Gary Cohn Announced His Resignation as Top Economic Adviser to President Trump — widely viewed as a voice for Wall Street in the White House, Gary Cohn has announced his resignation as the top economic adviser to President Trump, fanning fears of protectionist tariffs and a full-blown trade war. Trump tweeted he “will be making a decision soon” on replacing Cohn, who oversaw a major revamp of the U.S. tax code and pushed for a significant rewrite of financial rules.
4. AAII Weekly Sentiment Survey — in this week’s sentiment survey from AAII, bullish sentiment dropped nearly 11 percentage points falling from 37.28% down to 26.4%. That’s the lowest weekly reading since the end of August and the largest two-week decline since June 2013.

However, bearish sentiment hasn’t seen much of a bounce. At 28.38%, it is slightly higher than bullish sentiment, but it has been higher as recently as early February.

5. Trump Agrees to Meet N. Korean Leader on De-nuclearization Talks — President Trump has agreed to an invitation from North Korean leader Kim Jong-un to meet to discuss denuclearization. Kim made the invitation for Trump to come to North Korea in a letter hand delivered by South Korea’s national security adviser Chung Eui-yong, and Trump said he would meet by May, though the White House is now saying the time and place of the meeting is yet to be determined. Kim says he’s prepared to suspend nuclear and missile tests in the meantime.

The week ahead — Economic data from Econoday.com:

“We learn from history that we do not learn from history,” — George Wilhelm Friedrich Hege

1. Apple is Launching Medical Clinics — Apple is launching a group of medical clinics called AC Wellness to deliver the “world’s best healthcare experience” to its employees and their families, CNBC reports. A quietly published website, acwellness.com, said the Apple (NASDAQ:AAPL) initiative will begin this spring. The news comes as Amazon announced an effort with Berkshire Hathaway (BRK.A, BRK.B) and JPMorgan (NYSE:JPM) to improve the healthcare of their employees.
2. GE to Restate Two Years of Earnings — General Electric plans to restate the last two years of corporate profits, resulting in a cut of $0.13 in reported earnings per share for 2016 and $0.16 per share for 2017. The reduction comes as the conglomerate adopts new accounting standards for recognizing revenue from long-term contracts amid an SEC investigation into the method. GE will make the restatements on April 20.
3. U.S. to Imposed Heavy Duties on Aluminum Foil from China — the U.S. Commerce Department has imposed duties as high as 106% on aluminum foil from China after concluding that the country’s producers are dumping the product in the U.S. and receiving unfair government subsidies. In response, China’s Ministry of Commerce expressed “strong dissatisfaction” with the action and will take necessary measures to protect its legal rights and interests.
4. Energy ETF Closes February with Worst Monthly Drop Since December 2015 — the largest energy ETF (XLE) fell 10.8% for February, its worst monthly showing since December 2015. Prices for the April WTI contract settled 4.8% lower in February, the first monthly loss since August, while Brent crude fell 4.7% for the month in its first monthly loss since June. Also, Sundial Capital Research’s Jason Goepfert notes that “this is the first time since December 2015 that the S&P 500 has gained 1% or more for two straight days only to drop 1% or more on each of the next two days. That doesn’t happen very often, just 23 times since 1928. Here’s the rub: “All but 3 of them occurred during bear markets,” Goepfert writes. “Because it tended to occur in downtrends, future returns were poor, with declines over the next 30 days 65% of the time averaging -1.9%,” Goepfert writes.
5. SEC Launches Sweeping Probe Into Cryptocurrencies — the SEC has issued scores of subpoenas and information requests in a sweeping probe of technology companies and advisers involved in the booming market for digital tokens, the Wall Street Journal reports. The investigation significantly ratchets up the regulatory pressure on the booming U.S. market for raising funds in cryptocurrencies. Coin offerings raised $6.5B in 2017 and more than $1.6B so far this year despite a crash in the price of Bitcoin and other cryptocurrencies.
6. Trump’s Announcement Tariffs on Steel and Aluminum — Trump plans to impose tariffs of 25 percent on steel imports and 10 percent on aluminum. However, he didn’t elaborate on the details, saying the formal announcement will come next week. The EU said that it could target imports of Harley Davidson Inc. motorbikes, Levi Strauss & Co. jeans and bourbon whiskey as part of its response. Many nations are making a last-ditch attempt to have their nation’s steel and aluminum exempt from the action, a targeted strategy the U.S. Defense Department had voiced support for. Meanwhile, Canadian and Brazilian steel comprised a respective 16% and 13% of U.S. steel imports as of September 2017, while China, frequently criticized politically for dumping cheap steel on trade partners, is not one of the top 10 exporters of steel to the U.S., the report said. Meanwhile, top foreign sources of aluminum during 2013-16 included Canada (56%), Russia (8%) and the United Arab Emirates (7%).

The week ahead — Economic data from Econoday.com: