FRIDAY 2/28/14; EOM; Consumer Sentiment; Russia Invades Crimea

Japan factory output data is better than expected indicating a strong start to the year. Japan’s inflation surprises to the upside. Retail Sales post strong gains up +4.4% year over year. The Nikkei and Topix sell off, however, since the dollar/yen drops under 102 (stronger yen). The Japanese data may indicate a cyclical rebound rather than a sustainable recovery. The Chinese Yuan is set for biggest weekly loss ever. China is watching the Asian currencies weaken and is weakening the renminbi to keep pace. By weakening the .....



[Text is Redacted: Purchase February 2014-02 to Read the Complete Chronology]

For the month, the major indexes are all up from +4% to +5% printing the best February since 1998. February is typically one of the worst stock months of the year. The SOX is up +6.6% during the month with semiconductors leading the way. Airlines, XAL, fly +9% higher and biotech, IBB, is up +7.5%. Long traders continue to chase airlines, biotech, tech and healthcare stocks; the leaders from 2013. After the bell, Fast Retailing out of Japan is in talks to buy J Crew. DRI gains +2.5% as it avoids and muzzles questions from activist investors.

At 5 PM, President Obama delivers remarks concerning the crisis in Ukraine. The president is “deeply concerned” over military movements by the Russian Federation inside Crimea. He says the latest developments do not benefit Ukraine, Russia or Europe (did not mention the US) and that the Ukrainians need to decide their own path forward. He stresses that everyone should remain calm and any violation of Ukraine sovereignty would be “deeply destabilizing.” The president said that the US “will stand with the international community” and “there will be costs” if the Russian aggression continues but he did not say what the costs were or who would administer these costs.

The president’s statement is very terse, only a few minutes, and he exits the Whitehouse briefing room without taking any questions. An hour later he is shown on television having fun at a democratic fund raising happy hour party. Russia will likely pay little attention to his comments. Approximately 2000 soldiers are clearly in control of Crimea but the uniforms display no clear identification. Cargo planes are arriving at the airports unloading Russian military vehicles. The soldiers are presumed to be contractors and mercenaries working for Russia; a hybrid military force. Russia is clearly occupying Crimea. Putin’s actions will dictate the fate of Ukraine. A Russian spy ship is docked at a Cuban port over the last two days and is capable of monitoring both US military and non-military communications and activities.