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• The global equity markets are mixed, but had an uptick of activity in Asia compared to the prior night, with the Nikkei gaining nearly 1% and the Shanghai finishing up 0.6%. On the flip side, European indices have not had the experience, with the major averages trading in minor negative territory.
• In Asia, the Nikkei shook off a weaker opening, with buyers stepping and closing the week out on a high note. The most notable data released out of the region was the Preliminary March Manufacturing PMI, which came in at 52.6 (down from 53.3 last month). The take-away from the release seemed to be that of the «Goldilocks» sentiment, after the print represented solid expansion, but still weaker than the February result. As such, it likely did little to persuade the BOJ to deviate from current policy.
• Chinese markets were a conundrum on Friday, with the Shanghai rising in the face of a couple of notable events that have typically been a negative to Mainland markets. First, the PBOC refrained from injecting any new capital into the markets. Secondly, there were local reports the Central Govt is looking to tighten lending standards for the property markets. A rebound in the energy sector, led by CNOOC (+4%), helped to pave the way to the Shanghai's 0.7% gain for the week.
• European bourses have traded with a lackluster tone that may be most attributed to better than expected macro data out of the region. One of the most notable releases was the March Preliminary Manufacturing PMI of 58.3 (vs 56.5 exp). This accelerated the Euro's advance today, which put pressure on equity complex in turn. The take-away from the EU data may be quite different than that of Japan, considering this data set could be fairly impactful to the ECB's outlook on policy.

Market Updates

• S&P Futures vs Fair Value: +1.00 
• 10 yr Note: 2.4231% 
• USD/JPY: 111.01 +0.10 
• EUR/USD: 1.0804 +0.0020
• Europe: FTSE -0.2% DAX -0.2% CAC -0.4% 
• Asia: Hang Seng +2.6% Shanghai +3.2% Nikkei +0.4% 
• Commodities: Gold (1244.20 -3.00) Silver (17.61 +0.01) crude (47.97 +0.27) 

US Econ Data

• Fed's Evans speaks (8am)
• Fed's Bullard speaks (8:05am)
• Fed's Williams speaks (8:30am)
• February Durable Orders (8:30am)
• U.S. Manufacturing & Services PMI- Prelim (9:45am)

Equity indices in the Asia-Pacific region ended the week on a higher note. Investors showed some tolerance for risk amid continued hopes that the U.S. health care vote would be called before the weekend after all. Elsewhere, Bank of Japan Governor Haruhiko Kuroda shied away from discussing the central bank's long-run yield target, saying that inflation recovery remains tentative.

• In economic data:
  • Japan's March Manufacturing PMI 52.6 (expected 53.5; last 53.3) and March Reuters Tankan Index 25 (last 20). Leading Index 104.9 (expected 105.5; last 105.5)
  • New Zealand's February trade deficit NZD3.79 billion year-over-year (expected deficit of NZD3.66 billion; last deficit of NZD3.41 billion). February Imports NZD4.02 billion (expected NZD3.99 billion; last NZD4.16 billion) and February Exports NZD4.01 billion (expected NZD4.20 billion; last NZD3.91 billion)
  • South Korea's March Consumer Confidence 97 (last 94)
  • Singapore's February Industrial Production -3.7% month-over-month (expected 0.4%; last -4.8%); +12.6% year-over-year (consensus 10.8%; last 3.8%)

---Equity Markets---

• Japan's Nikkei climbed 0.9%, narrowing its weekly loss to 1.3%. Toshiba jumped 7.4% amid reports the Japanese government is planning a full review of the company's chip unit sale. SUMCO, Advantest, Sumitomo, Fanuc, Dentsu, and Sapporo Holdings climbed between 1.5% and 3.7%.
• Hong Kong's Hang Seng added 0.1%, eking out a weekly gain of 0.2%. CNOOC jumped 3.9% to lead the way while financials like BoC Hong Kong, ICBC, Bank of East Asia, and Ping An Insurance climbed between 0.3% and 1.6%. On the downside, property names like New World Development, Henderson Land, Sino Land, SHK Properties, and China Overseas lost between 0.6% and 1.3%.
• China's Shanghai Composite rose 0.6%, extending its weekly gain to 1.0%. Sichuan Languang Development, Wanhua Chemical Group, Tianjin Port Holdings, Tibet Tianlu, and Jinxi Axle advanced between 4.6% and 5.5%.
• India's Sensex gained 0.3%, ending the week higher by 1.6%. Financials ICICI Bank and SBI led the way with gains close to 2.8% apiece while AXIS Bank added 0.2%. IT consultants were mixed with Wipro adding 0.6% while Infosys and Tata Consultancy lost 0.9% and 1.3%, respectively.

---FX---

• USDJPY +0.1% to 111.06
• USDCNY UNCH at 6.8861
• USDINR UNCH at 65.411

Gapping up:

• HTGM +50.1%, RGLS +20%, NVCN +13.7%, LTBR +12.2%, MU +12.1%, SPHS +11.6%, SNAK +10.4%, ZSAN +8.5%, JAG +5.4%, EBIO +5.3%, VSTM +4%
• SPP +3.9%, QTNT +3.8%, IMMU +3.8%, WDC +3.7%, RXDX +3.4%, GLOG +3.1%, CYTX +3%, MTL +2.7%, NVO +2.4%, AMD +2.1%, GLOP +1.9%
• CHK +1.8%, AKS +1.6%, TWTR +1.3%, STX +1.2%, NGG +1%, INTC +1%, XOM +0.8%, SCVL +0.8%, REX +0.7%

Gapping down:

• FINL -12.8%, GME -11.3%, OXM -8.7%, ADPT -8.2%, CBAY -8.1%, CDOR -6.7%, SPWH -6.6%, OPGN -6.3%, MTW -4.8%, MYL -3.5%
• CHMI -3.4%, SBGL -2.8%, BLCM -2.1%, FL -1.1%, KLDX -1.1%, M -1%, DNKN -0.5%

• Very encouraged with start of spring selling season. Net order value +32%, +73% in the West
• SG&A ratio improved 160 bps YoY to 11.5%
• Sees Q2 homebuilding rev $880-940 mln vs. $930 mln consensus
• Sees GM expanding throughout the year; sees Q2 gross margin +50 bps Q/Q to 15.6%, with Q3 gross margin +70 bps and Q4 +100 bps Q/Q.
• Raises FY17 homebuilding rev to $4.0-4.3 bln from $3.8-4.2 bln; raises ASP to $385-395K from $370-385K; raises gross margin to 16.1-16.5% from 16.0-16.5% 

KBH indicated slightly lower premarket; stock +22% YTD.

Treasuries Set for Flattish Open

• U.S. Treasuries are a trading a touch lower this morning following the overnight release of better-than-expected purchasing managers' index data for the eurozone. The U.S. House of Representatives is set to vote on the American Health Care Act (AHCA) today and its passage would be an important step towards making corporate tax reform achievable with only 50 Senate votes. The AHCA is not expected to win passage in the House. The U.S. Dollar Index is down 0.08% to 99.68 and the S&P 500 is set to open up half a point to 2,346.4. WTI crude is higher by 0.69% at $48.03/bbl. and gold is losing 0.14% to $1,245.5/troy oz.
• Yield Check:
  • 2-yr: unch at 1.26%
  • 5-yr: -1 bp to 1.95%
  • 10-yr: unch at 2.42%
  • 30-yr: unch at 3.03%

• International News:
  • In Japan, the Reuters Tankan Index jumped to 25 for March from 20 in February
  • Japan's manufacturing purchasing managers' index unexpectedly fell to 52.6 in March from 53.3 in February
  • Japan's Leading Index fell to 104.9 for January from 105.5 for December
  • Russia's central bank unexpectedly cut its benchmark policy rate to 9.75% from 10%, citing cooling inflation and improving economic growth
  • The eurozone's manufacturing PMI unexpectedly rose to 56.2 in March from 55.4 in February
    • France: 53.4 (52.2 prior)
    • Germany: 58.3 (56.8 prior)
  • The eurozone's services PMI also beat expectations, climbing to 56.5 in March from 55.5 in February
    • France: 58.5 (56.4 prior)
    • Germany: 55.6 (54.4 prior)
  • Italy's trade balance swung to a surplus of EUR1.72 bln for February from a deficit of EUR0.89 bln in January
  • In the U.K., BBA Mortgage Approvals fell to 42.6K in February from 44.1K in January

• Data out Friday:
  
  • February Durable Goods and Durable Goods ex-trans (08:30 ET)]
• Fed Speakers:
  
  • Chicago Fed President Evans (FOMC voter) (08:00 ET)
  • St. Louis Fed President Bullard (non-FOMC voter) (08:05 ET)
  • San Francisco Fed President Williams (non-FOMC voter) (08:30 ET)
  • New York Fed President Dudley (FOMC voter) (10:00 ET)

• AeroCentury (ACY) discloses in a regulatory filing that it entered into an Exchange Agreement with Lee G. Beaumont, a shareholder of the Company, whereunder the Company transferred title to an off-lease CF34-8E5 Engine owned by the Company to Beaumont, in exchange for 150,000 shares of Common Stock of the Company, which represent all of the shares held by Beaumont and his affiliates, and approximately 9.6% of the outstanding shares of the Company.
• Align Technology (ALGN) announced and agreement with the Zfx GmbH to expand the restorative and laboratory marketplace for iTero Element® intraoral scanners through their dental network in major European, Asian and African countries. By collaborating with Zfx, an industry leader in digital prosthetic solutions, Align Technology will enable practitioners and dental laboratories to have access to high-quality iTero intraoral scans that drive the restorative digital workflow and precision restorations. Through this non-exclusive agreement, Zfx will serve as a sales agent for iTero Element intraoral scanners among its network of laboratories, milling centers, and dental professionals.

There has been a good bit of hand-wringing over the lowly GDP growth projections for the first quarter. On Friday those projections could move up, or down, following the release of the Durable Goods Orders Report.

According to the Briefing.com consensus estimate, durable goods orders are expected to increase 1.3% in February.  Excluding transportation, durable goods orders are expected to be up 0.7%.

This is an important data point because:

• It sheds light on business activity for U.S. manufacturers
• It enables economists and investors to develop a sense of business spending levels
  • The relevant line item in the report is new orders for nondefense capital goods, excluding aircraft
• Durable orders can be volatile due to aircraft orders. Accordingly, the underlying impression of manufacturing activity flows out of the level of new durable goods orders, excluding transportation.
• This report will factor into first quarter GDP computations
  • The relevant line item in the report pertaining to the GDP outlook is shipments of nondefense capital goods, excluding aircraft
• A positive surprise would help boost economic sentiment, whereas a negative surprise would pique concerns about the pace of business activity in the first quarter and the stock market being ahead of itself
• Durable goods orders data will be a focal point for the Federal Reserve in its determination of whether business spending is picking up

The report will be released at 8:30 a.m. ET.

French OATs Lead Eurozone Higher 

• Eurozone sovereign bonds are trading higher this morning despite the release of very strong purchasing managers' index for both the manufacturing and service sectors, which would normally be expected to push fixed-income asset prices lower. Both gauges were at their highest levels in 71 months in March. Stronger «soft» economic data like PMIs have not necessarily fed into stronger «hard» data like industrial production over the past few months but economists remain confident that it will eventually do so. The European Central Bank's Governing Council does not meet again until April 27 but the ECB's asset purchase program will taper to EUR60 bln/month on April 1 from its current level of EUR80 bln/month 
• European Economic Data:
  • The eurozone's manufacturing PMI unexpectedly rose to 56.2 in March from 55.4 in February
    
    • France: 53.4 (52.2 prior)
    • Germany: 58.3 (56.8 prior)
  • The eurozone's services PMI also beat expectations, climbing to 56.5 in March from 55.5 in February
    
    • France: 58.5 (56.4 prior)
    • Germany: 55.6 (54.4 prior)
  • French GDP growth was confirmed at 0.4% q/q for the fourth quarter of 2016
  • Italy's trade balance swung to a surplus of EUR1.72 bln for February from a deficit of EUR0.89 bln in January
  • Spain's producer price index was up 7.3% y/y in February after growing by 7.6% in January
  • In the U.K., BBA Mortgage Approvals fell to 42.6K in February from 44.1K in January
• Yield Check:
  • France, 10-yr OAT: -4 bps to 1.00%
  • Germany, 10-yr bund: -2 bps to 0.41%
  • Greece, 10-yr note: -2 bps to 7.28%
  • Italy, 10-yr BTP: -2 bps to 2.25%
  • Portugal, 10-yr PGB: unch at 3.86%
  • Spain, 10-yr ODE: -3 bps to 1.68%
  • U.K., 10-yr gilt: -2 bps to 1.20%

Gapping up
In reaction to strong earnings/guidance:

• HTGM +70.7%, (also announces that its HTG EdgeSeq technology has been successfully adapted for use with the QIAGEN GeneReader NGS System based on the results of initial technical feasibility tests)
• ZAIS +39.4%, EBIO +21.1%, NVCN +14.9%, MU +13.2%, LTBR +12.2%, VSTM +6%, JAG +5.4%, SPP +3.9%, CYTX +1.2%, SCVL +0.8%, REX +0.7%

Select MU peers/related names showing strength:

• WDC +3.8%, AMD +1.4%, STX +1.2%, INTC +0.7%, . 

Other news:

• RGLS +23.6% ( Chairman disclosed purchase of 500K shares, worth more than $600K)
• SNAK +10.4% (light volume; sells Fresh Frozen Foods to The Pictsweet in a cash transaction for approximately $23.7 mln; previously-announced strategic review remains ongoing)
• SPHS +8.5% (announces that data from its successful Phase 2a study of topsalysin will be presented as a poster on March 26 at the 32nd Annual European Association of Urology in London, UK)
• QTNT +3.8% (announces that eight new rare antisera blood typing reagent products have been licensed for commercialization in the U.S. by the FDA)
• RXDX +3.4% (is exploring strategic options for taladegib and has entered into an amended and restated license, development and commercialization agreement with Eli Lilly (LLY) for the taladegib oncology program)
• GLOG +3.1% (GasLog Partners to purchase from GasLog (GLOG) 100% of the shares in the entity that owns and charters GasLog Greece)
• GLOP +1.9% (GasLog Partners to purchase from GasLog (GLOG) 100% of the shares in the entity that owns and charters GasLog Greece)
• NVO +1.8% (announces the CHMP provided a positive opinion for an EU label update for Tresiba)
• A +1.7% (favorable commentary on Thursday's Mad Money)
• NVDA +1.3% (announces that Tencent (TCEHY) Cloud will adopt NVIDIA Tesla GPU)

Analyst comments:

• ZSAN +5.6% (initiated with a Overweight at Piper Jaffray)
• UAA +4.1% (upgraded to Buy from Hold at Jefferies)
• PVH +1.4% (upgraded to Buy from Neutral at Citigroup)
• UN +0.7% (upgraded to Overweight from Equal Weight at Barclays)
• ADBE +0.5% (upgraded to Outperform from Neutral at Credit Suisse)

• Kosmos Energy (KOS) announced today that it has begun the second phase of its multi-well explorationdrilling program offshore Mauritania and Senegal.
• Finjan Holdings, Inc. (FNJN) announced that its subsidiary Finjan, Inc. and Avast Software s.r.o. have reached an agreement that upon Avast's satisfaction of certain terms, Finjan will dismiss its breach of contract and patent infringement claims, filed in the U.S. District Court for the Northern District of California (Case No. 3:17-cv-00283-BLF), against Avast and its newly acquired subsidiary, AVG Technologies, with prejudice. The terms of the agreement are confidential.