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 Good morning! Here's what you need to know. Citi fails stress test. The Federal Reserve rejected Citigroup's capital plan, citing "deficiencies included Citigroup’s ability to project revenue and losses under a stressful scenario for material parts of the firm’s global operations." Shares are down 5% pre-market. Births and deaths. The U.S. simultaneously recorded the fewest births since 1998 and most deaths in its history last year. "Americans remain cautious about having babies following the worst recession since the Great Depression, although they are increasingly changing residences again, suggesting growing confidence in the economic recovery," Bloomberg's John McCormick wrote. BofA settles. Bank of America will pay $9.5 billion to settle mortgage claims with Fannie Mae, Freddie Mac and their federal regulator. Former CEO Ken Lewis was also banned for three years from working for any public company. Ukraine bailout. The International Monetary Fund said it had agreed on a $14-18 billion stand-by agreement with Ukraine, a deal that will unlock further credits to reach a total of $27 billion over the next two years. Charlotte Mayor booked. The mayor of North Carolina's largest city resigned Wednesday after prosecutors said he had been arrested on federal public corruption charges that include accepting more than $48,000 in bribes from undercover FBI agents. Booming UK retail sales. British consumers crushed expectations in February, lifting retail sales 1.7% month-over-month versus a consensus forecast of 0.5%. The pound was 0.25% higher against the dollar. Meanwhile, French shoppers followed up their Italian counterparts by lifting consumer confidence readings to a two-year high. The INSEE index climbed to 88 from 85, beating expectations for a reading of 85. Markets. Stocks were mostly up. France's CAC40 and Germany's Deutsche Boerse were higher, while the UK FTSE was down. Japan's Nikkei was up 1%. U.S. futures were higher. Gold and Bitcoin were both lower. Data. Thursday will be a busy day for data. As usual it kicks off with initial jobless claims at 8:30. They're expected to come in at 323,000 from 320,000 last week. Later, at 10 a.m. we get pending home sales, which are expected to be up a tick to 0.2%. GDP. Also at 8:30 we get a Q4 GDP reading, which is expected to hit 2.7%, up from a prior estimate of 2.4%. Core personal consumption expenditures were forecast at 1.3%, unchanged from the prior reading. Morgan Stanley on biotech. Some have been speaking of a bubble in the sector, but Morgan Stanley's Morgan Stanley's Matthew Harrison and Dr. David Friedman believe there remains opportunity in this space. "Major de-risking events leading to new mega blockbusters have transformed the Big 4 Biotechs (Amgen, Biogen, Celgene and Gilead)," they wrote in a new 24-page note to clients. "We expect total group revenues to double from $175B over the last 5 years to $335B over the next 5 years and total cash flows to triple from $31B to $95B. Investors have rewarded the group with a return ~2.3x the S&P 500 over last 3 years." *** Below is a Q&A with David Kotok, founder of Cumberland Advisors. *** BUSINESS INSIDER: Assuming things die down in Ukraine, what macro events is Cumberland watching closely? David Kotok: There are plenty of geopolitical hotspots. Not just Ukraine. Nigeria and the ongoing Islamic militant killing of Christians in the half the country threatens the other half and the oil producing section. Middle East and Persian Gulf we know. Venezuela is known. There is not lack of trouble spots. BI: What is Cumberland's view of the state of labor markets and inflation? DK: Labor market recovering slowly in US and that is likely to gradually improve but will take a long time to restore to normal, whatever normal means. There are about 20 million American households with under employment or unemployment characteristics and they suffer from lower labor income. This is not an easy issue to fix. It needs a lot of time. BI: Do investors have much to worry about out of China? DK: Yes. China slowing is a big issue and China credit system and the taking of credit losses is a new experience in this realm. On the other hand a pickup in India growth rate can offset a slowing of china growth rate. Mixed picture. BI: What is the most underreported macro story around? DK: Productivity gains from the acceleration of the rollout of the tech sector do not get enough attention. They continue unabated and are or may be accelerating. That means inflation is kept low from productivity gains and from low pressure coming from labor. That also means the case for low interest rates for a longer time than markets expect is intact. Every one fears higher rates. We may get some rise in rates but we may not get the spiking of rates that folks fear. Meanwhile the federal deficit is shrinking and that will continue for several more years. | 
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