Wednesday Watch

Evening Headlines

Bloomberg:

• Euro Region's Boost to Bailout Fund Falls Short of 1 Trillion-Euro Target. Euro-area finance ministers approved enhancements to their bailout fund while backing off from setting a target for its firepower and seeking a greater role for the International Monetary Fund in fighting the debt crisis. The finance chiefs of the 17 nations using the euro agreed to work on boosting the resources of the IMF so it can “cooperate more closely” with the European Financial Stability Facility, Luxembourg’s Jean-Claude Juncker told reporters late yesterday in Brussels after leading the meeting. “It’s very important that the IMF globally will increase its resources either by raising its capital or by bilateral loans so that it can lend more money to euro-zone countries in need,” Dutch Finance Minister Jan Kees de Jager said in an interview with Bloomberg Television after the meeting. “If we open the IMF effort, that will be sufficient together with the leverage options in the EFSF.” After a series of stop-gap accords failed to protect Italy and Spain from surging bond yields, the euro-area ministers are under growing pressure from U.S. leaders and international financial markets to find ways to boost the EFSF’s effectiveness. They agreed to a plan to guarantee up to 30 percent of new bond issues from troubled governments and to develop investment vehicles that would boost the facility’s ability to intervene in primary and secondary bond markets.
• Europe Faces Repeat of Credit Crunch Liikanen Tells Kauppalehti. Europe risks descending into a new credit crunch as it lacks the tools to stamp out the spread of the debt crisis, European Central Bank council member Erkki Liikanen told Finnish business newspaper Kauppalehti. “If the sovereign debt crisis isn’t contained, a negative spiral may start again through banks,” Liikanen said in an interview with the Helsinki-based newspaper conducted yesterday and published today. “Great financial crises traditionally go through this phase.” European leaders are struggling to win investor confidence amid rising debt yields across the single currency area and after Germany last week failed to sell all bonds in an auction. Signs of deteriorating bank lending are emerging in the interbank markets. The difference between the 12-month secured Eurepo and same maturity unsecured Euribor rates that banks charge each other was at a post-Lehman high of 170 basis points yesterday, or 60 basis points lower than its high of 230 basis points on Oct. 31, 2008. Across Europe, 87 banks in 15 nations, including the largest lenders in France, Italy and Spain, may have their subordinated debt ratings cut to reflect the potential removal of government support, Moody’s Investors Service said yesterday. Common euro bonds won’t come soon enough to help resolve the crisis as “many great obstacles” stand in the way of introducing joint borrowing in the region, Liikanen said.
• ECB's Stark Says Central Banks Must Maintain Focus on Price Stability. European Central Bank Executive Board member Juergen Stark said central banks must guard their independence and keep their focus on price stability or risk being dominated by free-spending governments. “Crucial challenges in this regard include the risk that monetary policy is overburdened by fiscally dominant regimes caused by government’s irresponsible fiscal behavior and unsustainable public finances,” Stark said today in the text of a lecture hosted by the Federal Reserve Bank of Dallas. Monetary policy also risks being “dominated by financial stability concerns, implying that price stability would be subjugated by financial stability,” Stark said in Dallas. To make policy more “robust,” Stark said central bankers “should recognize the centrality of price stability for monetary policy.” “The crisis is still on-going,” Stark said in a lecture about “Globalization and Monetary Policy: From Virtue to Vice.” Since 2007, the crisis has spread to “sovereigns with weaker balance sheets, which in turn contributed to increasing the vulnerability of the core financial system even further.” “In recent months, this negative and self-reinforcing dynamic of adverse feedback loops between weak sovereign and financial sector balance sheets has been all too apparent in parts of the euro area,” Stark said. Stark used the bulk of his speech to comment on the impact of globalization on monetary policy during the financial crisis. Global forces require “much greater economic policy co- ordination among monetary union members,” he said. He differed with the U.S. policy approach, which has given equal weight to maximum employment and price stability. “The ECB has never subscribed to the view that monetary policy has a primary role to play in the management of aggregate demand and we think that this element of the pre-crisis monetary policy paradigm should be revised,” he said.
• BNP, SocGen Lose European Loans Share as Post-Lehman Gains Fade. France’s three biggest banks’ share of underwriting European loans tumbled to the lowest in five years as the region’s deepening crisis forces their retreat. BNP Paribas SA (BNP), Credit Agricole SA (ACA) and Societe Generale SA’s combined share of the $933 billion in syndicated loans this year in Europe, the Middle East and Africa fell to 14.9 percent from 16 percent, data compiled by Bloomberg show, as they gave back gains made after emerging stronger than rivals following the 2008 collapse of Lehman Brothers Holdings Inc. In France, the banks had the smallest slice of loans since at least 1999. “French banks benefitted from the post-Lehman fragility of U.S. and U.K. banks, but now they’ve been knocked down by the euro zone’s weakness,” said Jacques-Pascal Porta, who helps manage 600 million euros ($799 million) at Ofi Gestion Privee in Paris and holds BNP Paribas shares. “Today their obsession is: capital, capital, capital.”
• Goldman(GS) to UBS Cut by S&P in Global Bank Rout: Credit Markets. Goldman Sachs Group Inc., Bank of America Corp. and UBS AG led the world's biggest banks in having their ratings cut by Standard & Poor's as debt of financial firms heads for its worst month since the credit crisis. S&P lowered the two U.S. lenders' rankings to A-, the seventh level of investment grade, from A, as part of criteria changes started three years ago. UBS was reduced to A from A+. Bank bonds have lost 3 percent in November, the worst monthly performance since September 2008 when Lehman Brothers Holdings Inc. collapsed, Bank of America Merrill Lynch index data show. Pressure is rising as Europe struggles to contain fiscal imbalances and the Organization for Economic Cooperation and Development reduces its 2012 global growth forecast to 1.6 percent from 2.8 percent. Lenders including Bank of America, Citigroup Inc. and Morgan Stanley have said they may need to post billions of dollars of additional collateral and termination payments on trades because of a one-level downgrade in their credit ratings. "It's clearly not over for the banks," said Marilyn Cohen, president of Los Angeles-based Envision Capital Management Inc., which manages $325 million in bonds. "It's not even close to the end." S&P also cut Morgan Stanley, Citigroup and Bank of America's Merrill Lynch unit to A- from A. JPMorgan Chase & Co. was reduced one level to A. S&P also downgraded Barclays Plc to A from A+, and HSBC Holdings Plc to A+ from AA-, according to the report.
• Credit Swaps on Bank of America(BAC), Goldman Sachs(GS) Jump as S&P Cuts Ratings. The cost to protect debt issued by U.S. banks from Bank of America Corp. to Goldman Sachs Group Inc. jumped after Standard & Poor’s lowered their long-term credit ratings as it revised criteria for the banking industry. Credit-default swaps on Bank of America, which were little changed before the announcement, increased 16.9 basis points to 478.8 and those on its Merrill Lynch & Co. unit climbed 24.1 to 524.9 as of 4:46 p.m. in New York, according to data provider CMA. Contracts on Goldman Sachs increased 8 to 403.6. “The European sovereign and banking system stress no longer has borders,” said Guy LeBas, chief fixed-income strategist at Janney Montgomery Scott LLC in Philadelphia. “A stone splashing in the European pond causes big ripples in the U.S. as well.” Contracts on Citigroup Inc. increased 9.2 basis points to 306.8 basis points and swaps tied to Morgan Stanley’s debt added 6.2 basis points to 506.9, according to CMA, which is owned by CME Group Inc. and compiles prices quoted by dealers in the privately negotiated market. Contracts linked to JPMorgan Chase & Co. increased 3.8 basis points to 171.
• Repo Rates Top Fed Funds as Euro-Zone Crisis Reins in Lending. The rate on collaterialized loans in the market for borrowing and lending Treasuries has been higher than the amount for unsecured borrowing almost every day this month as Europe's sovereign-debt crisis prompts banks and investors to curtail lending. The overnight general collateral repurchase rate, the cost to borrow Treasuries or cash for one day, has averaged 3 basis points above the so-called federal funds effective rate in November. During the first half of the year, the rate was one basis point on average below the effective rate. The rate was .066 percentage point less on average in the 10 years prior to August 2007, when the collapse of the subprime mortgage market triggered a global credit rout. The rise in the cost for collaterialized loans, which typically have a lower rate than unsecured rates such as fed funds, indicates rising concern the contagion will spread to the U.S. banking system.
• Silver Lake Bids $16.60 a Share for Yahoo(YHOO) Stake.
• U.K. Warns of 'Serious Consequences' After Tehran Embassy Attack. Iranian protesters stormed the British Embassy complex in Tehran yesterday, calling for “death to the U.K.” and burning its flag, a week after the U.S. and Britain imposed additional sanctions due to Iran’s nuclear program. The incursion lasted less than two hours before the protesters were cleared out by police, according to the Associated Press. Detained protesters will be brought before judiciary authorities, the state-run Mehr news said, citing Tehran’s police chief, Hossein Sajedinia. U.K. Prime Minster David Cameron, in a statement, said all embassy personnel have been accounted for after the attack, which he called “outrageous and indefensible.” “The Iranian Government must recognize that there will be serious consequences for failing to protect our staff,” Cameron said.
• Senate Republicans to Propose Offset for Payroll Tax Cut. U.S. Senate Republicans plan to offer a proposal to offset the cost of extending a payroll tax cut, establishing a marker for negotiations with Democrats and President Barack Obama. Minority Leader Mitch McConnell didn’t provide details to reporters today about how Republicans plan to cover the forgone revenue from extending a 2-percentage-point reduction in employees’ portion of the Social Security tax. He predicted Congress would extend the tax reduction, which expires Dec. 31. Democrats have proposed extending and expanding the tax cut. The Democrats’ $265 billion proposal would be offset by a 3.25 percent surtax on annual income exceeding $1 million, and they are planning a test vote as soon as this week. “We think it ought to be paid for and not by raising taxes on the people we’re depending upon to create jobs,” Texas Republican John Cornyn said in Washington today.
• China Stocks Decline Most in 2 Weeks on Policy. Chinese stocks fell the most in two weeks after a central bank adviser signaled the nation will maintain tight monetary policies next year and Shenyin & Wanguo Securities Co. forecast a plunge in exports in November. Baoshan Iron & Steel Co. (600019) and Anhui Conch Cement Co., the biggest makers of steel and cement, slid after Shenyin & Wanguo estimated the export growth rate will be halved this month. Jiangxi Copper Co. paced a decline for metal producers after Morgan Stanley said further gains for commodities may be limited next year. Yanzhou Coal Mining Co. dropped 4.2 percent after BOC International cut its share-price estimate by 17 percent amid earnings concerns. “There’s a consensus view that economic growth will slow next year and companies related to investment will suffer,” said Dai Ming, fund manager at Shanghai Kingsun Investment Management & Consulting Co. “The key is whether the economy is poised for a soft landing as is expected by the market.” The Shanghai Composite Index (SHCOMP) fell 49.8 points, or 2.1 percent, to 2,362.58 as of 11:15 a.m. local time, the most since Nov. 16. The CSI 300 Index (SHSZ300) dropped 2.5 percent to 2,544.75.
• China Says Kyoto Dispute Puts UN Global Warming Talks in Peril. China said a rift with industrial nations over the Kyoto Protocol’s rules on greenhouse gas risks destroying the international response to global warming, raising the chance this year’s talks in South Africa will fail. Su Wei, Beijing’s lead negotiator, said it’s essential for industrial nations to sign up for another round of emissions reductions under the pact, whose limits expire next year. Japan, Canada and Russia already have rejected extending the treaty. The European Union says it will only take on new commitments if all nations fix a date for adopting a new treaty. “If we cannot get a decision for the future of the second commitment period, the whole international system on climate change will be placed in peril,” Su said yesterday in an interview with Bloomberg and two other news organizations at the talks in Durban. “If the Kyoto Protocol is devoid of any further commitment period, the Kyoto Protocol itself will be dead.”
• Kocherlakota Says Fed May Need to Reduce Accommodation. Federal Reserve Bank of Minneapolis President Narayana Kocherlakota said policy makers should begin removing accommodation in 2012, assuming their forecasts for lower unemployment and stable inflation are on target. “It would be simplest to reduce the level of accommodation by changing” the Fed’s pledge to hold rates low through at least mid-2013 “to a shorter period of time,” Kocherlakota said in a speech today in Stanford, California. He told reporters beforehand that the Fed needs to be “clearer” and “sharper” about its objectives.

Wall Street Journal:

• Euro Zone Falls Short on Fund. Ministers Look to IMF, ECB as Expected Rescue Pool Seen Too Small to Mount Italy, Spain Rescues. Euro-zone finance ministers agreed on Tuesday on details to expand the bloc's bailout fund but acknowledged it would have less capacity to help troubled nations than once hoped, and suggested future efforts to resolve the worsening crisis would depend on the European Central Bank and the International Monetary Fund coming to their aid.
• Merrill Survey: Mass Affluent Americans Saving More. About half of these mass-affluent consumers said their financial situations were the same as they were a year ago, while 23% said their financial situations were better than they were a year ago. The consumer group still expressed growing concerns about their future savings, with 57% saying it will be harder to save for long-term goals five years from now compared with today. Such worries prompted 21% to increase their savings in the last year. The survey reported 47% of non-retirees expected to retire later than they had planned a year ago, up from 42% in January.
• Goldman(GS) Focuses on Funding Others. After getting burned by investments in its own hedge funds during the financial crisis, Goldman Sachs Group Inc. is turning to the less risky, but potentially less lucrative, business of providing start-up money to hedge-fund managers. The New York securities firm has raised $600 million from clients such as pension funds, wealthy families and large institutions for a new fund. It plans investments in eight to 10 new hedge funds, to get them up and running, according to people familiar with the matter.
• U.S. Nears Milestone: Net Fuel Exporter. U.S. exports of gasoline, diesel and other oil-based fuels are soaring, putting the nation on track to be a net exporter of petroleum products in 2011 for the first time in 62 years. A combination of booming demand from emerging markets and faltering domestic activity means the U.S. is exporting more fuel than it imports, upending the historical norm. According to data released by the U.S. Energy Information Administration on Tuesday, the U.S. sent abroad 753.4 million barrels of everything from gasoline to jet fuel in the first nine months of this year, while it imported 689.4 million barrels.
• Hedge Fund Managers Give Policy Makers Poor Marks for Handling of Euro Crisis. Hedge fund managers asked to grade policy-makers’ handling of the European financial crisis handed out low marks, according to a new survey released Tuesday by Aksia, a hedge fund research and advisory firm. “Parents would not be pleased with the report cards of the world’s policy makers,” the Aksia survey said, noting that the U.S. Congress, E.U. leaders, and the U.S. President all received “D” grades. The survey said the low marks “might be generous” given that a wide-majority gave them either a D or F.
• Ax Falls at Smaller Banks. Cuts at Lenders as Industry Job Growth Slows: 'There Will Be More to Come'. Smaller U.S. banks and savings institutions are cutting jobs in a sign of a deepening financial-industry retrenchment that is shaking firms from Main Street to Wall Street. More than 2,500 banks cut their work forces in the third quarter, reducing their staff by a combined 20,332 jobs, or 2.5%, according to an analysis by The Wall Street Journal of filings with U.S. banking regulators.
• Blame It on Berlin. The euro bailout caucus wants the Germans to write a blank check. The tragedy is that the euro-zone countries failed to abide by their original fiscal rules, a failure that has brought them to this unhappy pass. The Brussels-Washington bailout caucus now wants to extend the damage to monetary policy by printing more euros and worrying about the consequences later. In opposing that option, the Germans are said to be imposing their Prussian morality on everyone else. But without reforms, the countries of southern Europe will never pull out of their downward debt spiral. The Germans are at least telling the truth.

MarketWatch:

• IMF Rescue of Italy Will Spark Global Uprising.

Business Insider:

• Investor Leon Cooperman Sends Monster, Scathing Letter To Obama. Omega Advisors Founder Leon Cooperman sent a scathing letter to President Obama yesterday, [via @andrewrsorkin] and its contents are just short of being outright brutal. In the three page letter, Cooperman outlines his grievances with Obama's administration, calling his policy decisions "profligate and largely ineffectual" and calling Obama out for using a political rhetoric that promotes the ideas of class warfare.
• The Situation In Europe Sounds Kind Of Bad... Economics professor Karl Smith writes on his blog Modeled Behavior that the situation on the ground is more grim than people realize. It's no longer just about sovereign debt, and the ECB, but about a breakdown in the banking system.

Zero Hedge:

• Standard And Poors Reviews 37 Global Banks, Downgrades Bulk - Full List Attached.

CNBC:

• John Paulson Apologizes to Investors for 'Worst' Year. Hedge fund legend John Paulson apologized to investors for what he is calling a year that has been “the worst in the firm’s 17 year history.” “We are disappointed and apologize,” the Paulson Funds said in a letter to investors obtained by CNBC. Paulson’s funds stumbled significantly this year. The Paulson Advantage fund was down 32.57 percent for the year. The Advantage Fund Plus, a leveraged version of the Advantage fund, was down 45.35 percent. That represents a slight recovery from an earlier reported decline of 47 during the first nine months of the year. What happened? Paulson misread the macroeconomic conditions, according to the letter, which is titled "2011 Third Quarter Report." “At the beginning of the year, we positioned our portfolios with net equity exposure appropriate for growth in the U.S. and an orderly resolution of Europe’s sovereign credit issues. However, as the year progressed, our assumptions proved overly optimistic and our net equity exposure was too great. Growth in the U.S. slowed and Europeans leaders were, as yet, unable to deal with the escalating sovereign debt crisis,” the letter says. The report says Paulson is confident that “many of our position will recover as fear subsides.” Paulson’s other funds are also suffering. The Credit Opportunities Funds are down nearly 19 percent. The Credit Opportunities II is down 15.31 percent for the year. Paulson’s merger funds are also down. Paulson International Ltd. is down 10.40 percent for the year. Paulson Partners LP is down 9.89 percent. Paulson Enhanced Ltd. is down 22.11 percent. Paulson Partners Enhanced is down 19.83 percent. The Paulson “Recovery funds”, which invest in hotels, financial and real estate services companies are down more than 31 percent, compared to a better than 23 percent gain last year.
• ECB's Noyer: Europe's Situation Has Significantly Worsened. European Central Bank governing council member Christian Noyer said on Wednesday that the situation in Europe has significantly worsened, threatening global financial markets. "The situation in Europe and the world has significantly worsened over the past few weeks. Market stress has intensified," he said at a conference in Singapore. "We are now looking at a true financial crisis -- that is a broad-based disruption in financial markets."
• Indian Firms Risk Dollar Debt Default as Rupee Slides. Dozens of Indian companies are coming under financial stress after the sharp fall of the rupee against the dollar during the past few months made once-cheap loans in the US currency much more expensive, analysts have warned.

Forbes:

• Climategate II: More Smoking Guns From The Global Warming Establishment.
  

Rasmussen Reports:

• Election 2012: Generic Republican 48%, Obama 42%.

Reuters:

• After Bounce, Hedge Funds Slide Again In November. Whipsawing markets continue to baffle supposedly savvy hedge fund managers, who are hobbling again this month after registering a short-lived revival in October. A Bank of America Merrill Lynch hedge fund index fell 1.02 percent through November 23, according to a report released Tuesday by Bank of America Corp (BAC) analyst Mary Ann Bartels. With a week to go, it appears November is shaping up as another mediocre month for the $2 trillion hedge fund industry, in what is shaping up to be a rather forgettable year.
• North Korea Says Work on Uranium Enrichment Moves Briskly.
• Asian Internet Shoppers Turning Cautious - Visa(V) Survey. Asian internet shoppers are turning cautious, according to a survey by credit card company Visa, with half of respondents saying they plan to keep their year-end shopping budgets at the same level as in 2010. "Shoppers are more cautious this year with their spending. Even if they said they were spending more, they were doing so mainly to keep up with the rising cost of products," Paul Jung, Visa's head of eCommerce for Asia-Pacific, Central Europe, Middle East and Africa, said in a statement.
• Illinois House Votes Down CME(CME), Sears(SHLD) Tax Relief. The Illinois house voted down a proposal on Tuesday that would have given $100 million in tax relief to CME Group and Sears Holdings , which have threatened to move to other states.
• OmniVision Sees Q3 Below Estimates On Order Cutbacks. OmniVision Technologies Inc gave a third-quarter outlook below market estimates, hurt by a cutback in orders for sensors used in smartphones, sending its shares down 12 percent in extended trade. "Late in our second quarter we encountered an unanticipated cutback in orders from major customers for sensors that were designed into consumer devices," Chief Executive Shaw Hong said on a conference call with analysts.

Financial Times:

• Businesses Plan For Possible End Of Euro. International companies are preparing contingency plans for a possible break-up of the eurozone, according to interviews with dozens of multinational executives.

Telegraph:

• Wolfgang Schauble Admits Euro Bail-Out Fund Won't Halt Crisis. Europe's "big bazooka" bail-out fund is not ready and won't stem the debt crisis that on Tuesday pounded Italy and the European Central Bank (ECB), admitted Wolfgang Schauble, Germany's finance minister. Mr Schauble said eurozone finance ministers, who are meeting in Brussels, could not agree on the terms of the European Financial Stability Facility (EFSF). He told Germany’s Handelsblatt that although Europe needed a fund “capable of action”, plans for the EFSF were too “intricate and complex” for investors to understand. The finance ministers, who were meeting ahead of a full Ecofin summit today, acknowledged the €440bn (£376bn) fund would not win support to leverage it up to €1 trillion. Its capacity would be betwen €500bn and €700bn instead – a total that is unlikely to be big enough to rescue Spain and Italy.
• Autumn Statement 2011: nightmare economic outlook has Chancellor George Osborne dreaming up income.

China Daily:

• China should take short-term and long-term measures to prevent financial risk, Yi Xianrong, a researcher at the Chinese Academy of Social Sciences, wrote in a commentary. "Marginal" declines in housing prices don't warrant a suspension or loosening of regulatory measures on real estate speculation. A real-estate bubble is the biggest danger for the Chinese economy, Yi writes.

21st Century Business Herald:

• China should maintain a prudent monetary policy next year, citing a person close to the country's central bank. The country should keep its M2 money supply target for 2012 no higher than this year's 16%. Inflation target for next year may be lower than 4%, or possibly 3.5%, the person said.

Shanghai Securities News:

• China's stock market may face pressure as the lock up on about 160b yuan of stocks ends in Dec., citing analysts.

Securities Times:

• China May Suspend Stockpiling of Non-Ferrous Metals. Non-ferrous metals prices are currently "elevated" and stockpiling agencies may start selling to keep prices in check.

Evening Recommendations

• None of note

Night Trading

• Asian equity indices are -2.50% to +.25% on average.
• Asia Ex-Japan Investment Grade CDS Index 226.0 +2.0 basis points.
  
• Asia Pacific Sovereign CDS Index 165.50 -.75 basis point.
• FTSE-100 futures -.40%.
  
• S&P 500 futures -.53%.
  
• NASDAQ 100 futures -.31%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (JOSB)/.51
• (UNFI)/.40
• (AEO)/.27
• (GES)/.73
• (SNPS)/.45
• (ARO)/.28
• (SMTC)/.45
• (FNSR)/.22
• (RUE)/.33

Economic Releases
8:15 am EST

• The ADP Employment Change for November is estimated at 130K versus 110K in October.
  

8:30 am EST

• Final 3Q Non-Farm Productivity is estimated to rise +2.5% versus a prior estimate of a +3.1% gain.
• Final 3Q Unit Labor Costs are estimated to fall -2.1% versus a prior estimate of a -2.4% decline.

9:45 am EST

• The Chicago Purchasing Manager Index for November is estimated to rise to 58.5 versus 58.4 in October.

10:00 am EST

• Pending Home Sales for October are estimated to rise +2.0% versus a -4.6% decline in September.

10:30 am EST

• Bloomberg consensus estimates call for a weekly crude oil inventory build of +50,000 barrels versus a -6,219,000 barrel decline the prior week. Distillate supplies are estimated to fall by -1,250,000 barrels versus a -770,000 barrel decline the prior week. Gasoline supplies are estimated to rise by +1,450,000 barrels versus a +4,475,000 barrel gain the prior week. Finally, Refinery Utilization is estimated to rise by +.4% versus a +.7% gain the prior week.

2:00 pm EST

• Fed's Beige Book

Upcoming Splits

• (SXL) 3-for-1
  

Other Potential Market Movers

• The ECB's Draghi speaking, Challenger Job Cuts report for November, NAPM-Milwaukee for November, weekly MBA mortgage applications report, China PMI, Jefferies Energy Conference, JPMorgan SMid-Cap Conference and the CSFB Aerospace/Defense Conference could also impact trading today.
  

BOTTOM LINE: Asian indices are mostly lower, weighed down by industrial and financial shares in the region. I expect US stocks to open modestly lower and to maintain losses into the afternoon. The Portfolio is 75% net long heading into the day.