Stocks Lower into Final Hour on Debt Ceiling Worries, Emerging Markets Debt Concerns, Yen Strength, Homebuilding/Financial Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Modestly Lower
  

• Sector Performance: Most Sectors Declining
  

• Volume: Below Average

• Market Leading Stocks: Performing In Line

Equity Investor Angst:

• Volatility(VIX) 14.24 +8.54%
• Euro/Yen Carry Return Index 139.10 -.76%
• Emerging Markets Currency Volatility(VXY) 9.72 -1.12%
• S&P 500 Implied Correlation 49.36 +4.47%

• ISE Sentiment Index 72.0 -15.29%

• Total Put/Call .96 -8.57%

• NYSE Arms 1.41 -11.31% 

Credit Investor Angst:

• North American Investment Grade CDS Index 80.35 +.57%

• European Financial Sector CDS Index 139.82 -.38%

• Western Europe Sovereign Debt CDS Index 87.0 +.10%

• Emerging Market CDS Index 266.20 +1.45%

• 2-Year Swap Spread 14.50 -1.0 basis point

• TED Spread 24.50 +.5 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -5.5 +1.0 basis point

Economic Gauges:

• 3-Month T-Bill Yield .00% -1 basis point

• Yield Curve 237.0 -3 basis points

• China Import Iron Ore Spot $132.40/Metric Tonne +.46%

• Citi US Economic Surprise Index 45.90 +1.5 points
• Citi Emerging Markets Economic Surprise Index 3.60 +1.5 points

• 10-Year TIPS Spread 2.26 -2 basis points

Overseas Futures:

• Nikkei Futures: Indicating -63 open in Japan

• DAX Futures: Indicating +9 open in Germany

Portfolio: 

• Slightly Higher: On gains in my index hedges 
• Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges and some of my (EEM) short
• Market Exposure: Moved to 50% Net Long