Market Week in Review

• S&P 500 1,994.99 -2.77%*

The Weekly Wrap by Briefing.com.

*5-Day Change

Stocks Reversing Lower into Final Hour on Surging Eurozone/Emerging Markets Debt Angst, Fed Rate Hike Worries, Global Growth Fears, Homebuilding/Transport Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Lower
  

• Sector Performance: Most Sectors Declining
  

• Volume: Slightly Below Average

• Market Leading Stocks: Underperforming

Equity Investor Angst:

• Volatility(VIX) 19.47 +3.78%

• Euro/Yen Carry Return Index 138.72 -.81%

• Emerging Markets Currency Volatility(VXY) 10.99 +6.29%

• S&P 500 Implied Correlation 65.70 -1.22%

• ISE Sentiment Index 90.0 +25.0%

• Total Put/Call 1.07 -5.31%

• NYSE Arms .92 -28.63% 

Credit Investor Angst:

• North American Investment Grade CDS Index 69.14 +1.98%
• America Energy Sector High-Yield CDS Index 761.0 +.74%

• European Financial Sector CDS Index 68.07 +5.84%

• Western Europe Sovereign Debt CDS Index 25.17 -1.10%
• Asia Pacific Sovereign Debt CDS Index 70.22 +1.78%

• Emerging Market CDS Index 403.62 +1.72%

• iBoxx Offshore RMB China Corporates High Yield Index 113.48 +.41%
• 2-Year Swap Spread 24.0 +1.25 basis points

• TED Spread 24.5 +.75 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -13.75 +.75 basis point

Economic Gauges:

• 3-Month T-Bill Yield .01% unch.

• Yield Curve 120.0 -4.0 basis points

• China Import Iron Ore Spot $62.21/Metric Tonne -1.68%

• Citi US Economic Surprise Index -4.0 -5.1 points
• Citi Eurozone Economic Surprise Index 10.0 +12.3 points

• Citi Emerging Markets Economic Surprise Index -4.80 +1.6 points

• 10-Year TIPS Spread 1.64 +1.0 basis point

Overseas Futures:

• Nikkei Futures: Indicating -45 open in Japan

• DAX Futures: Indicating +5 open in Germany

Portfolio: 

• Slightly Higher: On gains in my biotech sector longs, index hedges and emerging markets shorts

• Disclosed Trades: Added to my (IWM)/(QQQ) hedges and took some profits in my biotech longs

• Market Exposure: Moved to 25% Net Long

Today's Headlines

Bloomberg: 

• Germany Warns Greece Against Isolation as Tsipras Shunned. Greece’s government risks isolation in the European Union by threatening to break ranks on sanctions against Russia and ditch its bailout deal, German Chancellor Angela Merkel’s minister for European affairs said. “Greece is firmly anchored in the mainstream of the European Union,” Michael Roth, who’s also deputy foreign minister, said in an interview. “I can only hope that this is where it wants to stay.” Prime Minister Alexis Tsipras’s government, sworn in Tuesday, is putting Greece’s financial lifeline at risk, the German Finance Ministry said. Greece’s bailout terms mean his government needs to undertake further reforms by the end of February. Extending the deadline would only make sense if Tsipras showed willingness to implement agreed reforms, and “the announcements from Athens go in the opposite direction,” ministry spokesman Martin Jaeger said Friday.
• Greece Sets Up Cash Crunch for March Telling EU It’s Over. Finance Minister Yanis Varoufakis said Greece won’t seek an extension of its bailout agreement, setting the government on course to enter March without a financial backstop for the first time in five years. Greece won’t engage with officials from the troika of official creditors who have been policing the conditions of its rescue since 2010. It’s five-day-old government wants a new deal with the European Union that allows for more spending, Varoufakis said at a joint press conference with Eurogroup Chief Jeroen Dijsselbloem in Athens, Friday. 
• Ukraine Rebels Urge Cease-Fire Talks After Territorial Gains. Rebels fighting government forces in Ukraine said they’re ready to discuss peace terms with the administration in Kiev after taking more territory and surrounding a key railway town. Artillery shells rained down on the eastern city of Debaltseve, where rebels said they had surrounded government positions in an assault that Ukraine and its allies in the U.S. and the European Union say is backed by Russia. Negotiators for the self-proclaimed rebel entities in the Donetsk and Luhansk regions called for a demarcation line agreed in a Sept. 5 truce in Minsk, Belarus to be moved to reflect their advance.
• Ruble Slides to Lowest Since December Panic on Surprise Rate Cut. The ruble slumped to the weakest level since panic swept across Russian financial markets last month after a surprise interest-rate cut signaled the central bank no longer considered tackling inflation its primary task. The currency tumbled as much as 4.3 percent to 71.8465 after borrowing costs were reduced by 200 basis points to 15 percent, in contrast to the expectations of all but one of 32 economists surveyed by Bloomberg. It hasn’t breached 70 since Dec. 17, a day after the currency tumbled past 80 in a rout that wreaked havoc across emerging markets.
• Ruble Bulls Facing $10 Billion Reason to Adjust Positions. Think the ruble’s close to finding its bottom? Investors might want to wait a month before deciding yes. Along with the central bank’s surprise rate cut on Friday, the threat of expanded sanctions over Ukraine and the prospect of a second, or third, downgrade to junk, Russian companies need $10.2 billion of foreign currency to repay maturing debt in February, according to data compiled by Bloomberg. Next month is the biggest for corporate redemptions this year, accounting for almost a quarter of the total. 
• Spain Compares Greek Debt Request to Catalan Independence. Spain’s deputy minister for the European Union, Inigo Mendez de Vigo, compared Greece’s request for a debt writedown to Catalonia’s push for independence and said EU officials won’t accept either. Mendez de Vigo insisted EU members are bound by common rules and must honor their commitments to each other in a speech at the University of Navarre, Spain, on Friday.
• Honda Cuts Profit Forecast After Recall Costs Mount. Honda Motor Co., Japan’s third-largest carmaker, cut its profit forecast for the second time in as many quarters recall costs mount. Net income will probably be 545 billion yen ($4.6 billion) in the fiscal year ending March, the Tokyo-based carmaker said in a statement today. That compares with the 565 billion yen the company previously forecast and the 591.2 billion yen average of 24 analysts’ estimates compiled by Bloomberg. Honda in October cut an earlier forecast. 
• Canadian Bank Stocks on Pace for Worst Start in 25 Years. Canadian bank stocks are on track for their worst start to the year in a quarter century as a plunge in crude oil and overstretched consumers dim their profit outlook. The eight-company Standard & Poor’s/TSX Commercial Banks index has dropped 9.5 percent this month, the weakest start to the year since a 12 percent decline in January 1990, according to data compiled by Bloomberg.  
• Europe Stocks Head for Best January Since 1989. European stocks declined, paring the best start to a year since 1989, as banks and telecommunications companies dropped. The Stoxx Europe 600 Index dropped 0.5 percent to 367.05 at the close of trading. The gauge rose as much as 0.4 percent earlier, before falling as much as 0.7 percent as Russia’s central bank unexpectedly cut its key rate. 
• Oil Rebounds on Speculation Low Prices Slowing Output. Crude oil rose for a second day on speculation the almost 60 percent slump in prices over the past seven months will slow production. The oil rig count fell to a three-year low of 1,223 this week, Baker Hughes Inc. reported. 
• Coal Keeps Dropping as OPEC-Like Tactic Stymied by Dollar. Coal prices, already down 52 percent since 2011, are forecast to keep falling. The rout shows that exporters’ OPEC-like tactics of trying to squeeze out high-cost producers have been frustrated by the rising dollar.
• VIX Calls Most Hated Since 2012 as Traders Shrug Off Volatility. Even with stock swings nearly doubling since 2014 and U.S. equities poised for their worst month in a year, traders aren't signaling too much concern. Investors own about 2.4 million options betting on a rise in the Chicago Board Options Exchange Volatility Index, compared to about 1.6 million contracts wagering on a drop. That's around the lowest ratio of calls to puts in more than two years, Bloomberg data show, indicating traders don't anticipate an increase in market turbulence anytime soon. "Those that typically use VIX call options to hedge long portfolios could be giving up on those hedges," Max Breir, a senior equity-derivatives trader at BMO in NY,  said by phone. 
• Bullard Says Markets Wrong Not to Expect Mid-Year Rate Rise. Federal Reserve Bank of St. Louis President James Bullard said investors are wrong to expect the Fed to postpone an interest-rate increase beyond midyear, with the U.S. economy leading global growth and unemployment dropping. “The market has a more dovish view of what the Fed is going to do than the Fed itself,” Bullard said in an interview Friday in New York. “Markets should take it at face value” from the Fed’s rate projections, and it’s “reasonable” to expect an increase in June or July.

Wall Street Journal: 

• Islamic State Militants Launch Offensive Outside Kurdish-Controlled Kirkuk. Senior Kurdish Commander Among the Dead in Surprise Offensive in Northern Iraqi Region.

MarketWatch.com:

• 10 best, 10 worst S&P 500 stocks so far in 2015.

Fox News:

• Romney announces he will not run for president in 2016. (video)

CNBC: 

• Secret hedge fund shorts revealed. Six hedge fund managers gave their best investment ideas at an exclusive—and private—conference, including new bets against companies.

ZeroHedge:

• Thanks Obamacare: This Is What Americans Spent The Most Money On In Q4. (graph)
• Chevron(CVX) Slashes 23% Of PA Workforce As US Rig Count Collapses To June 2010 Lows. (graph)
• Brazil's Economy Is On The Verge Of Total Collapse.
• Treasury Yields Are Crashing (Again). (graph)
• It Begins: Energy Giant Chevron Suspends Stock Buyback, Blames "Cash Flow Squeeze". (table)
• Shake Shak Opens For Trading Valued At 108x EBITDA. (graph)
• Greek Bond Yields Surge Above 19% After EU Talks. (graph)
• "Everything Is Awesome" American Consumers Are The Happiest In 11 Years. (graph)
• Chicago PMI Beats But Remains Lower Year-Over-Year. (graph)
• The Mexican Peso & Brazilian Real Are Collapsing. (graph)
• Greece Slams EU Bailout-ers: "We Don't Want The $7 Billion, We Want To Rethink The Whole Program".
• Q4 Annualized GDP Misses, Tumbles To 2.6% From 5.0%; Surging Personal Consumption Pulled Forward From 2015. (graph)
• Eurozone Deflation Ties Post-Lehman Record, Worse Than Expected. (graph)

Business Insider:

• Bill Ackman just made his biggest ever investment in another hedge fund manager.
• The index that timed the 2008 crash perfectly just slumped to a 3-decade low. (graph)
• TRADER: 'At this point, the Fed could be screwed'.
• China is banning university textbooks that promote Western values.
• The relationship between the White House and Israel is getting even more strained.
• New Greek government has deep, long-standing ties with Russian 'fascist' Dugin.
• Russian bank boss: sanctions are economic war against Russia.

NY Times:

• Greece 'Doesn't Want' EU7b Bailout Tranche, Varoufakis Says. "Out task is not to get the next loan tranche," which would be merely "kicking the can down the road," Greek Finance Minister Yanis Varoufakis is cited as saying. Greece asks "an opportunity to put together a proposal that will minimize the costs of Greece's loan agreement and give this country a chance to breathe again after policies that created massive social depravity," he said. EC President Jean-Claude Juncker's EU300b investment plan is "a public relations gimmick that has unfortunately occupied the minds of good people for too long - it will be a failure," he said. "We want to ensure that this country becomes an attractive destination for foreign direct investment, but not interest in a fire sale or selling the family silver," he said.

Telegraph:

• Eurozone heads towards 'protracted' deflation as bloc hit by record price drop. Prices fall by 0.6pc across the 19-nation single currency area in January as energy costs continue to tumble. 
• Eurozone breakup threat reaches all-time high. As Greek leaders enter negotiations with the troika, analysts have described the coming confrontation as an “unstoppable force meeting an immovable object”.

RIA:

• Russia to Send New Aid Convoy to Eastern Ukraine Jan. 31, Citing Russian Emergencies Ministry.

NDTV:

• Worsening Asset Quality Hits Banks; Sensex Sinks 600 Points. The BSE Sensex declined as much as 611 points in intraday trade on Friday as banking stocks came under sharp selling pressure. The Nifty snapped its 10-day rally that had powered the blue chip index to several record highs in the last few days. State-run lenders bore the brunt of the carnage with the sub-index of PSU banks on the National Stock Exchange ending 6 per cent lower.

Bear Radar

Style Underperformer:

• Small-Cap Value -1.23%

Sector Underperformers:

• 1) Airlines -4.03% 2) Construction -2.75% 3) Hospitals -2.46%

Stocks Falling on Unusual Volume:

• ADES, DECK, TUES, HA, ALGN, CPSI, GDOT, CBI, N, PAYC, FICO, JDSU, IIIN, BZH, UIS, RESN, SAIA, BMO, HBI, RY, BCR, CSII, IBN, BA, OSTK, HOG, CB, ABBV, XRX, INGR, COH, SFG, AHT, SAIA, PHM, PCAR, INVN, DMND, EXAM, DKS and HA

Stocks With Unusual Put Option Activity:

• 1) DECK 2) CNX 3) EWT 4) DISH 5) LOCO

Stocks With Most Negative News Mentions:

• 1) PBR 2) DAL 3) COP 4) WYNN 5) CVX
  

Charts:

• ETFs Falling on Unusual Volume

• Stocks Falling on Unusual Volume

Bull Radar

Style Outperformer:

• Large-Cap Growth -.62%

Sector Outperformers:

• 1) Gold & Silver +1.72% 2) Oil Service +.53% 3) Steel -.23%
  

Stocks Rising on Unusual Volume:

• AMZN, ICPT, SYNA, MAN, CPHD, QLGC, BIIB and V

Stocks With Unusual Call Option Activity:

• 1) DECK 2) GDP 3) SYNA 4) KRFT 5) RPTP
  

Stocks With Most Positive News Mentions:

• 1) COST 2) BIIB 3) AMZN 4) CELG 5) MA
  

Charts:

• ETFs Rising on Unusual Volume 

• Stocks Rising on Unusual Volume

Friday Watch

Evening Headlines 
Bloomberg:   

• Japan Limps Out of Recession With December Production Gain. Japan’s industrial production snapped two quarters of decline, signaling the world’s third-largest economy may have limped out of recession. Output rose 1.8 percent in the three months through December from the third quarter, the trade ministry said Friday. While household spending fell and inflation slowed in December, the labor market continued to tighten, with the ratio of jobs to applicants rising to the highest in more than two decades and the unemployment rate falling to the lowest since August 1997. 

• Top Economist Says BOJ Doesn’t Need More Stimulus: Japan Credit. Japan’s top-rated economist says the central bank doesn’t need more stimulus, defying the consensus. Ryutaro Kono, chief Japan economist in Tokyo at BNP Paribas SA, voted No. 1 by Nikkei Veritas magazine in six of the past seven years, says lower oil prices will stimulate growth and policy makers will favor yen stability. Twenty-six of 33 of economists in a Bloomberg News survey forecast the Bank of Japan will accelerate asset purchases by the end of October to meet a 2 percent inflation target. Ten-year inflation swaps slid to a two-year low of 0.74 percent this week, Meitan Tradition data showed.

• Taiwan’s GDP Growth Misses Economists Estimate in Fourth Quarter. Taiwan’s economy grew slower than economists estimated last quarter after a food scandal weighed on demand. Gross domestic product rose 3.17 percent from a year earlier in the three months through December, according to preliminary data the statistics bureau released in Taipei Friday. That missed the 3.25 percent median estimate in a Bloomberg survey of analysts and declined from 3.63 percent in the prior quarter. The economy expanded 3.51 percent in 2014.  

• Asian Stocks Advance to Extend First Monthly Gain Since October. Asian stocks rose, with the regional benchmark index extending its firstly monthly gain since October, as Japanese shares climbed after the yen weakened against the dollar on a drop in U.S. jobless claims. The MSCI Asia Pacific Index added 0.3 percent to 140.91 as of 9:01 a.m. in Tokyo.

• Plunging Oil Prices Felt Across Japan’s Industrial Base. The plunge in crude oil prices is taking its toll across Japan’s industrial base. Forecasts from Nippon Steel & Sumitomo Metal Corp., Japan Marine United Corp. and Komatsu Ltd. show the extent to which lower crude prices are eroding the outlooks for industrial companies with businesses linked to oil and gas.  

• Iron Ore Set for Monthly Loss as ABN’s Crystal Ball Shows No Joy. Iron ore is heading for the biggest monthly loss since May, signaling that the bear market that began last year has further to run as steel mills in China curtail output before a national holiday and major producers add supply. Ore with 62 percent content delivered to Qingdao, China, was at $63.27 a dry metric ton on Thursday, 11.2 percent lower this month, according to Metal Bulletin Ltd. The raw material fell to $63.09 on Wednesday, the lowest price on record going back to May 2009, and is poised for a third monthly drop.

• Hillary Clinton Faces Scrutiny for Use of Private Jets. Hillary Clinton took more than 200 privately chartered flights at taxpayer expense during her eight years in the U.S. Senate, sometimes using the jets of corporations and major campaign donors as she racked up $225,756 in flight costs.

Wall Street Journal:

• Underground Terror Network Said to Benefit Would-Be Jihadists in Europe. Officials Say Wife of Paris Gunman Used Resources to Reach Islamic State Territory in Syria. When a young Frenchwoman showed up early this month at an Islamic State border checkpoint in northern Syria, the extremists controlling that arid expanse were expecting her.

• Falling Prices Spread Pain Far Across The Oil Patch. Companies Plan to Slash Spending Along With Thousands of Jobs. Rumor became reality here last week when dozens of workers lost their jobs at Laredo Petroleum Inc. The Oklahoma-based energy outfit said it closed its regional office to cope with plunging oil prices.

• Mexico Prepares to Cut Spending as Oil-Price Drop Hits Revenue. By Reducing Spending, Government Signals It Aims to Continue Lowering Deficit.

• Former Hedge-Fund Managers Hit the Comeback Trail. Veteran Stock Pickers Michael Karsch, Adam Weiss Plan New Funds. It can be tough to start over in the hedge-fund world. The $2.8 trillion industry is strewed with tales of managers who, after shutting down large funds, relaunched only to limp along or close again. Undaunted, veteran stock pickers Michael Karsch and Adam Weiss plan to launch new funds less than two years after closing their old firms, according to Mr. Karsch and people familiar with Mr. Weiss’s plans.

• Obama Budget Proposes 7% More in Spending Above Sequestration Caps.

• America’s Strategy Deficit. A haphazard foreign policy makes a complicated world more dangerous. Something is going on here. On Tuesday retired Gen. James Mattis, former head of U.S. Central Command (2010-13) told the Senate Armed Services Committee of his unhappiness at the current conduct of U.S. foreign policy. He said the U.S. is not “adapting to changed circumstances” in the Mideast and must “come out now from our reactive crouch.” Washington needs a “refreshed national strategy”; the White House needs to stop being consumed by specific, daily occurrences that leave it “reacting” to events as if they were...

Fox News:

• Official: Gitmo prisoner traded for Bergdahl reaching out to Taliban. (video) One of the five Taliban fighters traded last year for Sgt. Bowe Bergdahl is trying to make contact with the Taliban once again, Fox News has learned. A U.S. official confirmed to Fox News that the former Guantanamo prisoner has been intercepted making telephone calls to the Taliban. The development comes amid rising concerns over former Guantanamo detainees returning to the battlefield, and over the nature of the Bergdahl-Taliban trade itself last year, which was negotiated with the involvement of the Qatari government.

CNBC:

• Amazon(AMZN) earnings: 45 cents a share, vs. expected EPS of 17 cents. Amazon.com blew past Wall Street's earnings expectations on Thursday as holiday sales climbed some 15 percent, sending the company's shares rallying 14 percent in after-hours trading.

• Google(GOOG) misses on earnings, blames strong dollar. (video) Google reported quarterly earnings and revenue that missed analysts' expectations, as foreign exchange and falling ad prices weighed on the company.

• Visa(V) offers 4-for-1 stock split, beats on top and bottom. Visa reported earnings on Thursday that beat on both the top and bottom line and also announced a four-for-one stock split. The stock rose more than 4 percent in after-hours trade.

Zero Hedge:

• The Wreck Of The Monetary Hesperus.

• Janet Yellen Now Advises Democrats What The Fed's Monetary Policy Plans Are.

• After VISA's(V) Stock Split, The Most Important Company In The Dow Jones "Industrial" Average Is...

• 3 Things - Fed Mistake, ECB QE, Housing. (graph)

• According To Citi(C), Small Hedge Funds May Have No Choice But To Become Paper Traders On Twitter. (graph)

• The Biggest "Hamilton Oil Shock" In History. (graph)

• The Next War In The Middle East Has Begun And Israel Vows "To Act Powerfully On All Fronts".

• Occupied By Wall Street – The Latest TARP Taxpayer Screw-Job Is Revealed.

Business Insider:

• Greece Is Quickly Turning Into Europe's Worst Nightmare.

• Shake Shack IPO Prices Way Higher Than Expected.

• Expert: The US Strategy In Syria Is A Complete Mess.

• Alibaba's(BABA) Fairy-Tale Ascent Is Being Threatened By 2 Major Risks.

• The US Is Running Out Of Intelligence In Yemen.

Reuters:

• U.S.-based stock funds attract $2.8 bln over week -Lipper.

• Deckers cuts full-year forecast as demand for UGG shoes slows. Outdoor footwear and apparel manufacturer and retailer Deckers Outdoor Corp cut its full-year forecast as demand for its UGG Australia branded sheepskin shoes slows in the United States. The company's shares fell 13.7 percent in after-market trading on Thursday.

• Chinese banks back risky stock margin finance in face of regulator crackdown. Chinese banks seeking to profit from the country's stock market frenzy have bought into the recent surge in margin finance, foiling regulatory efforts to reduce debt-fueled speculation and amplifying the risk if the rally turns into a rout. Although regulators are cracking down on credit flows into the stock market, financial industry insiders say they still have not closed loopholes that allow banks to channel credit into the stock market via brokerages.

Telegraph:

• The game is up. It’s time for Greece to leave the eurozone and move on. The stand-off between Greece and the rest of the eurozone will escalate, neither side will blink and the country will default.

Evening Recommendations 

• None of note

Night Trading

• Asian equity indices are -.25% to +.50% on average.

• Asia Ex-Japan Investment Grade CDS Index 110.0 -2.0 basis points.

• Asia Pacific Sovereign CDS Index 69.0 -.25 basis point.

• S&P 500 futures -.30%.

• NASDAQ 100 futures +.09%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (AXL)/.54

• (AON)/1.86

• (CBOE)/.66

• (FLIR)/.48

• (MMC)/.66

• (MCO)/.95

• (CCJ)/.31

• (D)/.83 

Economic Releases 
8:30 am EST

• The 4Q Employment Cost Index is estimated to rise +.6% versus a +.7% gain in 3Q.

• Advance 4Q GDP is estimated to rise +3.0% versus a +5.0% gain in 3Q.

• Advance 4Q Personal Consumption is estimated to rise +4.0% versus a +3.2% gain in 3Q.

• Advance 4Q Core PCE is estimated to rise +1.1% versus a +1.4% gain in 3Q.

9:00 am EST

• ISM Milwaukee for January is estimated to rise to 58.0 versus 57.61 in December.

9:45 am EST

• Chicago Purchasing Manager for January is estimated to fall to 57.5 versus 58.3 in December.

10:00 am EST

• Final Univ. of Mich. Consumer Sentiment for January is estimated at 98.2 versus a prior estimate of 98.2.
  

Upcoming Splits

• (SMBC) 2-for-1

Other Potential Market Movers

• The Fed's Rosengren speaking, Fed's Tarullo speaking and the Eurozone Unemployment Rate call could also impact trading today.

BOTTOM LINE: Asian indices are mostly higher, boosted by commodity and consumer shares in the region. I expect US stocks to open modestly higher and to weaken into the afternoon, finishing mixed. The Portfolio is 50% net long heading into the day.

Stocks Reversing Higher into Final Hour on Oil Bounce, Earnings Optimism, Yen Weakness, Homebuilding/Airline Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Modestly Higher
  

• Sector Performance: Most Sectors Rising
  

• Volume: Around Average

• Market Leading Stocks: Underperforming

Equity Investor Angst:

• Volatility(VIX) 19.34 -5.38%

• Euro/Yen Carry Return Index 139.80 +.89%

• Emerging Markets Currency Volatility(VXY) 10.32 +4.45%

• S&P 500 Implied Correlation 65.99 -5.17%

• ISE Sentiment Index 65.0 -26.97%

• Total Put/Call 1.16 +19.59%

• NYSE Arms 1.31 -62.28% 

Credit Investor Angst:

• North American Investment Grade CDS Index 68.09 -.34%
• America Energy Sector High-Yield CDS Index 752.0 +1.75%

• European Financial Sector CDS Index 64.32 +.40%

• Western Europe Sovereign Debt CDS Index 25.45 +3.24%
• Asia Pacific Sovereign Debt CDS Index 69.81 +.91%

• Emerging Market CDS Index 398.45 -.43%

• iBoxx Offshore RMB China Corporates High Yield Index 113.01 +.12%
• 2-Year Swap Spread 22.75 -2.5 basis points

• TED Spread 23.75 -.25 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -14.5 -2.0 basis points

Economic Gauges:

• 3-Month T-Bill Yield .01% -1.0 basis point

• Yield Curve 124.0 unch.

• China Import Iron Ore Spot $63.27/Metric Tonne +.29%

• Citi US Economic Surprise Index 1.1 +5.1 points
• Citi Eurozone Economic Surprise Index -2.30 -3.9 points

• Citi Emerging Markets Economic Surprise Index -6.40 +1.0 point

• 10-Year TIPS Spread 1.63 +2.0 basis points

Overseas Futures:

• Nikkei Futures: Indicating +229 open in Japan

• DAX Futures: Indicating +48 open in Germany

Portfolio: 

• Higher: On gains in my tech/retail/biotech/medical sector longs and emerging markets shorts

• Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges

• Market Exposure: Moved to 50% Net Long

Today's Headlines

Bloomberg: 

• EU Moves Toward Tougher Russia Sanctions as Greece Yields. European Union governments moved toward imposing further economic sanctions on Russia as Greece’s new administration refrained from casting a veto that could leave it isolated in Europe. EU foreign ministers gave the go-ahead to prepare steps that would go beyond last year’s decisions to ban financing for Russian state-owned banks and prohibit the export of advanced energy-exploration technology. The EU will also extend a blacklist of 132 people including Russian politicians and military officers involved in the Ukraine conflict by six months to September, and add more names to the list by Feb. 9. “It does include preparatory work for further punitive measures,” EU foreign policy chief Federica Mogherini told reporters after the 28 national ministers met Thursday in Brussels. “We hope this can help put pressure in particular on Russia to make positive steps.”

• Greek Market Moves Don’t Alter EU Stance, Official Says. (video) Market tension in Greece hasn’t weakened the European Union’s determination that officials in Athens stick to commitments under the nation’s international bailout, said Valdis Dombrovskis, the European Commission’s vice president for the euro. Stocks in Athens fell this week to lows not seen since the worst of the debt crisis, with Greek banks losing more than $10 billion of value within 48 hours of the appointment of an anti-bailout cabinet under new Prime Minister Alexis Tsipras. The markets rebounded Thursday as the government sought to downplay the prospect of a clash with creditors, with the stocks gaining 3 percent and the yield on benchmark 10-year Greek bond falling 21 basis points to 10.12 percent.

• Greek Government’s Signals are ‘Very Mixed,’ ECB’s Jazbec Says. Greece’s new government is sending “very mixed signals” on its aid program and it's too soon to say how the country will be treated in the European Central Bank's bond-buying plan, ECB Governing Council member Bostjan Jazbec said. “Our concerns and hopes are related to how the Greek government will understand the situation and react to it,” he said in an interview in Ljubljana on Thursday. “It’s too early to directly answer questions on when and how the ECB can buy Greek government bonds.” Jazbec’s comments are the most explicit yet from an ECB policy maker on the Greek government’s stance.

• German Inflation Rate Is Negative for First Time Since 2009. Germany’s inflation rate turned negative in January for the first time in more than five years, aggravating a slump in consumer prices in the euro area. Prices in Europe’s largest economy fell 0.5 percent from a year earlier, the Federal Statistics Office in Wiesbaden said today. That’s the lowest rate since September 2009. Economists predicted a drop of 0.2 percent. 

• Brazil Says Gain in Fighting Inflation Is Still Insufficient. Brazil’s central bank said progress in taming above-target inflation is insufficient after it bucked the trend of other central banks last week by raising its benchmark rate to the highest in more than three years.

• Nigeria Torn Asunder as Boko Haram Drive Fuels Caliphate Threat. Islamist fighters have declared a caliphate in northeastern Nigeria that’s the size of Belgium. Whether the region becomes autonomous or not, the damage has been done. As Nigeria prepares to hold general elections next month, Boko Haram is expanding a six-year campaign to impose its strict version of Islamic law on a region around Nigeria’s northeast and spilling into neighboring Chad and Cameroon. While it’s failed to capture the Borno’s capital, Maiduguri, the state’s emergency agency said this month that its officials can’t travel to 20 of 27 local government areas in Borno.  

• Alibaba(BABA) Revenue Misses Estimates, Shares Tumble 8% in Pre-Market. (video) Alibaba Group Holding Ltd. revenue missed estimates as the e-commerce giant’s push into mobile curbed its advertising sales growth. The shares fell. 

• Emerging Stocks Decline Amid Crisis Signs From Russia to Greece. Emerging-market stocks fell the most in three weeks as China intensified its crackdown on speculative trading and a flareup in the Ukraine conflict stoked concern that economies in the region are being pushed into crisis. Citic Securities Co. and Haitong Securities Co. fell in Shanghai as regulators planned a new round of checks into the margin-lending businesses of brokerages. Russia’s ruble weakened for a second day and stocks declined on speculation it will face tougher international sanctions linked to Ukraine. The Ibovespa sank for a second day in Sao Paulo. Greek banks rebounded from a slump driven by the new government’s pledge to end austerity. The MSCI Emerging Markets Index lost 1.4 percent to 971.10 at 11:07 a.m. in New York.

• European Stocks Trim Best Month Since 2009 as Shell Declines. European stocks closed little changed, paring earlier losses, as German inflation data missed forecasts, while U.S. jobless claims fell to a 15-year low. Royal Dutch Shell Plc slid 4.3 percent after reporting that fourth-quarter profit rose less than analysts predicted. Vallourec SA lost 3.8 percent after saying it will write down the value of assets by as much as 1.2 billion euros ($1.35 billion) as lower oil prices force some customers to cut spending. Deutsche Bank AG rose 2.6 percent after posting a surprise quarterly profit. The Stoxx Europe 600 Index fell 0.1 percent to 368.76 at the close of trading, after earlier losing 0.8 percent and rising 0.2 percent.

• Commodity Shipping Rate Falls to 28-Year Low on China Demand. A measure of global shipping costs for commodities fell to a 28-year low as slowing growth in China’s demand exacerbates the effect of a fleet glut. The Baltic Dry Index plunged 5.1 percent to 632 points, the lowest since Aug. 22, 1986, according to data from the Baltic Exchange in London on Thursday. Freight rates for all the vessel types within the measure declined.

• Oil’s Plunge Hurts Houston Office Sales, Calgary Leases. These are early signs that demand is weakening for commercial properties in cities that depend on the energy industry after crude oil prices fell below $50 a barrel, the lowest in five-and-a-half years, from more than $100 in June. Oil companies looking to reduce costs are cutting jobs and choosing to stay put rather than buy or lease new space, said Ross Moore, director of Canada research for CBRE.   

• Gold Heads for Biggest Drop Since 2013 as Silver Plummets. On the Comex, gold futures for April delivery lost 2.5 percent to $1,254.80 an ounce at 1:06 p.m. in New York, on pace for the biggest loss since Dec. 19, 2013.

• Wall Street Creating CLOs That May Bypass Rules: Credit Markets. Wall Street has another rule it’s trying to get around: regulations seeking to limit risk-taking by managers of collateralized loan obligations. Leon Black’s Apollo Global Management LLC, Carlyle Group LP and a unit of Credit Suisse Group AG have all taken steps in the past two months to create CLOs now that they may be able to refinance after the rules take effect in December 2016 without having to comply with the new regulations, according to three people with knowledge of the matter. The firms are trying to avoid a requirement to hold a stake in the funds they manage.  

• U.S. Homeownership Rate Falls to a 20-Year Low. The U.S. homeownership rate fell to the lowest in more than two decades in the fourth quarter as many would-be buyers stayed on the sidelines, giving the rental market a boost. The share of Americans who own their homes was 64 percent in the fourth quarter, down from 64.4 percent in the previous three months, the Census Bureau said in a report. The rate was at the lowest since the second quarter of 1994, data compiled by Bloomberg show.

Fox News: 

• Obama seeking to 'fully reverse' sequester cuts, raise spending caps in budget plan. (video) President Obama will push to "fully reverse" the so-called sequester cuts and significantly raise government spending caps as part of his upcoming budget plan, a proposal likely to anger fiscal conservatives who want to see spending limits in place. The across-the-board cuts, agreed to by both parties, have been in effect since 2013, after lawmakers were unable to produce a more strategic deficit-cutting plan. Members of both parties have problems with the cuts, which indiscriminately affect both domestic and defense programs.

CNBC: 

• Next for oil: Mergers, layoffs and 'death spirals'. The oil industry may be getting pinched by falling prices, but the next year could be a busy and lucrative time for private equity firms and restructuring specialists working in energy.

ZeroHedge:

• Alexis Tsipras Most Outrageous Outburst Yet?

• The Fed Has Boxed Itself Into A Corner.

• Europe's Largest Insurance Company Explains Why The ECB's QE Has Already Failed Using "Widget Makers".

• Crude Crumbles To Fresh Lows: $43 Handle. (graph)

• Alexis Tsipras' Open Letter To Germany: What You Were Never Told About Greece.

• It Will Now Cost You 0.5% To Save Money In Denmark: Danish Central Bank Cuts Rates For Third Time In Two Weeks.

• Pending Home Sales See 2nd Biggest MoM Plunge Since May 2010. (graph)

• Putin's Unexpected Victory: Europe Furious That Greece Is Now A Russian Sanctions Veto.

• Initial Jobless Claims Collapse To 15 Year Lows But Shale States Job Losses Explode. (graph)

Business Insider:

• GARY SHILLING: Here Are 11 Reasons Why I Still Like US Treasury Bonds.

• America's 3rd And 4th Largest Oil Companies Announced Huge Budget Cuts.

• FORGET GREXIT: The Big Risk In Greece Is That They Reverse Reforms.

• Bank Of America(BAC) Is Cutting Its Trader Bonus Pool Up To 10%.

• Legendary Marine General James Mattis Ripped Into Obama's Foreign Policy During Senate Testimony.

• Iran Targets Netanyahu Children for Assassination By Publishing Personal Information.

Reuters:

• Greece could face rating downgrade if troika talks stall - Fitch. Greece could face a rating downgrade if it cannot come to an agreement with its international creditors by the time Fitch next assesses the country in May, said Douglas Renwick, the firm's head of western European sovereigns on Thursday. "If by our next review on the 15th of May there is no progress on these talks or they look to be failing, of course that would be a trigger for a downgrade," said Renwick during a conference call.

• 
  
  METALS-Copper down after Fed meeting, inventories rise.

Telegraph: 

• Investors have woken up to Greece's nuclear risk. European and international authorities are facing a revolt from the Greek new prime minister, Alexis Tsipras.

Bear Radar

Style Underperformer:

• Small-Cap Growth -.33%

Sector Underperformers:

• 1) Steel -3.79% 2) Oil Service -3.70% 3) Gold & Silver -3.65%

Stocks Falling on Unusual Volume:

• TGI, CLB, AERI, POST, ALB, FTNT, OSTK, QCOM, YHOO, HSY, WRLD, CAVM, DSKY, SWFT, PAYC, KNX, HP, BABA, USLV, PCH, VRTX, RTN, UBSH, MMYT, RCL, CRS, GLW, FCX, CHMT, BEAV, CAM, CRUS, RTN, TKR, FNSR, X, GHL, STLD, WWWW and RES

Stocks With Unusual Put Option Activity:

• 1) NFX 2) EWG 3) CTSH 4) HON 5) HOG

Stocks With Most Negative News Mentions:

• 1) VRTX 2) CAT 3) BABA 4) OSTK 5) GHL
  

Charts:

• ETFs Falling on Unusual Volume

• Stocks Falling on Unusual Volume

Bull Radar

Style Outperformer:

• Large-Cap Growth -.30%

Sector Outperformers:

• 1) Homebuilders +2.47% 2) Restaurants +1.68% 3) Airlines +1.13%
  

Stocks Rising on Unusual Volume:

• XNCR, HZO, HAR, KATE, CMPR, IRE, COH, CSH, VAR, AZPN, NOW, MCD, LRN, CSII, OMER, ABMD, CL, PHM, JBLU, APD, BC, SWK, CEMP and TSCO

Stocks With Unusual Call Option Activity:

• 1) VNDA 2) MCD 3) ADT 4) EMES 5) CL
  

Stocks With Most Positive News Mentions:

• 1) HOLX 2) BA 3) PG 4) FB 5) NOC
  

Charts:

• ETFs Rising on Unusual Volume 

• Stocks Rising on Unusual Volume

Thursday Watch

Evening Headlines 
Bloomberg: 

• Russia Set to Hold Main Rate at 17% With No Cut Seen Before June. Russia will probably keep its main interest rate unchanged this week and is unlikely to cut it from an emergency level before June as stabilizing the ruble and taming inflation take precedence over a looming recession, according to two surveys of economists. The first reduction this year is likely in June or July, according to a majority of respondents in a survey of 23 economists. The central bank will act once the inflation rate has dropped to 11.2 percent or less, based on the median of 18 estimates. All but one analyst in a separate survey of 19 economists predict the Bank of Russia will hold its benchmark at 17 percent at a meeting on Friday. 

• Russian Consumer Crunch Spurs Tinkoff Stock Volatility. Price swings in TCS Group Holding Plc have surged to the highest level in eight months as analysts cut projections for the consumer lender amid a financial crisis that’s making it more difficult for Russians to pay their debts. Fifty-day historical volatility, a measure of price fluctuations during the period, jumped to 73 percent Wednesday as the company’s London-traded shares headed for an eighth straight monthly decline. The stock has sunk 84 percent from its October 2013 initial public offering price of $17.50.

• Greece Wants a Debt Break. What About Its Poorer Neighbors? The 40-year-old prime minister’s rise to power has put him on a collision course with Germany, as he struggles to deliver on his campaign promises to renegotiate his country’s debt and overturn the painful austerity demanded by Greece's creditors. But if Tsipras is to bring home the deal he feels Greece deserves, he will have to more than face down the Germans. He’ll have to win over skeptical taxpayer in other euro zone countries, reassure European leaders worried about insurgent challenges of their own and make the case that – in a Europe still reeling from the 2008 global financial crisis – Greece is uniquely deserving of assistance.

• Japan’s Retail Sales Unexpectedly Slump in Challenge to Abe. Japanese retail sales unexpectedly fell in December, underscoring challenges to Prime Minister Shinzo Abe’s effort to stoke a recovery in the world’s third-biggest economy. Sales slid 0.3 percent from November for a third straight monthly decline, the trade ministry said Thursday in Tokyo. That compared with the median estimate for a 0.3 percent gain in a Bloomberg News survey. Sales increased 1.7 percent in 2014.

• With India Bulls Everywhere, a Rare Look at the Risks. There are times in financial-market rallies where the gains become so spectacular and the euphoria reaches such a pitch that it becomes easy to forget about the risks. India, it could be argued, is going through such a moment. 

• China Stocks Fall for Third Day as CSRC Starts New Margin Probe. China’s stocks fell for a third day, sending the benchmark index to a one-week low, amid speculation increased regulatory scrutiny of margin loans will spur some leveraged investors to reduce holdings. Citic Securities Co. and Haitong Securities led declines for financial companies with losses of at least 1.8 percent. The securities regulator plans a new round of checks into the margin-lending businesses of brokerages, the Xinhua News Agency reported Wednesday night. Trainmakers China CNR Corp. and CSR Corp. rose at least 1.6 percent after the government said it will promote railway firms’ overseas investments. “The authorities sent a signal that they don’t feel comfortable,” said Yuliang Chang, Hong Kong-based strategist at Deutsche Bank AG. The pace of growth in margin lending and umbrella trusts “is creating a systemic risk in the financial industry,” he said. The Shanghai Composite Index dropped 0.9 percent to 3,275.18 at 10:28 a.m. local time.

• Asian Stocks Track U.S. Declines After Federal Reserve Statement. Asian stocks fell, tracking declines in U.S. equities, after the Federal Reserve cited international risks to the American economy and oil slumped below $45 per barrel. The MSCI Asia Pacific Index slid 0.5 percent to 141.74 as of 9:01 a.m. in Tokyo. The Fed acknowledged global risks in its statement Wednesday, saying that it will take into account readings on “international developments” as it decides how long to keep key rates near zero. While boosting their assessment of the economy, policy makers said inflation will probably slow further. U.S. oil supplies climbed to their highest level in data going back more than 30 years, exacerbating concerns over a global supply glut.

• Copper Poised to Catch Up With Oil’s Collapse: Chart of the Day.

• Tesla(TSLA) Bears Rev Engine on Falling Oil, China Skepticism. Slumping oil prices have restored Tesla Motors Inc.’s status as a favorite among short sellers and bearish options traders. Speculation that a 58-percent plunge in West Texas Intermediate crude since June and competition from General Motors Co. will hurt demand have pushed short sales to a one-year high. The difference in the cost of bearish options versus bullish ones has almost quadrupled from September, reaching the highest level since November 2012, data compiled by Bloomberg show.

Wall Street Journal: 

• U.S. Must Return Guantanamo for Normal Relations With Cuba, Raúl Castro Says. Demands Come as Two Nations Move Toward Renewing Full Diplomatic Relations. Cuban President Raúl Castro demanded Wednesday that the U.S. return the base at Guantanamo Bay, lift the half-century trade embargo on Cuba and compensate his country for damages before the two nations re-establish normal relations. 

• Islamic State Offshoots Spring Up in Egypt, Other Countries. Egyptian Army Battles a Deadly Sinai Insurgency. The video looks hard to distinguish from the ones filmed in Syria and Iraq. Islamic State gunmen arrive in a fleet of pickup trucks, set up checkpoints on a busy highway and start hauling away suspected collaborators with the “apostate” government. It ends, predictably, with forced confessions and gruesome, close-up shots of killings.

• Militants Driven From Pakistan Flock to Afghan Towns. Migration to Lawless Regions Pose New Threat to National Security. Arab and Central Asian Islamist militants have moved into Afghanistan after a military offensive by Islamabad largely eliminated havens in Pakistan’s tribal areas, Afghan officials and local residents say, posing a potential new threat to the country’s already tenuous security.

• Up to Six Million Households Facing Penalty for Skipping Health Insurance. The Fine for Not Carrying Insurance in 2014 is $95 per Adult, or 1% of Family Income. The U.S. government estimates as many as six million households may have to pay a penalty for not having had health-insurance coverage last year as required under the Affordable Care Act, officials said Wednesday.

• Building Toward Another Mortgage Meltdown. In the name of ‘affordable’ loans, the White House is creating the conditions for a replay of the housing disaster. The Obama administration’s troubling flirtation with another mortgage meltdown took an unsettling turn on Tuesday with Federal Housing Finance Agency Director Mel Watt’s testimony before the House Financial Services Committee. 

Fox News:

• Fox News Poll: 47 percent say Obama downplays threat from Islamic terrorists.

MarketWatch.com: 

• Sands China's quarterly profit falls 18%. Sands China Ltd. (1928.HK), the Macau unit of Las Vegas Sands Corp. (LVS), said Thursday fourth-quarter net income dropped 18% from a year earlier amid a softer gaming market in Macau.

Zero Hedge:

• The Most Ridiculous Charts From Facebook's(FB) Quarterly Earnings. (graph)

• Fed-nado Crushes Stocks And Crude; Long Yields Hit Record Low. (graph)

• Crude Contagion: California's Kern County Declares Fiscal Emergency Due To Plunging Oil Price.

• Another Ex-Central Planner Speaks Up: Currency War Policy "Risks Major Downward Shock To Asset Prices".

• Teachers' Retirement Funds Are Piling Into Manhattan Real Estate At Record High Prices.

• Norway Regulator Fears Housing Bubble "Isn't Sustainable". (graph)

• The Homebuilder Hope Trade Deja Vu. (graph)

Business Insider:

• McDonald's(MCD) CEO Is Out.

• ISIS Just Gave Japan Another Ominous Deadline.

• Raul Castro Says The US Must Return Guantanamo Bay Before Ties Are Normalized.

• The Aussie Dollar Is Getting Smoked. (graph)

• More Fireworks Could Be Coming Out Of Greece After Syriza's Win.

• Why Shake Shack Won't Be The Next Chipotle(CMG).

Reuters: 

• Petrobras(PBR) still faces default risk despite release, fund says. Brazilian state-run oil company Petrobras still runs the risk of being declared in default on billions of dollars of debt even after releasing its delayed third-quarter earnings before a self-imposed deadline, a New York-based hedge fund said on Wednesday. 

• Samsung Elec Q4 profit meets guidance; outlook cautious. Samsung Electronics Co Ltd on Thursday reported its first annual earnings decline in three years, as strong chip earnings failed to make up for weakness in the South Korean giant's smartphone business.

• Qualcomm(QCOM) says key customer passed on new chip, stock drops. Qualcomm Inc reduced its outlook for fiscal 2015, saying it expects its newest Snapdragon mobile chip will not be used in a major customer's flagship smartphone, sending its shares lower. The San Diego, California, company also warned that "challenges" with another of its chips had hurt its competitiveness in China, where Qualcomm has been disappointed with growth that has fallen short of expectations.

Bild:

• EU's Schulz Sees Non Majority for Greek Debt Cut. EU Parliament President Martin Schulz says he will speak frankly to Greek Prime Minister Alexis Tsipras on trip to Athens and tell him to ask the billionaires who stashed money abroad to pay their taxes, citing an interview. Sees coalition with right-wing populist party as problematic, remains to be seen how the parties will cope with their internal contradictions. Greece's rejection of sanctions against Russia doesn't mark a successful debut; EU sanctions have held together and solo efforts don't go so easily without consultations.

Le Figaro:

• EC President Juncker Says Greece Should Respect Europe. Europe won't provide credit unless Greece sticks to commitments, European Commission President Jean-Claude Juncker says in an interview. No question of forgiving Greek debt, he said. A country can't take "democratic choice" to go against European treaties, Juncker said.

Economic Information Daily:

• China 2014 Tax Revenue Growth Lowest in 20 Years. Tax revenue grew 8.8% to 10.4t yuan, citing data from the State Administration of Taxation.

Evening Recommendations 

• None of note

Night Trading

• Asian equity indices are -1.0% to unch. on average.

• Asia Ex-Japan Investment Grade CDS Index 112.0 +2.0 basis points.

• Asia Pacific Sovereign CDS Index 69.25 -1.25 basis points.

• S&P 500 futures +.22%.

• NASDAQ 100 futures +.13%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (ABT)/.65

• (APD)/1.49

• (ALXN)/1.27

• (BABA)/.76

• (AUO)/.68

• (BAX)/1.31

• (BEAV)/.86

• (BX)/.91

• (CAM)/1.20

• (CAH)/1.10

• (CELG)/.99

• (COH)/.66

• (CL)/.74

• (COP)/.60

• (DOW)/.69

• (EMC)/.68

• (F)/.23

• (HOG)/.33

• (LLL)/2.278

• (NOC)/2.25

• (PSX)/1.37

• (POT)/.47

• (DGX)/1.05

• (RTN)/1.81

• (RCL)/.43

• (RYL)/.96

• (SHW)/1.39

• (SWK)/1.51

• (VLO)/1.29

• (VIAB)1.29

• (ZMH)/1.70

• (AMZN)/.17

• (BIIB)/3.77

• (BRCM)/.87

• (CB)/2.15

• (CSC)/1.12

• (DECK)/4.52

• (GOOG)/7.13

• (MCHP)/.62

• (RHI)/.61

• (V)/2.49

• (WYNN)/1.43

Economic Releases 
8:30 am EST

• Initial Jobless Claims are estimated to fall to 300K versus 307K the prior week.

• Continuing Claims are estimated to fall to 2405K versus 2443K prior.

10:00 am EST

• Pending Home Sales for December are estimated to rise +.5% versus a +.8% gain in November.

Upcoming Splits

• (SMBC) 2-for-1

Other Potential Market Movers

• The Eurozone CPI, Japan CPI, $35B 5Y T-Note auction, $29B 7Y T-Note auction, weekly EIA natural gas inventory report, weekly Bloomberg Consumer Comfort Index and the (KATE) conference call could also impact trading today.

BOTTOM LINE: Asian indices are lower, weighed down by real estate and industrial shares in the region. I expect US stocks to open mixed and to weaken into the afternoon, finishing modestly lower. The Portfolio is 25% net long heading into the day.