Stocks Modestly Lower into Final Hour on Fed Rate Hike Fears, European/Emerging Markets Debt Angst, Yen Strength, Transport/Defense Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Modestly Lower
  

• Sector Performance: Most Sectors Declining
  

• Volume: Below Average

• Market Leading Stocks: Underperforming

Equity Investor Angst:

• Volatility(VIX) 13.77 -.58%

• Euro/Yen Carry Return Index 140.52 +.52%

• Emerging Markets Currency Volatility(VXY) 10.01 -1.38%

• S&P 500 Implied Correlation 64.54 -1.16%

• ISE Sentiment Index 91.0 +.40%

• Total Put/Call 1.0 +81.82%

• NYSE Arms .98 -3.90% 

Credit Investor Angst:

• North American Investment Grade CDS Index 64.98 +.01%

• America Energy Sector High-Yield CDS Index 1,072.0 -.39%

• European Financial Sector CDS Index 74.34 +2.0%

• Western Europe Sovereign Debt CDS Index 22.78 +.82%

• Asia Pacific Sovereign Debt CDS Index 59.82 +1.19%

• Emerging Market CDS Index 296.0 +.64%
  

• iBoxx Offshore RMB China Corporates High Yield Index 118.53 +.20%

• 2-Year Swap Spread 27.25 +.5 basis point

• TED Spread 27.0 -.5 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -20.25 +.5 basis point

Economic Gauges:

• 3-Month T-Bill Yield .01% unch.

• Yield Curve 166.0 unch.

• China Import Iron Ore Spot $62.88/Metric Tonne -.22%

• Citi US Economic Surprise Index -59.50 +1.5 points

• Citi Eurozone Economic Surprise Index 9.1 -1.4 points

• Citi Emerging Markets Economic Surprise Index -16.7 -.9 point

• 10-Year TIPS Spread 1.89 +1.0 basis point

Overseas Futures:

• Nikkei 225 Futures: Indicating -75 open in Japan 
• China A50 Futures: Indicating -225 open in China

• DAX Futures: Indicating +14 open in Germany

Portfolio: 

• Slightly Higher: On gains in my index hedges and emerging market shorts

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

• Market Exposure: Moved to 50% Net Long