Stocks Lower into Final Hour on China Bubble-Bursting Fears, Rising European/Emerging Markets/US High-Yield Debt Angst, Oil Decline, Commodity/Financial Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Lower
  

• Sector Performance: Almost Every Sector Declining
  

• Volume: Slightly Below Average

• Market Leading Stocks: Performing In Line

Equity Investor Angst:

• Volatility(VIX) 14.71 +6.60%

• Euro/Yen Carry Return Index 143.79 +.34%

• Emerging Markets Currency Volatility(VXY) 10.69 unch.

• S&P 500 Implied Correlation 56.18 -.51%

• ISE Sentiment Index 61.0 +5.17%

• Total Put/Call 1.09 +14.74%

• NYSE Arms 1.76 +103.25% 

Credit Investor Angst:

• North American Investment Grade CDS Index 78.79 +1.14%

• America Energy Sector High-Yield CDS Index 1,922 +1.15%

• European Financial Sector CDS Index 78.48 +3.60%

• Western Europe Sovereign Debt CDS Index 22.09 -1.78%

• Asia Pacific Sovereign Debt CDS Index 74.19 +4.40%

• Emerging Market CDS Index 353.66 +2.87%
  

• iBoxx Offshore RMB China Corporates High Yield Index 119.05 -.01%

• 2-Year Swap Spread 23.5 -.25 basis point

• TED Spread 26.75 +1.0 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -18.25 +1.75 basis points

Economic Gauges:

• 3-Month T-Bill Yield .04% -3.0 basis points

• Yield Curve 147.0 unch.

• China Import Iron Ore Spot $56.41/Metric Tonne -.90%

• Citi US Economic Surprise Index -15.8 -7.6 points

• Citi Eurozone Economic Surprise Index 10.4 -.4 point

• Citi Emerging Markets Economic Surprise Index -5.5 +.7 point

• 10-Year TIPS Spread 1.58 -2.0 basis points
• # of Months to 1st Fed Rate Hike(Morgan Stanley) 3.50 -.04

Overseas Futures:

• Nikkei 225 Futures: Indicating -122 open in Japan 
• China A50 Futures: Indicating -340 open in China

• DAX Futures: Indicating +2 open in Germany

Portfolio: 

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

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

• Market Exposure: Moved to 50% Net Long