Stocks Slightly Lower into Final Hour on Earnings Outlook Worries, Fed Rate Hike Fears, European/Emerging Markets/US High-Yield Debt Angst, Commodity/Financial Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Lower
  

• Sector Performance: Most Sectors Declining
  

• Volume: Around Average

• Market Leading Stocks: Underperforming

Equity Investor Angst:

• Volatility(VIX) 14.75 +2.93%

• Euro/Yen Carry Return Index 138.85 +.43%

• Emerging Markets Currency Volatility(VXY) 11.03 +.64%

• S&P 500 Implied Correlation 58.53 +1.76%

• ISE Sentiment Index 135.0 +35.71%

• Total Put/Call .86 +13.16%

• NYSE Arms 1.16 +18.76% 

Credit Investor Angst:

• North American Investment Grade CDS Index 78.52 +1.03%

• America Energy Sector High-Yield CDS Index 1,125.0 -1.71%

• European Financial Sector CDS Index 69.83 +1.94%

• Western Europe Sovereign Debt CDS Index 18.58 +1.50%

• Asia Pacific Sovereign Debt CDS Index 74.59 +2.81%

• Emerging Market CDS Index 327.38 +1.61%
  

• iBoxx Offshore RMB China Corporate High Yield Index 122.42 +.12%

• 2-Year Swap Spread 12.0 +2.0 basis points

• TED Spread 28.25 -2.5 basis points

• 3-Month EUR/USD Cross-Currency Basis Swap -30.5 -.75 basis point

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 71.68 -.12%
• 3-Month T-Bill Yield .06% +2.0 basis points

• Yield Curve 145.0 +6.0 basis points

• China Import Iron Ore Spot $49.65/Metric Tonne -.60%

• Citi US Economic Surprise Index -10.5 -.5 point

• Citi Eurozone Economic Surprise Index 25.7 +5.8 points

• Citi Emerging Markets Economic Surprise Index -12.50 +1.1 points

• 10-Year TIPS Spread 1.52 +5.0 basis points
• # of Months to 1st Fed Rate Hike(Morgan Stanley) 4.31 -1.58

Overseas Futures:

• Nikkei 225 Futures: Indicating +39 open in Japan 
• China A50 Futures: Indicating -30 open in China

• DAX Futures: Indicating -16 open in Germany

Portfolio: 

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

• Disclosed Trades: Added to my (IWM)/(QQQ) hedges

• Market Exposure: Moved to 25% Net Long