Stocks Falling into Final Hour on Fed Rate Hike Fears, Rising European/Emerging Markets/US High-Yield Debt Angst, Emerging Markets Currency Worries, Homebuilding/Retail Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Lower
  

• Sector Performance: Almost Every Sector Declining
  

• Volume: Below Average

• Market Leading Stocks: Underperforming

Equity Investor Angst:

• Volatility(VIX) 16.75 +16.89%

• Euro/Yen Carry Return Index 138.38 +.15%

• Emerging Markets Currency Volatility(VXY) 10.89 +.93%

• S&P 500 Implied Correlation 57.20 +2.12%

• ISE Sentiment Index 78.0 -18.75%

• Total Put/Call 1.12 +9.80%

• NYSE Arms .97 +24.12% 

Credit Investor Angst:

• North American Investment Grade CDS Index 81.32 +3.04%

• America Energy Sector High-Yield CDS Index 1,137.0 +1.03%

• European Financial Sector CDS Index 70.88 +3.85%

• Western Europe Sovereign Debt CDS Index 19.32 +4.66%

• Asia Pacific Sovereign Debt CDS Index 69.10 -2.36%

• Emerging Market CDS Index 327.42 +3.37%
  

• iBoxx Offshore RMB China Corporate High Yield Index 123.43 +.02%

• 2-Year Swap Spread 9.0 unch.

• TED Spread 26.5 -3.0 basis points

• 3-Month EUR/USD Cross-Currency Basis Swap -40.25 -5.0 basis points

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 70.92 -.35%
• 3-Month T-Bill Yield .08% unch.

• Yield Curve 147.0 +3.0 basis points

• China Import Iron Ore Spot $48.24/Metric Tonne +.06%

• Citi US Economic Surprise Index .6 +.6 point

• Citi Eurozone Economic Surprise Index 23.4 +1.3 points

• Citi Emerging Markets Economic Surprise Index -3.6 +.9 point

• 10-Year TIPS Spread 1.61 +2.0 basis points
• # of Months to 1st Fed Rate Hike(Morgan Stanley) 2.99 -.52

Overseas Futures:

• Nikkei 225 Futures: Indicating -237 open in Japan 
• China A50 Futures: Indicating -159 open in China

• DAX Futures: Indicating -18 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 to my (EEM) short

• Market Exposure: Moved to 25% Net Long