Thursday Watch

Evening Headlines

Bloomberg:

• European Banking Risks Are 'Rapidly' Growing, Swedish FSA's Andersson Says. Risks to Europe’s bank industry are “rapidly” mounting as the fallout of Greece’s debt crisis engulfs the whole region, said Martin Andersson, director- general of Sweden’s Financial Supervisory Authority. “We don’t see any positive signs,” Andersson said in an interview in Stockholm yesterday. “Things are getting worse and, of course, then you’re more concerned about liquidity and solvency.” Europe’s debt crisis has reached “a systemic dimension” and needs to be tackled “decisively,” European Central Bank President Jean-Claude Trichet told lawmakers in Brussels this week. Policy makers are debating how to recapitalize the region’s troubled banks as the sovereign debt crisis threatens to wreak havoc on balance sheets, undermining any recovery prospects. “We might end up in a situation similar to what happened in 2008” following the collapse of Lehman Brothers Holdings Inc. (LEHMQ), Andersson said. “And then of course there will be problems with liquidity.” In Sweden, banks need to reduce their reliance on dollar funding, the central bank and Finance Minister Anders Borg have warned. Swedish banks’ efforts to boost capital since 2008 are encouraging, though higher buffers are needed to compensate for dollar funding risks, Andersson said. “The banks now have a better liquidity management,” he said. “They are much more prepared for this uncertainty that’s in the market right now and potentially much worse turbulence.”
• Libor Diverges Most Since 2009 as Europe Leads: Credit Markets. Rates at which the world's banks say they can borrow from each other in dollars are diverging by the most in more than two years, a sign European leaders are still struggling to contain the region's debt crisis. The gap between the highest and lowest reported fixings by 19 contributing banks contributing to the three-month London interbank offered rate reached 18.5 basis points yesterday, the widest since September 2009.
• Swaps Registrants Would Have to Vouch for Capability in SEC Rule. Securities-based swap dealers and large swap participants would need to have senior officers certify their ability to participate in the $601 trillion market under registration rules proposed by the U.S. Securities and Exchange Commission. SEC commissioners voted 3-1 yesterday to seek comment on a Dodd-Frank Act rule that calls on firms to certify operational and compliance capabilities and ensure trades aren’t conducted by people who are “statutorily disqualified.”
• China Inflation Proves 'Stubborn' on Way Down. China's inflation, which has exceeded the government's target each month this year, is moderating more slowly than expected as food prices remain high in the biggest pork-consuming nation, according to Citigroup Inc. "Inflation has peaked in July but will cool at a slower pace than we previously estimated because food inflation remains stubborn and may ease very slowing," said Ding Shuang, a Hong Kong-based economist at Citigroup. Elevated prices may encourage officials to keep benchmark interest rates at the highest in about three years after three increases this year. September's inflation may have been pushed up by holiday spending on food and a jump in vegetable prices.
• Oil Declines a Second Day on Outlook for Fuel Demand; Brent Spread Widens. Oil dropped for a second day in New York as investors speculated that fuel consumption will falter on signs of a weakening global economy. Brent’s premium to U.S. prices widened. Futures slipped as much as 1.1 percent after American Petroleum Institute data showed U.S. implied gasoline demand fell the most in more than five years. Reports today may Chinese exports and imports slowed, while U.S. jobless claims rose. Brent oil in London was at the highest premium to New York crude in five weeks. “The economy is showing moderate, sub-trend growth,” said Ric Spooner, a chief market analyst at CMC Markets in Sydney. “There’s an expectation that the rate of Chinese export growth is declining, reflecting weaker demand internationally. The market will also be focusing closely on the import side of things to get a bearing on Chinese domestic demand.” Crude for November delivery dropped as much as 93 cents to $84.64 a barrel in electronic trading on the New York Mercantile Exchange and was at $85.02 at 12:12 p.m. Sydney time. Implied gasoline demand in the U.S., the world’s biggest oil user, dropped 10.5 percent in the week ended Oct. 7, the API report showed. This is the biggest decline since March 2006. The International Energy Agency yesterday cut its 2012 demand estimate for oil by 210,000 barrels a day and said Libyan output will rebound to 50 percent more than earlier forecast. The North African nation may pump about 600,000 barrels a day of crude oil by the end of the year, up from an earlier estimate of as much as 400,000 barrels, according to the IEA.
• Fisher Says Fed Has 'Done Everything It Can' to Boost Jobs. Federal Reserve Bank of Dallas President Richard Fisher said that while too many Americans remain unable to find jobs, central bankers have done as much as possible to shore up the labor market without sparking inflation. “There are limits to what a central bank can do,” Fisher said during a speech today in Abilene, Texas. “We can provide fuel, but we cannot provide incentives for those who create jobs” to “step on the gas pedal.” The U.S. is struggling with stubborn unemployment even as the central bank “may have overfilled the tank” by providing too much liquidity to the economy, the Dallas Fed chief said. The so-called Operation Twist is not an “effective way” to deal with the economy right now and fiscal authorities, not the central bank, “are the problem,” Fisher said in response to audience questions after his speech. He called lawmakers’ attitude toward U.S. fiscal issues “disgraceful,” and said further monetary accommodation would only encourage Congress to do less.
• U.S. Takes Case Against Iran to UN After Saudi Murder Plot. The Obama administration today gave United Nations diplomats detailed intelligence to support charges that Iran plotted to assassinate Saudi Arabia’s ambassador to the United States. In a possible prelude to a bid for tighter sanctions, U.S. Ambassador to the UN Susan Rice, flanked by officials from the FBI, the CIA and the Justice and State Departments, briefed Security Council members on the evidence. Colombia’s Nestor Osorio said Rice and her Saudi counterpart provided “much more information” about how U.S. law enforcement and intelligence foiled the plot than has been reported in the media.
• Egypt Violence Piles Pressure on Army to Hand Over Power Faster. Egypt’s worst violence since the popular revolt that toppled President Hosni Mubarak in February adds to pressure on the army to speed up the transfer of power to an elected government. Clashes between protesters, mostly Coptic Christians, and security forces in Cairo this week left at least 25 people dead and fueled calls for the ruling generals to change a timeline that may allow them to stay in power until 2013. The violence rocked the government, with Finance Minister Hazem El Beblawi handing in a resignation that was rejected by the army council.
• Hong Kong Inflation Better Than Change to Peg, Greenwood Says. Hong Kong must bear the pain of inflation to maintain the dollar peg because the Chinese city may be worse off with the alternatives, according to John Greenwood, architect of the city’s fixed-exchange-rate system. Hong Kong’s consumer prices excluding distortions from government subsidies rose 6.3 percent in August from a year earlier, the highest rate since the global financial crisis in 2008. Accelerating inflation has highlighted limits on monetary policy in the city, where official interest rates move in sync with those of the U.S. Federal Reserve. “Although inflation is unpleasant, undesirable, it is a lesser cost than having a fluctuating currency such as we had in 1983,” Greenwood, chief economist at Invesco Asset Management, said in an interview in Hong Kong yesterday. “We would be jeopardizing, potentially, a lot of the capital market activities if we have to move to a more volatile currency system.”
• Google(GOOG) Said Not to Plan Acquisition of Akamai(AKAM). Google Inc. (GOOG) isn’t planning to acquire Akamai Technologies Inc. (AKAM), two people familiar with the matter said, countering a report in Business Insider that fueled speculation a takeover may be imminent. The story, which sparked an after-hours surge of as much as 17 percent in Akamai stock, is baseless, said the people, who asked not to be identified. Several people in the advertising technology industry “think Google is about to buy Akamai,” Business Insider reported earlier today. “It’s mostly just a rumor,” according to the report.
• China Offers Loan, Tax Help to Small Companies as Wenzhou Risks Spreading. China announced a package of measures to help small companies, including tax breaks and easier access to bank loans, after the collapse of manufacturers in Wenzhou city highlighted growing risks to the economy. The government will provide financial support and preferential tax policies for small companies, the State Council said in a statement yesterday, after a meeting at which Premier Wen Jiabao presided. The government will be more tolerant of bad loan ratios for small-company loans, the Cabinet said.
• Sony(SNE) Recalls 1.6 Million Bravia TV Sets Because of Fire Risk.
• S. Korea Raises Combat Readiness Near Sea Border, Yonhap Says. South Korea’s military increased combat readiness after spotting unusual military movement by North Korean forces along the western sea border, Yonhap News said, citing a South Korean government official it didn’t identify. South Korea recently detected the relocation of a North Korean ground-to-air missile to the north of Baengnyeong Island near its disputed western sea border, according to Yonhap. North Korea also moved the missile’s mobile launch pad to a base near the sea border and recently fired several missiles off the coast, it said.

Wall Street Journal:

• Herman Cain Vaults to Lead in Latest Poll. Former restaurant-industry executive Herman Cain has catapulted to the lead in the race for the Republican presidential nomination, a new Wall Street Journal/NBC News poll finds. Drawn by Mr. Cain's blunt, folksy style in recent debates, 27% of Republican primary voters picked him as their first choice for the nomination, a jump of 22 percentage points from six weeks ago.
  
• John Malone Now Biggest Landowner in the U.S. Ted Turner has lost his crown. According to the newly released 2011 Land Report 100, which ranks the top land barons, John Malone is now America’s biggest individual landowner. The 70-year-old cable pioneer and chairman of Liberty Media now owns 2.2 million acres, after purchasing more than 1 million acres of timberland in Maine and New Hampshire earlier this year.
• Apple(AAPL), Hollywood in Talks to Allow Movies on iPhones, iPads. Apple Inc. is negotiating with Hollywood studios for deals that would let people who buy movies from the iTunes Store watch streaming versions of those movies on Apple devices such as iPads or iPhones without manually transferring them, according to people familiar with the matter.
  
• Congress Approves Trade Pacts. Congress passed free-trade agreements Wednesday with South Korea, Colombia and Panama, ending negotiations so nettlesome they likely spell the end of progress on such pacts until after the 2012 election. The House passed all three deals Wednesday evening, and the Senate followed suit. The deals are expected to generate $13 billion in new exports—$11 billion to South Korea—chiefly farm products. As well, they lift a host of non-tariff barriers, including over U.S. professional services.
• France Says It Won't Tap EU to Help Its Banks. The French government is standing by to help recapitalize the country's banks should that become necessary, and won't tap a European rescue fund for that purpose, said a government spokeswoman. Speaking after the weekly cabinet meeting, Valerie Pecresse said that once the expanded European Financial Stability Facility is approved, it "will be able to lend to certain countries that need to recapitalize their banking system, but France won't make use of the EFSF."

MarketWatch:

• China Sees Wenzhou Lending Crisis Snowball. Chinese city plays risky game of high-interest private lending. Dubbed the nation’s capital of private financing, the city of Wenzhou offers a textbook example of how non-bank lending has fueled private-sector prosperity — and risk-taking — in China. A recent central bank survey said about 60% of all local businesses and the vast majority of households are interconnected through the city’s private-lending system. It’s a tight financial network that interweaves lenders and borrowers collectively, often to their mutual benefit and sometimes to their terrible loss. If only a few debt-ridden companies collapse because they can’t afford to repay the high-rate, short-term loans they’ve gotten from private lenders in the network, the ensuing financial trouble can ripple through the entire credit-connected community, exempting few from turmoil. Since early this year, according to the Wenzhou Public Security Bureau, some major Wenzhou-area private-company owners have fled creditors to avoid repaying loans. In each of these cases, though, the system survived relatively unscathed, and community deal-making continued. Yet a serious domino effect of financial trouble started to endanger the entire system in July, after a well-known entrepreneur named Wang Xiaodong disappeared.

Business Insider:

• Some People In China Are Absolutely LOVING Occupy Wall Street. In China, they're calling Occupy Wall Street the "Great Wall Street Revolution," according to Asia Times Online. And by "they" we mean China's New-leftists, a group of people who are upset with the country's capitalist reforms and wish to return to the time of Mao. In the past few days, they've held protests in Luoyang and Zhengzhou (in Henan province) to show their support for the Americans who, they hope, will bring down capitalism once and for all.
• These Funds Are So Bad That Employees Are Suing For Having To Invest In Them.
  

Zero Hedge:

• Chinese Copper Inventories Revealed To Be Double Estimated.
• Market Slumps After European Banks Admit They Can't/Won't Raise Capital; Will Proceed With Asset Liquidations Instead.

CNBC:

• China Trade Surplus Narrows in Face of Global Woes. China's trade surplus narrowed in September for a second month in a row as growth of exports and imports both fell below forecasts, reflecting global economic weakness and offering Beijing ammunition to resist U.S. pressure on the yuan. Exports increased 17.1 percent last month from a year ago, slowing from a 24.5 percent gain in August, and imports increased 20.9 percent, compared with August's 30.2 percent rise, the customs office said on Thursday. That created a trade surplus of $14.5 billion in September, compared with $17.8 billion in August and $31.5 billion in July. The rolling 12-month trade surplus reached $180.3 billion in September, dipping from $182.7 billion in August. "Export growth in September was much lower than market expectations, showing the sputtering external economy, and we expect the slowing export trend to continue in the coming months," said Wang Hu, an analyst for Guotai Junan Securities in Shanghai. Economists had expected Chinese exports to grow 20.7 percent in September and imports to rise 24.5 percent, bringing the monthly surplus to $16.3 billion. In month-on-month terms, exports fell in September after calendar adjustment by 2.1 percent, versus a decline of 3.3 percent in August and a rise of 5.4 percent in July. That suggested the world's No. 2 economy is feeling the pinch of Europe's worsening debt crisis and slowing growth in the United States.
  

IBD:

• Cerner(CERN) Helps Medical Records Go Electronic.

Financial Times:

• Insurance Plan to Boost Rescue Fund's Reach. European policymakers are moving towards a plan that would enable the eurozone’s €440bn rescue fund to insure investors against some losses on government bonds, arguing it presents the fewest legal and political hurdles to quickly increasing the fund’s firepower.

Telegraph:

• Mario Draghi Fears Italian Debt Spiral. Italy risks a debt spiral without "drastic" steps to cut spending and restore confidence in public finances, the country's central bank governor has warned.
• Even a Slovak 'Yes' Will Make No Difference. He also touched on the most neuralgic issue, reminding everybody that the EFSF is "mainly for saving foreign banks". These are French, German, British, Dutch, and Belgian banks, of course. Mr Sulik is right. The EU-IMF rescue loans have not helped Greece pull out of its downward spiral. They have pushed the country further into bankruptcy. Greek public debt will rise from around 120pc of GDP to 160pc under the rescue programme, and the IMF is pencilling in figures above 180pc. The rescue loans have rotated into the hands of creditor banks, life insurers, pension funds, and even a few hedge funds. ECB bond purchases have allowed to investors to dump their holdings at reduced loss, shifting the risk to EMU taxpayers. It is a racket for financial elites. A pickpocketing of taxpayers, including poor Slovak taxpayers. "I’d rather be a pariah in Brussels than have to feel ashamed before my children," he said. Bravo.

Leipziger Volkszeitung:

• The German finance ministry is assessing the potential impact of losses of up to 50% on Greek bonds, citing government sources. The assessment, which is being coordinated with France, is taking longer than expected and has resulted in a European Union meeting scheduled for Oct. 17 being moved to Oct. 18.

South China Morning Post:

• Top shippers poised to see US$600m loss. Analyst says deficit is likely on fall in demand and freight rates on routes from Asia to North America.

China Securities Journal:

• The room for yuan appreciation in the future may not be "too large" as the currency's exchange rate is gradually moving to a balanced and reasonable level, the China Securities Journal says in a front-page editorial.

Evening Recommendations
Barclays Capital:

• Rated (OC) Overweight, target $37.
• Rated (PHM) Overweight, target $8.
• Rated (IFSIA) Overweight, target $18.
• Rated (LEN) Overweight, target $20.
• Rated (TOL) Overweight, target $21.
• Rated (AWI) Overweight, target $50.
  

Night Trading

• Asian equity indices are -.50% to +1.25% on average.
• Asia Ex-Japan Investment Grade CDS Index 211.0 -10.25 basis points.
  
• Asia Pacific Sovereign CDS Index 159.50 -.5 basis point.
• FTSE-100 futures -.32%.
  
• S&P 500 futures +.03%.
  
• NASDAQ 100 futures +.09%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (FCS)/.32
• (LNN)/.61
• (JPM)/.92
• (FAST)/.33
• (CBSH)/.77
• (GOOG)/8.77
• (VMI)/1.53
• (SWY)/.35
  

Economic Releases
8:30 am EST

• The Trade deficit for August is estimated to widen to -$45.8B versus -$44.8B in July.
• Initial Jobless Claims are estimated to rise to 405K versus 401K the prior week.
• Continuing Claims are estimated to rise to 3710K versus 3700K prior.

11:00 am EST

• Bloomberg consensus estimates call for a weekly crude oil inventory build of +800,000 barrels versus a -4,679,000 barrel decline the prior week. Distillate supplies are estimated to fall by -500,000 barrels versus a -744,000 barrel decline the prior week. Gasoline supplies are estimated to rise by +250,000 barrels versus a -1,137,000 barrel decline the prior week. Finally, Refinery Utilization is expected to fall -.78% versus a -.10% decline the prior week.

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Fed's Kocherlakota speaking, 30-Year Treasury Bond Auction, weekly Bloomberg Consumer Comfort Index, (GPS) investor meeting, (MJN) investor day, (RIGL) investor day and the (PETM) analyst day could also impact trading today.
  

BOTTOM LINE: Asian indices are mostly higher, boosted by automaker and technology shares in the region. I expect US stocks to open modestly higher and to weaken into the afternoon, finishing mixed. The Portfolio is 75% net long heading into the day.

Stocks Higher into Final Hour on Less Eurozone Debt Angst, Less Financial Sector Pessimism, Short-Covering, Diminishing Global Growth Fears

Broad Market Tone:

• Advance/Decline Line: Substantially Higher
  
• Sector Performance: Most Sectors Rising
  
• Volume: Below Average
  
• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• VIX 30.63 -6.79%
  
• ISE Sentiment Index 97.0 -24.22%
  
• Total Put/Call 1.24 -12.06%
  
• NYSE Arms .63 -33.64%
  

Credit Investor Angst:

• North American Investment Grade CDS Index 129.43 -4.11%
  
• European Financial Sector CDS Index 218.08 -4.35%
  
• Western Europe Sovereign Debt CDS Index 335.33 -1.01%
  
• Emerging Market CDS Index 304.98 -7.66%
  
• 2-Year Swap Spread 37.0 -1 bp
  
• TED Spread 39.0 -1 bp
  

Economic Gauges:

• 3-Month T-Bill Yield .01% +1 bp
  
• Yield Curve 193.0 +8 bps
  
• China Import Iron Ore Spot $162.0/Metric Tonne -1.46%
  
• Citi US Economic Surprise Index -1.50 +1.0 point
  
• 10-Year TIPS Spread 1.99 +3 bps
  

Overseas Futures:

• Nikkei Futures: Indicating +125 open in Japan
• DAX Futures: Indicating +14 open in Germany

Portfolio:

• Higher: On gains in my Tech, Retail and Medical sector longs
  
• Disclosed Trades: Covered all of my (IWM)/(QQQ) hedges and some of my (EEM) short, then added them back
  
• Market Exposure: 75% Net Long

BOTTOM LINE: Today's overall market action is mildly bullish, as the S&P 500 trades back to the high-end of its range over the last 2 months on less Eurozone debt angst, less financial sector pessimism, short-covering and diminishing global growth fears. On the positive side, Alt Energy, Oil Tanker, Paper, Bank, I-Banking, Hospital, Insurance, Construction, REIT, Education and Airline shares are especially strong, rising more than +2.0%. Cyclical and Small-cap shares have outperformed throughout the day again. As well, (XLF) is trading relatively well. Copper is rising +2.21% and the UBS-Bloomberg Ag Spot Index is falling -.6%. The 10-Year Yield is rising +6 bps to 2.21%. The Russia sovereign cds is falling -8.6% to 246.33 bps, the UK sovereign cds is falling -3.24% to 84.33 bps and the Brazil sovereign cds is plunging -11.46% to 154.45 bps. Major Asian and European equity indices rallied 1-3% today. On the negative side, Computer, Utility, Disk Drive, Networking, Biotech and Restaurant shares are flat-to-lower on the day. (XLK) has lagged throughout the day. Lumber is falling -3.2% and Gold is rising +.88%. Rice is still close to its multi-year high, rising +29.5% in about 13 weeks. The Spain sovereign cds is rising +1.29% to 356.17 bps, the Portugal sovereign cds is gaining +.69% to 1,096.77 bps, the Ireland sovereign cds is gaining +2.16% to 710.0 bps, the Japan sovereign cds is gaining +3.37% to 115.68 bps and the China sovereign cds is soaring +15.3% to 166.10 bps. The Libor-OIS Spread is +1 bp to 32.0 bps, which is the highest since July 2010. As well, the TED and 2-Year swap spreads are still very close to their recent highs, which is also noteworthy considering the recent strong equity advance. The Western Europe Sovereign CDS Index, the European Financial Sector CDS Index and the Asia-Pacific Sovereign CDS Index are still near their records and trending higher despite the recent pullbacks. The Nikkei fell -.4% overnight, despite gains in the rest of Asia, and is -14.6% lower ytd. As well, Russian equities sat out today's advance and are down -20.3% ytd. Many of the most economically sensitive multi-national stocks have soared over the last week, despite (AA)'s cautionary comments on the state of demand in Europe, and are now very overbought technically. As well, the S&P 500 is now at the top end of its range over the last 2 months. I suspect stocks will, at best, thrash around current levels over the near-term unless earnings outlooks are stronger than I expect over the coming days. I expect US stocks to trade mixed-to-lower into the close from current levels on profit-taking, more shorting, technical selling and global debt angst.

Today's Headlines

Bloomberg:

• Euro Strengthens to Three-Week High as Barroso Seeks Coordinated Debt Plan. The euro rose to three-week highs against the dollar and yen as European Commission President Jose Barroso called for a “coordinated approach” to recapitalize the region’s banks. The 17-nation currency extended gains after policy makers in Slovakia, the only nation yet to approve a retooled bailout fund, reached an agreement on another vote to ratify the plan. “The market has priced in a lot of the good news from the constructive proposals,” said Aroop Chatterjee, a currency strategist at Barclays Plc in New York. “The question remains whether actions will meet expectations. If the euro hovers around here, there will be less urgency from European politicians.”
• Sovereign, Corporate Credit-Default Swap Indexes Fall in Europe. The cost of insuring against default on European sovereign and corporate debt fell, according to traders of credit-default swaps. The Markit iTraxx SovX Western Europe Index of swaps on 15 governments declined five basis points to 320 at 3:30 p.m. in London. A decrease signals improvement in perceptions of credit quality. Contracts on the Markit iTraxx Crossover Index of 50 companies with mostly high-yield credit ratings decreased 23 basis points to 746, according to JPMorgan Chase & Co. The Markit iTraxx Europe Index of 125 companies with investment-grade ratings fell 5.5 basis points to 173.5 basis points. The Markit iTraxx Financial Index linked to senior debt of 25 banks and insurers decreased eight basis points to 233 and the subordinated index declined 16 to 468.
  
• Hungary's IMF Need May Hinge on Euro Crisis, Jarai Tells TV2. The outcome of the euro crisis may determine whether Hungary will need to resort to another International Monetary Fund loan, said Zsigmond Jarai, a former central bank president and head of the state Fiscal Council. “Nothing is unimaginable on this front and it depends on what happens in the world economy,” Jarai told TV2 late yesterday, according to a video posted on the commercial station’s website. “It’s unforeseeable what will happen in the world economy, and only that could push Hungary into a situation where the financing of the state debt becomes uncertain.” Hungary may be “part of a group of countries” whose economies would be most affected by a potential Greek default, said Jarai, who is an ally and former finance minister of Prime Minister Viktor Orban.
• EU Needs Treaty Change for Euro, Westerwelle Tells Tagespiegel. European Union governments must change the treaties governing the bloc to restore its financial stability, German Foreign Minister Guido Westerwelle said in a commentary published in the Tagesspiegel newspaper. Deficit controls at EU level must be strengthened and the union must be given the power to intervene in the budgets of countries that “stray from the path of fiscal virtue,” Westerwelle said, according to an e-mailed advance copy of his opinion piece. Article 126 of the EU treaty, which determines deficit procedures against overspending members, should be altered, a move that could be accomplished within a year, Westerwelle said.
• Default Swaps on Greece's Debt May Pay Out If Losses Exceed 21% Threshold. Credit-default swaps insuring Greek government debt may pay out should proposals to increase losses on the bonds exceed the 21 percent already agreed, according to analysts. Deeper cuts would likely have to be imposed on bondholders, triggering a credit event on the swaps contracts, analysts at Barclays Capital, Evolution Securities Ltd. and Credit Agricole SA said.
• Some Federal Reserve Officials Sought to Retail Option of QE3, Minutes Say. The Federal Reserve said some officials last month wanted to keep further asset purchases as an option to boost the economy as policy makers saw “considerable uncertainty” that U.S. growth will pick up. Most participants favored giving additional information on the central bank’s goals and how they influence the Fed’s decisions, and most “saw advantages” in tying the Fed’s near- zero interest rates to more-specific developments in the economy, the Fed said in minutes of the Sept. 20-21 session, released today in Washington. Such changes may be expressed in ways other than the post-meeting statement, the Fed said.
• Job Openings Fell in August, Hiring Climbed. Job openings in the U.S. fell in August for the first time in four months, signaling a sustained labor market recovery will take time to unfold. The number of positions waiting to be filled dropped by 157,000 to 3.06 million, according to Labor Department figures issued today in Washington. Hiring increased by 38,000 to 4.01 million. Payrolls climbed by 103,000 workers in September, a better- than-forecast outcome that included 45,000 returning Verizon Communications Inc. strikers. With unemployment hovering above 9 percent, the economy slowing and concerns of a European default mounting, employers may be slow to further boost hiring. “Companies don’t want to risk making additional hires with the outlook so uncertain,” Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York, said before the report. “Corporations are playing it very close to the vest and keeping payrolls lean.” Job openings decreased 4.9 percent in August from a revised 3.21 million in July that were smaller than initially reported, the data showed. The drop in vacancies was led by trade, transportation and utilities.
• Ex-Goldman(GS) Traders' Hedge Fund Shuts as Macro Strategy Falters. Global Trading Strategies, a Sydney- based hedge fund founded by three former Goldman Sachs JBWere Pty. traders, has returned investors their money after its strategy of betting on global economic trends faltered. The fund, which peaked at $1.2 billion in 2008 after starting in 2005, finished trading July 31 after more than a year of negative returns, Chief Operating Officer Murray Chatfield said in a telephone interview yesterday.
• Harrisburg Files for Bankruptcy on Debt. Harrisburg, Pennsylvania, facing a state takeover of its finances, filed for bankruptcy protection after failing to pay the debt on a trash-to-energy incinerator. The council made its 4-3 decision against the advice of a city attorney who said the panel did not follow proper procedure. It’s the ninth bankruptcy filing this year by a municipal-bond issuer, and the first by a U.S. state capital since 1980 when the municipal bankruptcy laws were overhauled, said James Spiotto, a partner at Chapman & Cutler in Chicago who tracks such cases.
• Obama Watchdog Said to Have Known About Bank Debit Fee Plan. The Obama administration’s new consumer watchdog knew about Bank of America Corp. (BAC)’s plan to impose a $5 monthly debit-card fee at least two weeks before the firm’s announcement ignited a public firestorm, said people briefed on the discussions. The lender met with Consumer Financial Protection Bureau officials on Sept. 16 to inform them of the fee, Susan Faulkner, head of consumer banking products, told employees yesterday at a gathering in Delaware, said two people who attended. They asked for anonymity because the event was private. Faulkner said the regulator didn’t oppose the fee, according to one of the people.
• RIM(RIMM) Races 'Against Clock' as BlackBerry Disruption Spreads. Research In Motion Ltd. (RIM)’s BlackBerry service was disrupted for some users in North America, as a snag that is halting messaging for a third day across Europe, the Middle East and Africa spread to its largest market. Subscribers in the Americas may experience “intermittent service delays,” RIM said on its website today. The company said it is working to resolve the issue and apologized to users.

Wall Street Journal:

• At Ports, a Sobering Omen for Holiday Sales. Key parts of the U.S. supply chain have some troubling news: The traditional holiday peak in shipping volumes has disappeared.
  

CNBC.com:

• Wal-Mart(WMT) Poised to End Nine Quarters of Sales Declines.

Business Insider:

• Guess Who REALLY Planned The Occupy Wall Street Millionaire March.
• The 15 Most Offensive PETA Advertisements. (pics)
  

Zero Hedge:

• Put A Fork In It: Greece Effectively Shuts Down As Finance Ministry To Begin 9 Day Strike.
• Credit Suisse Buries China's Banks.
• Banks, Credit Events, And Sovereign CDS.
  

Apple Insider:

• Apple(AAPL) Rumored to Counter Amazon(AMZN) Kindle Fire with 'iPad mini' in 2012.

Rasmussen Reports:

• 16% Say U.S. Heading In Right Direction.

Reuters:

• Bank Sovereign Debt to Be Marked Down in Tests - EU. The sovereign debt of banks is likely to be marked down to its market value in an ongoing assessment of bank strength by the European Banking Authority, an EU source said on Wednesday. The banking authority is also likely to apply a hurdle of a core Tier 1 capital ratio of 9 percent when deciding whether banks need more capital, the source said.
• German Banks Say EU Proposals for Banks Unsuitable. Earlier on Wednesday the EU Commission's President Jose Manuel Barroso called for "a fully coordinated approach to strengthen Europe's banks", based on a stricter assessment of bank health using a "temporary significantly higher capital ratio of highest quality capital". German Banking Association BdB on Wednesday said proposals from the president of the European Commission to accelerate capital raising at European banks are unsuited for addressing the causes of the sovereign debt crisis. The BdB said the proposals are unsuited because they fail to address the causes of the sovereign debt crisis. Banks have already used the past months to strengten capital, the BdB said in a statement. Efforts to consider banning dividend payouts as a way to accelerate capital accumulation could hinder efforts to raise capital on the market, the BdB said.

Les Echos:

• French Prime Minister Francois Fillon is seeking to increase the country's supplementary tax on high earners. The extra tax will be increased to 3% for households with individuals earning 250,000 euros each year, and 4% for households where the individuals earn at least 500,000 euros each year.

Arab News:

• Saudi Arabia wants to strengthen its political and economic ties with China, citing the kingdom's Deputy Foreign Minister Prince Abdul Aziz bin Abdullah.

Bear Radar

Style Underperformer:

• Large-Cap Growth (+1.49%)

Sector Underperformers:

• 1) Tobacco -.23% 2) Biotech -.07% 3) Computer -.05%

Stocks Falling on Unusual Volume:

• WDC, ADTN, VOLC, SQI, GMCR, DMND, VRUS, VPRT, WBMD, CYOU, SOHU, PTP, BAX, EVN, WNI and VSI
  

Stocks With Unusual Put Option Activity:

• 1) BAX 2) VFC 3) EWH 4) INFY 5) XLK
  

Stocks With Most Negative News Mentions:

• 1) FSLR 2) NSC 3) LXK 4) PCX 5) CHRW
  

Charts:

• ETFs Falling on Unusual Volume
• Stocks Falling on Unusual Volume
  

Bull Radar

Style Outperformer:

• Large-Cap Growth (+1.58%)

Sector Outperformers:

• 1) Coal +3.63% 2) Banks +3.09% 3) Alt Energy +3.04%

Stocks Rising on Unusual Volume:

• HDB, NIHD, ONXX, JVA, ASML, INFY, SWKS, CSTR, NFLX, CTSH, COO, NSR, WHR, JCI, ONXX, DNR and C
  

Stocks With Unusual Call Option Activity:

• 1) CY 2) WHR 3) WDC 4) ELN 5) CMA
  

Stocks With Most Positive News Mentions:

• 1) HUM 2) IACI 3) GOOG 4) HS 5) MDP
  

Charts:

• ETFs Rising on Unusual Volume
• Stocks Rising on Unusual Volume
  

Wednesday Watch

Evening Headlines

Bloomberg:

• Slovak Parties Seek Talks on EFSF Vote Repeat. Slovakia’s opposition leader said lawmakers must find a way to approve Europe’s enhanced bailout fund, which was rejected yesterday amid a dispute over the future of Prime Minister Iveta Radicova. Slovakia “must sign up to the rescue fund,” Robert Fico said late yesterday, adding that his party, which didn’t back the measure yesterday, is awaiting a proposal from the ruling coalition. Radicova said the only country in the 17 nations that use the euro that has yet to approve European Financial Stability Facility, must find a solution to approve the EFSF “as soon as possible.” No time for a new vote has been set. “Eventually a yes vote will be secured,” Tim Ash, head of emerging-market research at Royal Bank of Scotland Group Plc in London, said by phone yesterday. “Does Slovakia really want to be alone among 17 euro-zone members states on this one, and when the future of Europe is at stake?” The political turmoil in the country of 5.4 million people reverberated on global stock and currency markets. Slovak approval of enhanced powers of the EFSF, the temporary bailout fund, is crucial for adopting the key element in the strategy to prevent contagion from the debt crisis that has spread from Greece to other countries in the region.
• Alcoa(AA) Profit Misses Estimates as Europe Orders Cut 'Dramatically' and Costs Rise. Alcoa Inc. (AA), the largest U.S. aluminum producer, posted third-quarter profit that trailed analysts’ estimates and said its customers in Europe “dramatically” cut orders amid uncertainty about the region’s economy. The New York-based company’s earnings excluding restructuring costs and tax benefits were about 14 cents a share. The average of 15 analysts’ estimates compiled by Bloomberg was for 22 cents. Chief Executive Officer Klaus Kleinfeld said yesterday European aluminum demand will decline 13 percent in the second half from the first half. Alcoa is grappling with rising production costs while the price of aluminum on the London Metal Exchange has fallen in the past two months. The company cut thousands of jobs and closed smelters after commodities plunged during the financial crisis in 2008. Alcoa yesterday declined to provide a forecast for its fourth-quarter alumina and primary aluminum production. “They are going through and trying to decide do they need to cut production somewhere and if so, when,” Lloyd O’Carroll, a Richmond, Virginia-based analyst at Davenport & Co., who has a “buy” recommendation on Alcoa, said in an interview. “If the LME pulls back enough, they will. I don’t know what their magic trigger number is, but I think there is one.” Shares of the company dropped 5.3 percent to $9.75 as of 7:59 p.m. in New York. Alcoa fell 33 percent this year before the close of regular trading yesterday, the third-worst performer on the Dow after Bank of America Corp. and Hewlett- Packard Co. “Fearful of a slowing economy, our European customers reduced their orders dramatically, even into September, and drove a significant reduction in this segment’s profitability,” Chief Financial Officer Charles McClain said on the company’s earnings conference call, referring to its unit that produces flat and rolled aluminum. Growth in the three biggest euro-region economies will shrink 0.4 percent this quarter, the OECD said Sept. 8. European Union and International Monetary Fund officials are negotiating a 110 billion-euro ($150 billion) bailout. Alcoa received at least 24 percent of its 2010 revenue from European countries, according to company filings. The cost of goods sold -- excluding selling, general administrative and some other expenses -- increased 20 percent to $6.42 billion in the quarter, Alcoa said.
• CFTC Said to Have Enough Votes to Approve Speculation Limits. The U.S. Commodity Futures Trading Commission has the three votes necessary to approve limits on speculation in oil, natural gas and other commodities at an Oct. 18 meeting, said a person briefed on the rule-making process. At the same meeting in Washington, the agency’s five commissioners may vote on rules governing clearinghouses that stand between buyers and sellers in derivatives markets, CFTC Chairman Gary Gensler said in a speech at a Futures Industry Association conference today in Chicago. The agency also may vote to delay until next year regulations originally set to be completed by July 2010. “We are focusing on considering these rules thoughtfully - - not against a clock,” Gensler said in the speech. The person briefed on the process spoke on condition of anonymity because the decision-making isn’t public. The rules will govern trades conducted by Goldman Sachs Group Inc., JPMorgan Chase & Co. and transactions on CME Group Inc., the world’s largest futures exchange, among others. The so-called position-limits rule to curb speculation will include an analysis estimating that it will cost the financial industry at least $100 million to comply, Scott O’Malia, a CFTC commissioner, told reporters at the conference. The position- limits rule may also come up for a vote on Oct. 18, he said. The CFTC and Securities and Exchange Commission, which are leading U.S. efforts to write derivatives regulations, also are working on a final rule that will define which Wall Street banks, energy firms and other companies are considered swaps dealers or other major swaps participants. Those definitions will lead companies to have higher capital and margin requirements to limit risk in trades.
• Romney Steers Debate Course; Cain Trumpets 9-9-9. Former pizza executive Herman Cain sought to capitalize on his rise in opinion polls by repeatedly promoting his 9-9-9 tax plan at a debate focused on the economy, as other Republican presidential candidates derided it as impractical and criticized each other’s credentials. Mitt Romney, the former Massachusetts governor who is the party’s frontrunner, navigated through repeated attacks from his opponents, including Texas Governor Rick Perry, who is struggling to reignite his candidacy. The debate tonight showcased disputes among the candidates on a range of economic issues, including Chinese currency, housing loans, job creation and the possibility of future bailouts should the nation face another economic crisis. The candidates were united in their criticism of government, blaming President Barack Obama, the Federal Reserve and Congress for the nation’s economic struggles without noting that Republicans control the U.S. House.
• Oil Drops First Day in Six on Concern Economy to Falter as Stockpiles Rise. Oil fell for the first day in six in New York, snapping the longest run of gains this year, on concern that fuel demand will falter after U.S. and European lawmakers rejected plans to bolster their economies. Futures slipped as much as 0.9 percent after Slovak lawmakers voted against an overhaul of Europe’s bailout fund and the Senate blocked President Barack Obama’s $447 billion plan to boost job creation. The Organization of Petroleum Exporting Countries cut its global oil demand growth forecast for this year and 2012, citing a weak economic outlook in industrialized nations. A report tomorrow may show U.S. crude stockpiles increased, according to a Bloomberg News survey. “The market is starting to come to grips with the depth of the issues in Europe,” Jonathan Barratt, a managing director of Commodity Broking Services Pty in Sydney, said by phone today. Investors are “questioning the ongoing demand for crude oil,” he said. Crude for November delivery dropped as much as 81 cents to $85 a barrel in electronic trading on the New York Mercantile Exchange and was at $85.03 at 11:13 a.m. Sydney time. The contract yesterday climbed 0.5 percent to $85.81, the highest close since Sept. 21. Prices are down 6.9 percent this year.
• Senate Blocks Obama's $447B Jobs Plan. Opponents of President Barack Obama’s $447 billion jobs plan blocked the measure in the Senate, with two Democrats joining Republicans to derail his prime proposal to help turn around the struggling economy. The tally on the test vote was 50-49, falling short of the 60 needed to advance the measure and shelving it in its current form. Senate Minority Leader Mitch McConnell called the measure a “lousy idea” that relies on proposals similar to 2009’s $825 billion stimulus, an effort he said that failed to work. Senate Democratic leaders last week revised the president’s initial proposal, partly to try to pick up more support within their party. That scrapped Obama’s method of paying for the jobs plan, including higher taxes on families making more than $250,000 a year. Senate leaders substituted a 5.6 percent surtax on people making at least $1 million annually. Even so, Democratic Senators Jon Tester of Montana and Ben Nelson of Nebraska opposed the plan. “I can’t support tax gimmicks that do little to create jobs” and don’t address the need for a bipartisan deficit-cutting plan, Tester said in a statement. “The president’s jobs initiative is at the end of its legislative life -- not that it really had one,” Stretch said. He said the focus will likely shift away from jobs and toward the work of a congressional supercommittee that is tasked with cutting $1.5 billion from the federal deficit over 10 years. The new method of offsetting the bill’s costs still ran into Democratic opposition. Senator James Webb, a Virginia Democrat, said he would vote to let debate start, but wouldn’t support the Senate jobs legislation as it was drafted. He said a tax on millionaires that is income-based fails to address real issues of inequality in the tax code. He said the best method to spread the tax burden would be to boost taxes on capital gains. “The present proposal looks good at first glance; it sounds good on a TV bite, but in all respect to the people who put it forward, I do not believe it’s smart policy and it does not go where the real economic division lies in our country,” Webb said.
• Volcker Rule Gaps May Leave Uncertainty About Trading Bans. More than a year after they began crafting the details of the Dodd-Frank Act’s ban on proprietary trading by U.S. banks, regulators released their first version of the so-called Volcker rule while acknowledging that hundreds of questions remain unanswered. The proposal written by four regulatory agencies and issued for public comment today would ban banks from making trades for their own accounts, allowing them to continue short-term trades for hedging or market-making. Banks also would face limits on investments in hedge funds and private-equity funds. Within the rule’s 298 pages, regulators seek feedback instead of offering precise definitions for many of the banned activities, which may leave financial firms uncertain about how to prepare for the final adoption of the rule next year. “There aren’t bright lines on many questions and that will make it difficult for banks to put in place their compliance regime,” said Kim Olson, a principal at Deloitte & Touche LLP, who formerly worked at the bank supervision department in the Federal Reserve Bank of New York.
• China Sovereign Fund to Invest $1 Billion in Kremlin-Backed Fund. China Investment Corp., the nation’s sovereign-wealth fund, agreed to invest $1 billion in a Russian private-equity fund, the first foreign commitment to an investment pool championed by President Dmitry Medvedev. Beijing-based CIC, which managed $409.6 billion by end-2010, plans to invest in the Russia Direct Investment Fund, Kirill Dmitriev, head of the Russian company, said by phone from Beijing yesterday, where the agreement was signed during a visit by Prime Minister Vladimir Putin.
• Hong Kong's Tsang Vows to Remedy Public Anger at Home Prices. Hong Kong Chief Executive Donald Tsang pledged to “break with tradition” ahead of his final policy speech today, moving to address discontent at a surge in home prices that threatens to mar his legacy.
• Goldman(GS) May Drop Bank Status on Volcker Rule Costs, Hilder Says. Goldman Sachs Group Inc. and Morgan Stanley may consider dropping their status as bank holding companies to avoid expenses tied to the Volcker rule, said David Hilder, an analyst at Susquehanna Financial Group LLP.

Wall Street Journal:

• U.S. Accuses Iran in Plot. Two Charged in Alleged Conspiracy to Enlist Drug Cartel to Kill Saudi Ambassador. U.S. authorities said Tuesday they foiled an Iranian-directed plot to assassinate the Saudi Arabian ambassador to Washington, a rare instance where Tehran is accused of fomenting terrorism on U.S. soil. Prosecutors alleged an elaborate international plot, with two men, including an Iranian-born U.S. citizen who had been living in Texas, using funding from the Iranian government to try to hire a Mexican drug cartel to kill the ambassador. Attorney General Eric Holder said elements of Iran's Qods Force, a unit of the Islamic Revolutionary Guard Corps, were ready to spend $1.5 million on the plan. Saudi officials described the alleged plot as an escalation in the confrontation between the two Middle Eastern rivals, which have clashed anew in recent months over Saudi efforts to bolster the monarchy in Bahrain.
• Credit-Card Issuers Circling Subprime Borrowers Again. Credit-card issuers are knocking on the doors of subprime borrowers again as they look for ways to grow their business amid stiff competition. The move is part of a broader effort by banks to lure more credit-card customers after many lenders retrenched from the subprime market.
• The iPhone Finds Its Voice by Walt Mossberg. Features in the 4S Include a System That Answers Questions Out Loud and Learns a User's Speech.
• Red Flags for Green Energy. While Solyndra LLC's flameout has fueled criticism of federal initiatives to encourage alternative power sources, the solar-panel maker is hardly the only disappointment among U.S.-backed energy programs. That's evident in California, which was awarded $4.6 billion by the Energy Department as part of the 2009 Recovery Act—far more than any other state—to fund programs in energy efficiency and other areas.

MarketWatch:

• Alberta Jobs-Increase Figures Are 'Stunning'. Commentary: Maligned oil sands fuel Canada’s strongest economy. Here’s a term you don’t hear too often these days — “blockbuster job growth.” But that’s what analysts are calling the latest employment figures in oil-rich Alberta, an exciting, upbeat place these days.

Business Insider:

• David Pogue: iPhone 4S Is 'Magical,' Siri Changes The Definition Of 'Phone'.
• Eurozone Crisis: 10 Key Dates for the Eurozone.
• It All Comes Bank To Mexico: The Big Story Behind Today's Iranian Terror Plot.
  

Zero Hedge:

• Saudi Arabia Blasts Iran, Verbally For Now.
• The Evolution Of The EFSF, And Its €726 Billion In Max Losses.
• Senate Passes China Currency Legislation Bill 63-35.
  

CNBC:

• Holiday Sales for Some Retailers Could Beat Forecasts.
• Australia's Carbon Tax Plan Passes Biggest Hurdle. Australia's plan for a sweeping national carbon price passed its biggest political hurdle on Wednesday when the lower house of parliament voted in favor of the scheme — a major victory for beleaguered Prime Minister Julia Gillard.

NY Times:

• Massachusetts Asks Banks for Details on Recruiting. The top financial regulator in Massachusetts on Tuesday asked many of Wall Street’s biggest banks for more information on their hedge fund recruiting services. In a letter of inquiry sent to Bank of America, Goldman Sachs, Deutsche Bank, UBS and Morgan Stanley, William F. Galvin, the secretary of the commonwealth of Massachusetts, asked the firms to give a list of the clients they had provided employment referrals to since January 2009. Mr. Galvin said his letter was aimed at putting the firms “on notice that these are issues that need to be explored.”

Rasmussen Reports:

• Election 2012, Generic Presidential Ballot: Republican 47%, Obama 41%.

Reuters:

• China Set to Raise Threshold for Oil, Gas Windfall Tax - Sinopec. China will raise the threshold for windfall tax on domestic oil and gas production, a top Chinese oil executive said on Wednesday. "The threshold for windfall tax will be raised...the government has such plans," Wang Tianpu, President of Sinopec Corp , told Reuters. But Wang added there was no timeline for such a change yet. Wang's comments come shortly after the government extended nationwide a resource tax on oil and gas.

Financial Times:

• Most Hedge Funds to Escape Tighter Oversight.

Telegraph:

• China's Debt Spree Returns to Haunt. Bail-outs are coming thick and fast in China. In less than a week the authorities have had to step in to prop up the banks, rescue the insolvent railway system and save the near bankrupt city of Wenzhou from a spectacular debt crash.

Handelsblatt:

• Billionaire investor George Soros and 100 supporters, including politicians, managers and economists, called for immediate measures to solve the European debt crisis, citing a letter to the heads of the 17-nation currency bloc. The signatories, among them former German Foreign Minister Joschka Fischer, former German Finance Minister Hans Eichel, Emma Bonino, an Italian former minister for European Affairs, and Timothy Garton Ash, a professor of European Studies at Oxford University, wrote that national solutions for the debt crisis would inevitably lead to an European collapse. Current measures are coming too late, are not sufficient and may trigger global tensions on financial markets.

Kyodo News:

• Rice grown in Japan's Fukushima prefecture was cleared for shipping after post harvest radiation testing, citing the prefectural government.

China Business News:

• The eastern Chinese province of Zhejiang is taking measures to stop company executives from fleeing the repayment of debt.

South China Morning Post:

• Global Trade May Drop Up to 15%, Standard Chartered's Kwan Says. Trade volumes may decline by early next year if there's a recession similar to that caused by the 2008 financial crisis, citing Nicholas Kwan, the bank's chief economist for Asia. China and Asia are now more exposed to Europe's financial problems than during the 2008 crisis, he said.

China Securities Journal:

• More Chinese coal producing provinces may follow Guizhou in the southwest and increase charges for local coal producers, citing analysts. Guizhou raised the charge to 10% of the coal sales price Oct. 1, with the fee put into a local coal prices adjustment that will be used to subsidize coal-fired power plants.

Evening Recommendations
CSFB:

• Reiterated Underweight on Chinese banking sector.

Night Trading

• Asian equity indices are -.50% to +1.50% on average.
• Asia Ex-Japan Investment Grade CDS Index 232.0 +9.5 basis points.
  
• Asia Pacific Sovereign CDS Index 160.0 +3.5 basis points.
• FTSE-100 futures -.09%.
  
• S&P 500 futures -.30%.
  
• NASDAQ 100 futures -.15%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (PGR)/.28
• (HST)/.17
• (PEP)/1.30

Economic Releases
2:00 pm EST

• Minutes of FOMC Meeting.
  

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Fed's Fisher speaking, Fed's Plosser speaking, Fed's Pianalto speaking, ECB's Trichet speaking, ECB's Stark speaking, JOLTs Job Openings report for August, USDA's October Ag Supply/Demand Estimates Report, weekly MBA mortgage applications report, 10-Year Treasury Note auction, Canaccord Energy Conference, (WMT) analyst day, (ALOG) analyst day and the (HPP) investor day could also impact trading today.
  

BOTTOM LINE: Asian indices are mostly higher, boosted by real estate and industrial shares in the region. I expect US stocks to open modestly lower and to rally into the afternoon, finishing mixed. The Portfolio is 75% net long heading into the day.