Bull Radar

Style Outperformer:

• Large-Cap Growth +.58%

Sector Outperformers:

• Oil Service +1.28% 2) REITs +1.27% 3) Coal +.96%
  

Stocks Rising on Unusual Volume:

• CREE, ACRX, AM, PWRD, RKUS, CLDX, YELP, FHN and ANF

Stocks With Unusual Call Option Activity:

• 1) CLWR 2) AWAY 3) ONXX 4) ACHN 5) WLL
  

Stocks With Most Positive News Mentions:

• 1) COF 2) LVS 3) T 4) STX 5) CSTR
  

Charts:

• ETFs Rising on Unusual Volume 

• Stocks Rising on Unusual Volume

Tuesday Watch

Evening Headlines 
Bloomberg: 

• Chinese Malls Waive Rents as Vacancies Loom: Real Estate. Chinese landlords are forgoing rent and paying to outfit stores for mass-market fashion brands including Zara and H&M, a bid to blunt the impact of a boom in shopping-mall construction that threatens to push up vacancies. Preferential leasing terms were reserved until recently for luxury brands such as Louis Vuitton and Gucci, which are coveted because they bring shoppers into malls. Now moderately priced labels are being enticed with offers as landlords work harder to fill shops, according to Cushman & Wakefield Inc. and RET Property Consultancy Ltd. Consumer demand is cooling as China’s economy slows and President Xi Jinping reins in lavish spending by officials.

• Golden Era Fades for China’s Banks as Crunch Raises Default Risk. Chinese banks’ valuations are close to their lowest on record as the nation’s interbank funding crisis exacerbated investors’ concern that earnings growth will stall and defaults may surge as the economy slows. Investors’ disenchantment with Chinese banks reflects concern that a crackdown on shadow banking and measures to direct new credit away from repaying old loans and toward boosting economic productivity will undermine earnings and trigger a surge of bad loans. President Xi Jinping also signaled last week that China’s new leaders will tolerate slower growth. “The golden era of banking is over,” said Mike Werner, an analyst at Sanford C. Bernstein & Co. in Hong Kong who recommends clients buy shares of ICBC and divest mid-sized Chinese lenders. “Investors have to recognize that more market discipline is going to be imposed upon the banks.” Shares of ICBC and its three largest local competitors -- China Construction Bank (939), Agricultural Bank of China Ltd. and Bank of China Ltd. -- fell by an average 12 percent in Hong Kong last month, erasing the year’s gains and underperforming the 7.1 percent decline in the benchmark Hang Seng Index. The shares dropped by an average 9 percent in Shanghai, where the broader market of Chinese stocks also declined, with the CSI 300 Index (SHSZ300) losing 16 percent on the month and entering a bear market June 24. 

• Hong Kong Realtors May Lose Jobs on Curbs, Midland Says. About a third of Hong Kong’s property agents may lose their jobs over the next year if the government persists with its real estate curbs, according to realtor Midland Holdings Ltd. (1200) “For the industry, we’re probably looking at the lowest point for over two decades,” Angela Wong, deputy chairman and the daughter of Midland chairman and founder Freddie Wong, said. “The worst thing is that it’s now a stagnant market so we’re not sure whether we should expand or contract. This is tough.” 

• China’s Slowdown Could Slam Hong Kong. 

• Bets on Japan Stocks Most Bullish Since 2000: Chart of the Day. Japanese investors who trade stocks using borrowed money are the most bullish since 2000. The number of Japanese shares bought through margin accounts that profit when stocks rise outnumbered those that make money during declines by about 7 to 1, a ratio not seen for 13 years, data compiled by Bloomberg show.

• Banks Stay Bond-Addicted as Cash Hoarders Prevail: Japan Credit. Japanese banks’ addiction to government bonds is proving hard to break, potentially undermining Prime Minister Shinzo Abe’s plans to revive the world’s third-largest economy. Lenders, which loaded up on debt as loan demand stagnated in recent years, want to reduce the risk of losses on their 151 trillion yen ($1.5 trillion) in holdings as the bond market gyrates and yields climb following efforts by the government and central bank to spark inflation. Yet more than six months after Abe took office, even as banks try to trim their bond holdings, households and companies aren’t taking out enough loans, saddling lenders with record excess deposits. Abe’s vision for ending deflation, stoking loan demand and creating economic growth -- termed Abenomics -- remains “far removed from the current reality,” said Satoshi Yamada, a debt-trading manager for Okasan Asset Management Co., which oversees the equivalent of $11 billion in assets. 

• Japanese Men’s Allowance at 1982 Low as They Await Abenomics. The average Japanese husband’s monthly allowance slumped to the lowest level since 1982 at the start of the financial year as workers await the dividends promised by Abenomics. Salarymen’s spending money, typically set by wives managing family budgets, was 38,457 yen ($386), down 3 percent from last year and less than half the 1990 peak, according to Shinsei Bank Ltd., a Tokyo-based lender whose data go back to 1979. The survey of 2,000 people was done April 20th and 22nd via the Internet, the report published June 28 showed.

• Australia Recession Risk Flagged by Rudd in Rhetoric Shift. Kevin Rudd is ditching the optimism of his predecessor and selling himself as the best leader to steer Australia through a downturn as Chinese demand wanes. The new prime minister, who ousted Julia Gillard last week as the ruling Labor party headed toward a landslide election loss, is channeling his ex-boss Ross Garnaut in flagging that the end of a China-led mining boom could lead to a recession. He’s highlighted the dangers posed by a slowing China in at least five statements and warned policies advocated by his opponent Tony Abbott would result in British-style contraction. 

• China’s Stocks Fall. Industrial & Commercial Bank of China Ltd. (3988), the nation’s biggest lender, slid 1.2 percent, sending financial companies to the biggest loss among industry groups. Shandong Gold Mining Co., China’s second-largest gold company, plunged 10 percent for a second day on plans to buy assets from its parent. Goertek Inc. paced an advance for technology companies after the China Securities Journal said the government plans to introduce policies to increase industry sales. The Shanghai Composite Index (SHCOMP) slipped 0.4 percent to 1,987.70 at the 11:30 a.m. local-time break.

• Asian Stocks Rally on Global Output; Copper, Zinc Retreat. Asian stocks rose for a fifth day, the longest winning streak since April, and U.S. futures advanced on signs the global economy is improving. Industrial metals retreated, following their biggest gain in eight weeks. The MSCI Asia Pacific Index climbed 0.7 percent as of 12:21 p.m. in Tokyo, where the Topix Index (TPX) gained 1.1 percent. Standard & Poor’s 500 Index (SPX) futures rose 0.2 percent after the gauge climbed 0.5 percent in New York. The dollar traded near its strongest level in almost a month versus the euro, while Copper, zinc and tin all fell at least 0.4 percent. China’s benchmark money-market rate declined for an eighth day amid signs policy makers injected cash to alleviate a cash crunch. 

• Ship Rates Drop as U.S. Oil Imports Fall Most Since ’91: Freight.  Growing U.S. energy independence is driving the biggest drop in crude imports in two decades and rates for the oil tankers most reliant on the shipments to the weakest in at least 16 years. Seaborne imports will decline 11 percent to 5.4 million barrels a day in 2013, the largest slide since at least 1991, according to Clarkson Plc, the leading shipbroker. Suezmaxes hauling 1 million-barrel cargoes earned $10,652 a day this year, the least since 1997, its data show. The rate is 55 percent less than Euronav NV says it needs to break even on the 22 tankers it owns. Shares of the company will fall 8.3 percent in a year, the average of six analyst estimates compiled by Bloomberg shows. 

• Port Hedland Iron Ore Exports Decline as Chinese Demand Wanes. Iron ore shipments from Australia’s Port Hedland, the world’s biggest bulk terminal, declined from a record last month after exports to China dropped. Exports totaled 27.7 million metric tons in June from 27.9 million tons in May, data on the Port Hedland Port Authority’s website showed. Shipments to China decreased to 22.9 million tons from 23.3 million tons. Iron ore fell 26 percent from a 16-month high in February on concern that expansion in China is faltering.

• Katainen Monitoring Finnish Debt as ECB Policy Splits Euro Area. Finnish Prime Minister Jyrki Katainen said his government is monitoring the nation’s housing market to ensure record-low euro-zone rates don’t fuel risks that would warrant regulatory intervention. “It’s certainly a very sensitive issue for Finland as it is for other euro countries,” Katainen said yesterday in an interview in Helsinki. “It must be monitored constantly.”

• Egyptian Military Issues 48-Hour Ultimatum to End Crisis. Egypt’s army gave President Mohamed Mursi 48 hours to end a political impasse that culminated in mass protests demanding his ouster, raising the specter of military intervention if unrest continues.

Wall Street Journal: 

• Emerging Markets Hit by Converging Forces. Countries from Turkey to Brazil to China are getting hit by a brutal combination of events, as economies slow, investors pull out cash, commodity prices tumble and protesters take to the streets—all fresh reminders that these markets can be difficult places to try to make money. An outflow of funds from so-called emerging markets has picked up pace over the past month, triggered by expectations among some investors that the days of easy money globally are coming to an end as the U.S. economy recovers. 

• Martin Feldstein: The Fed Should Start to 'Taper' Now. There's little chance that more bond-buying will help the economy. Meanwhile, the financial risks are growing.

Fox News:

• Republicans use 'war on coal' charge to tarnish Dems ahead of elections. Foes of President Obama's alleged "war on coal" climate plan are hoping to use the combustible issue to tarnish Democrats in the next round of elections. The political backlash started almost immediately after the president announced last week he's ordering the EPA to draft new rules to limit emissions at coal-fired power plants. In Virginia, it didn't take long for Republican gubernatorial candidate Ken Cuccinelli to label the plan the "Obama-Biden-McAuliffe war on coal," in his race for governor against former Democratic Party chairman Terry McAuliffe.

CNBC:

• Why We’re More Gloomy About BRICs: Goldman(GS). Goldman Sachs says it has ended a recommendation to buy a basket of U.S. stocks with the highest sales exposure to Brazil, Russia, India and China (BRIC) and instead prefers U.S. firms with most exposure to the domestic market – just one more sign that sentiment towards emerging markets is fading fast. The U.S. investment bank said its decision was based on revised expectations for slower growth in China, the world's second largest economy. 

• Stocks Start Q3 on Upswing, but Headwinds Coming.

• Hard Choices for Self-Employed Caught in Obamacare Gaps. As he tries to build his consulting business, David Ferreira is making sure he doesn't get sick over the next six months. He's counting down the days until he can sign up for insurance under the Affordable Care Act, or ACA.

Zero Hedge: 

• The Biggest Problem Currently Is... The biggest problem currently is that there is virtually no expectation, or analysis that incorporates the impact, of an average economic recession ever occurring again. 

• 36 Tough Questions About The U.S. Economy That Everyone Should Be Asking.

• The relative size of margined buys vs margined sells on the 3 major Japanese stock exchanges was last this high at the very peak of the TOPIX in 1999.  (graph)

• Nick Barisheff: The Case For (Much) Higher Gold Prices.

• Can Bernanke Brake Without Derailing?

Business Insider: 

• The Chinese Central Bank Freaked Out Over A Bank Lending Spike Unlike Anything It Had Ever Seen Before In History.

• It Is Going To Be A Long Night In Cairo's Tahrir Square [PHOTOS].

• 7 Reasons Why We're Still Asking Questions About The Crash Of TWA Flight 800.

Hong Kong Economic Journal:

• Hong Kong's Tsang Says More Property Curbs Possible. The government won't rule out the possibility of introducing more property cooling measures in the short term if earlier curbs failed to contain property prices, citing an interview with Financial Secretary John Tsang.

China Daily:

• Foreign Movie Ticket Sales in China Decline 26.8%. Ticket sales for foreign-made movies in China this year as of June 23 had fallen 26.8%, citing EntGroup Consulting.

China Securities Journal:

• China 2Q Growth May Slow. China's economic growth may slow to about 7.5% in 2Q on weak demand and de-stocking of companies, citing a person familiar with the data.

Evening Recommendations 
Keefe Bruyette:

• Cut (WFC) to Market Perform, target $43.

Night Trading

• Asian equity indices are -.50% to +.75% on average.

• Asia Ex-Japan Investment Grade CDS Index 148.50 -4.0 basis points.

• Asia Pacific Sovereign CDS Index 110.75 -3.5 basis points.

• FTSE-100 futures -.17%.

• S&P 500 futures +.15%.

• NASDAQ 100 futures +.21%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (AYI)/.89

• (STZ)/.40

• (GBX)/.55

Economic Releases
10:00 am EST

• Factor Orders for May are estimated to rise +2.0% versus a +1.0% gain in April.

Afternoon:

• Total Vehicle Sales for June are estimated to rise to 15.5M versus 15.24M in May.

Upcoming Splits

• (AAON) 3-for-2

Other Potential Market Movers

• The Fed's Powell speaking, Fed's Dudley speaking, Spain Unemployment Rate report, RBA rate decision, weekly retail sales reports, ISM New York for June, IBD/TIPP Economic Index for July and US regulator decision on bank capital requirements could also impact trading today.

BOTTOM LINE: Asian indices are mostly higher, boosted by automaker and commodity shares in the region. I expect US stocks to open modestly higher and to weaken into the afternoon, finishing modestly lower. The Portfolio is 25% net long heading into the day.

Stocks Higher into Final Hour on Less Eurozone/Asian Debt Angst, Central Bank Hopes, Short-Covering, Metals & Mining/Biotech Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Higher
  

• Sector Performance: Most Sectors Rising
  

• Volume: Below Average

• Market Leading Stocks: Underperforming

Equity Investor Angst:

• Volatility(VIX) 16.15 -4.21%
• Euro/Yen Carry Return Index 135.76 +.93%
• Emerging Markets Currency Volatility(VXY) 10.71 -2.28%
• S&P 500 Implied Correlation 58.05 +.2%

• ISE Sentiment Index 94.0 +4.44%

• Total Put/Call .88 -5.3%

• NYSE Arms 1.08 -20.62% 

Credit Investor Angst:

• North American Investment Grade CDS Index 84.10 -3.45%

• European Financial Sector CDS Index 163.62 -1.93%

• Western Europe Sovereign Debt CDS Index 93.93 -1.13%

• Emerging Market CDS Index 314.95 -1.59%

• 2-Year Swap Spread 15.5 +.25 bp

• TED Spread 26.25 +2.0 bps

• 3-Month EUR/USD Cross-Currency Basis Swap -9.75 +.75 bp

Economic Gauges:

• 3-Month T-Bill Yield .01% -2 bps

• Yield Curve 213.0 +1 bp

• China Import Iron Ore Spot $116.90/Metric Tonne +.34%

• Citi US Economic Surprise Index -3.6 +5.4 points
• Citi Emerging Markets Economic Surprise Index -34.60 +2.5 points

• 10-Year TIPS Spread 2.02 +3 bps

Overseas Futures:

• Nikkei Futures: Indicating +208 open in Japan

• DAX Futures: Indicating -14 open in Germany

Portfolio: 

• Higher: On gains in my tech/biotech/medical/retail sector longs
• Disclosed Trades: Added to my (IWM)/(QQQ) hedges, added to my (EEM) short
• Market Exposure: Moved to 25% Net Long

Bear Radar

Style Underperformer:

• Large-Cap Value +.74%

Sector Underperformers:

• 1) Oil Tankers -.42% 2) Utilities -.31% 3) REITs -.17%

Stocks Falling on Unusual Volume:

• INSM, IDCC, FLTX, EQM, AAWW, SAP, HURN, UIL, WEC, TWC, ABX, VSAT, GOLD, CDE, NXST, PTR, SRE, NEM and OAK

Stocks With Unusual Put Option Activity:

• 1) STZ 2) ITB 3) MA 4) OIH 5) ADBE
  

Stocks With Most Negative News Mentions:

• 1) BBRY 2) BRCM 3) MMM 4) MGM 5) ORCL
  

Charts:

• ETFs Falling on Unusual Volume

• Stocks Falling on Unusual Volume

Bull Radar

Style Outperformer:

• Mid-Cap Growth +1.64%

Sector Outperformers:

• Biotech +3.69% 2) Airlines +2.26% 3) Disk Drives +1.82%
  

Stocks Rising on Unusual Volume:

• ONXX, CIE, CVC, ARIA, CSIQ, P, PCYC, MDVN, TSLA, CLDX and ALXN

Stocks With Unusual Call Option Activity:

• 1) NBL 2) GNC 3) OC 4) ABBV 5) IBB
  

Stocks With Most Positive News Mentions:

• 1) REGN 2) FFIV 3) LMT 4) ALNY 5) MRK
  

Charts:

• ETFs Rising on Unusual Volume 

• Stocks Rising on Unusual Volume

Monday Watch

Weekend Headlines 
Bloomberg:     

• Xi Says GDP Not Officials’ Sole Focus in Signal on Growth. China’s President Xi Jinping said officials shouldn’t be judged solely on their record in boosting gross domestic product, the latest signal that policy makers are prepared to tolerate slower economic expansion. The Communist Party should instead place more importance on achievements in improving people’s livelihood, social development and environmental quality when evaluating the performance of officials, the Xinhua News Agency reported June 29, citing Xi at a meeting on personnel management on the eve of the 92nd anniversary of the party’s founding.

• Chinese Manufacturing Gauges Fall as Slowdown Persists: Economy. Two gauges of China’s manufacturing fell in June, underscoring a sustained slowdown in the nation’s economy as policy makers seek to rein in financial speculation and real-estate prices. An official Purchasing Managers’ Index (CPMINDX) dropped to 50.1 from 50.8, the National Bureau of Statistics and China Federation of Logistics and Purchasing said today in Beijing. A private PMI from HSBC Holdings Plc and Markit Economics was 48.2, the weakest since September. Readings above 50 signal expansion. 

• China’s June Home Prices Jump on Increasing Sales, SouFun Says. China’s new home prices jumped in June by the most since they reversed declines in December, defying the government’s tightened property curbs as increased sales supported developers’ efforts to avoid price cuts. Prices surged 7.4 percent last month from a year earlier to 10,258 yuan ($1,671) per-square-meter (10.76 square feet), SouFun Holdings Ltd. (SFUN), the country’s biggest real estate website owner, said in a statement today after a survey of 100 cities. Last month’s increase was the biggest since December, when prices climbed 0.03 percent, reversing a 0.46 percent decline in November.

• China Orders Armed Patrols in Xinjiang After Violence Killed 35. China ordered paramilitary troops to patrol around the clock in the western Xinjiang province after unrest killed at least 35 people in one of the region’s worst outbreaks of violence in four years. The stepped-up security, announced on the Ministry of Public Security’s website yesterday, comes before the fourth anniversary of clashes between Uighurs and Han Chinese in the regional capital Urumqi on July 5, 2009 that killed 200 people. 

• China Stocks Fall After Manufacturing Data Show Slower Expansion. China’s stocks fell, led by material and financial companies, after an official gauge of manufacturing expanded at the slowest pace in four months in June. The Purchasing Managers’ Index was at 50.1, the National Bureau of Statistics and China Federation of Logistics and Purchasing said. That was down from May’s 50.8 reading and matched the median forecast of 33 analysts in a Bloomberg News survey. Readings above 50 signal expansion. The Shanghai Composite Index (SHCOMP) slid 0.8 percent to 1,963.04 at 9:33 a.m. local time, extending last week’s 4.5 percent slump, the biggest loss since the five days ended Feb. 22.

• Pawnbrokers Thrive as Poorest Aussies Bear Brunt of Slowdown. On a sidewalk in Sydney’s Bankstown neighborhood, where unemployment is more than double Australia’s average, Dave Cox pulls the starter cord of an edge trimmer to prove it works as he tries to sell it to pawnbroker Cash Converters International Ltd. (CCV) “The economy is pretty crap right now,” 38-year-old truck driver Cox, who’s between jobs, said after he offloaded the snipper for A$30 ($28). In the past month, he sold an iPhone and got a loan at Cash Converters, whose sales last year grew faster than any other Australian retailer that didn’t make a major acquisition. “It just feels bad out there.”

• Asian Stocks Outside Japan Decline on China Manufacturing. Asian stocks outside Japan fell, with a regional index heading for its first decline in four days, after an official gauge of manufacturing activity in China expanded at the slowest pace in four months. Commonwealth Bank of Australia, the nation’s largest lender, fell 1.8 percent. Toyota Motor Corp., the world’s No. 1 carmaker, gained 0.5 percent as the yen weakened against the dollar. Hisamitsu Pharmaceutical Co. (4530) surged 5.8 percent in Tokyo after its Noven unit won U.S. approval for its drug to ease hot flushes associated with menopause. The MSCI Asia Pacific Excluding Japan Index fell 0.4 percent to 430.67 as of 12:06 p.m. in Hong Kong, with eight of the 10 industry groups on the measure falling.

• Europe Stocks Addicted to Emerging Markets Stretching Valuations. For the first time ever, European companies are relying on emerging markets for a third of all revenue, stretching equity valuations as Chinese growth slows and protests turn violent from Turkey to Brazil. 

• Draghi’s One Size Fits All Rescue Fuels Northermost Debt. The European Central Bank’s attempt to resuscitate the 17-member euro economy with record-low interest rates is fueling a debt boom in its most creditworthy country and exposing a growing disconnect in monetary policy. In Helsinki, about 1,500 kilometers (930 miles) northeast of the Frankfurt offices of ECB President Mario Draghi, household debt has surged to a record as Finns take advantage of the lowest mortgage rates in the euro area to buy property. Citizens of crisis-stricken countries from Greece to Portugal are either unable to get loans or forced to pay much higher rates. 

• Rebar Declines as Pace of Manufacturing Growth in China Slows. Steel reinforcement-bar futures in Shanghai fell as two gauges of China’s manufacturing fell in June, underscoring a slowdown in the nation’s economy. Rebar for delivery in January on the Shanghai Futures Exchange declined as much as 1 percent to 3,501 yuan ($571) a metric ton before trading at 3,518 at 10:28 a.m. local time. Futures fell 6.8 percent last quarter, the most since the three months ended in September. 

• Rubber Falls First Day in Three After China Manufacturing Slows. Rubber futures in Tokyo declined for the first time in three days after manufacturing expanded at the slowest pace in four months in China, the largest consumer of the commodity used in tires. The contract for delivery in December slipped as much as 1 percent to 233.9 yen a kilogram ($2,356 a metric ton) on the Tokyo Commodity Exchange and was at 234.8 yen at 12:13 p.m. local time. Futures lost 14 percent last quarter, the biggest decline in a year.

• U.S. Should Show Some Ambition on Bank Leverage. U.S. regulators are showing encouraging signs of coming to a crucial understanding: If they want the financial system to be more resilient and beneficial for the economy, they’ll have to make sure the largest banks’ shareholders have more skin in the game. This week, Federal Reserve officials are expected to vote on new rules for bank capital -- shareholders’ equity and other forms of financing that, as opposed to debt, can absorb losses and prevent insolvency in times of trouble. According to Bloomberg News, U.S. authorities have been considering increasing the requirement to $6 in capital for every $100 in assets, a “leverage ratio” of 6 percent. That’s double the international minimum set by global regulators in Basel, Switzerland. The current U.S. minimum is 4 percent. A higher leverage ratio would be a welcome step toward strengthening the U.S. banking system. 

• Hedge Funds Cut Gold Bets as Goldman Lowers Outlook: Commodities. Hedge funds cut wagers on a gold rally to a five-year low as a record quarterly drop drove prices below $1,200 an ounce for the first time since 2010 and Goldman Sachs Group Inc. forecast more declines. Money managers reduced their net-long position by 20 percent to 31,197 futures and options by June 25, U.S. Commodity Futures Trading Commission data show. That’s the lowest since June 2007. Holdings of short contracts climbed 5 percent to 77,027, the second-highest on record. Net-bullish wagers across 18 commodities tumbled 9 percent, the most in 12 weeks.

Wall Street Journal: 

• Immigration Bill Faces Uphill Climb in House. For all the battles in Congress over immigration, the issue isn't likely to be a decisive one in many individual campaigns for House seats in 2014, strategists for both parties say. That is likely to affect the debate in the House as it weighs the sweeping immigration bill passed by the Senate last week.

• Health-Insurance Costs Set for a Jolt. For the Healthy, Rates Could Soar Under New Law; Sicker Consumers to See Relief. Healthy consumers could see insurance rates double or even triple when they look for individual coverage under the federal health law later this year, while the premiums paid by sicker people are set to become more affordable, according to a Wall Street Journal analysis of coverage to be sold on the law's new exchanges.

Fox News:

• 18 firefighters confirmed dead fighting Arizona blaze. Local fire officials have confirmed that at least 18 firefighters have died while battling the Yarnell Hill Fire in central Arizona. The Prescott Fire Department confirmed to MyFoxPhoenix that the firefighters,all part of a group called the Prescott Granite Mountain Hotshots, had passed away Sunday evening. The Yavapai County Sheriff's Office has notified residents in the Peeples Valley area and in the town of Yarnell to evacuate.

CNBC: 

• Why China's Economy May Be Heading for a Crash. China's central bank sent global markets reeling when it attempted tighten credit and rein in the country's shadow banking system. But the consequences of China's credit binge may just be getting started, and experts say there could be more pain to come for the world's second-largest economy.  

• Onyx Pharma(ONXX) Rejects Buyout Offer From Amgen(AMGN).

Zero Hedge:

• The Golden (Sentiment) Rule: If It Isn’t Off The Chart Now, It Soon Will Be. (graphs)

• Stocks Plunge In Last Minute On Rebal Day, June Is Worst Month Since October 2012. (graphs)

• Collateral Transformation: The Latest, Greatest Financial Weapon Of Mass Destruction.

• The Days Of The Super-Powered Chinese Economy Are Over.

• When Milton Friedman Opened Pandora's Box...

• Global Macro In 12 Simple Charts - Find The Clean Shirt.

• EU Parliament "Shocked" At NSA "Bugging" Diplomatic Offices; Threatens Trade Talks.

• Meanwhile, In Egypt... - Live Feed.

• How The "Taper Tantrum" Cost US Banks $25 Billion In Q2 Net Income.

• Multiple Government Agencies Are Keeping Records Of Your Credit Card Transactions.

• China PMI Drops To Lowest In 9 Months; Schrodinger's Economy Continues. (graph)

• The Drag From Higher Mortgage Rates. (graphs)

Business Insider:

• US Marines Put On Alert To Move Into Egypt Amid Violent Protests.

• Fitch Affirms AAA Rating For US But Elevated Debt Keeps Outlook Negative.

• GLENN GREENWALD: The NSA Can Store 'One Billion Cell Phone Calls Every Single Day'.

• NOT GOOD: Global Canary In The Coal Mine Looks Sick. (graph)

• LIVE: Thousands Of Companies Around The World Are Revealing The Truth About The Economy.

• These Photos Show Just How Massive The Protests In Egypt Have Become.

• FORGET THE FED: Here's The Troubling Trend That's Really Behind Stock Market Volatility. (graph)

• New Developments Threaten To Burst China's Staggering Housing Bubble.

Wall Street All-Stars:

• Indicator Update: What do Higher Interest Rates Mean for Stocks.

Telegraph:

• France's triumphant 'Joan of Arc' vows to bring back franc and destroy euro. Marine Le Pen is spoiling for a fight. The leader of France's Front National vows to smash the existing order of Europe and force the break-up of monetary union, if she wins the next election.

Night Trading

• Asian indices are -.75% to +.25% on average.

• Asia Ex-Japan Investment Grade CDS Index 152.50 +1.0 basis point.

• Asia Pacific Sovereign CDS Index 114.25 +1.5 basis points.

• FTSE-100 futures +.06%.

• S&P 500 futures -.13%.

• NASDAQ 100 futures +.01%.

Morning Preview Links

Earnings of Note
Company/Estimate

• None of note

Economic Releases
8:30 am EST

• Final Markit US PMI is estimated to rise to 52.4 versus a prior estimate of 52.2.

 10:00 am EST

• Construction Spending for May is estimated to rise +.6% versus a +.4% gain in April.

• ISM Manufacturing for June is estimated to rise to 50.5 versus 49.0 in May.

• ISM Prices Paid for June is estimated to rise to 50.5 versus 49.5 in May.

Upcoming Splits

• (SNP) 13-for-10

• (OGE) 2-for-1

• (AAON) 3-for-2

Other Potential Market Movers

• The Eurozone PMI/Inflation reports, Japan 10Y Treasury auction and the (SD) annual meeting could also impact trading today.

BOTTOM LINE: Asian indices are mostly lower, weighed down by commodity and financial shares in the region. I expect US stocks to open mixed and to weaken into the afternoon, finishing modestly lower. The Portfolio is 50% net long heading into the week.