Friday, July 10, 2015

Stocks Surging into Afternoon on Greece Debt Deal Hopes, China Bounce, Less European/Emerging Markets/US High-Yield Debt Angst, Drug/Transport Sector Strength

Broad Equity Market Tone:
  • Advance/Decline Line: Substantially Higher
  • Sector Performance: Almost Every Sector Rising
  • Volume: Below Average
  • Market Leading Stocks: Performing In Line
Equity Investor Angst:
  • Volatility(VIX) 17.36 -13.07%
  • Euro/Yen Carry Return Index 142.83 +2.10%
  • Emerging Markets Currency Volatility(VXY) 8.87 -3.06%
  • S&P 500 Implied Correlation 59.88 -5.42%
  • ISE Sentiment Index 79.0 -10.2%
  • Total Put/Call .97 -17.09%
  • NYSE Arms .86 +8.92% 
Credit Investor Angst:
  • North American Investment Grade CDS Index 68.86 -5.37%
  • America Energy Sector High-Yield CDS Index 1,261.0 -.80%
  • European Financial Sector CDS Index 79.43 -13.37%
  • Western Europe Sovereign Debt CDS Index 25.25 -17.09%
  • Asia Pacific Sovereign Debt CDS Index 59.92 -2.91%
  • Emerging Market CDS Index 300.99 -3.12%
  • iBoxx Offshore RMB China Corporates High Yield Index 119.24 +.09%
  • 2-Year Swap Spread 25.75 +.5 basis point
  • TED Spread 26.75 -.5 basis point
  • 3-Month EUR/USD Cross-Currency Basis Swap -19.5 +2.25 basis points
Economic Gauges:
  • 3-Month T-Bill Yield .01% unch.
  • Yield Curve 176.0 +4.0 basis points
  • China Import Iron Ore Spot $50.10/Metric Tonne +2.27%
  • Citi US Economic Surprise Index -21.8 +1.1 points
  • Citi Eurozone Economic Surprise Index -3.9 +2.2 points
  • Citi Emerging Markets Economic Surprise Index -19.50 -2.0 points
  • 10-Year TIPS Spread 1.89 +3.0 basis points
  • # of Months to 1st Fed Rate Hike(Morgan Stanley) 7.43 -.44
Overseas Futures:
  • Nikkei 225 Futures: Indicating +331 open in Japan 
  • China A50 Futures: Indicating -366 open in China
  • DAX Futures: Indicating +55 open in Germany
Portfolio: 
  • Higher: On gains in my tech/biotech/medical/retail sector longs
  • Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges
  • Market Exposure: Moved to 75% Net Long

Today's Headlines

Bloomberg:     
  • Europe Weighs Greek Proposal as Tsipras Seeks Lawmaker Support. France praised a Greek package of reforms while other nations voiced skepticism, as lawmakers in Athens prepared to debate whether to support Prime Minister Alexis Tsipras’s plan to access a bailout of at least 53.5 billion euros ($60 billion). The packet of spending cuts, pension savings and tax increases was being studied on Friday by the European Commission, the International Monetary Fund and the European Central Bank after it was submitted late the previous day. While the German government said it will wait for the institutions to make their assessment, French President Francois Hollande said in a rare Twitter post that the reform proposals were “serious, credible” and demonstrated Greece’s determination to stay in the euro area. Lithuanian President Dalia Grybauskaite voiced pessimism, saying the new offer “will really not be enough,” Reuters reported.
  • Greek Bank Restructuring May Be Unavoidable Even With Bailout. Greece’s last-minute efforts to secure a 53.5 billion euro ($60 billion) bailout may have come too late to save the nation’s banks and their bondholders. “Even with an agreement between the government and Europe, bank senior debt may need to be bailed in,” said Michael Doran, a partner at law firm White & Case in London. “Additional recapitalization tools may also be required given the scale of the problems.” Doran worked on the restructuring of Cypriot banks in 2013, which included seizing nearly half of all deposits over 100,000 euros.
  • Greek Skeptics Say Market Rally Masks Lingering Risks of Failure. While European markets show signs of optimism that Greece can reach a deal with its creditors as soon as this weekend, not everyone is ready to call time on the saga. Fitch Ratings’s global head of sovereigns says the two sides remain far apart. And strategists at Societe Generale SA still see a 65 percent chance that Greece will leave the euro. “Even with the program that we saw submitted last night, we think it’ still going to be quite difficult to reach an agreement,” Fitch’s James McCormack said in a Bloomberg Television interview. “The two sides are further apart than ever. In the Greek economy the hole that they’ve been digging is deeper now so the adjustment on the fiscal side is going to have to be that much bigger.”
  • China's Richest People Just Lost About $100 Billion in a Month. Market Seesaw Reshapes Global Wealth Landscape. It takes an iron stomach to be one of the richest people in China. Billionaires from China and Hong Kong who rank among the 400 wealthiest people on earth gained $121 billion this year through June 12, 2015, when equity markets peaked there. They lost almost $100 billion as shares plummeted this month, including $30 billion at the start of the week, before the rally on Thursday and Friday. ``I hope these people realize that it's just paper money,'' said Niklas Hageback, who helps oversee about $202 million at Hong Kong-based money management firm Valkyria Kapital. ``I hope for their own personal mental health that they have been able to realize that. Otherwise, if you just start to look at your own income statements, the losses are truly horrendous.''
  • China Slashes Vehicle Sales Forecast to 3% Amid Stocks Rout. China slashed its forecast for vehicle sales in the world’s largest market, projecting deliveries to expand at the slowest pace in four years amid a stock-market rout that threatens to dent consumer sentiment. Total vehicle deliveries including trucks and buses will probably rise by 3 percent this year, down from the 7 percent projected in January, the China Association of Automobile Manufacturers said Friday. That would be the smallest increase since 2011, when the government unwound stimulus measures unleashed in the wake of the global financial crisis.
  • Volkswagen Said to Give out $161 Million to China Dealers. The funding will be paid to distributors selling VW brand cars made by the company’s joint venture with China FAW Group Corp., according to two people familiar with the plan, who asked not to be named because the discussions were private. Volkswagen, the biggest foreign automaker by sales in China, is the latest company to extend financial subsidies to distributors hit by the slowing economy and a stock market that erased $4 trillion in market value in less than a month. BMW AG earlier this year agreed to pay subsidies to its distributors in China to help cover losses after retailers stopped ordering cars from the manufacturer.  
  • China's Stock Market Selloff Explained in Six Charts.
  • Putin Calls U.S. Debt ‘Serious Problem’ as He Defends Greece. Russian President Vladimir Putin warned of dangers to the global economy from U.S. borrowing while saying Greece isn’t solely to blame for its debt crisis. “It’s a serious problem not just for the United States but for the whole world economy,” Putin told reporters Friday in the Russian city of Ufa in response to a question on the prospects of the biggest developing nations. “Debt exceeds gross domestic product there. 
  • Canada Jobs Loss in June Ratifies Faltering-Economy View. Canadian employment fell by 6,400 in June on the biggest decline in part-time work in more than four years, sustaining the view the economy is losing steam and may require another jolt of stimulus from the central bank. The unemployment rate remained at 6.8 percent for a fifth month, Statistics Canada said Friday in Ottawa. Part-time work fell 71,200, exceeding the 64,800 gain in full-time work. Quebec posted a decline of 33,300, the most since May 2005.
  • India’s Factory Output Misses Estimates as Consumer Goods Fall. India’s factory output rose less than economists estimated, boosting pressure on policy makers to revive investment in Asia’s third-largest economy. Industrial production rose 2.7 percent in May from a year earlier after a revised 3.4 percent gain in April, the Central Statistical Office said in a statement on Friday. That compares with a 4 percent rise predicted by the median of 32 estimates in a Bloomberg survey of economists. Manufacturing output climbed 2.2 percent, electricity 6 percent, mining 2.8 percent and capital goods production rose 1.8 percent. Consumer goods fell 1.6 percent. 
  • Europe Stocks End Dizzying Week With Biggest Gain in Three Years. Investors got quite the ride with a week of almost symmetrical contrasts, culminating in the largest two-day rally since November 2011. The Stoxx Europe 600 Index rose 1.4 percent this week amid speculation that Greece may finally secure a fresh bailout. Shares had earlier tumbled to the lowest level since February, flirting with a correction, as Greek voters rejected creditors’ demands. Stocks wrapped up the week with a 2 percent gain.
  • IEA Says Oil Prices May Fall Even Further Before Supply Fades in 2016. (video)
    Oil prices may fall further as the world remains “massively oversupplied,” before markets tighten in 2016 when output growth outside OPEC grinds to a halt, according to the International Energy Agency.
  • Traders Dump Energy Hedges Amid Another Low Hurdle for Earnings. Investors see history repeating for energy companies this season, speculating that profit forecasts are again so low that there’s little need to hedge against a miss. Implied volatility on an exchange-traded fund tracking energy companies is at its lowest in 14 months versus another ETF mirroring the Standard & Poor’s 500 Index, according to data compiled by Bloomberg. The decline signals falling demand for options used to protect against losses in the shares. 
  • For Big Miners, the Pain's Only Likely to Get Worse. (graph) Overproduction and a weakening Chinese economy could put dividends at risk. Even after a bounce-back over the past two days, the Bloomberg World Mining Index of 79 producers has tumbled 61 percent from a 2011 peak as prices for iron ore, coal, copper, and other industrial metals collapsed. 
  • Yellen Maintains Outlook for First Rate Increase in 2015. Federal Reserve Chair Janet Yellen said she still expects to raise interest rates this year and repeated that the subsequent pace of increases will be gradual. “I expect that it will be appropriate at some point later this year to take the first step to raise the federal funds rate and thus begin normalizing monetary policy,” Yellen said in her first public remarks since the June meeting of the Federal Open Market Committee. “But I want to emphasize that the course of the economy and inflation remains highly uncertain, and unanticipated developments could delay or accelerate this first step,” she said in the text of a speech Friday in Cleveland.
  • Plosser: A Lot of Desire for Federal Reserve Rate Hike. (video)
  • Confederate Flag Removed From Capitol in South Carolina. (video)
Fox News: 
  • OPM director Katherine Archuleta resigns in wake of data breach. (video) U.S. personnel chief Katherine Archuleta resigned Friday in the wake of massive data breach that allowed hackers to steal the records of more than 21 million people under her watch, Fox News confirmed. Archuleta submitted her resignation to President Obama Friday morning. Her resignation is effective at the close of business today.
ZeroHedge: 
Telegraph:
ZDF TV:
  • Tsipras's Proposals Run Against Greek People's Will: Brinkhaus. Ralph Brinkhaus, deputy chairman of German Chancellor Angel Merkel's Christian Union bloc in parliament, says he doesn't see how Prime Minister Alexis Tsipras's govt can implement proposed reforms that were rejected by a majority of Greeks. "It's interesting that he seems to be offering the EU and his partners what his own people rejected in the referendum on Sunday," he said. "We have to ask ourselves two questions: what's on this reform list and how credible is it that this reform list will actually be implemented?"
China Auto New:
  • Volkswagen's China Partner Says Co. 1H Sales 'Fail'. Changes in the market structure was "beyond our expectations," citing FAW-VW's board secretary Sun Guowang. FAW-VW 1H sales fell 11.3% y/y, according to the report. Sales performance was not up to expectations, he said.

Bear Radar

Style Underperformer:
  • Mid-Cap Value +.86%
Sector Underperformers:
  • 1) Coal -1.68% 2) Gold & Silver -1.34% 3) Oil Service +.16%
Stocks Falling on Unusual Volume:
  • CUDA, HELE, Z, PTC, MIK, VCLT, BIIB, ROG, CPG, DOV, COTY, ENV, BJRI, TREE, CMCM, DFRG, CNSI, SOHU, WBAI, VIIX, MDVN, SINA, NVRO and BIS
Stocks With Unusual Put Option Activity:
  • 1) SMH 2) MCHP 3) Z 4) HPQ 5) BIIB
Stocks With Most Negative News Mentions:
  • 1) RIG 2) Z 3) SHAK 4) RPTP 5) PBYI
Charts:

Bull Radar

Style Outperformer:
  • Small-Cap Growth +1.31%
Sector Outperformers:
  • 1) Airlines +2.92% 2) Drugs +2.11% 3) Steel +1.69%
Stocks Rising on Unusual Volume:
  • ZGNX, PHG, BUD, UN, TOT, SNY, WBA, HMSY and ALK
Stocks With Unusual Call Option Activity:
  • 1) GRUB 2) HUN 3) ADSK 4) LGF 5) APOL
Stocks With Most Positive News Mentions:
  • 1) LMT 2) AAL 3) FN 4) IPHI 5) LB
Charts:

Morning Market Internals

NYSE Composite Index:

Friday Watch

Evening Headlines 
Bloomberg:   
  • The Chinese Stock Meltdown That Makes the Greece Saga Look Trivial. The bear market by the numbers, below. The Shanghai Stock Exchange Composite Index has lost 28 percent since its peak on June 12, the worst selloff in two decades. About $3.9 trillion in market valuation has evaporated, more than the total annual output of Germany—the world’s fourth-largest economy—and 16 times Greece’s gross domestic product. As shares tumbled, companies rushed to apply for trading suspension. More than 1,400 companies stopped trading on mainland exchanges, locking sellers out of 50 percent of the market. The China Securities Regulatory Commission also banned major shareholders, corporate executives, and directors from selling stakes in listed companies for six months.  
  • Already Weakening, China Economy Faces New Blow From Stocks. While the extent of damage to China’s growth has yet to emerge as policy makers battle to shore up the stock market, Chen’s story flashes a warning sign for an economy already burdened with a property-market slump and export slowdown. Two-thirds of economists surveyed by Bloomberg this week saw at least some hit to gross domestic product this quarter. “The impact on household wealth and future consumption growth can’t be ignored,” said Shen Jianguang, the chief Asia economist for Mizuho Securities Asia Ltd. in Hong Kong. “For those who were lured into the stock market earlier this year, the losses are already huge.” 
  • China Trading Halts Slip After Rally With 47% Still Frozen. The number of companies with trading suspensions on mainland Chinese exchanges fell as the nation’s stock indexes rebounded. About 1,365 companies have halted trading, equivalent to 47 percent of total listings on Friday, down from 1,439 or 50 percent a day earlier, according to data compiled by Bloomberg. Current suspensions have locked up about $2.4 trillion worth of shares, or 36 percent of China’s market capitalization.
  • China's Dream of World Class Stock Markets Suffers Intervention Blow. It’s hard for Alex Wolf to believe that the Chinese officials he met four months ago are the same ones running the world’s second-largest stock market today. When Wolf, an emerging market economist at Standard Life Investments, sat down with the nation’s securities regulators in Edinburgh in March, they had a clear message: China is enacting the free-market reforms needed to lure foreign investors and gain entry into MSCI Inc.’s global indexes. Now, after a week of unprecedented government intervention to prop up the stock market, it’s clear to Wolf that reform has taken a back seat to easing the pain from a rout that many analysts say was inevitable. He's among international investors at Aberdeen Asset Management and Clough Capital Partners who say market meddling threatens to further delay MSCI inclusion after the index provider decided to leave China’s domestic shares out of its equity gauges in June.
  • Greece Seeks $59.2 Billion Bailout as Tsipras Bows to Demands. In an 11th-hour bid to stay in the euro, the government of Greek Prime Minister Alexis Tsipras offered to meet most of the demands made by creditors in exchange for a bailout of 53.5 billion euros ($59.2 billion). The proposal submitted to European institutions late Thursday almost mirrored the one from creditors on June 26, which was rejected by voters in a July 5 referendum. The package of spending cuts, pension savings and tax increases will face its first hurdle in the Greek Parliament on Friday. Though Tsipras ceded ground, he insists long-term debt to be made more manageable to allow Greece to recover from a crisis that has erased a quarter of its economy. In this, he has a growing support base that includes the U.S., European Union President Donald Tusk and the International Monetary Fund.
  • Singapore New Office Leases Drop by Half as Companies Cut Costs. Singapore’s new office leases declined by more than half as tenants such as Barclays Plc gave up space, while companies including Google Inc. moved out of prime office districts to cut costs. The proportion of new leases dropped to 6 percent of all signed in the first six months from 15 percent a year earlier, according to the latest figures compiled by commercial-property broker Cushman & Wakefield Inc.
  • Australian Mortgage Approvals Drop Most in Five Years in May. Australian home-loan approvals fell in May by the most in more than five years as the country’s banks tighten lending criteria. The number of mortgages approved for owners that occupy their home fell 6.1 percent in May from April, the largest drop since December 2009, according to government data released Friday. In New South Wales, which counts Sydney as its capital, such approvals fell 5.9%, the most since February 2012.
  • Iran Talks Stall as Russia, West Spar Over Arms Restrictions. Talks on Iran’s nuclear program were deadlocked and set to miss another deadline as the Islamic Republic’s interlocutors argued over persistent differences, including lifting restrictions on arms sales. Senior officials involved in the negotiations said it was too late to reach a deal by Friday morning in Vienna, the last chance to qualify for a 30-day review in the U.S. Congress. An agreement after that would be subject to 60 days of scrutiny, pushing back the date when Iran could qualify for sanctions relief, its main objective.
  • Chinese Stocks Head for Biggest Two-Day Rebound Since 2008. Chinese stocks rallied, sending the benchmark index toward its biggest two-day jump since 2008, as a flurry of government measures to stem an equity rout started to take effect. The Shanghai Composite Index climbed 5.2 percent to 3,900.20 at 10:14 a.m., adding to Thursday’s 5.8 percent surge, as health-care, industrial and consumer companies advanced. Only two stocks fell on the benchmark gauge with about 49 percent of companies on mainland exchanges still halted from trading on Friday, down slightly from the previous day.
  • Asia Stocks Track Global Gains as Greece Proposal Spurs Optimism. Asian stocks rose, following gains in global equities, after Greece submitted a bailout proposal similar to that proposed by its creditors. The MSCI Asia Pacific Index climbed 0.1 percent to 140.85 as of 9:00 a.m. in Tokyo, trimming its decline this week to 3.8 percent, which would be the largest weekly drop since 2012.
  • PC Shipments Fall 9.5% as Companies Limit Tech Spending. Worldwide personal-computer shipments fell 9.5 percent in the second quarter, hurt by restrained corporate technology spending and the strength of the U.S. dollar, market researcher Gartner Inc. said. Manufacturers shipped 68.4 million units, compared with 75.6 million a year earlier, the steepest quarterly decline since the third quarter of 2013. U.S. unit sales fell to 15.1 million, down 5.8 percent, with desktop PCs hit particularly hard, Gartner said Thursday in a report. Researcher IDC also said shipments slumped in the period. The second quarter’s decline, following a 5.2 percent drop in the prior period, underscores the persistent challenges for PC makers in an increasingly mobile world dominated by smartphones and tablets.
  • Three Banks’ Too-Big-to-Fall Plans Hamper ETN Sales. At least three major U.S. banks trying to show they’re not too big to fail said they stopped issuing very short-term debt, halting growth in their exchange-traded note programs in a way that may put investors at risk of losses. Morgan Stanley, Citigroup Inc. and Goldman Sachs Group Inc. aren’t issuing new shares of their ETNs, which count as short-term debt because holders can typically redeem them on about a week’s notice, according to “living wills” submitted to the Federal Deposit Insurance Corp. and the Federal Reserve last month, details of which were released Monday. Existing shares will continue to trade. 
  • Citigroup Sees Student-Loan Bonds on Course for Disruptions. Top-rated securities backed by U.S. government-guaranteed student loans face cuts to as low as junk that may further roil the market for the debt, according to Citigroup Inc. A review by rating companies that may lead to downgrades is unlikely to take into consideration that in some instances the securities have sponsors such as Navient Corp. that can accelerate repayments by buying out the underlying loans. The rating drops, which could also be avoided by amending the deals’ maturities, could rock the market, Citigroup’s Mary Kane and Eugene Belostotsky wrote Thursday.
  • Apple Stock at Brink of Correction After Consecutive 2% Declines. Apple Inc. fell for a fifth day, posting its first consecutive 2 percent declines since 2013 and pushing shares to the brink of a 10 percent correction. The slide comes amid a rout in China’s market that is occurring two weeks before the company reports earnings. The iPhone maker’s stock decreased 2 percent to $120.07, bringing its five-day loss to 5.2 percent -- a drop that wiped out $38 billion of market value. Since reaching its all-time high of $133 on Feb. 23, the stock is down 9.7 percent, leaving it about 40 cents away from a correction.
Wall Street Journal: 
  • New Greek Proposal Appears Closer to Creditor Demands. Plan would raise taxes, overhaul pensions, but may not be enough to unlock a new bailout. A new Greek proposal for economic policy overhauls and budget cuts appears to have moved closer to creditors’ demands on some of the most divisive issues, but there was no immediate word on whether it would be enough to unlock a new bailout package. The 13-page plan, submitted Thursday night to Greece’s eurozone creditors, the... 
Fox News:
  • FBI head: Several potential attacks thwarted ahead of July 4. (video) FBI Director James Comey said Thursday that the agency believes it stopped potential acts of violence in the month before the July 4 holiday. Comey said authorities suspect that some of the more than 10 people arrested during that time were planning to commit violence tied to the holiday. But he declined during a wide-ranging discussion with reporters to describe any of the potential plots that might have been thwarted or to identify specific individuals the FBI thought might carry out an attack.
  • Barracuda Networks(CUDA) says fewer customers signed big storage contracts in 1st qtr; stock slumps. The cloud-based security and storage services provider said it didn't sign as many large and lengthy storage deals in the first quarter as it had in the previous quarter and said more customers chose virtual and cloud products. Barracuda Networks said it signed some more big storage contracts after the quarter ended. The company also said the strong dollar affected its results. Barracuda Networks Inc. stock declined $6.70, or 17.1 percent, to $32.42 in extended trading.
CNBC:
  • Greece asks for $59B in aid, IMF says it needs more. International Monetary Fund (IMF) Chief Economist Olivier Blanchard warned that Greece may require even more debt relief and funding than the 60 billion euros ($66 billion) the fund forecast only a few days ago.
  • FDA Strengthens Heart Safety Warnings on Painkillers. The warning covers drugs called nonsteroidal anti-inflammatory drugs or NSAIDS for short. They include ibuprofen, sold under brand names like Advil or Motrin; naproxen (Aleve), as well as prescription arthritis drugs known as COX-2 inhibitors, such as Celebrex. Tylenol, known generically as acetaminophen, is not an NSAID.
Zero Hedge: 
Business Insider: 
Reuters: 
  • China's companies at risk of stock-backed loan recalls. Chinese companies that borrowed money using shares as collateral may have to put up more assets or repay their debts, carrying the ripples from the stock market plunge into the wider economy. A near 30 percent collapse in share prices has started to endanger some businesses using such financing, and the country's banking regulator said on Thursday it would let financial institutions renegotiate lending terms in these circumstances.
Telegraph: 
Yonhap News:
  • Hyundai, Kia see China sales plunge in June. Hyundai Motor Co. and its smaller affiliate Kia Motors Corp. saw their combined sales in China plunge in June amid intensifying competition and a lack of new models, industry data showed Friday. Hyundai Motor, South Korea's largest carmaker, sold around 60,000 cars in China last month, down 30.8 percent from a year earlier. Kia Motors saw its China sales in June drop 26.5 percent on-year to some 38,000 units, according to the data.
Financial News:
  • BoCom Sees Little Room for China Rate Cut in 2H. There's little room for an interest rate cut in 2H as new loans my rise about 13% to about 10.5t yuan in 2015, citing Bank of Communications as saying. Financial News is a publication of China's central bank.
South China Morning Post:
  • China's sweeping national security law sparks uncertainty for foreign firms. German envoy warns of legal uncertainty and hurdles to investment. The mainland's sweeping national security law and a series of related laws in the making have created legal uncertainty for foreign companies and new hurdles for their investment, said Michael Clauss, the German ambassador to China.
Evening Recommendations 
Mizuho:
  • Rated (LNKD) Buy, target $240.
Night Trading
  • Asian equity indices are +.25% to +1.25% on average.
  • Asia Ex-Japan Investment Grade CDS Index 112.0 -5.75 basis points.
  • Asia Pacific Sovereign CDS Index 61.75 -2.75 basis points.
  • S&P 500 futures +.99%.
  • NASDAQ 100 futures +.94%.

Earnings of Note
Company/Estimate
  • None of note
Economic Releases
10:00 am EST
  • Wholesale Inventories for May are estimated to rise +.3% versus a +.4% gain in April.
  • Wholesale Sales for May are estimated to rise +.9% versus a +1.6% gain in April.
Upcoming Splits
  • None of note
Other Potential Market Movers
  • The Fed's Yellen speaking, Fed's Rosengren speaking, Wasde Crop report, UK Trade Balance report and the (PBY) annual meeting could also impact trading today.
BOTTOM LINE: Asian indices are mostly higher, boosted by healthcare and financial shares in the region. I expect US stocks to open modestly higher and to maintain gains into the afternoon. The Portfolio is 50% net long heading into the day.