Today's Headlines

Bloomberg: 

• Awkward Alliance Running Germany Exposed by Greek Crisis. In 2000, Angela Merkel pushed past Wolfgang Schaeuble on her way to the top of the political ladder. As finance minister, he’s won her pledge of a free hand in policy making in exchange for his loyalty. Now the awkward alliance that forms the core of Europe’s financial crisis-fighting effort is under its biggest strain yet. As officials prepare a third Greek bailout, Merkel is holding fast to the view that the 19-member currency union must stay intact. Schaeuble has pushed back, dangling the threat of expulsion to what he considered an untrustworthy government.

• European Banks Face Capital Hit From Second-Quarter Bond Selloff. The bond market selloff in the second quarter probably dented the capital defenses of many European banks, with lenders in Italy and Spain hit hardest. The extent of the damage will be disclosed when banks report earnings starting this week. It probably won’t be so much as to force lenders to sell shares, analysts at brokerages including Nomura Holdings Inc., Deutsche Bank AG and Citigroup Inc. agreed.

• Rating-Cut Angst Lurks as Brazil Stocks, Real Decline on Budget. Traders now have one more reason to expect a downgrade of Brazil’s credit rating. A press report saying President Dilma Rousseff will cut the primary budget surplus goal, which excludes interest payments, spurred the biggest slide in the world for the real and sank the Ibovespa. An earlier-than-estimated revision of the target is seen hurting the government’s credibility and worsening the outlook for an economy set for the worst recession in 25 years. The Ibovespa retreated 1.6 percent to 50,653.63 at 3:06 p.m. in Sao Paulo, led by lender Itau Unibanco Holding SA. The real slid 1.7 percent to 3.2240 per dollar, the most in two months.

• Russia Braces for Longest Recession in Decades With $50 Oil. For an economy that lives and dies by crude prices, the latest downturn in the world oil market means Russia’s recession may stretch into next year for the longest slump in two decades. Russia’s first economic slump since 2009 looked like it would plateau as oil gained 40 percent from a six-month low in January. Crude’s recovery has faltered in recent weeks, raising questions about government assurances that the economy will return to growth in 2016 and further squeezing a budget already on course for its widest deficit in five years.

• China's Bubbles Are a Big Challenge for Apple: Bevan. (video)

• ARM(ARMH) Revenue Misses Estimates as Smartphone Market Cools. ARM Holdings Plc, the chip designer whose technology powers almost all smartphones, reported sales that missed analysts’ estimates after device shipments by customers including Apple Inc. trailed predictions. Second-quarter revenue rose 22 percent to 228.5 million pounds ($356 million), the Cambridge, England-based company said Wednesday. Analysts had predicted 234.9 million pounds on average, according to data compiled by Bloomberg. 

• Emerging-Market Stocks Retreat as Apple Outlook Saps Tech Shares. Emerging-market stocks fell, led by technology companies, as Apple Inc.’s lower-than-forecast iPhone shipments and disappointing revenue forecast dragged down suppliers and Hong Kong-traded Chinese stocks slumped. Hon Hai Precision Industry Co., which makes iPhones for Apple, slid 1.6 percent in Taipei. Hong Kong’s Hang Seng China Enterprises Index sank to a one-week low. Naspers Ltd. led declines in South Africa. The Ibovespa fell for a fourth day as concern mounted that Brazil’s credit rating will be cut. Turkey’s lira slid 1 percent against the dollar after two police officers were killed in an attack along the Syrian border. The MSCI Emerging Markets Index declined 1 percent to 930.34 at 11:24 a.m. in New York.

• European Stocks Fall for Second Day Amid Apple Miss, Earnings. European stocks fell after Apple Inc.’s worse-than-forecast results dragged semiconductor companies lower and commodity producers deepened declines. Apple chip suppliers Dialog Semiconductor Plc and Infineon Technologies AG lost at least 5.2 percent. ARM Holdings Plc, whose technology is used in iPhones, tumbled 6.6 percent. The company’s quarterly revenue also missed estimates. BHP Billiton Ltd. slid 5.7 percent, leading a drop in miners, after saying petroleum, copper and coal output will drop in fiscal 2016. The Stoxx Europe 600 Index slipped 0.6 percent to 400.28 at the close of trading.

• Gold Rout Spreads to Copper, Tin and Zinc. Nothing is safe. The selloff in gold is infecting metal markets from copper to zinc and tin. “Commodities are not in vogue,” Daniel Briesemann, an analyst at Commerzbank AG in Frankfurt, said by e-mail. “The speculative financial investors are still withdrawing from the markets. The weakness of the precious metals prices is spilling over to the base metals.” Copper, zinc and lead fell more than 1 percent. The worst losses were in tin, which fell as much as 4.9 percent, the most this month.

• Commodity Losses Accelerate as Miners See Lows of 2009 Crisis. The commodities rout that’s pushed prices to a 13-year low pulled some of the biggest mining and energy companies below levels seen during the financial crisis. The FTSE 350 Mining Index plunged as much as 4.9 percent to the lowest since 2009 on Wednesday, with BHP Billiton Ltd. and Anglo American Plc leading declines. Gold and copper are near the lowest in at least five years, while crude oil retreated to $50 a barrel. “This commodity bear market is like a train wreck in slow motion,” said Andy Pfaff, the chief investment officer for commodities at MitonOptimal in Cape Town. “It has a lot of momentum and doesn’t come to a sudden stop.”

• This measure of copper is another bad omen for the commodities meltdown. A measure of demand for copper, the metal used in everything from power lines to electronics, is at the weakest in more than two years, signaling the meltdown that’s sweeping through commodity markets could get even worse. The number of requests to withdraw copper from London Metal Exchange warehouses relative to the level of global inventories tracked by the bourse dropped this week to the lowest since March 2013. That shows consumption has almost dried up for the stockpiles that have doubled over the past year.

• Americans Fleeing Pricey Cities as Foreigners Rush In. New York City, Los Angeles, Honolulu: They're all places you would think would be popular destinations for Americans. So it might come as a surprise that these are among the cities U.S. residents are fleeing in droves. Twenty metropolitan areas among the 100 most populous in the United States lost the greatest share of local people to other parts of the country between July 2013 and July 2014, according to a Bloomberg News analysis of U.S. Census Bureau data. The New York City area ranked second, just behind  El Paso, Texas. New York lost about a net 163,000 U.S. residents, closely followed by a couple surrounding suburbs in Connecticut. Honolulu ranked fourth and Los Angeles ranked 14th.

• Taxpayers Could Lose Billions If Students Walk Away From Loans. Cody Roderiques, a college senior, owes the federal government more than $100,000 for his student loans. He may not have to pay taxpayers back. That’s because the New England Institute of Art is vanishing around him. On the campus of the for-profit college near Boston, studios were shuttered, teachers lost their jobs and the school announced in May it was closing for good. Under U.S. law, the institution’s death might excuse Roderiques, who will graduate in December, from his loan debt.

Fox News:

• Boehner vows fight to scuttle Iran nuclear deal. (video)

ZeroHedge: 

• Nine Reasons Why Low Oil Prices May "Morph" Into Something Much Worse. (graph)

• Retail Investors' "Cult"-est Stocks.

• Subprime Auto Loan "Titan" Proclaims There's Nothing To Worry About.

• Forget Recession: According To Caterpillar There Is A Full-Blown Global Depression.

• Perhaps It Wasn't Such A Good Idea To Leave The Fate Of The Tech Bubble In The Hands Of Apple(AAPL). (graph)

• Retail Federation Slashes Sales Outlook By 15%, Blames "Deflationary Enviornment". (graph)

• Bonds Say Let The Rate Hikes Begin: 1Y Bills Sells At Highest Yield In 5 Years. (graph)

• In Case You Needed Any More Proof That There Is No Bond Market Liquidity Left...

• Will The Oil Patch Bust Trigger Recession? (graph)

• Ongoing Greece Deposit Run Forces ECB To Boost Greek ELA Ceiling Yet Again. (graph)

• WTI Back Below $50 After Inventory Build Takes Crude Stocks To Highest In 80 Years. (graph)

• Existing Home Prices Hit Record; Sales Soar To 8 Year High. (graph)

• It's Not Just Greece: Total European Debt Hits New All Time High. (graph) 

• Mind The Dow Divergence - Transports Are Signaling A Slump. (graph)

Bild:

• Germany's Krichbaum Says No Greek Aid Without Reforms. German CDU lawmaker Gunther Krichbaum, chairman of European Affairs committee in lower house of parliament, says Greece's implementation of reforms is being observed very closely and aim will only be released if terms are fulfilled, citing an interview. Krichbaum said Greek exit is still an option.

WirtschaftsWoche:

• Issing Says Greek Euro Exit Will Be Topic Again in Months. Former ECB chief economist Otmar Issing says a possible Greek exit from the euro region will be on the agenda again within months, citing an interview. "I don't think that a Grexit would be the beginning of the end of the euro," he said. "If Greece drops out, the others move together even more closely in order to avoid a similar fate. I'm convinced of that," While state bankruptcy laws are needed globally, they can't be applied to euro region members because "it would be absurd if a country that can't service its debt with the ECB would receive further loans for its banks from Frankfurt," Issing said. Loans to Greece are "largely lost", creditors are likely to extend maturities by several decades. "Officially this is not a haircut, but boils down to the same thing. At a company you'd call this accounting fraud," he said. Political union that would fix the euro area's shortcomings is not in sight. "I can't imagine that a majority would vote in favor of a political union - neither in France nor in Germany. Therefore, reforms aimed at an unattainable political union should be banned," Issing said.

Shanghai Securities News:

• China Securities Finance's Stake in Some Stocks Exceeded 5%. China Securities Finance Corp. transferred some shares to asset management account at fund co. after figuring out that its holdings in some stocks exceeded 5% of listed cos.' total equity, citing a company official. Shares transferred haven't been sold.

Caijing:

• China Mobile Cuts Managers' Pay by 20%-50%. Compensation of senior executives will be cut by as much as 50% while that of junior managers will be reduced by 20%, citing a pay cut plan released at co.'s interim meeting. The pay cut is implemented based on salary reform plan for managers at central government administered cos. announced earlier.

Bear Radar

Style Underperformer:

• Large-Cap Gowth -.56%

Sector Underperformers:

• 1) Semis -2.93% 2) Oil Service -2.31% 3) Steel -2.12%

Stocks Falling on Unusual Volume:

• BEAV, ARMH, FWRD, PEGI, ILMN, BHI, HCLP, TUP, GPRO, ASTE, LLTC, PII, FTI, CNMD, EXPO, BIIB, HAL, AAPL, ATI, PKX, NXPI, MEMP, BMI, OII, TXT, SXC, LXK, CAT, AN, MCHP, ABG, IPI, RDUS, ON, INVN, PII, CAM, SWKS, CRUS and ADI

Stocks With Unusual Put Option Activity:

• 1) MOS 2) UTX 3) ILMN 4) XLNX 5) CAT
  

Stocks With Most Negative News Mentions:

• 1) CHK 2) ADI 3) BIIB 4) CAT 5) BEAV
  

Charts:

• ETFs Falling on Unusual Volume

• Stocks Falling on Unusual Volume

Bull Radar

Style Outperformer:

• Small-Cap Growth +.08%

Sector Outperformers:

• 1) Homebuilders +2.18% 2) Restaurants +.99% 3) Medical Equipment +.97%
  

Stocks Rising on Unusual Volume:

• THOR, LPCN, DVAX, CMG, ISRG, CHKP, PKG, SEIC, NUAN, WHR, HUBG, MANH, PKG, IPG, HAWK and VMW

Stocks With Unusual Call Option Activity:

• 1) PNK 2) EIX 3) QRVO 4) ISRG 5) LOCK
  

Stocks With Most Positive News Mentions:

• 1) ISRG 2) CMG 3) MNST 4) CHFC 5) WHR
  

Charts:

• ETFs Rising on Unusual Volume 

• Stocks Rising on Unusual Volume

Morning Market Internals

NYSE Composite Index:

• Volume Running 14.3% Above 100-day average
• 5 Sectors Rising, 5 Sectors Declining
• 44.6% of Issues Advancing, 52.4% Declining
• 45 New 52-Week Highs, 264 New Lows
• 40.7% of Issues Above 200-day Moving Average
• Average 14-Day RSI 38.9
• Vix 12.29
• Total Put/Call .79
• TRIN/Arms 1.09

Wednesday Watch

Evening Headlines 

Bloomberg: 

• ECB Readies for Athens Return as Greek Banks Remain in Emergency. The European Central Bank is embarking on a third tour of duty in Athens, with victory less certain than ever. Officials holding a telephone call on Wednesday to discuss the Emergency Liquidity Assistance that keeps Greece’s financial system alive will be mindful that their decision is just a precursor to a bigger task. They’re about to send a team back to the Greek capital to monitor compliance with austerity policies -- honed over two previous rescues since 2010 -- that the government accepted in return for a bailout deal. The ECB has an interest in seeing Greece make good on its commitments, as the institution is embroiled there on multiple fronts from saving the banks to deciding when to include the nation in monetary stimulus. If the government of Prime Minister Alexis Tsipras fails to convince on reforms, the ECB will once again be burdened with the dilemma over whether it’s obliged to let the lenders collapse.

• China's Market Aftershock Felt in Global Earnings. (video)

• World’s Wildest Stock Market Submits to Communist Party Rule. It took three weeks of unprecedented government intervention, but Chinese authorities have finally managed to subdue the world’s wildest stock market. That’s the verdict from options traders, whose expectations of share-price swings on mainland exchanges have tumbled 48 percent since the end of June. In a market where daily fluctuations exceeding 3 percent had become the norm, this week’s moves of less than 1 percent in the Shanghai Composite Index have barely registered on the price charts. For bulls, the growing sense of calm is a key step toward restoring investor confidence after the Shanghai Composite lost as much as 32 percent from its June high. Bears point to the costs of intervention, including an exodus by international money managers and the moral hazard of backstopping one of the world’s most expensive stock markets. “The government has won the battle in terms of stemming the rout, but they’ve lost the war if you think of the bigger picture,” Megan Greene, the chief economist at Manulife Asset Management, whose parent company oversees about $648 billion worldwide, said in a Bloomberg Television interview in London. 

• Hyundai Motor's First-Half China Sales Slump 8.5%. Hyundai Motor Co.’s deliveries in China slumped 8.5 percent in the first half of this year, the latest foreign carmaker to report slowing demand in the world’s largest vehicle market. The South Korean automaker sold 513,784 vehicles in China in the first six months of this year, according to an e-mail from the company. Excluding imports, sales last fell in the second half of 2007, when deliveries slumped 24 percent.

• A $4 Trillion Force From China That Helped the Euro Now Hurts It. For almost a decade, China’s effort to diversify the world’s biggest foreign-exchange reserves supported the euro. Now, the almost $4 trillion force may be working against the single currency. China’s central bank depleted $299 billion of reserves in the year through June to keep the yuan from falling, offsetting the private sector’s sales of the currency for dollars amid a stock-market rout and faltering economy. The decline in reserves is the longest in People’s Bank of China data going back to 1993. It may mark the end of an era of accumulation that led the bank to buy euros as part of reducing reliance on the dollar.

• Chinese Stocks in Hong Kong Fall to Extend World’s Worst Losses. Chinese stocks fell in Hong Kong trading, adding to losses for the benchmark index that have made it the world’s worst performer this month. Hong Kong’s Hang Seng China Enterprises Index retreated 1.5 percent to 11,692.13 at 10:03 a.m. local time, heading for the steepest loss in a week. China Railway Group Ltd., the nation’s biggest construction company by total assets, and China Telecom Corp. slid more than 2 percent. GF Securities Co. led declines among brokerages with a 1.5 percent drop. The H-shares gauge has fallen 9.9 percent in July, making it the worst performer among major global benchmarks tracked by Bloomberg, after Chinese policy makers introduced a spate of measures to prop up equities. 

• Asia Stocks Drop With Nasdaq Futures on Apple’s Miss; Oil Slides. Asian stocks retreated with Nasdaq 100 Index futures as Apple Inc. tumbled in after-hours trade and the dollar held Tuesday’s losses. Oil resumed its decline while wheat sank for a ninth straight day. The MSCI Asia Pacific Index dropped 0.9 percent by 10:36 a.m. in Tokyo, with a rebound in the yen sending Japan’s Topix index down 1 percent.

• Commodity Rout Extends to Currencies Led Lower by Kiwi to Loonie. Janet Yellen is breaking up the six-year-long party in the currencies of economies tied to commodities, with New Zealand’s dollar suffering the worst hangover. The Federal Reserve chair’s determination to raise U.S. interest rates this year has seen the currencies of New Zealand, Australia, Canada and Norway underperform their developed-market peers in the past three months. The kiwi has lost 14 percent in that time, or more than the other three combined. The currencies are under pressure as commodity-exporting nations cut interest rates to support growth after raw-materials prices plunged 45 percent from their 2011 highs. None, though, will ease as aggressively over the next year as New Zealand, according to market-implied policy rates. Its Reserve Bank will start by lowering rates for a second straight meeting on Thursday, economist forecasts compiled by Bloomberg show.

• BHP(BHP) Fourth-Quarter Iron Ore Output Rises 6%. BHP Billiton Ltd., the world’s biggest mining company, said fourth-quarter iron ore output rose 6 percent to beat analysts’ estimates. Production was 60 million metric tons in the three months ended June 30, from 56.6 million tons a year earlier, Melbourne-based BHP said Wednesday in a statement. That compares with the 58.9 million tons median estimate of six analysts surveyed by Bloomberg. Total output will rise 6 percent to 247 million tons fiscal 2016. Total output in the year to June 30 was 233 million tons, it said.

• Tech Rally Unravelling With Apple Poised for $50 Billion Slump. The biggest technology rally since October was knocked cold, as disappointing earnings reports punished Microsoft Corp. and left Apple Inc. in danger of its worst-ever loss of market value. Five days after Google Inc.’s earnings sparked the largest one-day increase in market capitalization, computer and software shares are tumbling. Apple, Microsoft and Yahoo! Inc. retreated on disappointing results. Apple, the world’s most valuable company, dropped 6.7 percent, a slump that would wipe more than $50 billion from its value.

Wall Street Journal:

• Hedge Funds Gear Up for Another Big Short. Some money managers are looking to profit from potential trouble at some ‘alternative’ mutual funds and bond ETFs.

• Iran can easily stretch out the inspection of suspect nuclear sites for three months or more. The Obama administration assures Americans that the Iran deal grants access within 24 days to undeclared but suspected Iranian nuclear sites. But that’s hardly how a recalcitrant Iran is likely to interpret the deal. A close examination of the Joint Comprehensive Plan of Action released by the Obama administration reveals that its terms permit Iran to hold inspectors at bay for months, likely three or more.

Fox News:

• Army chief Odierno, in exit interview, says US could have ‘prevented’ ISIS rise. (video) The Army’s top officer told Fox News Tuesday it’s “frustrating” to watch the gains he helped achieve in Iraq disintegrate at the hands of the Islamic State, saying in an exit interview that the chaos now unfolding “might have been prevented” had the U.S. stayed more engaged.

• British charge Muslim man in plot against U.S. military, trying to join ISIS. (video) A Muslim delivery driver used his rides to scout the largest U.S. air base in Britain, all the while planning to run over an American serviceman, kill him with a knife and detonate a suicide vest, according to UK prosecutor Mark Dawson.

MarketWatch.com: 

• Microsoft(MSFT) reports biggest-ever quarterly loss. Microsoft Corp. said its revenue fell 5.1% in its latest quarter, hurt by continued weak PC demand, and posted its biggest quarterly loss ever on a hefty write-down and other items related to the Nokia mobile-phone business acquired last year.

CNBC:

• Apple's(AAPL) real earnings problem: The forecast. (video)

• DOJ approves massive AT&T, DirecTV merger.

Zero Hedge: 

• China's Record Dumping Of US Treasuries Leaves Goldman Speechless. (graph)

• Chinese Stocks Slide Into Red After Business Sentiment Crashes To 6-Year Lows. (graph)

• Wall Street Prepares To Reap Billions From Another Main Street Wipe Out.

• 470,000 Vehicles At Risk After Hackers "Take Control & Crash" Jeep Cherokee From A Sofa 10 Miles Away.

• You Are Here. (graph)

• US Economic 'Hope' Plunges To 10-Month Lows. (graph)

• Gold Warns Again. (graph)

• Obamanomics? More Chidren Live In Poverty Now Than During Crisis.

• Apple(AAPL) Plunges Despite EPS Beat On iPhone Sales Miss, Drop In China Sales, Weak Guidance And Strong Dollar Warning. (graph)

• 'Buffett' Says Sell; BofAML Asks, Should We Listen? (graph)

• Dollar Dumped & Stocks Thumped As Bonds & Bullion Bounce. (graph)

Business Insider: 

• Chipotle(CMG) sales miss.

• 2016 presidential candidates are starting to talk about the $18.6 trillion national debt.

• Crude oil rail shipments are way off track. (graph)

• Toyota is holding off building the Lexus brand in China because of the country's stalled auto market.

Reuters: 

• Intuitive Surgical(ISRG) posts 30 pct rise in profit. Robotic surgical equipment maker Intuitive Surgical Inc reported a better-than-expected quarterly profit and forecast surgical procedures to grow 11 to 13 percent this year, sending its shares up 13 percent.

• Higher costs to attract eyeballs weigh on Yahoo(YHOO) forecast. Yahoo Inc forecast lower-than-expected revenue for the current quarter as it struggles to revive its core online advertising business and spends more to attract users to its websites. Shares of Yahoo were marginally down at $39.34 in after-market trading.

• Deeper back-to-school discounts to hurt teen clothing retailers.

Financial News:

• China Researcher Sees Lower Potential Growth in Next 5 Years. China's potential economic growth for 2016-2020 may slow to around 6%-6.5%, as earlier high growth driven by investment and exports would be unsustainable, HKEx chief China Economist Ba Shusong writes in article. China may see L-shaped recovery in economic growth, rather than V-shaped rebound, Ba wrote.

Netease:

• China Regulators to Evaluate Banks' Equity Investments. People's Bank of China and China Banking Regulatory Commission have ordered commercial banks to assess their equity investment, citing a person familiar with the matter. Regulators aim to stress test risk exposure of banks' equity investment.

Evening Recommendations 

• None of note

Night Trading

• Asian equity indices are -1.0% to -.25% on average.

• Asia Ex-Japan Investment Grade CDS Index 106.25 +.75 basis point.

• Asia Pacific Sovereign CDS Index 58.25 +1.0 basis point.

• S&P 500 futures -.41%

• NASDAQ 100 futures -1.2%.

Morning Preview Links

Earnings of Note

Company/Estimate

• (ABT)/.50

• (ARMH)/.07

• (AN)/1.02

• (BA)/1.39

• (KO)/.60

• (EMC)/.41

• (ITW)/1.28

• (OC)/.54

• (STJ)/1.00

• (WHR)/2.61

• (AXP)/1.33

• (CAKE)/.62

• (CCI)/1.06

• (FFIV)/1.60

• (LVS)/.61

• (NEM)/.26

• (OII)/.68

• (QCOM)/.95

• (RJF)/.89

• (SNDK)/.34

• (TXN)/.70

• (TSCO)/1.11

• (WFT)/-.12

• (XLNX)/.54

Economic Releases

9:00 am EST

• The FHFA House Price Index for May is estimated to rise +.4% versus a +.3% gain in April.
  

10:00 am EST

• Existing Home Sales for June are estimated to rise to 5.4M versus 5.35M in May.

10:30 am EST

• Bloomberg consensus estimates call for a weekly crude oil inventory decline of -1,450,000 barrels versus a -4,346,000 decline the prior week. Gasoline supplies are estimated to rise by +565,000 barrels versus a +58,000 barrel gain the prior week. Distillate inventories are estimated to rise by +1,680,000 barrels versus a +3,819,000 barrel gain the prior week. Finally, Refinery Utilization is estimated to fall by -.09% versus a +.6% gain prior.
  

Upcoming Splits

• (ETE) 2-for-1

• (AZN) 2-for-1

Other Potential Market Movers

• The UK inflation report, BoE Meeting Minutes, (CPB) investor day and the weekly MBA Mortgage Applications report could also impact trading today.

BOTTOM LINE: Asian indices are lower, weighed down by industrial and technology shares in the region. I expect US stocks to open lower and to maintain losses into the afternoon. The Portfolio is 25% net long heading into the day.

Stocks Falling into Final Hour on Global Growth Fears, Earnings Outlook Concerns, European/US High-Yield Debt Angst, Tech/Defense Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Lower
  

• Sector Performance: Most Sectors Declining
  

• Volume: Below Average

• Market Leading Stocks: Performing In Line

Equity Investor Angst:

• Volatility(VIX) 12.71 +3.76%

• Euro/Yen Carry Return Index 141.68 +.80%

• Emerging Markets Currency Volatility(VXY) 8.20 -1.20%

• S&P 500 Implied Correlation 59.93 +1.70%

• ISE Sentiment Index 78.0 -45.83%

• Total Put/Call .93 +2.20%

• NYSE Arms .92 -18.27% 

Credit Investor Angst:

• North American Investment Grade CDS Index 66.77 +1.38%

• America Energy Sector High-Yield CDS Index 1,530.0 +1.01%

• European Financial Sector CDS Index 67.76 +1.95%

• Western Europe Sovereign Debt CDS Index 21.11 +3.05%

• Asia Pacific Sovereign Debt CDS Index 58.35 +1.97%

• Emerging Market CDS Index 299.92 -.49%
  

• iBoxx Offshore RMB China Corporates High Yield Index 120.46 +.09%

• 2-Year Swap Spread 25.75 unch.

• TED Spread 27.5 -.75 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -20.5 +.75 basis point

Economic Gauges:

• 3-Month T-Bill Yield .03% unch

• Yield Curve 166.0 -1.0 basis point

• China Import Iron Ore Spot $52.10/Metric Tonne -.55%

• Citi US Economic Surprise Index -13.2 +1.6 points

• Citi Eurozone Economic Surprise Index 9.2 +3.6 points

• Citi Emerging Markets Economic Surprise Index -9.8 +.3 point

• 10-Year TIPS Spread 1.83 unch.
• # of Months to 1st Fed Rate Hike(Morgan Stanley) 5.19 -.37

Overseas Futures:

• Nikkei 225 Futures: Indicating -142 open in Japan 
• China A50 Futures: Indicating -430 open in China

• DAX Futures: Indicating -25 open in Germany

Portfolio: 

• Slightly Lower: On losses in my tech/biotech/retail sector longs

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

• Market Exposure: Moved to 25% Net Long