Today's Headlines

Bloomberg:

• Sluggish Global Sales Damp U.S. Earnings From Caterpillar(CAT) to 3M(MMM). Sluggish international markets are damping earnings at U.S. industrials giants. Caterpillar Inc., the largest manufacturer of construction and mining machinery, cut its full-year sales forecast Thursday, saying important end-user industries remain weak. 3M Co. reduced the top end of its 2015 profit and revenue, citing lower-than-expected global economic growth. The earnings season has been spotty for U.S. companies so far. Earnings per share at Standard & Poor’s 500 Index companies probably slumped 5.3 percent in the second quarter, according to analysts’ estimates, weighed down by tumbling oil and commodities prices and slow global economic growth. Excluding the energy industry, S&P 500 profits rose just 1.5 percent, analysts estimate.

• Why ISI's Straszheim Says Beware the China Stock Market. (video)

• China’s Intervention Disturbing for Investors: Lacaille. (video)

• ECB Deadline Looms for Greece as the Troika Heads Back to Athens. Greek Prime Minister Alexis Tsipras’s 4 a.m. win in Parliament sets the clock ticking on yet another make-or-break deadline: this time it’s Aug. 20, when Greece has to make its next major payment to the European Central Bank.

• Japan’s Debt Risks Surge to Triple GDP Without Change, IMF Says. Japan’s debt is unsustainable and could climb to almost three times the size of its economy by 2030 unless the government does more to cut its budget, the International Monetary Fund said. The government should consider rules to curb spending, limits on extra budgets and independent assessments of its projections, the IMF said. Reliance on optimistic economic assumptions risks harming confidence in its plan to put the budget into surplus, excluding interest payments, by 2020, according to a report released on Thursday in Washington.  

• Which Countries Are at Risk in the Commodities Rout? (video)

• Real Slumps to Four-Month Low Amid Brazilian Budget Capitulation. Brazil’s real sank to a four-month low and led global declines after the government said it will fail to meet its fiscal targets, adding to concern the nation is facing a credit downgrade. The real dropped 1.9 percent to 3.2866 per dollar at 1:03 p.m. in Sao Paulo, the weakest level on a closing basis since March 19. The decline was the biggest among 31 major currencies tracked by Bloomberg.

• This Dollar Chart Is Bad News for Emerging Markets. (graph) Commodities crash or credit crunch, a rising U.S. dollar doesn’t look good for EM. If history is any guide, emerging markets are headed for trouble as the dollar strengthens. 

• Emerging Stocks, Currencies Drop on Fed Outlook After Jobs. Emerging-market stocks and currencies fell for a second day as a plunge in U.S. jobless claims bolstered the case for the Federal Reserve to increase the near-zero interest rates that have supported demand for riskier assets. The real sank to a 12-year low as Brazil’s finance minister lowered the government’s fiscal target, adding to concern the nation is facing a credit downgrade. OAO Gazprom led Russian energy producers lower as oil traded near the lowest level in three months. Turkish stocks and the lira declined amid more violence near the Syrian border. Chinese stocks rose for a sixth day and volatility fell as traders bet government intervention to support equities is working. The MSCI Emerging Markets Index fell 0.7 percent to 924.35 at 11:30 a.m. in New York.

• European Stocks Decline as Energy Drop Outweighs Credit Suisse. (video) European stocks fell for a third day as a decline in energy shares outweighed better-than-expected results from Credit Suisse Group AG and Unilever. Oil-and-gas stocks contributed the most to the Stoxx Europe 600 Index’s drop, with BP Plc retreating 1.4 percent. Credit Suisse rose 6.2 percent after quarterly profit beat estimates. Unilever climbed 1.6 percent after the maker of Magnum ice cream reported higher-than-forecast sales growth. The Stoxx 600 slid 0.5 percent to 398.1 at the close of trading, after earlier rising as much as 0.6 percent. The volume of shares changing hands was 18 percent lower than the 30-day average. 

• Indonesia Coal Exports Suffer Most as Chinese Demand Falls. (graph)

• Jobs Machine From Canada Oil Slows as Robots Add to Price Slump. In addition to the market rout, the father of two now worries about the self-driving trucks Suncor Energy Inc. is rolling out in its oil-sands mining operations that will replace workers like him to save companies money.

• World’s Top Iron-Ore Miner Presses on Output as Price Slide. Vale SA boosted iron-ore production last quarter to the second-highest ever for the company, exceeding analyst estimates and worsening a supply glut that saw prices of the steelmaking ingredient collapse. Iron-ore output rose 7.4 percent to 85.3 million metric tons in the quarter through June 30, compared with 79.4 million tons a year ago, the company said in a statement Thursday. The result, which excludes third-party purchases and operations at a venture with BHP Billiton Plc, topped the 82.5 million-ton average of eight analyst estimates compiled by Bloomberg.

• Oil Warning: The Crash Could Be the Worst in More Than 45 Years. (video) There's only one thing holding back a price rebound. It's a big thing. Morgan Stanley has been pretty pessimistic about oil prices in 2015, drawing comparisons with the some of the worst oil slumps of the past three decades. The current downturn could even rival the iconic price crash of 1986, analysts had warned—but definitely no worse. This week, a revision: It could be much worse.

• Moody’s Says Low Oil Price Here to Stay as Russia Bleeds Capital. Low oil prices are just the tip of what ails Russia, according to Moody’s Investors Service. With its dependence on commodities and a slump in investment, Russia will have a hard time recovering from its record economic slump as global oil prices are bound to remain lower for a long time, Yves Lemay, managing director in the sovereign risk group at Moody’s in London, said in an interview on Wednesday. As much as a quarter of Russia’s gross domestic product and two-thirds of its exports are linked to the energy industry, according to the rating company.

• Oil Rigs Left Idling Turn Caribbean Into Expensive Parking Lot. Imagine parking your $300 million boat for months out in the open sea, with well-paid mechanics hovering around it and the engine running. The Gulf of Mexico and the Caribbean Sea have become a garage for deepwater drillships -- at a cost of about $70,000 a day each. It’s either that or send your precious rig to a scrapyard. The dilemma underscores how an offshore industry that geared up for an oil boom is grappling with a bust.

• Nikkei to Buy Pearson's FT for $1.3 Billion. (video) After almost six decades of stewardship of one of Britain’s most storied institutions -- the Financial Times -- Pearson Plc is selling the business daily to Japan’s biggest financial news group.

ZeroHedge:

• Schaeuble – The Man Behind The Throne. 

• China Spends 10% Of GDP On "All Bark, No Bite" Stock Bailout.

• 30Y Treasury Yield Breaks Below 3.00% - Retraces "Greece Is Fixed" Sell-Off. (graph)

• Has The Land War Begun: Turkish Tanks Are Firing Into Syria. 

• Central Banks Have Shot Their Wad - Why The Casino Is In For A Rude Awakening, Part I. (graph)

• "No Longer Confined To The Lunatic Fringe": SocGen Admits Markets Are Completely Manipulated.

• Commodity Carnage Continues - Copper Crashes To 6 Year Lows. (graph)

• WTI Crude Tumbles To $48 Handle, Energy Stocks At Dec 2012 Lows. (graph)

• "Fannie & Freddie Are Back; Bigger & Badder Than Ever" - NYTimes Warns.

•  Jobless Claims "Good News" Is Bad News - Dow Dumps Into Red For 2015. (graph)

• Bridgewater's Ray Dalio Loses His Cool On China: "There Are No Safe Places Left To Invest".

• Why Most Companies "Beat" Earnings Expectations - Explained In One Chart. (graph)

• JPY Slides After IMF Warns Debt Is "Unsustainable". (graph)

• Even The Stronger Areas Of The Market Are Starting To Weaken. (graph)

• Caterpillar(CAT) Explains Why It Is A Global Recession.

• Grexit Remains Most Likely Outcome For JPMorgan.

Telegraph:

• Why 'whatever it takes’ just isn’t going to work for the euro anymore. The trouble is that, while solving a financial crisis, Mario Draghi created an economic one.

Deutschlandfunk:

• German Lawmaker 'Skeptical' About Greek Reforms. German lawmaker Gunther Krichbaum says he's "skeptical" that Greek reform steps passed in parliament will be fully implemented, citing an interview. Negotiations with Greek govt about a third bailout program will be "very, very difficult," outcome is open. Says he's skeptical that Greek govt will take "ownership" of reform steps, citing comments by Greek Prime Minister Alexis Tsipras that govt was forced to agree to reforms it doesn't believe in.

Bear Radar

Style Underperformer:

• Small-Cap Value -1.34%

Sector Underperformers:

• 1) Gold & Silver -4.06% 2) Road & Rail -3.51% 3) Oil Tankers -2.71%

Stocks Falling on Unusual Volume:

• DFRG, CUBI, SCSS, CVA, CAB, DST, LHO, URI, QSII, RDUS, TBI, WCC, DGLY, BCC, DNKN, DLB, HDS, NTCT, R, FCX, CFX, CHSP, HZO, WRLD, IVC, AXP, HLT, HST, IDXX, TCBI, CAT, MMM, DFS, BKS, COP, CHSP, DOW, GMT, ZFGN, R, WCC, UNP, DYN, ADS, PEB, HTZ, FCX, HEES, LHO and WRLD

Stocks With Unusual Put Option Activity:

• 1) PTEN 2) JNPR 3) AXP 4) GPS 5) CAT
  

Stocks With Most Negative News Mentions:

• 1) STJ 2) HTZ 3) CAT 4) UNP 5) QCOM
  

Charts:

• ETFs Falling on Unusual Volume

• Stocks Falling on Unusual Volume

Bull Radar

Style Outperformer:

• Mid-Cap Growth -.13%

Sector Outperformers:

• 1) Networking +1.79% 2) Computer Hardware +1.47% 3) Semis +1.28%
  

Stocks Rising on Unusual Volume:

• CARA, FTK, CRUS, AFOP, SNDK, ADPT, INFN, FTNT, UA, FBHS, ASPS, FFIV, RTN, CY, SRNE, USG, CUDA, LUV, GM and RS

Stocks With Unusual Call Option Activity:

• 1) XRX 2) NTAP 3) INFN 4) ADI 5) BCEI
  

Stocks With Most Positive News Mentions:

• 1) SNDK 2) CRUS 3) FTNT 4) LUV 5) UA
  

Charts:

• ETFs Rising on Unusual Volume 

• Stocks Rising on Unusual Volume

Morning Market Internals

NYSE Composite Index:

• Volume Running 13.0% Above 100-day average
• 4 Sectors Rising, 6 Sectors Declining
• 49.4% of Issues Advancing, 46.7% Declining
• 88 New 52-Week Highs, 177 New Lows
• 41.4% of Issues Above 200-day Moving Average
• Average 14-Day RSI 39.2
• Vix 11.87
• Total Put/Call .73
• TRIN/Arms 1.21

Thursday Watch

Evening Headlines 

Bloomberg: 

• Greece Approves EU Demands in Order to Keep the Euro. Greece passed a second bundle of policy measures demanded by the country’s European creditors as Prime Minister Alexis Tsipras urged lawmakers to stop the country being forced out of the euro. Tsipras won the support of at least 151 lawmakers in a televised, public vote in the 300-seat parliament in Athens for a bill that will simplify court decisions and transpose European rules on failing banks. Echoing the rhetoric of the predecessors he once demonized, Tsipras said he’ll implement the creditors’ program even though he thinks the policies being imposed are wrong. He insisted he’ll do everything he can to improve the final deal. 

• Catalans Spur the Remaking of Spain With Battle for Independence. Catalonia’s bid for independence has opened the floodgates: Now all Spain’s major parties are looking to remake the way the way the state’s power is carved up. Catalan President Artur Mas plans to use voting for the region’s parliament on Sept. 27 -- weeks before national elections are due -- as a de-facto referendum on leaving Spain. Just as the Scottish independence movement has prompted a rethink of how the U.K. is governed, Spain’s national parties are responding with plans to prevent the disintegration of a country whose mainland borders are unchanged since the 17th century. 

• China Auto Market in ‘Downward Spiral,’ Japan Group Says. China’s vehicle market has shown signs of a “downward spiral” that will eventually hit Japanese carmakers, according to the head of Japan’s auto association. “There’s excessive competition and carmakers are building excessive capacity, and to raise utilization of the plants, they will engage in excessive selling,” Fumihiko Ike, chairman of Japan Automobile Manufacturers Association, told reporters in Tokyo Thursday. Japanese automakers are coming off a record first-half in China, cementing a comeback from anti-Japanese protests in 2012, even as competitors like Volkswagen AG and Hyundai Motor Co. posted sales declines. The gains are a bright spot in the world’s largest car market, which is headed for the slowest expansion in four years as economic growth moderates and cities cap vehicle registrations. The slump in demand has prompted automakers to cut prices, threatening profit margins.

• Does China Have Bigger Problems Than the Stock Market? (video)  

• Who Are China's Lucky Retail Investors? (video)

• Fitch Sees Risk in Japan Relying on Growth for Debt Reduction. Fitch Ratings Ltd. said Japan’s increasing reliance on economic growth to cut its debt burden exposes the nation to greater risks. Relying on growth as the “primary engine of fiscal stabilization is riskier” than focusing on reducing deficits and government borrowing, Andrew Colquhoun, Fitch Ratings’ head of Asia-Pacific sovereign ratings, said in an interview in Tokyo on July 21. The government’s target of a primary budget surplus five years from now “is a bit of a tall order,” he said.

• Asian Stocks Rise as Japan Rally Counters Drop in Mining Shares. Asian stocks rose as a rally in Japanese equities countered a decline in mining shares amid a deepening commodities rout. The MSCI Asia Pacific Index gained 0.1 percent to 143.76 as of 9:05 a.m. in Tokyo. A gauge of commodities returned to a 13-year low, with a rout that started in gold infecting other metals, oil and farm products. 

• Copper Slumps to Two-Week Low as Goldman Gets Even More Bearish. Copper dropped to the lowest in two weeks after Goldman Sachs Group Inc. cut its forecasts and said China’s demand will grow at the slowest in almost two decades. Goldman Sachs lowered its copper price outlook by as much as 44 percent through 2018 as consumption in China weakens and supply expands faster than expected. The bank’s gloomier forecasts on Wednesday came amid a fresh rout in commodities markets, as industrial metals, gold and iron ore tumbled. 

• Cotton Stockpiles in India Swell to Record as China Cuts Imports. Cotton stockpiles in India are poised to jump to a record as exports plunge and a revival in monsoon rains boost crop prospects. Inventories will surge 25 percent to 7.39 million bales by October from 5.89 million a year earlier, the Cotton Association of India estimates. That would be the highest ever, data from the nation’s Cotton Advisory Board show. The surplus may further widen with next year’s harvest likely to be a near record 40 million bales, according to trader Gill & Co.

• Distressed-Debt Market Upended Amid Deepening Commodities Rout. The worst commodities slump in 13 years is wreaking havoc for investors seeking to profit from companies in distress. Distressed bonds have lost 8.2 percent this month as oil and coal prices slid, bringing this year’s loss to 12.2 percent, according to a Bank of America Merrill Lynch index that tracks the debt. The securities are on pace to lose more than 20 percent for the second straight year, the worst performance since 2008. SandRidge Energy Inc. bonds have lost almost 30 percent since June, while notes of miner Cliffs Natural Resources Inc. are down more than 27 percent.

• Fed September Liftoff Odds Stay at 50% Despite Global Troubles. Forget the world crises. Six weeks of international turmoil from Greece to China have had zero impact on economists’ outlook for the first Federal Reserve rate rise. Odds for a September liftoff remain at 50 percent, exactly where they were in June, according to the median of 46 responses in a July 20-22 survey. They assigned 40 percent odds to a later move and saw no chance of a decision when the Federal Open Market Committee gathers July 28-29 in Washington. The outlook for a September move remained intact even as crises in Greece and China temporarily rocked markets and dimmed global economic prospects. Now that those concerns have eased, U.S. policy makers can focus on their dual mandate for full employment and low, stable inflation at home.

Wall Street Journal: 

• Giant Hedge Fund Bridgewater Flips View on China: ‘No Safe Places to Invest’. Investment firm warns that recent stock gyrations will have broad, negative repercussions. The world’s biggest hedge fund has turned on the world’s fastest-growing economy. Bridgewater Associates LP, one of Wall Street’s more outspoken bulls on China, told investors this week that the country’s recent stock-market rout will likely have broad, far-reaching repercussions.

• Bank of America(BAC) Financial Chief Exits as Part of Shake-Up. Some had seen Financial Chief Bruce Thompson as heir apparent to CEO Brian Moynihan.

• Apple(AAPL) Cuts Annual Spending Forecast By $1 Billion. Reduction comes on more efficient spending on tooling gear and facilities; no product changes planned.

• The Calamity of Obama’s Iran Deal by Mitt Romney. If the ayatollahs have a nuclear weapon, they will use it. Now they’re on the path to get one. When giving Moses the Ten Commandments, God says that he will “visit the iniquity of the fathers upon the children unto the third and fourth generation.” Of course, God doesn’t have to punish these later generations himself; rather, the perils that follow are the natural course of events. Bad actions or bad choices made by one generation lead

Fox News:

• Seattle sees fallout from $15 minimum wage, as other cities follow suit. (video) Evidence is surfacing that some workers are asking their bosses for fewer hours as their wages rise – in a bid to keep overall income down so they don’t lose public subsidies for things like food, child care and rent.

MarketWatch.com: 

• Here’s the real reason the Fed wants to raise rates. Federal Reserve policy makers are hoping, even praying, that no unexpected domestic development or international crisis intervenes to prevent them from taking the first baby step to normalize interest rates at the Sept.16-17 meeting. Why? Fed officials point to a number of reasons: the unnatural state of a near-zero benchmark rate; the potential risk of financial instability; an improving labor market; diminishing headwinds; and yes, expectations of 3% growth just over the horizon.

CNBC:

• Qualcomm(QCOM) cuts workforce by 15%; stock turns down. (video) Qualcomm announced Wednesday that it would cut its workforce by about 15 percent contributing to a total of $1.4 billion in cost reductions. It also announced changes to its board and executive compensation. Shares were up as high as 2 percent in extended trading before reversing to a drop of nearly 2.5 percent. 

• Cigna(CI) shares spike on Anthem(ANTM) takeover report. Cigna shares rose more than 6 percent in the after-hours session. The stock closed Wednesday at about $151.

Zero Hedge:

• "Far Worse Than 1986": The Oil Downturn Has No Parallel In Recorded History, Morgan Stanley Says. 

• First China Arrests "Sellers", Now Bans "Defaulters" From Traveling.

• "It's Laughable Really": Why No One, Especially Not Jamie Dimon, Will Be Held Accountable For London Whale.

• A Middle-East Game Of Thrones.

• Americans Are Fleeing These US Cities In Droves. (map)

• Kiwi Pops After RBNZ Cuts Rates, Citing Commodity Price Pressures.

• 12 Ways The Economy Is In Worse Shape Now Than During The Depths Of The Last Recession.

• Commodisaster. (graph)

Business Insider: 

• New York City mayor drops Uber vehicle cap.

• YouTube just poached an MTV bigwig to jumpstart its plan to take on television.

• China is having a massive impact on Australia’s economy and it could get bigger.

• It's been a crappy earnings season for the Dow.

• The death of US coal. After decades of strong financial numbers and dominance in the electric power sector, coal producers are starting to fall apart faster than anyone could have anticipated. SNL Financial has produced some jaw dropping data on the quickly deteriorating coal industry, with a horrific performance in the second quarter.

• The first entitlement crisis is only a year away.

• Debt is destroying the fracking revolution.

• Here's another sign China's economy is slowing fast.

Reuters:

• Texas Instruments(TXN) revenue forecast misses on weak chip demand. Texas Instruments Inc forecast third-quarter revenue below analysts' expectations due to weak demand for its chips used in PCs and industrial and communications equipment. The company, which also reported lower-than-expected revenue for the second quarter, said its communications business was hurt by weak demand from wireless base stations. Chief Financial Officer Kevin March said the company did not expect any recovery in communications or PC markets in the current quarter. "With industrial slowing a bit like it did in the second quarter, we are expecting that our third quarter will be probably a little bit weaker than we would normally expect at this time of the year," March told Reuters.

• Spurt in retail sales helps SanDisk(SNDK) beat profit expectations. Data storage products maker SanDisk Corp reported a quarterly profit that was double what analysts had expected, helped by higher retail sales and new products. The company's shares rose 13 percent to $61.20 in after-market trading on Wednesday.

• F5 Networks(FFIV) revenue, profit beat as services income jumps. Network equipment maker F5 Networks Inc reported higher-than-expected quarterly revenue and profit as it earned more from services including cybersecurity and data traffic management. F5's revenue from its services business rose 15.5 percent to $234.8 million in the third quarter, accounting for nearly half of its total revenue. Shares of the company, which also forecast current-quarter profit above analysts' expectations, rose 6 percent in extended trading on Wednesday.

• U.S.-based domestic stock funds post huge outflows -ICI.

• U.S. senator urges probe of Apple's music streaming practices. A U.S. senator wants two federal agencies to investigate whether Apple Inc is breaking antitrust law in how it treats music services that compete with the streaming service it launched in June. Democratic Senator Al Franken in a letter on Wednesday said that he was concerned that some Apple practices could limit choices and raise prices for consumers. The letter was sent to Attorney General Loretta Lynch and Federal Trade Commission Chairwoman Edith Ramirez.

Telegraph:

• Capital exodus from China reaches $800bn as crisis deepens. China is reverting to credit stimulus after attempts to engineer a stock market boom failed horribly. The day of reckoning is delayed again.

Caixin:

• Some China Automakers Cut July Vehicle Output Target. FAW-Volkswagen cuts vehicle output target by ~30,000 units from ~100,000 units, citing people familiar with the matter. A production base of SAIC-GM cuts July output target by ~40% from earlier plan. Changan Ford also cuts production target for July, according to the report.

Evening Recommendations 

• None of note

Night Trading

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

• Asia Ex-Japan Investment Grade CDS Index 106.0 -.25 basis point.

• Asia Pacific Sovereign CDS Index 59.0 +.75 basis point.

• S&P 500 futures +.20%.

• NASDAQ 100 futures +.31%.

Morning Preview Links

Earnings of Note

Company/Estimate

• (MMM)/1.99

• (ALK)/1.73

• (ADS)/3.25

• (ABC)/1.15

• (BSX)/.21

• (BMY)/.36

• (CAB)/.62

• (CAM)/.77

• (CAT)/1.27

• (CELG)/1.21

• (CMCSA)/.84

• (CS)/.54

• (CY)/.13

• (DHR)/1.04

• (DOW)/.82

• (DNKN)/.48

• (LLY)/.74

• (FCX)/.08

• (GM)/1.08

• (GNTX)/.25

• (KMB)/1.36

• (MCD)/1.24

• (NUE)/.25

• (PTEN)/-.27

• (PHM)/.27

• (DGX)/1.23

• (RS)/1.11

• (R)/1.62

• (SNA)/2.00

• (LUV)/1.02

• (TROW)/1.20

• (UA)/.05

• (UNP)/1.35

• (UAL)/3.31

• (VRX)/2.47

• (ALTR)/.25

• (AMZN)/-.13

• (T)/.63

• (COF)/1.97

• (CB)/1.86

• (ETFC)/.27

• (JNPR)/.40

• (MXIM)/.39

• (RHI)/.66

• (SBUX)/.41

• (V)/.58

Economic Releases

8:30 am EST

• Chicago Fed National Activity Index for June is estimated to rise to -.05 versus -.17 in May. 

• Initial Jobless Claims are estimated to fall to 278K versus 281K the prior week.

• Continuing Claims are estimated to rise to 2240K versus 2215K prior.
  

10:00 am EST

• The Leading Index for June is estimated to rise +.3% verssu a +.7% gain in May.

11:00 am EST

• The Kansas City Fed Manufacturing Activity Index for July is estimated to rise to -5.0 versus -9.0 in June.
  

Upcoming Splits

• (ETE) 2-for-1

• (AZN) 2-for-1

Other Potential Market Movers

• The China Manufacturing PMI, Japan Manufacturing PMI, UK retail sales report, $15B 10Y TIPS auction, weekly Bloomberg Consumer Comfort Index and the weekly EIA natural gas inventory report could also impact trading today.

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

Stocks Lower into Final Hour on Earnings Outlook Worries, Global Growth Fears, European/US High-Yield Debt Angst, Tech/Commodity Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Modestly Lower
  

• Sector Performance: Mixed
  

• Volume: Slightly Below Average

• Market Leading Stocks: Performing In Line

Equity Investor Angst:

• Volatility(VIX) 12.17 -.41%

• Euro/Yen Carry Return Index 141.32 -.22%

• Emerging Markets Currency Volatility(VXY) 8.38 +2.44%

• S&P 500 Implied Correlation 58.59 -.75%

• ISE Sentiment Index 88.0 +1.15%

• Total Put/Call .82 -11.83%

• NYSE Arms .97 -7.22% 

Credit Investor Angst:

• North American Investment Grade CDS Index 68.14 +2.37%

• America Energy Sector High-Yield CDS Index 1,526.0 -.35%

• European Financial Sector CDS Index 69.43 +2.48%

• Western Europe Sovereign Debt CDS Index 22.37 +5.94%

• Asia Pacific Sovereign Debt CDS Index 59.01 +1.13%

• Emerging Market CDS Index 304.68 +1.82%
  

• iBoxx Offshore RMB China Corporates High Yield Index 120.42 -.03%

• 2-Year Swap Spread 25.5 -.25 basis point

• TED Spread 26.5 -1.0 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -20.5 unch.

Economic Gauges:

• 3-Month T-Bill Yield .03% unch

• Yield Curve 162.0 -4.0 basis points

• China Import Iron Ore Spot $51.76/Metric Tonne -.65%

• Citi US Economic Surprise Index -12.3 +.9 point

• Citi Eurozone Economic Surprise Index 8.7 -.5 point

• Citi Emerging Markets Economic Surprise Index -9.9 -.1 point

• 10-Year TIPS Spread 1.81 -2.0 basis points
• # of Months to 1st Fed Rate Hike(Morgan Stanley) 5.24 +.05

Overseas Futures:

• Nikkei 225 Futures: Indicating +44 open in Japan 
• China A50 Futures: Indicating -303 open in China

• DAX Futures: Indicating +14 open in Germany

Portfolio: 

• Slightly Higher: On gains in my medical/retail sector longs and emerging markets shorts

• Disclosed Trades: None

• Market Exposure: 25% Net Long