Today's Headlines

Bloomberg:  

• China’s Richest Traders Are Fleeing Stocks as the Masses Pile In. The wealthiest investors in China’s equity market are heading for the exits. The number of traders with more than 10 million yuan ($1.6 million) of shares in their accounts shrank by 28 percent in July, even as those with less than 100,000 yuan rose by 8 percent, according to the nation’s clearing agency. While some of the drop is explained by falling market values, CLSA Ltd. says China’s rich have taken advantage of state buying to cash out after the nation’s record-long bull market peaked in June. Investors with the most at stake are finding fewer reasons to own Chinese shares amid weak corporate earnings and some of the world’s highest valuations. With this month’s devaluation of the yuan adding to outflow pressures, bulls have started to question whether there’s enough buying power to prop up prices once the government pares back its unprecedented rescue effort - - a concern that contributed to the Shanghai Composite Index’s 6 percent plunge on Tuesday. “The high net worth clients are the ones who moved the market,” Francis Cheung, the head of China and Hong Kong strategy at CLSA, wrote in an e-mail. “They tend to be more savvy.” The median stock on mainland bourses traded at 72 times reported earnings on Monday, more expensive than any of the world’s 10 largest markets. The ratio was 68 at the peak of China’s equity bubble in 2007, according to data compiled by Bloomberg. 

• China Stimulus Confronts Drag From Headwinds of Debt, Land Sales. China’s efforts to put a floor under growth with stimulus and a yuan devaluation are struggling. Headwinds range from slumping land sales to interest payments on local-government debt and lackluster growth in fiscal revenue. Local governments alone face a debt-service burden of about 1 trillion yuan this year ($156 billion), according to JPMorgan Chase & Co., while revenue from land sales in the first seven months plunged 954 billion yuan from a year earlier, according to the government. Growth in fiscal revenue was 5.4 percent in the first seven months compared with 8.5 percent a year earlier using the same methodology, highlighting pressure on receipts. Premier Li Keqiang’s ability to counter those drags may determine the fate of his growth target of about 7 percent for the year. The severity of the funding squeeze is especially acute in the northeastern province of Liaoning, where first-half revenue slumped 23 percent and this month it failed to sell bonds even with coupons 15 percent higher than similar maturity sovereign debt.

• China’s Stocks Sink Most in Three Weeks on State Support Concern. Chinese stocks tumbled the most in three weeks as traders reduced stimulus bets and speculated the government will pare back efforts to prop up equities. The Shanghai Composite Index sank 6.2 percent to 3,748.16 at the close, the biggest loss since an 8.5 percent rout on July 27. About 35 stocks fell for each that rose, while more than 600 companies plunged by the daily 10 percent limit. The Hang Seng China Enterprises Index slid 1.75 percent to its lowest level in nine months in Hong Kong. Chinese investors lowered expectations for further monetary stimulus after data Tuesday showed home-price gains are spreading. Odds of an imminent cut to lenders’ reserve requirements dropped after the central bank injected cash into the financial system through its weekly open-market operations. The securities regulator said Friday that China Securities Finance Corp., the state agency tasked with supporting share prices, will reduce buying as volatility falls. “Investors ran for the exit when the government failed to step in to support the market,” said Steve Wang, the chief China economist at Reorient Financial Markets Ltd. in Hong Kong. “The CSF has become a main player in this market so everyone is watching it. People panic when it stops buying.” 

• Russia May Halt Monetary Easing If Oil at $40, Kremlin Aide Says. Russia’s central bank may pause its monetary easing cycle if oil prices fall to $40 a barrel, Kremlin economic aide Andrey Belousov said in an interview. “If the situation on the foreign-exchange market changes as a result of a significant drop in oil prices -- to $40 a barrel, with fluctuations between $40 and $45 -- then the central bank will probably halt the process of cutting the rate,” Belousov said by phone on Tuesday. 

• Commerzbank Cutting Russia Debt Worsens Bond Rout as Ruble Falls. Russian bonds fell for a third day and the ruble retreated as Commerzbank AG recommended selling the nation’s local debt as sliding oil prices make it less likely that the central bank can press on with interest-rate cuts. The decline in five-year OFZ bonds lifted the yield three basis points to 11.26 percent, set for the highest level in a month. The currency weakened 0.5 percent to 65.8560 per dollar by 6:08 p.m. in Moscow, a six-month low as President Vladimir Putin said he discussed the currency on Tuesday with Prime Minister Dmitry Medvedev.

• Russia Fails to Soothe Oil Concerns as Citi Joins Ruble Bears. Russia’s efforts to assure investors it can weather oil’s plunge are winning few believers in the bond and currency markets. Citigroup Inc., the second-most accurate ruble forecaster in the first quarter, predicted the currency will tumble to near its lowest on record by the end of next month, diminishing any prospect of further interest-rate cuts to rescue the economy from a recession. Eurobond prices dropped to a five-month low on Monday and the cost of protecting government debt against default climbed.

• Saudi Stocks Sink Into Death Cross as IMF Sees Growth Slowing. Investors sold Saudi Arabian stocks after an International Monetary Fund warning of slowing growth in the Middle East’s biggest economy tipped the equity index into a so-called death cross. Dubai’s shares also slumped. The Tadawul All Share Index slid for a sixth day, closing 2.9 percent lower at 8,197.02, the weakest level in more than seven months. That dragged its 50-day moving average below the 200-day moving average, a signal to some investors that further declines are in store. Al Rajhi Bank’s 2.9 percent decrease was the biggest contributer to the loss. Dubai’s DFM General Index slipped 2.5 percent to the lowest close since April 13. 

• China, Commodities, Currencies Challenge Emerging Markets. (video)

• Brazil Real Falls as Commodities Trigger Emerging-Market Selloff. Brazil’s real fell for the first time in three days as a global decline in commodities and pessimism surrounding China, the Latin American nation’s biggest trading partner, triggered an emerging-market selloff. Moody’s Investors Service, which cut Brazil’s rating last week to the lowest level of investment grade after it failed to meet budget targets, predicted a contraction of about 2 percent this year. Copper and silver led a renewed slump in commodities amid speculation China’s economy will face further headwinds. 

• Emerging Stocks Decline as Thai Bomb Adds to China, Fed Concerns. (video) Emerging-market stocks traded for a second day at a 2011 low as a deadly bombing in Bangkok and speculation China will reduce stimulus measures worsened investor sentiment already undermined by expectations for higher U.S. interest rates.

• European Stocks Rise for Second Day After China-Fueled Selloff. European stocks extended a rebound after the worst weekly drop in more than a month, amid signs the U.S. economy is strengthening. The Stoxx Europe 600 Index added 0.2 percent to 388.13 at the close of trading, rising higher after data that showed U.S. new-home construction climbed to an almost eight-year high in July.

• We Just Got a Look at How Much Higher Wages Are Costing Wal-Mart(WMT). (video) 

• Demise of Phone Subsidies Masks U.S. Wireless Sales Slowdown. (video) The heavy discounting used by U.S. wireless companies to get consumers hooked on pricey smartphones is going away -- boosting near-term results, while masking weakness in the industry’s main business of selling monthly mobile services. T-Mobile US Inc. kicked off the shift away from handset subsidies in 2013, prompting other carriers to phase out the incentives that for years were used to encourage subscribers to sign two-year contracts. With the move, carriers book almost the full price of smartphones on the day of the sale, making revenue and some profit metrics appear rosier.

Fox News:

• Grassley questions whether Clinton attorney had clearance for thumb drives. (video) A top Republican senator is questioning whether Hillary Clinton's personal attorney had the security clearance to keep thumb drives containing thousands of her emails, after it was revealed some of her messages contained highly sensitive -- even "top secret" -- information. "The transmission of classified material to an individual unauthorized to possess it is a serious national security risk," Senate Judiciary Committee Chairman Chuck Grassley, R-Iowa, wrote in a letter to Clinton lawyer David Kendall.

• Iran threatened ‘harm’ to top nuke inspector to prevent disclosure of secret deal. Iranian leaders prevented a top International Atomic Energy Agency (IAEA) official from disclosing to U.S. officials the nature of secret side deals with the Islamic Republic by threatening harm to him, according to regional reports.

CNBC: 

• St. Louis Fed official: No evidence QE boosted economy. (video)

Zero Hedge:

• China Stocks Crash, More Than Half Of Market Halted Limit Down; PBOC Loss Of Control Spooks Global Assets. (graph)

• Cyanide Thunderstorms Feared As Mystery Deepens Around $1.5 Billion Tianjin Explosion.

• China & The Decline In Quality (And Soon In Profits).

• No Jon Hilsenrath, It Is Not "Anti-Semitic" To Criticize Goldman Sachs.

• 23 Nations Around The World Where Stock Market Crashes Are Already Happening.

• Hilsenrath Warns Fed Is Out Of Ammo, "Policy Makers Resorting To Backup, Backup Plans".

• Atlanta Fed Q3 GDP Forecast Doubles Thanks To Subprime Auto Loans. (graph)

• What Investors Think Is The Biggest "Tail Risk" Right Now. (graph)

• More Trouble In Turkey As Lira Plunges To New Lows, Bond Yields Soar. (graph)

• Base Metals Battered As "Unholy Combination Of Factors" Crushes Copper. (graph)

• Building Permits Plunge After NYC Property Tax Break Expires, Housing Starts Stable. (graph)

• Indonesia Impaled: Currency Crashes To 1998 Asian Crisis Low As Exports Crater. (graph)

• Walmart(WMT) Stock Slides After EPS Miss, Profits Tumble, Full Year Guidance Slashed. (graph)

Business Insider:

• The world's top China analyst has a doomsday scenario. The note said: "Reform is relatively effortless when GDP growth is in the teens; it is much more complex and painful in a climate in which GDP growth is rapidly slowing. "For this reason, we see a risk that Chinese policymakers won't be able to stomach the pain of some reforms and will simply back away — the same way they recently walked away from their pledge last fall to cut off new local government borrowing." That would mean the Chinese authorities putting off the hard decisions in the hope that they can maintain stability and ultimately grow their way out of the difficulties they currently face. Every time they do that they increase the likelihood that the blowup will be more devastating if and when it comes.

• This is the scariest chart in the history of cable TV. (graph)

• One alarming reason Walmart's(WMT) profit is down. Walmart's theft problem is getting worse.

• The probe of Hillary Clinton's server could find more than just emails.

• If China's GDP is so amazing then why have Chinese metal prices collapsed? (graph)

• China just tested a new intercontinental missile that can fire multiple nuclear warheads at once.

• Here are the various ways the US depends on China. (graph)

• Warren Buffett's favorite valuation measure says stocks are overvalued. (graph)

• The 'Keqiang Index' shows China is growing at this ridiculously low rate. (graph)

• Donald Trump's immigration plan would wreak havoc on US society.

• We may see a nasty surprise if the world ignores North Korea’s nuclear progression.

• Iran is one step closer to advanced air defense capability.

• Now it looks like Merkel may not be able to put the Greek bailout together.

Mashable:

• Apple's(AAPL) biggest new business risk is a cheaper Chinese currency.

The Hill:

• Planned Parenthood launches ads against vulnerable GOP senators. Planned Parenthood announced Tuesday that it is launching ads targeting vulnerable Republican senators over talk of defunding the organization. The ads will run in the home states of Sens. Kelly Ayotte (R-N.H.), Rob Portman (R-Ohio), Ron Johnson (R-Wis.) and Pat Toomey (R-Pa.), all of whom face tough reelection races next year.

Financial Times:

• China shadow banks appeal for government bailout. The collapse of a state-owned credit guarantee company in China’s rust belt has shone a new spotlight on risk from bad debt and moral hazard in the country’s shadow banking system. As China’s economy slows, concerns are mounting over rising defaults, especially on loans from non-bank lenders, which provide credit to risky borrowers at high interest rates.

Bear Radar

Style Underperformer:

• Small-Cap Growth -.64%

Sector Underperformers:

• 1) Semis -1.81% 2) Airlines -1.62% 3) Alt Energy -1.35%

Stocks Falling on Unusual Volume:

• ESNT, W, HAIN, ESPR, CMCM, IDTI, WMT, VRA, EROS, CSTE, CNCE, MTZ, TECD, ANF, USLV, SEP, BRS, PAYC, TANH, PSIX, FRAN, BPT, SCCO, ICUI and DQ

Stocks With Unusual Put Option Activity:

• 1) IDTI 2) LVS 3) KRE 4) MON 5) ITB
  

Stocks With Most Negative News Mentions:

• 1) SNDK 2) CBS 3) DIS 4) PBR 5) VRA
  

Charts:

• ETFs Falling on Unusual Volume

• Stocks Falling on Unusual Volume

Bull Radar

Style Outperformer:

• Large-Cap Growth -.23%

Sector Outperformers:

• 1) Homebuilders +1.69% 2) HMOs +1.08% 3) Drugs -.04%
  

Stocks Rising on Unusual Volume:

• OMER, NPBC, IQNT, SLH, TJX, LL and Z

Stocks With Unusual Call Option Activity:

• 1) HIG 2) MAS 3) AEO 4) URBN 5) XPO
  

Stocks With Most Positive News Mentions:

• 1) AN 2) COH 3) EL 4) TGT 5) NPBC
  

Charts:

• ETFs Rising on Unusual Volume 

• Stocks Rising on Unusual Volume

Morning Market Internals

NYSE Composite Index:

• Volume Running 8.6% Below 100-day average
• 2 Sectors Rising, 8 Sectors Declining
• 35.4% of Issues Advancing, 61.7% Declining
• 82 New 52-Week Highs, 141 New Lows
• 40.9% of Issues Above 200-day Moving Average
• Average 14-Day RSI 43.3
• Vix 13.3
• Total Put/Call .89
• TRIN/Arms .86

Tuesday Watch

Evening Headlines 

Bloomberg:  

• China Reserves Seen Dropping $40 Billion a Month on Yuan Support. China’s foreign-exchange reserves are expected to drop by some $40 billion a month as the central bank intervenes to support the yuan, a Bloomberg survey shows. The holdings, the world’s largest, will decline to $3.45 trillion by year-end from $3.65 trillion at the end of July, based on the median estimate of 28 strategists and traders surveyed following last week’s surprise devaluation of the currency. The forecasts ranged from $3 trillion to $3.71 trillion. The currency is seen weakening 1.6 percent to 6.50 a dollar in the remainder of 2015, the survey showed.

• China Challenges: $1.6B for Affordable Housing Embezzled. (video)  

• Weibo to Youku Drop as Sales Forecasts at China Peers Disappoint. Weibo Corp. and Youku Tudou Inc. fell in New York as disappointing revenue guidance at their larger Chinese peers raised concern the Internet firms may report quarterly results this week that will trail analysts’ estimates. American depositary receipts of Weibo, China’s Twitter-like social media platform, sank 3.8 percent on Monday to a four-month low of $13.09. Youku Tudou, owner of China’s largest video websites, fell 3.3 percent to the lowest since April. A Bloomberg gauge of the most-traded Chinese companies in the U.S. slid 0.3 percent in the first decline in three days.A total of 10 out of 13 Chinese companies, including Baidu Inc. and Vipshop Holdings Ltd., have provided quarterly sales projections to U.S. investors that were below analyst expectations this earnings season, according to data compiled by Bloomberg.

• G-20 Growth Won’t Hit Pre-Crisis Pace Anytime Soon, Moody’s Says. Don’t expect global economic growth to reach the level it attained before the financial crisis anytime soon, Moody’s Investors Service said. Expansion in the Group of 20 economies won’t return to its pre-2008 rate within the next five years, the credit-rating company said Tuesday in an update to its global outlook. Combined output growth in the group, which includes 19 nations and the euro area, will average 3 percent per year from 2015 to 2019, about half a percentage point lower than in the decade through 2007. The world economy is being held back by the crisis’s lingering drag on productivity growth, China’s slowdown, unfavorable demographic trends and slowing gains from trade, Moody’s said. The company lowered its U.S. expansion forecast for this year to reflect a slower-than-projected rebound in the second quarter, while leaving the G-20 growth forecast for 2015 unchanged at 2.7 percent. The report cites a big, sustained drop in Chinese asset prices or a Greek exit from the euro as risks for the world economy.

• Bangkok Blast Kills at Least 19 in Worst Attack Since Thai Coup. A powerful explosion killed at least 19 people in Bangkok’s central shopping district on Monday night, the first major attack in the Thai capital since the military seized power in May last year. The blast during rush hour left body parts scattered on Ratchaprasong intersection, which is surrounded by malls, hotels and the Erawan Hindu shrine frequented by tourists and locals. The military government blamed miscreants seeking to destroy the tourist-reliant economy. Nineteen people, including Chinese and Filipino tourists, were killed, the Ministry of Public Health said. Hospital officials are treating 117 people, many of whom are foreigners, according to the Emergency Medical Institute of Thailand.

• Brazil's Political Crisis Puts the Entire Economy on Hold. In Brazil, General Motors Co. has been halting factories and laying off thousands. Latam Airlines, the region’s biggest, is cutting flights. And the world’s third-largest planemaker, Embraer SA, is delaying its biggest new aircraft. In the midst of its deepest economic and political crisis in a generation, Brazil is contending with a business climate so punishing that major projects across numerous sectors are being frozen or shrunk, while small businesses slash prices and shift focus.  

• Korea’s Won Falls for Second Day as Data Show Pickup in Outflows. The won fell for a second day amid concern foreign investors will pull more money from South Korean assets as economic growth slows. Global funds reduced holdings of local bonds in July by the most since December 2011 and of equities by the most since June 2013, the Financial Supervisory Service reported Tuesday. The government will prepare detailed measures to stabilize financial markets if needed in response to risks such as volatility in Chinese stocks and the yuan’s devaluation, Finance Minister Choi Kyung Hwan said at a meeting with officials on Monday. The won fell 0.3 percent to 1,185.95 a dollar as of 10:01 a.m. in Seoul, according to data compiled by Bloomberg. The currency has lost 6 percent this quarter, the worst performance in Asia after Malaysia’s ringgit. 
• Thai Stocks Drop Most in 8 Months on Bangkok Attack; Baht Falls. Thai stocks sank the most in eight months and the baht dropped after an explosion in Bangkok killed at least 20 people and put the nation’s tourism industry at risk. The benchmark SET Index fell as much as 2.8 percent, before paring losses to 1.7 percent at 10:23 a.m. in Bangkok. Gauges of tourism and transport-related companies declined more than 4 percent. The baht weakened 0.5 percent to 35.536 per dollar, approaching its lowest level since April 2009.
• Most Asian Stocks Rise After U.S. Shares Gain on Housing Data. Most Asian stocks advanced, with the regional benchmark index holding near a seven-month low, following gains in U.S. equities as strong homebuilder data added to signs the world’s biggest economy is improving. The MSCI Asia-Pacific Index fell 0.1 percent to 137.73 as of 9:05 a.m. in Tokyo with about three stocks gaining for every two that fell.

• It's Like 2009 for Some Asset-Backed Securities Rattled by the Fed. Asset-backed securities -- bundles of debt mainly tied to consumer borrowing -- are taking a hit as investors become increasingly rattled by broad financial issues, including the Federal Reserve possibly raising interest rates next month. While bonds ranging from corporate notes to mortgage-linked securities also have suffered recently, they aren’t losing as much ground as ABS, or at least when it comes to the yields compared to benchmark rates. In ABS, this spread shows that “many market segments are at or near the post-crisis wides established in 2010,” according to Wells Fargo & Co. analysts John McElravey and Ryan Brinkoetter. Bank of America Corp. described them as “at the wide end of three-year trading ranges and even five-year trading ranges.”

Wall Street Journal:

• Obama Administration Pushes for Deal to Start Flights to Cuba by Year’s End. White House aims to loosen travel restrictions for individual U.S. travelers despite congressional ban.

• EPA to Propose Rules Cutting Methane Emissions From Oil and Gas Drilling. Agency to call for 40%-45% cut in methane emissions by 2025.

• Nice Guys Finish Last—Against Hillary. The only way a Democrat can defeat Mrs. Clinton is by making an issue of her Nixon-like character.

Zero Hedge:

• Today's Most Stunning Statistic.

• "Global Shock Absorber" China Holds Currency Stable, Margin Debt Rises For 7th Day. (graph)

• What Options Are Saying About A Possible September Rate Hike. (graph)

• The Wall Street Ponzi At Work - The Stock Pumping Swindle Behind Four Retail Zombies. (graph)

• Greek Deposits Become Eligible For Bail-In On January 1, 2016. (graph)

• Which Are The Most Illiquid Assets In The Market Right Now.

• America's "Over-Promise & Under-Deliver" Economy. (graph)

• "Avoid ALL Contact" With Rain, American Embassy In Beijing Warns.

• Corporate Debt - Road To Oblivion In A Bear Market. (graph)

• The Biggest Surprise About Claren Road's Upcoming Liquidation.

• Savannah River Nuclear Facility Under Lockdown Amid "Security Event".

• Currency Carnage: Gross Warns On "Fakers And Breakers", Morgan Stanley Tells Asia To Watch Its REER.

• LOLume Lifts Stock; Bonds Bid As Crude, Copper, & Credit Crumble. (graph)

Business Insider:

• Junk bonds just 'blew up'.

• The State Department is going to review 305 Clinton emails for potentially classified informaton.

• San Francisco's 'housing crisis' is reaching epic proportions.

• Illinois is in 'technical default'.

• Iranian official: Nuclear inspectors can't enter the country unless our intelligence agency approves them.

• The Communist Party is trying to reassure Chinese that there will be no cover-up of the Tianjin explosion.

• Egypt just moved a lot closer to harsh authoritarian rule.

Reuters:

• Urban Outfitters says comparable sales may be slower in 3rd qtr. Urban Outfitters Inc on Monday said same-store sales growth so far in the third quarter was slower than in the previous three months, raising concerns about the apparel retailer's performance in the back-to-school shopping season. The Philadelphia-based retailer reported second-quarter comparable sales growth of 4 percent on Monday, lower than the 4.3 percent rise analysts on average had expected, according to research firm Consensus Metrix. Urban Outfitters' shares initially rose as much as 10 percent in extended trading after it reported a better-than-expected quarterly profit, but fell nearly 7 percent when Chief Financial Officer Frank Conforti said sales were slower so far in August.

• BB&T to buy National Penn Bancshares for about $1.8 billion. BB&T Corp (BBT.N) said it would buy National Penn Bancshares Inc (NPBC.O) in a cash-and-stock deal for about $1.8 billion to expand in the U.S. Mid-Atlantic region. The deal would consist of 70 percent BB&T shares and 30 percent in cash. National Penn shareholders can opt to receive 0.3206 of a BB&T share or $13 in cash for each National Penn share.

Financial Times:

• Russia struggles to shrug off China slowdown. Even grand projects are not immune from the Chinese economic downturn.

Telegraph:

• World shipping slump deepens as China retreats. Ports across the world suffer worst hit since the Lehman crisis as emerging markets wilt, but trade may not matter so much to global GDP any longer.

Liquidity crunch a catalyst for big China slowdown – analysts The mini liquidity crunch is the early warning sign of a substantial economic correction long overdue, amid rising leverage and a broken growth model, say bearish analysts.


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Shanghai Securities News: 

• China's Economic Growth May Remain Low, PBOC Adviser Says. China's economic growth may remain low for the next few years, citing Fan Gang, an adviser to the People's Bank of China, as saying at a financial industry seminar. China needs to deal with overcapacity and debt problems into 2018, Fan said. China's economy may face further difficulties next year and only stabilize in 2017, he said.

Evening Recommendations 

• None of note

Night Trading

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

• Asia Ex-Japan Investment Grade CDS Index 116.25 -1.0 basis point.

• Asia Pacific Sovereign CDS Index 71.25 +1.0 basis point.

• S&P 500 futures +.09%.

• NASDAQ 100 futures +.05%.

Morning Preview Links

Earnings of Note

Company/Estimate

• (DKS)/.75

• (HAIN)/.55

• (HD)/1.69

• (TJX)/.76

• (TSL)/.26

• (WMT)/1.12

• (ADI)/.74

• (DV)/.61

• (SINA)/.07

• (WB)/.02

Economic Releases

8:30 am EST

• Housing Starts for July are estimated to rise to 1180K versus 1174K in June. 

• Building Permits for July are estimated to fall to 1228K versus 1343K in June.

Upcoming Splits

• None of note

Other Potential Market Movers

• The RBA minutes, UK CPI report and the weekly US retail sales reports could also impact trading today.

BOTTOM LINE: Asian indices are mostly lower, weighed down by industrial and technology 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 day.

Stocks Reversing Higher into Final Hour on Central Bank Hopes, Short-Covering, Less Eurozone Debt Angst, Biotech/Homebuilding Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Modestly Higher
  

• Sector Performance: Most Sectors Rising
  

• Volume: Light

• Market Leading Stocks: Performing In Line

Equity Investor Angst:

• Volatility(VIX) 13.15 +2.40%

• Euro/Yen Carry Return Index 143.98 -.20%

• Emerging Markets Currency Volatility(VXY) 10.74 -.09%

• S&P 500 Implied Correlation 55.13 -.58%

• ISE Sentiment Index 43.0 -50.57%

• Total Put/Call .97 -3.96%

• NYSE Arms .82 -28.87% 

Credit Investor Angst:

• North American Investment Grade CDS Index 76.59 +.28%

• America Energy Sector High-Yield CDS Index 1,898.0 -.12%

• European Financial Sector CDS Index 75.71 -.88%

• Western Europe Sovereign Debt CDS Index 22.36 -.07%

• Asia Pacific Sovereign Debt CDS Index 71.05 +1.25%

• Emerging Market CDS Index 343.77 +.17%
  

• iBoxx Offshore RMB China Corporates High Yield Index 119.47 +.08%

• 2-Year Swap Spread 24.0 -.25 basis point

• TED Spread 23.75 +.75 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -19.75 +.75 basis point

Economic Gauges:

• 3-Month T-Bill Yield .07% -2.0 basis points

• Yield Curve 145.0 -1.0 basis point

• China Import Iron Ore Spot $56.66/Metric Tonne -.14%

• Citi US Economic Surprise Index -9.2 -4.8 points

• Citi Eurozone Economic Surprise Index 10.2 +1.4 points

• Citi Emerging Markets Economic Surprise Index -4.4 +1.9 points

• 10-Year TIPS Spread 1.60 -3.0 basis points
• # of Months to 1st Fed Rate Hike(Morgan Stanley) 3.57 -.11

Overseas Futures:

• Nikkei 225 Futures: Indicating +35 open in Japan 
• China A50 Futures: Indicating -229 open in China

• DAX Futures: Indicating +19 open in Germany

Portfolio: 

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

• Disclosed Trades: None

• Market Exposure: 50% Net Long