Morning Market Internals

NYSE Composite Index:

• Volume Running 21.1% Above 100-day average
• 0 Sectors Rising, 10 Sectors Declining
• 21.9% of Issues Advancing, 75.9% Declining
• 7 New 52-Week Highs, 265 New Lows
• 38.0% of Issues Above 200-day Moving Average
• Average 14-Day RSI 39.8
• Vix 17.1
• Total Put/Call 1.15
• TRIN/Arms .69

Thursday Watch

Evening Headlines 

Bloomberg: 

• China’s Newest Make-or-Break Level for Stocks Is Shanghai 3,500. In a Chinese stock market obsessed with round numbers, 3,500 has emerged as the latest make-or-break level for traders trying to gauge the staying power of state support. Signs of government buying have appeared at that level on the Shanghai Composite Index at least four times over the past six weeks.  
• Bear Market Looms for Hong Kong Stocks as Index Sinks With China. Hong Kong stocks are poised to enter a bear market as declines in mainland markets and the devaluation of the yuan erode support for the city’s shares. The Hang Seng Index lost 1.8 percent to 22,743.54 as of 10:16 a.m. in Hong Kong on Thursday, bringing its decline from a seven-year high on April 28 to 20 percent. The Hang Seng China Enterprises Index of Chinese equities listed in the city, which entered a bear market last month, fell 2.5 percent on Thursday. Shares in the former British colony have been buffeted by a rout in China that destroyed about $4 trillion in market value. The Shanghai Composite Index fell by almost a third from its peak in mid-June, prompting the government to step in with unprecedented measures to support the market. “People are scared,” said Rahul Chadha, co-chief investment officer at Mirae Asset Global Investments in Hong Kong. “It’s the fear factor.”
• China’s Stocks Resume Declines Amid Economy, Outflow Concerns. China’s stocks fell to a two-week low as traders gauged government support for the equity market amid concern a slowing economy and weaker yuan will spur capital outflows. The Shanghai Composite Index lost 1.4 percent to 3,743.77 at 9:59 a.m. local time, led by health-care and energy companies. Hong Kong’s Hang Seng Index lost 1.1 percent, taking its decline from its April 28 high to 19.5 percent, approaching the 20 percent decline that some traders consider the start of a bear market.
• Asian Stocks Fall Fifth Day on Fed Minutes, China Slowdown Fears. Asian stocks fell for a fifth day after Federal Reserve minutes showed U.S. officials sought more progress on inflation and investors watched China as concerns heighted over the nation’s slowdown. The MSCI Asia-Pacific Index slid 0.1 percent to 135.87 as of 9:05 a.m.
• Junk-Bond Risk Gauge Surges to '15 High Amid Escalating Oil Rout. Junk-bond investors are getting fidgety amid a renewed plunge in the energy market. The risk premium on the Markit CDX North American High Yield Index, a credit-default swaps benchmark tied to the debt of 100 speculative-grade companies, surged 6.3 basis points to 394 basis points, the highest level this year. BlackRock’s iShares iBoxx High Yield Corporate Bond ETF, the largest fund of its kind, extended its slump this month trading near a four-year low. Oil prices that have dropped below $41 are rattling investors in the high-yield bond market. The debt is poised to post a third straight month of losses -- something that has never happened since 2008. “The best of times for high-yield are behind us and we are now witnessing the beginning of the end of the credit cycle,” Bank of America Corp. strategists wrote in a report Monday.
• One-year oil at 10-year low with no respite in sight. Oil is already trading at the lowest level in a decade in New York, as far as one-year contracts go, signalling traders don't expect much reprieve from the current rout. West Texas Intermediate oil for delivery in September 2016 touched $US47.90 a barrel on the New York Mercantile Exchange Wednesday, the lowest intraday price for a contract out 12 months since February 2005. "This says that the price prospects for 12 months from now are bleak as we speak," John Kilduff, a partner at Again Capital, a New York-based hedge fund, said by phone. "The curve is a representation of the collective wisdom of the market. It's a best guess of market conditions 12 months from now."
• Cheap Oil’s Making It Tough for Ethanol to Pay the Bills. Cheap crude oil may make it hard for ethanol companies to pay their bills on time. The lowest oil prices in six years are hitting biofuel producers two ways: They’re making ethanol less attractive as a blend for gasoline, and emboldening the arguments of petroleum backers who say the U.S. law mandating consumption of the fuel alternative is obsolete, Standard & Poor’s Rating Services Inc. said in a report Wednesday.
• Cliffs CEO Takes Aim at Crazy China Steel Exports as Glut Grows. Steel exports from China will surge to more than 100 million metric tons this year as local mills benefit from a rising tide of cheap iron ore to produce more than Asia’s top economy needs, according to Cliffs Natural Resources Inc. “It’s like a bad virus,” Lourenco Goncalves, chief executive officer of the largest U.S. iron ore producer, said in a phone interview from the company’s headquarters in Cleveland, Ohio. “Australia continues to give iron ore to China almost for free, allowing them to produce more than they need.”
• So Long September: Bond Traders Defer Their Date With the Fed. So much for September. Traders gearing up for the Federal Reserve to raise interest-rates next month reversed course Wednesday after minutes from the central bank’s July meeting showed policy makers were still waffling on whether the economy is strong enough to warrant higher borrowing costs. That's far short of the confidence they expected to see from a central bank supposedly just weeks away from what would be the first increase in almost a decade. The probability that futures traders assign to a rate boost next month slid to 36 percent, the lowest since July, from about 50 percent earlier in the day. The levels assume that the Fed’s target will average 0.375 percent after the first move. The chance of an increase at or before the Fed's December meeting dropped as well, to 65 percent from 73 percent Tuesday.
• GE(GE) Said to Mull Atlanta Site Among Possible Headquarters Options. General Electric Co. has held exploratory talks about relocating its headquarters to Atlanta from Connecticut as part of a review of possible new homes, according to people familiar with the matter. GE may meet with developer Tishman Speyer Properties in the coming weeks to discuss space at Three Alliance Center, a 30-story building going up in Atlanta’s Buckhead neighborhood, said the people, who asked not to be identified because details aren’t public.

Wall Street Journal:

• Divided Fed Puts Yellen on Hot Seat. Central bank chief faces cliffhanger decision as rate call comes down to wire. The Federal Reserve faces a potential cliffhanger about whether to raise interest rates at its September meeting, a decision that will test Chairwoman Janet Yellen’s ability to lead an uncertain policy-making committee.
• Time to End Quarterly Reports, Law Firm Says. Wachtell Lipton argues the ritual distracts companies from long-term results. Influential law firm Wachtell, Lipton, Rosen & Katz has an idea that may be music to the ears of its big corporate clients and a nightmare for some investors and analysts: end quarterly earnings reports.

Fox News:

• ‘Dangerous farce’: Lawmakers rip Iran deal over report Tehran can use own nuke inspectors. (video) Capitol Hill opposition to the Iranian nuclear deal was stoked Wednesday by a bombshell report that Tehran will be allowed to use its own experts to inspect one of the country's most controversial nuclear sites. "Allowing the Iranians to inspect their own nuclear sites, particularly a notorious military site, is like allowing the inmates to run the jail," Sen. Lindsey Graham, R-S.C., a presidential candidate, said in a statement.

CNBC:

• World drowns in oil as producers slug it out. (video)

Zero Hedge:

• China Strengthens Yuan By Most In 2 Months Amid Another Massive Liquidity Injection, Stocks Indicated Lower Pre-Open. (graph)
• Echoes Of 1997: China Devaluation "Rekindles" Asian Crisis Memories, BofA Warns.
• Facing Public Fury, China Reveals Owners Of Tianjin Warehouse.
• Economic Crisis Goes Mainstream - What Happens Next?
• Presidential Candidate "Deez Nuts" Surges In Polls.
• "There Is No Other End Than A Bad One... It's A Mathematical Certainty".
• The "Best Way To Play The Chinese Credit-Commodity Crunch" Is About To Pay Off Big. (graph)
• Lehman's Gift To Jeb Bush For Funneling Pension Money: A $1.3 Million Consulting "Job".
• Keeping The Bubble-Boom Going. (graph)
• All Bubbles Are Different. (graph)
• The Path To Rate Normalization Will Not Come Without Pain.
• Momo No Mo' - BofAML Warns Stocks "Close To A Tipping Point". (graph)
• Bonds & Bullion Pumped While Stocks & Dollar Dumped. (graph)

Business Insider:

• Putin just warned foreign nations to stay away from Crimea.
• The sub-prime auto lending bubble could be about to burst.
• The robots may be coming to take our jobs — but one trait might keep you safe.
• China was just dealt a major blow to the renminbi.
• Clinton's lawyer says her email server was wiped clean.
• The real reason a controversial secret side deal involving Iran is so important.
• New Jersey woman's dying wish: 'Do not vote for Hillary Clinton'.
• A bunch of new startups are trying to make it cheaper and easier for immigrants to send money home.
• Citi: China could lower its growth target for 2016 to just 6%.

Gawker:

• Snapchat Lost a Ton of Money Last Year.

Reuters:

• Hacker's Ashley Madison data dump threatens marriages, reputations. Love lives and reputations may be at risk after the release of customer data from infidelity website Ashley Madison, an unprecedented breach of privacy likely to rattle users' attitudes towards the Internet. Hackers dumped a big cache of data containing millions of email addresses for U.S. government officials, UK civil servants and high-level executives at European and North America corporations late on Tuesday, the latest cyber attack to raise concerns about Internet security and data protection. The hacker attack has been a big blow to Toronto-based assignation website firm Avid Life Media, which owns Ashley Madison and has indefinitely postponed the adultery site's IPO plans.
• LatAm credits wider on commodity concerns. LatAm credits took another beating on Wednesday, as a rally in US Treasuries after the Fed's minutes failed to offset concerns about growth in China as well as sputtering commodity prices. Ten-year US Treasury yields fell back to around 2.12% after the minutes suggested the FOMC wanted more data on US growth and inflation before an "approaching" hike in rates. The possibility of a delay in monetary tightening in the US, however, brought little comfort to investors looking at EM assets in Latin America.

npr:

• Government Inquiry Into Clinton Emails Likely To Widen. "I think that the FBI will be moving with all deliberate speed to determine whether there were serious breaches of national security here," said Ron Hosko, who used to lead the FBI's criminal investigative division.

Economic Information Daily:

• China May Increase Direct Taxes in Next 5-Yr Plan. China may increase direct taxes including property and land taxes in the 2016-2020 period and cut indirect taxes, citing Gao Peiyong, head of National Academy of Economic Strategy under the Chinese Academy of Social Sciences.

Evening Recommendations 

• None of note

Night Trading

• Asian equity indices are -1.25% to -.50% on average.

• Asia Ex-Japan Investment Grade CDS Index 124.0 +3.5 basis points.

• Asia Pacific Sovereign CDS Index 74.75 +3.75 basis points.

• S&P 500 futures +.11%.

• NASDAQ 100 futures +.09%.

Morning Preview Links

Earnings of Note

Company/Estimate

• (AMWD)/.69
• (BKE)/.47
• (JKS)/.88
• (PERY)/.00
• (SHLD)/-2.50
• (SSI)/.34
• (SMRT)/.05
• (TECD)/.97
• (TTC)/.91
• (CRMT)/.86
• (GPS)/.65
• (HPQ)/.85
• (INTU)/-.11
• (MRVL)/.11
• (ROST)/.62
• (CRM)/.17
• (TFM)/.40

Economic Releases

8:30 am EST

• Initial Jobless Claims are estimated to fall to 271K versus 274K the prior week.
• Continuing Claims are estimated to fall to 2265K versus 2273K prior.

10:00 am EST

• Existing Home Sales for July are estimated to fall to 5.43M versus 5.49M in June.
• Philly Fed Business Outlook for August is estimated to rise to 6.8 versus 5.7 in July.
• The Leading Index for July is estimated to rise +.2% versus a +.6% gain in June.
  

Upcoming Splits

• None of note

Other Potential Market Movers

• The Fed's Williams speaking, UK retail sales report, Bloomberg Economic Expectations Index for August, weekly Bloomberg Consumer Comfort Index,  and the weekly EIA natural gas inventory report could also impact trading today.

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

Stocks Lower into Final Hour on China Bubble-Bursting Fears, Rising European/Emerging Markets/US High-Yield Debt Angst, Oil Decline, Commodity/Financial Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Lower
  

• Sector Performance: Almost Every Sector Declining
  

• Volume: Slightly Below Average

• Market Leading Stocks: Performing In Line

Equity Investor Angst:

• Volatility(VIX) 14.71 +6.60%

• Euro/Yen Carry Return Index 143.79 +.34%

• Emerging Markets Currency Volatility(VXY) 10.69 unch.

• S&P 500 Implied Correlation 56.18 -.51%

• ISE Sentiment Index 61.0 +5.17%

• Total Put/Call 1.09 +14.74%

• NYSE Arms 1.76 +103.25% 

Credit Investor Angst:

• North American Investment Grade CDS Index 78.79 +1.14%

• America Energy Sector High-Yield CDS Index 1,922 +1.15%

• European Financial Sector CDS Index 78.48 +3.60%

• Western Europe Sovereign Debt CDS Index 22.09 -1.78%

• Asia Pacific Sovereign Debt CDS Index 74.19 +4.40%

• Emerging Market CDS Index 353.66 +2.87%
  

• iBoxx Offshore RMB China Corporates High Yield Index 119.05 -.01%

• 2-Year Swap Spread 23.5 -.25 basis point

• TED Spread 26.75 +1.0 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -18.25 +1.75 basis points

Economic Gauges:

• 3-Month T-Bill Yield .04% -3.0 basis points

• Yield Curve 147.0 unch.

• China Import Iron Ore Spot $56.41/Metric Tonne -.90%

• Citi US Economic Surprise Index -15.8 -7.6 points

• Citi Eurozone Economic Surprise Index 10.4 -.4 point

• Citi Emerging Markets Economic Surprise Index -5.5 +.7 point

• 10-Year TIPS Spread 1.58 -2.0 basis points
• # of Months to 1st Fed Rate Hike(Morgan Stanley) 3.50 -.04

Overseas Futures:

• Nikkei 225 Futures: Indicating -122 open in Japan 
• China A50 Futures: Indicating -340 open in China

• DAX Futures: Indicating +2 open in Germany

Portfolio: 

• Slightly Higher: On gains in my index hedges and emerging markets shorts

• Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges

• Market Exposure: Moved to 50% Net Long

Today's Headlines

Bloomberg:   

• China Becomes Liability for Korean Stocks Dependent on Tourism. South Korean companies reliant on Chinese demand are turning from the stars of the stock market to the also-rans after the yuan’s devaluation. Shares of AmorePacific Corp., a cosmetics company that counts China as its second-biggest market, had more than doubled in the 12 months before the Chinese currency tumbled on Aug. 11. Hotel Shilla Co., which had been benefiting from an influx of mainland tourists, had rallied 20 percent. Both companies had lost 11 percent since the devaluation through Tuesday, more than five times the 1.6 percent loss of the MSCI Korea Index. “Cosmetics, tourism, and hotels are seen hit hard as Chinese inbound flows will be affected,” said Park Jeong Woo, a Seoul-based strategist at Korea investment Securities Co.
• Death Cross Looms in Hong Kong Stocks as Rout Seen Getting Worse. Traders hurting from a slump in Hong Kong shares since April say a pattern looming in stock charts suggests the rout has room to run. The average level of the Hang Seng Index over the past 50 days is close to dropping below its 200-day mean, a phenomenon known as a death cross. That’s happened six times in the past 10 years, with the measure then falling an average of more than 15 percent through the next market low. “Hong Kong has historically been very sensitive to this,” said Hank Terrebrood, Hong Kong-based managing director and strategist at MCM Partners.  
• Glencore CEO: China Is a Lot Weaker Than Anyone Expected. (video) Glencore Plc Chief Executive Officer Ivan Glasenberg said no one can read the Chinese commodity market.
  It’s getting harder to predict metals consumption in China, the world’s biggest user of raw materials, the billionaire CEO said in a phone interview in London. Glencore reported a 56 percent plunge in first-half profit on Wednesday and cut the earnings forecast for its trading division. “At the moment none of us can read China,” said the 58-year-old South African who’s the second-largest shareholder in the company. “None of us know what is going on there and I’m yet to find the guy who can predict China correctly. China in the first half was a lot weaker than anyone expected.”
• Rousseff Revives Policies That Pushed Brazil to Edge of Junk. Brazil’s President Dilma Rousseff is reviving policies that helped push the country’s debt rating to the brink of junk status as a political crisis and a recession erodes support for fiscal discipline. State-controlled banks Banco do Brasil and Caixa Economica Federal announced this week that they will provide car and auto-parts makers as much as 14 billion reais ($4 billion) in loans, a strategy to fuel growth and save jobs that Finance Minister Joaquim Levy repudiated when he took office earlier this year. He told reporters Wednesday the loans don’t threaten the fiscal adjustment and are mostly based on market rates.
• Brazil Set for Longest Bond Drought on Record Amid Credit Woes. Brazil is close to hitting its longest stretch ever without selling new bonds abroad. The Treasury hasn’t sold new notes in international markets since its $1 billion issue of 2025 bonds in September 2014 as a deepening recession and a widening political crisis drove the nation’s credit rating to the cusp of junk. Brazil joins other developing nations such as Russia, which due to sanctions over its involvement in Ukrainian conflict hasn’t been able to access the international debt market since September 2013. If the government doesn’t tap international markets by Sept. 23, it will break its record bond drought of 384 days ended in April 2003, when concern over the election of then-President Luiz Inacio Lula da Silva reduced foreigners’ appetite for new notes. 
• Brazil's Stock Exchange Is Nearing a Bear Market. A plunge in the Ibovespa from this year’s peak put the equity gauge on the brink of a bear market amid forecasts Latin America’s largest economy is headed toward the longest recession since the 1930s. The stock benchmark led world losses, extending its slump since May 5 to 20 percent, as lender Itau Unibanco Holding SA and oil producer Petroleo Brasileiro SA tumbled. Traders have been pulling money from Brazil on concern President Dilma Rousseff will struggle to revive the economy, curb inflation and narrow the budget deficit amid a political crisis and calls for her impeachment. The real posted the biggest decline among 16 global major currencies tracked by Bloomberg. The Ibovespa fell 2.5 percent to 46,262.77 at 1:54 p.m. in Sao Paulo, the lowest level since March 2014. State-run lender Banco do Brasil SA sank to a three-year low on plans to aid the automaker industry at a time when revenue has trailed analysts’ estimates for three straight quarters. The real dropped 1 percent to 3.5025 per dollar. Brazil’s bond risk, as measured by credit-default swaps, approached the highest in six years. 
• Russia Is Having Trouble Selling Its Debt. Russia fell short of its bond auction target for a third week as contagion from China’s yuan devaluation spread through emerging markets. The ruble fell as Brent slid below $48 a barrel for the first time since January. The government sold 60 percent of the 10 billion rubles ($151 million) of floating-rate and fixed-coupon bonds it offered in auctions Wednesday after investors sought a higher price for the debt than the Finance Ministry was prepared to pay. The ruble dropped for a fifth day, retreating 0.5 percent to 66.1980 against the dollar, the lowest since Feb. 12.
• As Canada’s Oil Debt Soars to Record, an Industry Shakeout Looms. Canadian energy companies’ debt loads are the heaviest in at least a decade, boosting concern that some won’t survive the collapse in crude prices. Trican Well Service Ltd., Canada’s largest fracking service provider, said last week it may be unable to continue because it’s in danger of breaching the terms of its debt. It’s the latest firm to see crude’s descent to a six-year low sap the cash flow needed to meet financial obligations. Oil’s plunge has pushed a measure of the average debt burden among Canadian energy firms to the highest since at least 2002, and another measure of their ability to make interest payments to the third-lowest level in a decade, according to data compiled by Bloomberg. Facing some of the highest production costs in the world and carrying more debt than U.S. peers, the Canadian industry has become ripe for acquisitions.
• Emerging-Market Losses Spread as Vietnam to Kazakhstan Devalue. Emerging markets took another knock as Vietnam and Kazakhstan weakened their currencies in response to China’s surprise devaluation and investors weighed the timing of the first U.S. rate increase since 2006. South Korean equities fell to a six-month low on Wednesday while Taiwanese shares lost 1.9 percent and the Saudi index tumbled 2.5 percent. Vietnam devalued the dong for the third time in 2015 and Kazakhstan, whose biggest trading partners are China and Russia, let its tenge slide 4.4 percent. Turkey’s lira fell to a record for a fifth day, extending declines after an explosion in Istanbul. China’s yuan weakened in offshore trading. The anticipation of higher U.S. interest rates and a slowing Chinese economy pushed the MSCI Emerging Markets Index into a bear market last week, while a gauge tracking 20 currencies is extending its longest slump since 2000. Global funds are poised to be net sellers in developing Asian equities tracked by Bloomberg for a third straight month, the longest stretch since the middle of 2012.
• China-Led Concern Drags European Stocks to Lowest in Six Weeks. (video) European stocks succumbed to fears of a slowing Chinese economy, with exporters leading the losses.
  The Stoxx Europe 600 Index gave up two-days of gains, slipping 1.8 percent to 381.31 -- its lowest level in six weeks -- at the close of trading. Automakers and chemical companies retreated more than 2.4 percent, while a gauge of commodity producers closed at its lowest level since 2009. Glencore Plc tumbled 9.7 percent to a record low after the miner posted a slump in profit. PSA Peugeot Citroen and Daimler AG lost at least 2.6 percent, while BASF SE fell 2.7 percent.
• U.S. Oil Could Return to 2008 Low of $32 in Citigroup View. Oil could fall to lows last seen during the global financial crisis amid a persistent supply surplus, Citigroup Inc. said. “Balances point to further oversupply throughout 2015 begging the question how low can oil go,” Citigroup analysts led by Seth Kleinman said in an e-mailed report Wednesday. The U.S. crude price of $32.40 a barrel reached in 2008 “is a conceivable reality.” Crude has tumbled more than 30 percent since June amid signs that producers are maintaining output even after oil fell back into a bear market. West Texas Intermediate, the U.S. benchmark, fell $1.64 to $40.98 at 12:08 a.m. local time on the New York Mercantile Exchange, the lowest level since March 2009.
• Oil Patch's Biggest Losers Sell Crude for More Than Exxon Mobil(XOM). Some of the worst-performing oil companies in North America are getting more for their crude than Exxon Mobil Corp. and other giants. That may not help them for long. Goodrich Petroleum Corp., the biggest loser in the Bloomberg Intelligence index of North American independent producers, sold its output for $86.49 a barrel in the second quarter, according to data compiled by Bloomberg. Halcon Resources Corp., which is down 49 percent this year, reaped $81.18. Compare that with Chevron Corp., which received an average $54.26, and Exxon Mobil, which got $56.90.The reason: lack of cash.
• Fed Officials in July Saw Rate Rise Conditions Approaching. (video) Federal Reserve officials said last month that while conditions for raising interest rates were approaching, they saw more room for labor market healing and need more confidence that inflation is moving toward their goal, minutes of their meeting show. Most meeting participants “judged that the conditions for policy firming had not yet been achieved, but they noted that conditions were approaching that point,” according to minutes of the July 28-29 Federal Open Market Committee session, released Wednesday in Washington. The details come four weeks before the Fed’s September meeting, when most economists forecast the central bank will raise its benchmark interest rate for the first time since 2006. Policy makers say a decision to raise rates will hinge on continued improvement in the labor market and confidence that inflation will move higher.
• Pimco Sees Sept. Fed Move Underpriced, in Clash With Options. Investors are underpricing the chances of the Federal Reserve raising interest rates next month, according to Pacific Investment Management Co. Options on rates and currencies indicate investor skepticism may be growing that the first increase since June 2006 will come at the Fed’s Sept. 16-17 meeting. The odds for that had dropped to 46 percent on Wednesday from 54 percent almost two weeks ago. That’s based on fed-funds futures and on the assumption that the effective rate will average 0.375 percent after the increase. “We think the odds are a little higher,” Anthony Crescenzi, an executive vice president at Pacific Investment Management Co., said in an interview in Sydney. Most recent communications from the Fed “have been making it clear that the bar for a hike on Sept. 17 is fairly low,” he said.

Zero Hedge:

• FOMC Minutes Leaked Early After Embargo Broken, Fed Warns Risk To GDP Forecast "Tilted To The Downside".
• FOMC Reaction - Stocks Rip, USD & Bond Yields Dip As Sept Rate-Hike Odds Drop To 40%. (graph)
• Hilsenrath Confirms Fed Confusion In Leaked FOMC Minutes.
• The Next Leg Of The Commodity Carnage: Attention Shifts To Traders - Glencore Crashes, Noble Default Risk Soars. (graph)
• "A 2011-Style Breakdown": Global Advance-Decline Line Breaks To 6 Month Lows.
• WTI Collapses To A $40 Handle & What That Means For Earnings, In One Chart. (graph)
• No SDR For You: IMF Tells China To Wait At Least One Year Until Reserve Basket Inclusion.
• Distressed American Workers Expose The Fallacy Of Improving Unemployment Numbers. (graph)
• Is Your Name In The Ashley Madison Hack? Here Are Some Easy Ways To Find Out.
• After 6 Years Of QE, And A $4.5 Trillion Balance Sheet, St. Louis Fed Admits QE Was A Mistake.
• China Rushes To Inject Hundreds Of Billions In Liquidity To Offset Yuan Intervention.
• Turkey Turmoiling: Lira Plunges To Record Low On Financial, Political, Terrorism Fears. (graph)
• Consumer Prices Rise At Slowest Pace Since 2014 As Airfares Plunge, Car Costs Slide, But 'Rents' Jump. (graph)

AP:

• AP Exclusive: UN to let Iran inspect alleged nuke work site. Iran, in an unusual arrangement, will be allowed to use its own experts to inspect a site it allegedly used to develop nuclear arms under a secret agreement with the U.N. agency that normally carries out such work, according to a document seen by The Associated Press. The revelation is sure to roil American and Israeli critics of the main Iran deal signed by the U.S., Iran and five world powers in July. Those critics have complained that the deal is built on trust of the Iranians, a claim the U.S. has denied.

MNI:

• Bullard Says Fed Must 'Manage' Balance Sheet Post-Liftoff. Fed should meticulously "manage" shrinking of balance sheet after it starts raising rates, and not let maturing securities run off indiscriminately, St. Louis Fed President Bullard said in an interview. "I see no reason why you couldn't have a target level for the balance sheet and just manage to that level, and some of that could be through allowing run-off, and some of it through purchases or sales," Bullard said.

Bear Radar

Style Underperformer:

• Large-Cap Value -1.16%

Sector Underperformers:

• 1) Oil Service -3.55% 2) Energy -3.15% 3) Steel -2.64%

Stocks Falling on Unusual Volume:

• CSTE, SLH, CSIQ, AEO, PHX, OMER, TGT, SUI, CLM, AMFW, RMAX, CRH, PEO, BBL, EMO, AER, ESPR, WWWW, LOCO, BSTC, TGH, IQNT, NVRO, GMLP, RNF, WWAV, BKFS, TJX, SHAK, MRO, ESPR and SGMS

Stocks With Unusual Put Option Activity:

• 1) ITB 2) XLNX 3) ADI 4) XOM 5) BHI
  

Stocks With Most Negative News Mentions:

• 1) CHK 2) ORCL 3) MA 4) ESPR 5) COST
  

Charts:

• ETFs Falling on Unusual Volume

• Stocks Falling on Unusual Volume

Bull Radar

Style Outperformer:

• Large-Cap Growth -.84%

Sector Outperformers:

• 1) Gold & Silver +1.64% 2) Restaurants -.02% 3) Utilities -.09%
  

Stocks Rising on Unusual Volume:

• AEM and CEMP

Stocks With Unusual Call Option Activity:

• 1) CLR 2) MET 3) AEO 4) TGT 5) KR
  

Stocks With Most Positive News Mentions:

• 1) ABX 2) CTRN 3) SJM 4) PRI 5) CYBR
  

Charts:

• ETFs Rising on Unusual Volume 

• Stocks Rising on Unusual Volume