Monday Watch

Today's Headlines 

Bloomberg:

• Tsipras Wins Big Again in Greece as Voters Ignore Euro Showdown. Alexis Tsipras will return to power in Greece following another emphatic election victory, securing a new mandate after he yielded to the demands of European leaders for more austerity in the crisis-hit country. The former prime minister’s Coalition of the Radical Left, or Syriza, received 35.5 percent of the vote, according to an official projection by the Interior Ministry based on more than half of votes counted. The center-right New Democracy, whose leader Evangelos Meimarakis conceded defeat, was expected to get 28 percent. With Syriza set to fall short of a majority in the 300-seat parliament, Tsipras, 41, will enter negotiations to build a viable government with the same coalition partner as before, scotching expectations he might do a deal with a more moderate party. In a year marked by the standoff between Greece and its European creditors, the difference now is that the new government will have little room to maneuver after Tsipras acceded to more spending cuts and tax increases in exchange for a new bailout.   
• China's ‘Sloppy’ Policy Irks Blankfein as Yellen Cites Xi Doubts. As China’s President Xi Jinping heads to the U.S. for his first state visit, he confronts a wall of skepticism from global money managers and policy makers. From New York to London to Tokyo, finance luminaries have criticized Xi’s administration for what they characterize as a series of clumsy -- and potentially damaging -- attempts to bolster the nation’s equities and the economy. Federal Reserve Chair Janet Yellen on Thursday referred to investor concerns over the "deftness" of China’s response, a day after Goldman Sachs Group Inc.’s Lloyd Blankfein called it "awfully sloppy." "If I wanted to invest in China, I wouldn’t invest now," Blankfein, Goldman’s chief executive, told a breakfast meeting in New York last week. “I’m not going to buy after the Chinese government may have intervened.”
• Macau Casino Analysts Capitulate on Idea of Second-Half Recovery. For Macau casinos analysts, this is what capitulation looks like. As revenue declined month after month this year, they have steadily cut their estimates for how the year will turn out. In January, they forecast a slight increase in overall casino revenue after the 2.6 percent decline in 2014, the first drop in the city’s history. That estimate kept sliding throughout the year until the median estimate from 12 analysts surveyed by Bloomberg is now for a 32 percent slump. They have given up on the idea of a second-half recovery, now assuming a $14 billion revenue decline in one year. 
• Citic Securities Slump Seen Deepening as Bulls Lose Faith. Analysts are too optimistic on Citic Securities Co. That’s the view of Hong Kong traders at Changjiang Securities Holdings (HK) Ltd. and Geo Securities Ltd., who predict analysts will cut their recommendations as a government campaign to stop the equity rout-- from a crackdown on speculative trading to suspending initial public offerings -- reduces profits and share prices across the industry. Brokerages are also being compelled to foot a 220 billion yuan ($35 billion) rescue bill for the stock market, while an investigation into the turmoil has ensnared Citic Securities’ president.
• New Home ‘Tsunami’ May Snap Sydney Romance With Exuberant Prices. A home-building frenzy that is shoring up Australia’s economy as the mining boom ends may also be what finally takes the steam out of one of the world’s most expensive property markets. The case in point: Green Square. Nearly 10,000 apartments will be built in one of Sydney’s newest suburbs in the next four years to satisfy investor demand, which has already sent property prices in the city to the highest ever. It will also add to the record 213,000 new home starts across the country amid slowing population and economic growth, prompting Goldman Sachs Group Inc. to warn of a supply glut by 2017. “There is a tsunami of home supply coming,” said Nigel Stapledon, head of real estate research at the University of New South Wales Business School and former chief economist at Westpac Banking Corp. “The market is going to be tested in accepting this sort of supply. It’s not like there is economic growth to support it. Income growth has gone from boom time to the lowest in a number of years and population growth has eased back.”
• Goldman Sachs Says Euro May Weaken Up to 10 Cents on ECB Easing. Goldman Sachs Group Inc. says the euro may fall up to 10 U.S. cents as the European Central Bank is set to increase currency weakening stimulus to meet its inflation target. The investment bank predicts the ECB will maintain quantitative easing at its current rate of 60 billion euros ($67.8 billion) a month through the end of 2016, an extension of the plan that was intended to run until September 2016, and only end it completely in mid-2017.
• Saudi Stocks Drop Most in Mideast as Fed Stirs Growth Concerns. Saudi Arabian equities fell the most in the Arab world after the Federal Reserve’s decision to keep interest rates unchanged sparked concern over global growth and the price of oil capped its third week of losses. The Tadawul All Share Index fell 1.4 percent to 7,365.98 at the close in Riyadh to the lowest in almost a month, marking a seventh day of losses. Banks made up four out of the top five contributors to the decline. Abu Dhabi’s ADX General Index advanced 0.6 percent. The Bloomberg GCC 200 Index, made up of the biggest and most liquid shares in the six-nation Gulf Cooperation Council, slipped 0.6 percent. That sent the premium it commands over MSCI Inc.’s emerging markets index on a future price-to-earnings basis to the lowest in almost five months.
• Asian Stocks Decline on Global Growth Concern After Fed Comments. Asian stocks declined after U.S. shares fell and Federal Reserve officials argued that an interest-rate increase is still warranted this year. Markets in Japan are closed. The MSCI Asia Pacific Excluding Japan Index lost 0.6 percent to 410.10 as of 10:01 a.m. in Sydney, before markets in China and Hong Kong opened.
• Saudi Arabia's Crude Stockpiles at Record High as Exports Fall. Saudi Arabia’s crude stockpiles rose to a record in July after exports by the world’s biggest oil shipper declined for the third time in four months. Commercial petroleum stockpiles increased to 320 million barrels, the highest since at least 2002, from 319.5 million barrels in June, according to data Sunday on the website of the Riyadh-based Joint Organisations Data Initiative. Crude exports slumped 1.2 percent to 7.28 million barrels a day after hitting a record 7.9 million barrels in March. Overseas shipments declined every month since then except in June. 
• Not Even Glencore Can Lift the Sagging Copper Market. The biggest cuts to copper production this year haven’t been enough to overcome the drumbeat of China’s slowdown.
  While copper is still up about 2 percent after Glencore Plc said it would reduce its output, the advance has stalled on renewed fears about consumption in the country that accounts for more than 40 percent of global demand. Even a 8.3-magnitude earthquake in Chile, the world’s largest copper miner, failed to send prices soaring.
• Wheat's Worst Plunge Since 1986 Isn't Steep Enough for Bears. Hedge funds are so down on wheat that even the worst price plunge in 29 years isn’t leaving them satisfied. Instead, a global glut has money managers ready for more losses and sticking with a net-bearish outlook for seven straight weeks. World inventories before the start of next year’s harvest are expected to climb to an all-time high as farmers reap bigger crops in the U.S., Russia and Ukraine. Wheat futures have tumbled 21 percent since the end of June, heading for the worst quarterly loss since 1986.
• Dialog Semiconductor to Buy Atmel(ATML) for About $4.6 Billion. Dialog Semiconductor Plc, which makes chips for Apple Inc.’s iPhone and iPad, agreed to buy Atmel Corp. for $4.6 billion in cash and shares to boost its offerings as more everyday objects become connected. Atmel holders will get $4.65 in cash and 0.112 of an American Depository Share in Dialog for each Atmel common share, Kirchheim, Germany-based Dialog said in a statement on the DGAP newswire. The price is equivalent to about $10.42 per Atmel share based on Dialog’s closing stock price on Sept. 18.

Wall Street Journal: 

• Putin’s Syria Tour de Force. Before: Russia is ‘doomed to fail.’ Now: Obama is happy to talk. Vladimir Putin doesn’t seem to share President Obama’s definition of “smarter.” Ten days ago Mr. Obama declared that the Russian President’s military deployments in Syria were “doomed to fail” and the Kremlin was “going to have to start getting a little smarter.” Mr. Putin then began sending fighter jets, and now it looks like Mr. Obama is the one who has been taken to school.

Fox News: 

• Pope Francis meets with Fidel Castro in Cuba. Pope Francis met with Fidel Castro on Sunday after urging thousands of Cubans to serve one another and not an ideology, delivering a subtle jab at the communist system during a Mass celebrated under the gaze of an image of Che Guevara in Havana's iconic Revolution Plaza.

MarketWatch.com: 

• Moody's downgrades France to Aa2 from Aa1 on concerns about weak growth.

Zero Hedge:

• "What Does The Fed Know That We Don't" - Bridgewater's Ray Dalio Answers. (graph)
• Global Stocks, EM FX Extend Losses Despite China Saying "No Collapse Is Nigh". (graph)
• Game Over.
• For Hedge Funds, The Real Pain Is Only Just Starting. (graph)
• The Fed's A "Joke," Saxobank CIO Prefers Gold Amid Increased Uncertainty.
• Martin Armstrong Warns "Hell Is About To Break Loose".
• FBI Opens Investigation Into Malaysian PM's Goldman-Financed Slush Fund.
• Obama Will "Accept" 100,000 Refugees In The US Starting 2017.
• Fed To Main Street: Screw You - Wall Street Matters More. (graph)
• Goldman Calls It: No Rate Hike Until Mid-2016.
• Rousseff Coup Could Sink Brazil, Emerging Markets.
• If You Live In These States You'll Soon Need A Passport For Domestic Flights.
• "Nope" & Change. (graph)
• Central Banks Have Shot Their Wad & The Market Deck Has Been Reshuffled.

Business Insider:

• Photos: Russia's forward operating base in Syria is growing at a rapid pace. (pic)
• An index that China's leaders use to measure economic growth looks horrible. (graph)
• China's president has been going to funerals lately — it's a sign of trouble. 
• The ISIS 'caliphate' is the wild card of Europe's refugee crisis.
• Iran's president on '60 Minutes': US-Iran enmity eased, but 'we cannot forget the past'.
• Donald Trump is slumping — and 2 new candidates are surging after the big GOP debate.
• Scientists are calling for a ban on beauty products that could be a threat to the planet.
• The party's over.
• One energy company is on the verge of a 'liquidity death spiral'.
• NYSE margin debt. (graph)
• Thousands pour into Austria as migrant crisis intensifies.
• FED'S BULLARD: Don't confuse a few rate hikes with tight monetary policy.

Financial Times:

• Plunging oil prices put question mark over $1.5tn of projects. Plunging oil prices have rendered more than a trillion dollars of future spending on energy projects uneconomic, according to a study that suggests that the impact on industry operators is worsening. A report published Monday says $1.5tn of potential investment globally — including in North America’s shale-producing heartlands — is “out of the money” at current oil prices close to $50 a barrel and unlikely to go ahead.

Telegraph:

• Greek elections: Alexis Tsipras emerges as clear winner in shock result. Syriza win resounding and unlikely victory as charismatic ex-PM Alexis Tsipras is re-elected.

Weekend Recommendations

Barron's:

• Bullish on (RL), (GM), (TAXI) and (VSI).
• Bearish on (BABA) and (GPRO).

Night Trading

• Asian indices are -2.0% to -.75% on average.

• Asia Ex-Japan Investment Grade CDS Index 148.25 +19.75 basis points.

• Asia Pacific Sovereign CDS Index 78.25 +.25 basis point.

• S&P 500 futures -.44%.

• NASDAQ 100 futures -.50%.

Morning Preview Links

Earnings of Note

Company/Estimate 

• (LEN)/.79
• (RHT)/.44
• (THO)/1.31

Economic Releases
10:00 am EST

• Existing Home Sales for August are estimated to fall to 5.5M versus 5.59M in July.

Upcoming Splits

• (JHX) 5-for-1

Other Potential Market Movers

• The Fed's Williams speaking, Fed's Bullard speaking, Fed's Lockhart speaking, German PPI report and the JMP Financial Services/Real Estate conference could also impact trading today.

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

Weekly Outlook

Week Ahead by Bloomberg. 

Wall St. Week Ahead by Reuters.

Weekly Economic Calendar by Briefing.com.

BOTTOM LINE: I expect US stocks to finish the week modestly lower on China bubble-bursting fears, Asian currency concerns, commodity weakness, Fed rate-hike worries, rising European/Emerging Markets/US High-Yield debt angst and earnings outlook concerns. My intermediate-term trading indicators are giving neutral signals and the Portfolio is 25% net long heading into the week.

Today's Headlines

Bloomberg: 

• Greeks Expect More of the Same Hardship as They Vote Again. (video) As Greeks prepare to return to the polls this weekend, hope their election will lead to a break from a six-year economic crisis has turned into fear the result will just deliver more of the same. Kiki Kondyli, an Athens store owner, was formerly an enthusiastic supporter of Alexis Tsipras’s Coalition of the Radical Left, or Syriza. She says she won’t support the party this time because of the former prime minister’s U-turn on opposing spending cuts and tax increases to meet the demands of the nation’s creditors. In fact, she may not bother to vote at all.
• Fed Officials Make Case for 2015 Liftoff After September Hold. Three Federal Reserve policy makers argued on Saturday for lifting the central bank’s key interest rate before year-end, countering bets by many traders that the Fed will wait until 2016. Laying out their rationale for a rate increase at one of the Fed’s two remaining meetings of 2015, the central bankers cited continued improvement in the domestic economy, including low unemployment, which they suggested overshadowed concerns about global conditions and volatile financial markets. San Francisco Federal Reserve Bank President John Williams, St. Louis Fed President James Bullard and Richmond Fed President Jeffrey Lacker each spoke or wrote on Saturday, days after the policy-setting Federal Open Market Committee voted on Thursday to leave rates unchanged. The central bank’s decision, and the way its deliberations were framed, were interpreted by many Fed watchers as a sign that the central bank might not raise rates this year. In holding rates steady, the Fed noted international uncertainties and subdued inflation.

Wall Street Journal:

• A Progressive’s Pilgrimage: Francis Meets the U.S. Flock. The papal visit comes as changes in demographics and religious attitudes challenge the fabric of the church. When Pope Francis sets foot on American soil this week, he will be visiting a Catholic community that wields vast influence on account of its size, wealth and political power. But he will also be confronting a flock increasingly divided on the direction he is taking the Catholic Church.
• Letting Clinton Off the Hook. A special prosecutor for Clinton’s emails is a dumb idea. Senate Majority Leader Mitch McConnell likes to say there’s no education in the second kick of a mule. Maybe not, but Mr. McConnell might want to kick his deputy John Cornyn anyway for asking Attorney General Loretta Lynch to appoint a special counsel to investigate Hillary Clinton’s email transgressions. Mr. Cornyn, the senior Senator from Texas and number two in the Republican leadership, says that Justice’s political appointees can’t fairly investigate President Obama’s former Secretary of State. But as dumb political... 

MarketWatch.com:

• Occam’s razor says the stock market is in a downtrend. 
• Traders now see Fed first hiking rates in 2016. Traders put a 52% chance of a rate hike in January, one meeting later than was expected prior to the Fed’s decision to leave rates unchanged, according to CME FedWatch. The Fed is scheduled to meet Jan. 26-27. Before Thursday’s meeting, the odds had favored a December rate hike.

Fox News:

• Obama administration urged by police, GOP candidates to be more outspoken on cop killings. Obama administration officials are being urged by law enforcement and Republican presidential hopefuls to be more outspoken about police officers being targeted and shot, amid a recent series of fatal attacks. "This is the president's problem because he has not shown law and order to be the rule of the day," Republican presidential candidate and New Jersey Gov. Chris Christie recent told Fox News.

CNBC: 

• Fed's case for continued cheap money not compelling: Bullard. St. Louis Fed President James Bullard said he argued against last week's decision by the U.S. Federal Reserve to hold interest rates steady, and felt other policymakers had not made a compelling case for yet again delaying a rate hike. Bullard does not currently vote on the Fed's policy setting committee and thus could not join Richmond Fed chief Jeffrey Lacker in dissenting from the decision to hold rates near zero for at least another six weeks. But he was sharply critical of the decision in remarks to a community banking group here. "The Committee has not, in my view, provided a satisfactory answer," to how near zero interest rates align with close to full employment and continued economic growth, Bullard said. Even though inflation is weak, rates will still be extraordinarily low even after an initial rate increase, Bullard said, and thus would continue to support economic growth and ultimately higher prices. "The case for policy normalization is quite strong," Bullard said, contending that the Fed's dual employment and inflation objectives "have essentially been met."

Zero Hedge:

• "Blood In The Casino Like Never Before" - Riding ZIRP Into Monetary Central Planning's Dead End.
• Conspiracy "Fact" - VIX Manipulation Runs The Entire Market. (graph)
• Don't Show This Chart To Your Hedge Fund Manager. (graph)
• Moody's Downgrades France, Blames "Political Constraints", Sees No Material Reduction In Debt Burden.
• Mark Spitznagel Warns: If Investors Thought August Was Scary, "They Ain't Seen Nothin' Yet". (video)
• It Begins: Australia's Largest Investment Bank Just Said "Helicopter Money" Is 12-18 Months Away.
• Yellen's "New" Mandate - Why We Are All Fed-Watchers Now.
• Interbank Credit Risk Soars To 3 Year Highs - Is This Why Janet Folded? (graph)
• "Activists" Misleading Ownership Stakes & Suspect "Positioning" Strategies.
• Why The Fed's Credibility Is Crashing: The Market's Three Biggest Worries. (graph)
• Fed Opens Negative Interest Rate Pandora's Box: What Happens Next.
• The Fed Is Trapped: The Naked Emperor's New "Reaction Function".
• Wanna See The 'Trick' In Trickle-Down? (graph)
• Investors Dump Stocks For Safety Of Bonds & Bullion In Yellen's New "World Of Confusion". (graph)
• Weekend Reading: Fed Rate Failure.

Business Insider:

• 'The devil made me do it': Obama's foreign policy just reached a new low. The Obama administration's policy toward Syria and its more than four-year civil war is rapidly becoming a black mark on the president's legacy. And a scathing new report by Peter Baker of The New York Times details the mind-boggling decision by the White House to refuse to accept any responsibility. The blame for the failed US effort to train Syrian rebels to fight ISIS "should be pointed not at Mr. Obama but at those who pressed him to attempt training Syrian rebels in the first place," administration officials told Baker.
• The American consumer is worried. (graph)
• Tesla(TSLA) might finally have something to worry about from other carmakers.
• A startup shot money out of guns into the streets of San Francisco during the Salesforce conference.
• WSJ: Biden's aides signal that he's a lot closer to running.
• The US signaled it's resigned to Russia's emerging plans on Syria.
• DEMOCRATIC DONORS: 'In our opinion, the next president must be Joe Biden'.
• Banks are threatening more layoffs if the Fed doesn't hike.
• The Clinton campaign thinks Donald Trump is helping Hillary. Hillary Clinton's team is evidently pretty pleased that Donald Trump is leading polls of the Republican presidential primary. On Wednesday evening, Clinton's campaign manager, Robby Mook, described Trump's rise as a "scary prospect" for Republicans that is "damaging" the GOP's chances of winning the general election.

Reuters:

• Fed's Williams still sees 2015 rate hike after 'close call'. An interest rate hike will likely be appropriate this year given the U.S. Federal Reserve's decision last week to stand pat was a "close call," a top Fed policymaker said on Saturday. John Williams, a centrist and president of the San Francisco Fed, said the arguments for and against beginning to tighten U.S. monetary policy are about balanced now that the economy is on solid footing, giving him confidence in continued economic and labor market growth. Williams, the first U.S. policymaker to speak publicly since the Fed's much-anticipated decision on Thursday, suggested he is almost ready to pull the trigger on a rate hike.

Market Week in Review

• S&P 500 1,958.03 -.15%*

The Weekly Wrap by Briefing.com.

*5-Day Change

Weekly Scoreboard*

Indices

• S&P 500 1,958.03 -.15%

• DJIA 16,384.58 -.30%

• NASDAQ 4,827.22 +.10%

• Russell 2000 1,163.35 +.48%

• S&P 500 High Beta 29.90 -.70%

• Goldman 50 Most Shorted 122.14 +1.0% 

• Wilshire 5000 20,492.22 -.05%

• Russell 1000 Growth 967.20 +.22%

• Russell 1000 Value 931.49 -.43%

• S&P 500 Consumer Staples 484.45 +.82%

• Solactive US Cyclical 119.66 -.67%

• Morgan Stanley Technology 1,010.42 +.05%

• Transports 8,036.37 -.20%

• Utilities 564.99 +2.83%

• Bloomberg European Bank/Financial Services 102.64 -2.14%

• MSCI Emerging Markets 34.25 +2.38%

• HFRX Equity Hedge 1,174.92 +.85%

• HFRX Equity Market Neutral 1,026.61 +.57%

Sentiment/Internals

• NYSE Cumulative A/D Line 229,598 +1.12%

• Bloomberg New Highs-Lows Index -88 +240

• Bloomberg Crude Oil % Bulls 34.21 +5.26%

• CFTC Oil Net Speculative Position 239,386 +3.44%

• CFTC Oil Total Open Interest 1,702,949 -.08%

• Total Put/Call 1.15 -4.17%

• OEX Put/Call 1.89 +36.96%

• ISE Sentiment 56.0 -30.0%

• NYSE Arms 3.72 +309.19%

• Volatility(VIX) 23.49 +.47%

• S&P 500 Implied Correlation 64.71 +1.62%

• G7 Currency Volatility (VXY) 10.12 -5.07%

• Emerging Markets Currency Volatility (EM-VXY) 11.54 -8.99%

• Smart Money Flow Index 16,945.71 +2.67%

• ICI Money Mkt Mutual Fund Assets $2.646 Trillion -.61%

• ICI US Equity Weekly Net New Cash Flow -$2.985 Billion

• AAII % Bulls 33.3 -4.0%

• AAII % Bears 29.1 -16.8%

Futures Spot Prices

• CRB Index 194.18 -1.29%

• Crude Oil 44.79 +.04%

• Reformulated Gasoline 135.99 -1.09%

• Natural Gas 2.61 -2.98%

• Heating Oil 149.38 -3.45%

• Gold 1,137.50 +2.70%

• Bloomberg Base Metals Index 150.60 -.88%

• Copper 237.50 -3.14%

• US No. 1 Heavy Melt Scrap Steel 199.0 USD/Ton -5.54%

• China Iron Ore Spot 57.69 USD/Ton -2.24%

• Lumber 248.20 +9.45%

• UBS-Bloomberg Agriculture 1,022.22 +1.91%

Economy

• ECRI Weekly Leading Economic Index Growth Rate -2.2% -20.0 basis points

• Philly Fed ADS Real-Time Business Conditions Index .0408 unch.

• S&P 500 Blended Forward 12 Months Mean EPS Estimate 126.40 -.02%

• Citi US Economic Surprise Index -27.4 -5.2 points

• Citi Eurozone Economic Surprise Index 14.5 -10.1 points

• Citi Emerging Markets Economic Surprise Index -23.7 -.9 point

• Fed Fund Futures imply 82.0% chance of no change, 18.0% chance of 25 basis point hike on 10/28
• # of Months to 1st Fed Rate Hike(Morgan Stanley) 3.23 -18.84%

• US Dollar Index 95.14 -.06%

• Euro/Yen Carry Return Index 141.49 -.83%

• Yield Curve 145.0 -3.0 basis points

• 10-Year US Treasury Yield 2.13% -6.0 basis points

• Federal Reserve's Balance Sheet $4.449 Trillion +.21%

• U.S. Sovereign Debt Credit Default Swap 15.30 -3.38%

• Illinois Municipal Debt Credit Default Swap 242.0 -1.23%

• Western Europe Sovereign Debt Credit Default Swap Index 20.42 -4.89%

• Asia Pacific Sovereign Debt Credit Default Swap Index 77.8 -9.67%
  

• Emerging Markets Sovereign Debt CDS Index 259.95 -4.96%
  

• Israel Sovereign Debt Credit Default Swap 67.50 -1.22%

• Iraq Sovereign Debt Credit Default Swap 758.73 -5.79%

• Russia Sovereign Debt Credit Default Swap 351.51 -4.96%

• iBoxx Offshore RMB China Corporates High Yield Index 119.12 +1.07%

• 10-Year TIPS Spread 1.56% -3.0 basis points

• TED Spread 33.0 +2.75 basis points

• 2-Year Swap Spread 12.75 -1.75 basis points

• 3-Month EUR/USD Cross-Currency Basis Swap -24.0 unch.

• N. America Investment Grade Credit Default Swap Index 76.87 -4.17%

• America Energy Sector High-Yield Credit Default Swap Index n/a

• European Financial Sector Credit Default Swap Index 77.88 -5.11%
  

• Emerging Markets Credit Default Swap Index 337.41 -4.82%
  

• CMBS AAA Super Senior 10-Year Treasury Spread  to Swaps 118.0 +2.0 basis points

• M1 Money Supply $3.024 Trillion -.55%

• Commercial Paper Outstanding 1,039.0 -.4%

• 4-Week Moving Average of Jobless Claims 272,500 -3,250

• Continuing Claims Unemployment Rate 1.7% unch.

• Average 30-Year Mortgage Rate 3.91% +1 basis point

• Weekly Mortgage Applications 400.50 -7.03%

• Bloomberg Consumer Comfort 40.2 -1.2 points

• Weekly Retail Sales +1.50% +20.0 basis points

• Nationwide Gas $2.30/gallon -.06/gallon

• Baltic Dry Index 883.0 +7.94%

• China (Export) Containerized Freight Index 827.16 +.89%

• Oil Tanker Rate(Arabian Gulf to U.S. Gulf Coast) 35.0 +27.27%

• Rail Freight Carloads 241,837 -13.59%

Best Performing Style

• Small-Cap Growth +.9%

Worst Performing Style

• Large-Cap Value -.4%

Leading Sectors

• Gold & Silver +6.2%

• Utilities +3.3%

• REITs +3.2%

• Airlines +2.8%

• Drugs +1.5%

Lagging Sectors

• Gaming -1.8% 

• Disk Drives -2.2%

• I-Banks -2.2%

• Banks -2.7%

• Steel -3.0%

Weekly High-Volume Stock Gainers (14)

• ITCI, COLL, AERI, ACET, ADXS, MRTX, PGI, TAP, CVC, SGEN, XNCR, SLH, NSA and RUSHB

Weekly High-Volume Stock Losers (7)

• ANET, CLC, GSBD, FNSR, TMST, MFRM and ZUMZ

Weekly Charts

ETFs

• High-Volume Gainers

• High-Volume Losers

Stocks

• High-Volume Gainers

• High-Volume Losers

*5-Day Change

Stocks Falling Substantially into Final Hour on China Bubble-Bursting Fears, 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: Heavy

• Market Leading Stocks: Performing In Line

Equity Investor Angst:

• Volatility(VIX) 22.55 +6.67%

• Euro/Yen Carry Return Index 142.07 -86%

• Emerging Markets Currency Volatility(VXY) 11.54 -1.79%

• S&P 500 Implied Correlation 64.35 +2.83%

• ISE Sentiment Index 55.0 -26.67%

• Total Put/Call 1.13 +26.97%

• NYSE Arms 3.05 +78.18% 

Credit Investor Angst:

• North American Investment Grade CDS Index 78.24 +1.98%

• America Energy Sector High-Yield CDS Index n/a

• European Financial Sector CDS Index 78.0 +1.64%

• Western Europe Sovereign Debt CDS Index 20.42 -3.27%

• Asia Pacific Sovereign Debt CDS Index 77.80 -.24%

• Emerging Market CDS Index 335.43 +2.20%
  

• iBoxx Offshore RMB China Corporates High Yield Index 119.12 +.17%

• 2-Year Swap Spread 12.75 -1.0 basis point

• TED Spread 33.0 +5.25 basis points

• 3-Month EUR/USD Cross-Currency Basis Swap -23.75 -4.75 basis points

Economic Gauges:

• 3-Month T-Bill Yield -.01% -2.0 basis points

• Yield Curve 146.0 -6.0 basis points

• China Import Iron Ore Spot $57.69/Metric Tonne +.56%

• Citi US Economic Surprise Index -27.4 -.1 point

• Citi Eurozone Economic Surprise Index 14.5 -.8 point

• Citi Emerging Markets Economic Surprise Index -23.7 +.5 point

• 10-Year TIPS Spread 1.56 -3.0 basis points
• # of Months to 1st Fed Rate Hike(Morgan Stanley) 3.23 unch.

Overseas Futures:

• Nikkei 225 Futures: Indicating -205 open in Japan 
• China A50 Futures: Indicating -155 open in China

• DAX Futures: Indicating +13 open in Germany

Portfolio: 

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

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

• Market Exposure: Moved to 25% Net Long