Friday Watch

Evening Headlines

Bloomberg:

• EU Has a Tough Balancing Act in Weighing Spain, Portugal Fines. The European Union is in a political bind as it looks into the unprecedented step of slapping sanctions against Spain and Portugal for breaching budget-deficit limits. The European Commission is seeking the go-ahead from finance ministers to propose fines and a suspension of some EU regional-development funding after concluding that Spain and Portugal took inadequate steps to narrow deficits. Should the finance ministers support the request as soon as next week, the commission would have 20 days to propose a set of penalties. Any fines could be as high as 0.2 percent of the countries’ gross domestic product, while the possible freezing of regional funds could be up to 0.5 percent of their GDP. The EU has three broad options, which involve different strategic considerations.
• Xi Boosts Party Say in China’s $18 Trillion State Company Sector. Chinese President Xi Jinping is putting more of the "state" in "state-owned enterprise." Carmaker FAW Car Co., fiber producer Sinoma Science & Technology Co. and miner Tibet Mineral Development Co. have recently modified their bylaws to give Xi’s Communist Party more oversight of management decisions. For example, company boards will now have an obligation to listen to internal party committees before making major decisions. "Communist Party officials are stepping up intervention in day-to-day operations of state-owned corporations," said Xu Baoli, a senior researcher with the State-owned Assets Supervision and Administration Commission, the government’s main SOE regulator. "There were cases in the past where the board would reject a proposal that had gone through the party. I doubt whether that will happen in the future."
• S&P Puts Australia Banks on Watch. (video)
• Shoppers Tightening Purse Strings Make Japan’s Retailers See Red. Japan’s discount-seeking shoppers drove some retailers into the red last quarter as an uncertain economic outlook persuaded consumers to tighten their purse strings. Supermarkets and clothing stores will probably cut prices more to spur sluggish sales, which caused Aeon Co., the nation’s biggest retailer by sales, to report its worst first quarter in eight years -- a 6.3 billion yen ($62 million) loss. Seven & i Holdings Co. posted operating profit that missed analysts’ estimates as its department store business that includes retailer Sogo & Seibu widened its operating loss to 1 billion yen.
• Boeing’s(BA) Agreement With Iran Comes Under Congressional Scrutiny. Boeing Co.’s historic agreement to provide 109 aircraft to Iran’s national airline is coming under increasing pressure from lawmakers in Washington. “I am extremely concerned that by relaxing the rules, the Obama administration has allowed U.S. companies to be complicit in weaponizing the Iranian regime,” Republican Representative Bill Huizenga of Michigan said Thursday at a hearing of a House Financial Services subcommittee.
• Brazil Real Extends Five-Day Decline as Central Bank Intervenes. Brazil’s real dropped as commodities traded lower and the central bank intervened for a fifth consecutive day to weaken the currency. The real declined 1.1 percent to 3.3675 per dollar Thursday as the monetary authority placed all 10,000 reverse swaps it offered, equivalent to buying $500 million in the futures market. The currency has declined 4.6 percent this month, the most in the world.
• Asian Stocks Head for Weekly Decline Ahead of U.S. Jobs Report. Asian stocks headed for a weekly decline as investors awaited a monthly U.S. jobs report to assess its implications for monetary policy. The MSCI Asia Pacific Index added 0.1 percent to 129.08 as of 9:06 a.m. in Tokyo, on course for a 0.4 percent retreat this week as concern over the fallout from the U.K.’s vote to leave the European Union returned to markets. Energy shares declined after crude fell to an almost two-month low on Thursday on renewed fears of oversupply in America. Taiwan shut financial markets and some offices Friday as Typhoon Nepartak approached the island.
• Big Oil’s $45 Billion of New Projects Signal Spending Revival. Two projects worth $45 billion announced this month show the world’s largest oil companies are regaining the confidence to make big investments, emboldened by rising crude prices and low costs that promise to trigger more expansion ahead. Chevron Corp. gave the go-ahead to a $37 billion expansion in Kazakhstan, the industry’s biggest undertaking since crude started tumbling two years ago. BP Plc signed off on the $8 billion expansion of a liquefied natural gas plant in Indonesia. Two more big projects are likely to get a green light this year, according to industry consulting firm Wood Mackenzie Ltd. and Jefferies International Ltd. -- BP’s Mad Dog Phase 2 in the Gulf of Mexico and Eni SpA’s Coral LNG development off Mozambique.
• Australia Cuts 2017 Iron Ore Forecast 20% on Outlook for Supply. The world’s biggest iron ore shipper cut its outlook for prices next year by 20 percent as the global market remains well supplied, loss-making mines are still churning out production and steel output in China is set to shrink further. Iron ore is seen at $44.80 a metric ton next year, Australia’s Department of Industry, Innovation and Science said in a quarterly report on Friday. That compares with its previous forecast of $56 given in the March quarter. The prediction for 2016 was little changed at $44.20 a ton from $45.

Wall Street Journal:

• Donald Trump Woos Some GOP Lawmakers, Leaves Others Cold. Likely GOP presidential nominee impresses some lawmakers during Capitol Hill visit, but encounters pushback from skeptics.
•  The Legend of Jim Comey. His political actions spared Clinton and protected his own job.

Fox News:

• State Department reopens Clinton emails probe. The State Department is reopening an internal investigation of possible mishandling of classified information by Hillary Clinton and top aides. Spokesman John Kirby says the emails probe is restarting now that the Justice Department isn't pursuing a criminal prosecution. The State Department suspended its review in April to avoid interfering with the FBI's inquiry. Kirby set no deadline for the investigation's completion. Clinton was secretary of state until early 2013. Most of her top advisers left shortly thereafter. But Kirby said this week former officials can still face "administrative sanctions." The most serious is loss of security clearances, which could complicate Clinton's naming of a national security team if she becomes president. Beyond the Democratic front-runner, the probe is most likely examining confidants Cheryl Mills, Jake Sullivan and Huma Abedin.
• Fox News Electoral Map: Clinton has 2016 edge, but many toss-ups in play. Utilities, a sector traditionally viewed as a safety play in times of market turmoil, have risen 21.2% in the first half of 2016—the sector’s best first-half performance in over 25 years. But if you ask some analysts, the run-up in prices leaves the sector extremely overextended and valuations dangerously high; some analysts believe the sector is in bubble territory.

MarketWatch:

• Wall Street’s safest bets are now in bubble territory. 

Zero Hedge:

• State Department Re-Opens Clinton Emails Probe, Hints At "Administrative Sanctions".
• Measuring America - 30-Year-Olds: Then & Now. (graph)
• Mass Protests Planned Following Castile Shooting, As Minnesota Governor Blasts Cops.
• "Maybe You Can Reverse Brexit" - Jamie Dimon Chimes In On How To Ignore The Voters.
• WalMart(WMT) Tries Subtle Cost Cutting Measures In China And It Backfires Spectacularly.
• "PADD 1 Is A Holy Mess" - Is This What Finally Drags Crude Oil Lower.
• Just 3 Things. (graph)
• Late-Day VIX-Clubbing Saves Stocks From Gas-mageddon. (graph)

Business Insider:

• GOP Rep. Trey Gowdy reads list of Clinton statements to FBI director, who says they were all false.
• We might be seeing 2008 all over again.
• Two patients in a cancer-drug trial died last week and shares of the company behind it are crashing.
• Gap(GPS) stock is leaping after sales crush expectations.

Telegraph:

• World faces deflation shock as China devalues at accelerating pace.

Express: 

• Britain and Moscow ready for WAR as they station troops on RUSSIAN BORDER. HUNDREDS of British troops are being scrambled to countries bordering Russia as a show of strength to Vladimir Putin.

China Securities Journal:

• Risks in China's Credit Market Remain High in 2H. Cos.' profitability and internal cash flows continue to deteriorate in recent years amid economic restructuring, resulting in weakening debt payment ability, according to a commentary published on the front page, written by reporter Zhang Qinfeng. Credit risks will keep accumulating as pressure from bonds due in 2H won't ease and investors may continue to favor safer assets, he said.

Night Trading 

• Asian equity indices are -.50% to unch. on average.
• Asia Ex-Japan Investment Grade CDS Index 139.25 -1.0 basis point.
• Asia Pacific Sovereign CDS Index 54.0 -.5 basis point.
• Bloomberg Emerging Markets Currency Index 71.90 +.03%. 
• S&P 500 futures +.02%. 
• NASDAQ 100 futures -.01%.

Morning Preview Links

Earnings of Note
Company/Estimate 

• None of note

Economic Releases  
8:30 am EST

• The Change in Non-Farm Payrolls for June is estimated to rise to 180K versus 38K in May.
• The Unemployment Rate for June is estimated to rise to 4.8% versus 4.7% in May.
• Average Hourly Earnings MoM for June are estimated to rise +.2% versus a +.2% gain in May. 

3:00 pm EST:

• Consumer Credit for May is estimated to rise to $16.0B versus $13.416B in April.

Upcoming Splits 

• None of note

Other Potential Market Movers

• The German Export/Import data could also impact trading today.

BOTTOM LINE:  Asian indices are mostly lower, weighed down by industrial and real estate shares in the region. I expect US stocks to open modestly higher and to weaken into the afternoon, finishing mixed. The Portfolio is 50% net long heading into the day.

Stocks Reversing Slightly Lower into Final Hour on Rising European Debt Angst, Oil Decline, Yen Strength, Commodity/Utility Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Slightly Lower
  

• Sector Performance: Mixed
  

• Volume: Below Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 15.78 +5.41%

• Euro/Yen Carry Return Index 116.45 -.91%

• Emerging Markets Currency Volatility(VXY) 10.19 -.59%

• S&P 500 Implied Correlation 54.53 +3.38%

• ISE Sentiment Index 86.0 -1.15%
  

• Total Put/Call .81 -20.59%

• NYSE Arms 1.32 +60.40% 

Credit Investor Angst:

• North American Investment Grade CDS Index 77.41 +1.36%
  

• America Energy Sector High-Yield CDS Index 782.0 -.56%

• European Financial Sector CDS Index 117.60 +1.02%

• Western Europe Sovereign Debt CDS Index 32.33 +.78%

• Asia Pacific Sovereign Debt CDS Index 53.93 -1.21%

• Emerging Market CDS Index 271.89 +.84%
  

• iBoxx Offshore RMB China Corporate High Yield Index 130.22 -.03%

• 2-Year Swap Spread 17.0 +.25 basis point
  

• TED Spread 37.75 -2.5 basis points

• 3-Month EUR/USD Cross-Currency Basis Swap -43.75 unch.
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 71.86 -.11%
• 3-Month T-Bill Yield .28% +1.0 basis point

• Yield Curve 80.0 unch.
  

• China Import Iron Ore Spot $55.07/Metric Tonne -1.54%

• Citi US Economic Surprise Index -3.1 +4.0 points

• Citi Eurozone Economic Surprise Index 10.1 -4.1 points

• Citi Emerging Markets Economic Surprise Index -14.90 -.7 point

• 10-Year TIPS Spread 1.46% -1.0 basis point
• 4.0% chance of Fed rate hike at Sept. 21 meeting, 3.9% chance at Nov. 2 meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating +38 open in Japan 
• China A50 Futures: Indicating -115 open in China

• DAX Futures: Indicating -52 open in Germany

Portfolio: 

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

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

• Market Exposure: Moved to 25% Net Long

Today's Headlines

Bloomberg: 

• Monte Paschi Bonds Drop as Italy-Europe Talks Halt in Deadlock. Banca Monte dei Paschi di Siena SpA’s subordinated bonds fell to a five-month low amid reports that Italy and the European Commission are in deadlock over how to boost the country’s broken banking system. Monte Paschi’s 379 million ($420 million) euros of notes due September 2020 fell 13 cents on the euro to 64 cents on Thursday, the lowest since Jan. 21, according to data compiled by Bloomberg. They were quoted above 90 cents last week. Italy and the EC are seeking ways to recapitalize Monte Paschi, Italy’s third-largest bank, and other lenders amid concerns they may fail critical stress tests due at the end of the month. Talks have foundered on whether creditors should face losses -- under so called bail-ins -- if taxpayer funds are used, according to people familiar with the discussions.
• Italy’s Banking Woes Spark Fears of Market Contagion. (video)
• Populist Politicians Take On Italy’s Massive Debt Pile. Unpaid bills stoke frustration over the country’s old guard. The Rome Olympics of 1960 marked the rebound of the Italian capital after years of war and reconstruction, an affirmation of the country’s renaissance and the city’s emergence as a symbol of dolce vita insouciance. Rome is still paying the bill, and the new mayor, Virginia Raggi, is sick of it. The city has roughly €13.6 billion ($15.2 billion) in debt and more than 12,000 creditors—though the pile is so complex no one really knows how much is owed to whom. Rome faces outstanding bills for operating its 61-year-old metro system, hauling trash, and running a network of unprofitable pharmacies that compete with private shops. The courts are grappling with hundreds of lawsuits over unpaid debts going back 50 years for land expropriated to build hospitals, streets, and other city projects—including some debts connected to the 1960 games, former Mayor Ignazio Marino has said.
• Europe Banks Close to Breaching Crisis Lows on Italy Woes: Chart.
• EU Commission Seeks Sanction on Spain, Portugal on Deficits. Spain and Portugal were hit by a European Union move to fine them for breaching budget deficit limits in an unprecedented step to enforce rules designed to avert another debt crisis. European finance ministers must now decide whether to back the proposal by the European Commission. Should the recommendation be approved, the commission would have 20 days to propose fines that could reach as high as 0.2 percent of gross domestic product, and a suspension of some regional funds. The penalties could be reduced or canceled for “exceptional” circumstances. “The two countries have veered off track in the correction of their excessive deficits and have not met their budgetary targets,” Valdis Dombrovskis, a commission vice-president, told reporters in Brussels. “Reducing the high deficit and debt levels is a pre-condition for sustainable economic growth in both countries."
• Traders Pile Into Swaps Insuring U.K. Company Debt After Brexit. Credit-default swaps covering a gross $202 million of Next’s bonds traded in the week through July 1, compared with $29 million the week before, according to DTCC data. Contracts insuring Marks & Spencer Group Plc’s debt rose to $242 million, while those on Barclays Plc climbed 50 percent to $590 million and swaps on Royal Bank of Scotland Group Plc rose 87 percent to $331 million, the data show. The cost of insuring U.K. corporate debt rose along with trading volumes, according to data compiled by Bloomberg. Credit-default swaps on Next rose to an almost four-year high of 128 basis points on Thursday, while those on Marks & Spencer climbed to a three-year high of 188 basis points. Barclays and RBS reached the highest levels since 2013 this week.
• German Output in May Unexpectedly Drops in Sign of Slowdown. German industrial production dropped the most in 21 months in May in a sign that the headwinds from a global economic slowdown and political uncertainty in Europe damped activity. Production, adjusted for seasonal swings, fell 1.3 percent from the previous month, when it rose a revised 0.5 percent, data from the Economy Ministry in Berlin showed on Thursday. Economists in a Bloomberg survey had predicted a 0.1 percent rise in the typically volatile gauge. Output fell 0.4 percent from a year earlier. The report underscores the challenges facing German manufacturers, with signs of fragility in the global economy now likely to be exacerbated by the U.K.’s decision to quit the European Union. The British vote in June could further weaken the German economy, Bundesbank President Jens Weidmann warned last week.
• Merkel Says Russia Has ‘Deeply Shaken’ NATO’s Eastern Members. German Chancellor Angela Merkel said Russia has “deeply unsettled” countries in eastern Europe, underscoring the need to strengthen NATO’s presence in the region. Addressing parliament in Berlin a day before she’ll join fellow leaders of North Atlantic Treaty Organization countries in Warsaw, Merkel defended the alliance’s decision to deploy four battalions to rotate through the Baltic nations and Poland. At the same time, lasting security in Europe is only possible in cooperation with Russia and NATO still has an “outstretched hand” for dialogue, she said. “Russia’s actions in the Ukraine crisis have deeply shaken our eastern allies,” Merkel said in her speech on Thursday. “That has deeply unsettled our alliance partners. They therefore require the unequivocal reassurance by the alliance.”
• Risks to China Property Market Increasing, CASS Researchers Say. China’s property prices and real estate investment are poised for slower growth even as home sales may rise to a record this year, according to a top government think tank. Real estate is due for a "short-term adjustment period" after heating up since 2015, the Chinese Academy of Social Sciences said in a report Wednesday. Price increases and investment will slow down in the second half of 2016 and the first half of 2017, with the divide between big cities and smaller ones continuing to widen.
• China Provinces Meddle in Bank Loan Choices to Keep Firms Alive. China’s regional governments are meddling in decisions of state-owned lenders to prop up local steel makers and miners, in a setback to efforts to let the market decide who gets financing. Last week, the Shandong government took steps to protect companies that have outstanding loans of 500 million yuan ($74.7 million) or more by asking banks to form committees to block any lender that tries to cut funding lines to the firms. The Shanxi government urged banks last month not to withdraw lending to the seven coal firms owned by the northern province.
• Australia Dealt AAA Blow as S&P Cuts Outlook on Fiscal Gridlock. S&P Global Ratings cut the outlook on Australia’s AAA credit rating to negative from stable as it warned the prospect of fiscal-policy gridlock could thwart government attempts to rein in a budget deficit. The agency acted following Saturday’s federal election, which hasn’t delivered either Prime Minister Malcolm Turnbull’s Liberal-National coalition or the main opposition Labor Party a strong mandate, potentially weakening the eventual winner’s ability to push through fiscal savings measures. While the coalition is edging ahead as counting continues, it remains unclear whether it will gain enough seats to form government in its own right.
• European Equities Rise First Time in Four Days in Broad Rebound. European stocks rose, snapping their longest losing streak in three weeks. The Stoxx Europe 600 Index added 1.1 percent at the close of trading, as all industry groups advanced. Travel and leisure shares and financial firms, among shares that suffered the worst declines in the aftermath of Brexit, were the best performers, while banks rebounded from their lowest levels since 2011.
• Commodities Rally Is Fizzling Out as Merchant Fund Sees Oil Drop. (video) The best is probably over for commodities this year as the Brexit vote adds risks to global growth and oil is set to retreat, according to the Merchant Commodity Fund, which returned 9 percent in the first half. The fund, run by ex-Cargill Inc. employees Doug King and Michael Coleman, has changed its commodities outlook to neutral from bullish earlier this year. The U.K. vote to exit the European Union has led to uncertainty and growth remains lackluster in top user China, King said. Oil may drop to $40 to $45 a barrel within three weeks as stockpiles fall more slowly than expected, he said.
• Libya to Resume Oil Exports From Biggest Ports Within a Week. Libya will resume crude exports from two of its biggest oil ports within one week after clashes that forced Islamic State militants to pull out of the area, according to the commander of the petroleum guards in the region. Crude exports will resume from Es Sider, the country’s biggest oil port, and Ras Lanuf, the third-largest, and which have been closed since 2014, Ibrahim al-Jedran, a regional commander of Libya’s Petroleum Facilities Guard, said in a phone interview. The exports will be under the authority of the Tripoli-based Government of National Accord, which is seeking to reunify the divided country, he said.
• Danone’s $10 Billion U.S. Deal Adds Soy Milk, Kale to Menu. (video) Emmanuel Faber’s first big move as Danone’s chief, the $10 billion takeover of WhiteWave Foods Co., is a foray into soy milk, protein shakes and kale aimed at kickstarting growth at the French yogurt maker that’s grappling with a drop in dairy consumption. The Paris-based producer of Actimel drinks agreed to buy the U.S. company for $56.25 a share in cash, gaining leadership in the burgeoning natural and organic food sector through its biggest acquisition in almost a decade.

Wall Street Journal:

• House Republicans Push for New Hillary Clinton Investigation. Declaration comes as FBI chief defends recommendation against charging former secretary of state over handling of emails. House Republicans said Thursday they would ask for a new FBI investigation into Hillary Clinton’s handling of classified information, this one focused on whether Mrs. Clinton lied to Congress about it.

Fox News:

• Comey testifies Clinton email claims ‘not true’ at heated Hill hearing. (video) FBI Director James Comey testified Thursday that Hillary Clinton’s claims -- some made under oath -- about her use of a private email server were “not true,” raising the question of whether in doing so she committed a felony. In a wide-ranging appearance before the House oversight committee, Comey also said Clinton’s email practices put America’s secrets at risk and her actions constituted the “definition of carelessness.”

CNBC:

• Rep Trey Gowdy rips into FBI Director James Comey on Hillary Clinton's 'intent'. (video) Here's a transcript of the exchange:

Zero Hedge:

• Europe's Bank Crisis Arrives In Germany: €29 Billion Bremen Landesbank On The Verge Of Failure.
• FBI Director Comey Explains His "Surprising & Confusing" Decision To The House - Live Feed. (video)
• Director Comey Admits If Hillary Worked At The FBI There Would Be Consequences. (video)
• "To Reassure The Public" - Paul Ryan Asks That Hillary Not Receive Any Classified Data.
• Crude Crash Drags Stocks, Bond Yields To Lows. (graph)
• The Blowback Begins: Marine Demands Same Treatment As Hillary.
• Next UK Prime Minister Will Be A Woman After Gove Is Eliminated From Tory Leadership Race.
• Italian Banks Crash To New Lows Despite Passing Self-Defined Stress-Test. (graph)
• In Unprecedented Decision, Europe Will Sanction Spain, Portugal Over Deficits While Ignoring France, Italy. (graph)
• The Reason For The Relentless Scramble For US Corporate Debt In One Chart.
• Meanwhile, European Bank Default Risk Is Spiking. (graph)
• Why Citi Sees No Solution For The Italian Banking Crisis Any Time Soon. (graph)
• Dear Janet, What Now? Initial Jobless Claims Tumble To 43 Year Lows. (graph)
• ADP Jobs Beat Expectations As Manufacturing Jobs Drop Most Since 2010. (graph)

Business Insider:

• Donald Trump entertains idea he might not actually serve as president if he wins election.
• The world's biggest buyers of gold are getting ready to load up.
• The government may be about to squash more than $91 billion of health insurance mergers.
• GOLDMAN: Stay away from these 17 stocks because they're about to fall off a cliff.
• North Korea is calling US sanctions on Kim Jong Un a 'declaration of war'.
• Iraqi Health Ministry: Baghdad bombing death toll rises to 292.
• The world's largest hedge fund is struggling.

Washington Post:

• Trump, seeking GOP unity, has tense meeting with Senate Republicans. Donald Trump’s private meeting Thursday with Senate Republicans — designed to foster greater party unity ahead of the national convention in Cleveland — grew combative as the presumptive presidential nominee admonished three senators who have been critical of his candidacy and predicted they would lose their reelection bids, according to two Republican officials with direct knowledge of the exchanges. Trump’s most tense exchange was with Sen. Jeff Flake (R-Ariz.), who has been vocal in his concerns about the business mogul’s candidacy, especially his rhetoric and policies on immigration that the senator argues alienate many Latino voters and others in Arizona.

Financial Times:

• Sovereign Downgrades Hit New Record. Fitch has cut credit ratings of 14 nations so far this year and says Brexit ‘hard to overstate’.

Bear Radar

Style Underperformer:

• Small-Cap Value -.6%

Sector Underperformers:

• 1) Oil Tankers -4.1% 2) Utilities -1.8% 3) HMOs -1.5%

Stocks Falling on Unusual Volume:

• ARE, FSLR, USLV, HUM, TARO, SXCP, ENR, EBF, STRP, GOLD, TDOC, O, POR, NNN, AZZ, CMG, HNP, SUN, LGIH, CACC, WGL, CHRW, SLW, AET and CAH

Stocks With Unusual Put Option Activity:

• 1) BK 2) LB 3) PSX 4) BBT 5) AET

Stocks With Most Negative News Mentions:

• 1) FSLR 2) DEPO 3) TLF 4) TNGO 5) HUM

Charts:

• ETFs Falling on Unusual Volume
• Stocks Falling on Unusual Volume

Bull Radar

Style Outperformer:

• Mid-Cap Growth +.3%

Sector Outperformers:

• 1) Disk Drives +1.8% 2) Computer Hardware +1.0% 3) Airlines +.9%

Stocks Rising on Unusual Volume:

• AVG, WWAV, BMRN, SIMO, SGY, HAIN, MOMO, GBX, COST, WB and GIMO

Stocks With Unusual Call Option Activity:

• 1) WWAV 2) SIRI 3) HAIN 4) BMRN 5) ZNGA

Stocks With Most Positive News Mentions:

• 1) COST 2) WWW 3) LPSN 4) RAX 5) CAE

Charts:

• ETFs Rising on Unusual Volume
• Stocks Rising on Unusual Volume

Morning Market Internals

NYSE Composite Index:

• Volume Running -7.4% Below 100-Day Average
• 7 Sectors Rising, 3 Sectors Declining
• 68.4% of Issues Advancing, 28.6% Declining
• 111 New 52-Week Highs, 6 New Lows
• 51.7% of Issues Above 200-day Moving Average
• Average 14-Day RSI 41.7%
• Vix 14.4 -3.9%
• Total Put/Call .96 -5.9%
• TRIN/Arms .92 +11.4%