Stocks Falling into Final Hour on Russia-Ukraine Tensions, Yen Strength, Technical Selling, Homebuilding/Technology Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Lower
  

• Sector Performance: Mixed
  

• Volume: Slightly Below Average

• Market Leading Stocks: Underperforming

Equity Investor Angst:

• Volatility(VIX) 12.17 -.65%

• Euro/Yen Carry Return Index 143.91 -.11%

• Emerging Markets Currency Volatility(VXY) 6.36 -2.30%

• S&P 500 Implied Correlation 50.86 -.55%

• ISE Sentiment Index 105.0 +6.06%

• Total Put/Call .99 +20.73%

• NYSE Arms .78 -26.60% 

Credit Investor Angst:

• North American Investment Grade CDS Index 56.87 -.27%

• European Financial Sector CDS Index 59.14 -1.78%

• Western Europe Sovereign Debt CDS Index 29.72 -1.11%
• Asia Pacific Sovereign Debt CDS Index 61.91 -3.03%

• Emerging Market CDS Index 278.71 -2.52%

• China Blended Corporate Spread Index 309.77 -.64%
• 2-Year Swap Spread 21.0 +.25 basis point

• TED Spread 21.25 -.5 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -16.25 +1.0 basis point

Economic Gauges:

• 3-Month T-Bill Yield .02% unch.

• Yield Curve 189.0 unch.

• China Import Iron Ore Spot $85.70/Metric Tonne -1.15%

• Citi US Economic Surprise Index 41.20 -2.3 points

• Citi Emerging Markets Economic Surprise Index -13.40 -.2 point

• 10-Year TIPS Spread 2.17 +1.0 basis point

Overseas Futures:

• Nikkei Futures: Indicating -30 open in Japan

• DAX Futures: Indicating -15 open in Germany

Portfolio: 

• Slightly Lower: On losses in my biotech/tech sector longs and emerging markets shorts

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

• Market Exposure: Moved to 25% Net Long

Bear Radar

Style Underperformer:

• Small-Cap Growth -.50%

Sector Underperformers:

• 1) Homebuilders -2.50% 2) Airlines -1.40% 3) Computer Hardware -.91%

Stocks Falling on Unusual Volume:

• CPLP, EFC, AER, RPRX, VNCE, CONN, CPG, HELE, COUP, HMSY, SC, TASR, CLMT, CDW, FEYE, CRR, TRUE, ECHO, AAPL, EFII, SPLK, CLVS, DEPO, TOL, DGLY, SWHC, CRR, VEEV, AKS, DAL and GDOT

Stocks With Unusual Put Option Activity:

• 1) AET 2) WDC 3) DOW 4) JNPR 5) JPM
  

Stocks With Most Negative News Mentions:

• 1) FB 2) AAPL 3) RPRX 4) BAC 5) CHRW
  

Charts:

• ETFs Falling on Unusual Volume

• Stocks Falling on Unusual Volume

Bull Radar

Style Outperformer:

• Large-Cap Value +.27%

Sector Outperformers:

• 1) Steel +1.89% 2) Road & Rail +.55% 3) Utilities +.49%
  

Stocks Rising on Unusual Volume:

• INFI, TTPH, CNQR, ACHN, FLEX, HALO, EXAS, ARWR, TSL, YNDX and LL

Stocks With Unusual Call Option Activity:

• 1) END 2) MRK 3) JOE 4) LOCO 5) TASR
  

Stocks With Most Positive News Mentions:

• 1) F 2) ZTS 3) T 4) NOC 5) WMT
  

Charts:

• ETFs Rising on Unusual Volume 

• Stocks Rising on Unusual Volume

Wednesday Watch

Night Trading

• Asian equity indices are unch. to +1.0% on average.

• Asia Ex-Japan Investment Grade CDS Index 94.50 -3.0 basis points.

• Asia Pacific Sovereign CDS Index 63.75 -1.75 basis points.

• FTSE-100 futures +.26%.

• S&P 500 futures +.12%.

• NASDAQ 100 futures  +.09%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (TOL)/.45
• (GIII)/.16
• (VNCE)/.24
• (NAV)/-.71
• (SCVL)/.15
• (PVH)/1.43
• (HRB)/-.39
• (CBK)/.04
• (AVAV)/-.10

Economic Releases
10:00 am EST

• Factory Orders for July are estimated to rise +11.0% versus a +1.1% gain in June.

Afternoon:

• Total Vehicle Sales for August are estimated to rise to 16.6M versus 16.4M in July.
  

2:00 pm EST

• Fed's Beige Book.
  

Upcoming Splits

• None of note

Other Potential Market Movers

• The Eurozone Services PMI, Eurozone GDP report, Brazil rate decision, weekly MBA Mortgage Applications report, weekly US retail sales reports, ISM New York for August, Cowen Transport Conference, Keefe Bruyette Insurance conference, Barclays Consumer Conference and Goldman Retailing Conference could also impact trading today.

BOTTOM LINE: Asian indices are mostly higher, boosted by consumer and industrial 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 Slightly Lower into Final Hour on Escalating Russian-Ukraine Tensions, Global Growth Worries, Technical Selling, Commodity/Gaming Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Higher
  

• Sector Performance: Mixed
  

• Volume: Around Average

• Market Leading Stocks: Outperforming

Equity Investor Angst:

• Volatility(VIX) 12.42 +3.67%

• Euro/Yen Carry Return Index 144.08 +.72%

• Emerging Markets Currency Volatility(VXY) 6.48 +2.05%

• S&P 500 Implied Correlation 52.52 -1.52%

• ISE Sentiment Index 101.0 +10.99%

• Total Put/Call .83 -12.63%

• NYSE Arms 1.07 +19.99% 

Credit Investor Angst:

• North American Investment Grade CDS Index 56.81 +.35%

• European Financial Sector CDS Index 59.89 +.39%

• Western Europe Sovereign Debt CDS Index 30.05 -2.81%
• Asia Pacific Sovereign Debt CDS Index 63.84 -1.07%

• Emerging Market CDS Index 286.17 +1.52%

• China Blended Corporate Spread Index 310.94 unch.
• 2-Year Swap Spread 21.0 -1.5 basis points

• TED Spread 21.25 +.25 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -17.25 +.25 basis point

Economic Gauges:

• 3-Month T-Bill Yield .02% unch.

• Yield Curve 189.0 +4.0 basis points

• China Import Iron Ore Spot $86.70/Metric Tonne -.46%

• Citi US Economic Surprise Index 43.50 +8.9 points

• Citi Emerging Markets Economic Surprise Index -13.20 -.5 point

• 10-Year TIPS Spread 2.16 +3.0 basis points

Overseas Futures:

• Nikkei Futures: Indicating +108 open in Japan

• DAX Futures: Indicating -13 open in Germany

Portfolio: 

• Slightly Lower: On losses in my biotech/medical sector longs and index hedges

• Disclosed Trades: None

• Market Exposure: 50% Net Long