Stocks Reversing Slightly Higher into Final Hour on Lower Long-Term Rates, Less US High-Yield Debt Angst, Technical Buying, Technology/Gaming Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Modestly Higher
  

• Sector Performance: Mixed
  

• Volume: Around Average

• Market Leading Stocks: Performing In Line

Equity Investor Angst:

• Volatility(VIX) 12.39 -.88%

• Euro/Yen Carry Return Index 141.69 -.37%

• Emerging Markets Currency Volatility(VXY) 9.30 +3.22%

• S&P 500 Implied Correlation 57.63 -.76%

• ISE Sentiment Index 92.0 -21.37%

• Total Put/Call .72 -20.0%

• NYSE Arms 1.35 +125.39% 

Credit Investor Angst:

• North American Investment Grade CDS Index 71.16 +1.31%

• America Energy Sector High-Yield CDS Index 1,579.0 -2.05%

• European Financial Sector CDS Index 74.89 +1.29%

• Western Europe Sovereign Debt CDS Index 21.98 -2.18%

• Asia Pacific Sovereign Debt CDS Index 62.44 +2.16%

• Emerging Market CDS Index 314.02 +.89%
  

• iBoxx Offshore RMB China Corporates High Yield Index 120.95 +.14%

• 2-Year Swap Spread 23.5 +1.25 basis points

• TED Spread 24.5 -.75 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -20.75 -1.0 basis point

Economic Gauges:

• 3-Month T-Bill Yield .06% +1.0 basis point

• Yield Curve 154.0 -4.0 basis points

• China Import Iron Ore Spot $55.89/Metric Tonne -.45%

• Citi US Economic Surprise Index -16.3 -1.4 points

• Citi Eurozone Economic Surprise Index 3.2 +7.0 points

• Citi Emerging Markets Economic Surprise Index -12.8 +.8 point

• 10-Year TIPS Spread 1.76 -1.0 basis point
• # of Months to 1st Fed Rate Hike(Morgan Stanley) 5.28 -.12

Overseas Futures:

• Nikkei 225 Futures: Indicating +48 open in Japan 
• China A50 Futures: Indicating -298 open in China

• DAX Futures: Indicating +4 open in Germany

Portfolio: 

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

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

• Market Exposure: Moved to 75% Net Long

Today's Headlines

Bloomberg: 

• Tsipras Confronts Rebels Within Who Oppose Greek Aid Talks. Greek Prime Minister Alexis Tsipras confronted rebels within his own party for not backing his deal with creditors, in a showdown that could put Europe’s most indebted state on course for snap elections. Speaking to a central committee meeting of the Syriza governing party, Tsipras challenged dissenters to hold a party ballot on Sunday if they reject his decisions. He also called for an emergency congress in September to gauge his support. The committee will decide on the initiatives after about a quarter of the party’s lawmakers rejected Tsipras’s move to seek a new bailout. 

• IMF Reiterates Unwillingness to Fund Greece Without Debt Relief. The International Monetary Fund reiterated its unwillingness to provide more financing to Greece without debt relief by euro-member states and further reforms from the Greek government. The Washington-based lender’s management won’t support a new loan program unless Greece’s debt is sustainable in the medium term and the country’s budget is fully financed for 12 months, an IMF official told reporters Thursday on a conference call. The official spoke on condition of anonymity. The IMF will require an explicit, concrete commitment of debt relief from euro-member countries before moving forward with a new loan, the official said. European countries haven’t had detailed discussions with the IMF on a debt restructuring, according to the official.

• Shanghai Market a Government Operation: Donald Strasheim. (video)

• Audi Trims Global Sales Forecast, Citing China Slowdown. Audi AG trimmed its global annual sales forecast as the world’s second-biggest luxury-car manufacturer faces volatile markets in China and elsewhere. Audi will deliver more cars this year than last, the Ingolstadt, Germany-based carmaker said Thursday in a statement. Audi had previously said it would sell “significantly more” cars. Its parent Volkswagen AG on Wednesday also lowered its global sales goal.

• Brazil Gives Borrowers With Record Debt a Lifeline: More Credit. Brazilian household debt has swelled to a record. The government has a way to help: Payday lending. Brazilian President Dilma Rousseff signed a decree this month making it easier to use payday loans from banks to refinance credit cards. In the U.S., the credit lines have earned a bad rap for high fees and shady marketing, but in Brazil they let borrowers cut interest rates by two-thirds. That doesn’t mean the rates are low -- at least not by global standards. While Brazilian household debt as a portion of income is still half that of the U.S., it’s the interest rates that’s worrying bank analysts and consumer watchdogs. In the U.S., credit cards charge an average of about 15 percent a year. In Brazil -- where formal credit is still a relatively new concept for much of the population -- consumers pay 85 percent for cards and 27 percent for payday loans, the central bank says. “It’s too much credit for people who aren’t educated financially and have to pay such high interest rates,” said Diogenes Donizete, a coordinator of debt services at Sao Paulo state’s consumer-protection agency, known as Procon. Payday loans are just another “excellent ingredient to get even more over-indebted people.”

• AB InBev Earnings Miss Estimates on Weakness in U.S, Brazil. Anheuser-Busch InBev NV, the world’s biggest brewer, reported second-quarter profit growth that missed analyst estimates on worse-than-expected beer sales in Brazil, the U.S. and China. Adjusted earnings before interest, taxes, depreciation and amortization rose 4.6 percent on an organic basis to $4.16 billion, the Leuven, Belgium-based maker of Stella Artois said Thursday in a statement. That lagged behind the median estimate of 17 analysts for 8 percent growth. The shares fell as much as 4.9 percent in Brussels.

• Puerto Rico Risking Point of No Return With Debt Payment Default. Puerto Rico is poised to set in motion a chain of events to force investors into negotiating a restructuring of the island’s $72 billion debt burden. The commonwealth’s Public Finance Corp. will likely fail to make $58 million in bond payments due Aug. 1, the first default since Puerto Rico was ceded to the U.S. following the Spanish-American War. Government officials say they can’t make the payment because the legislature didn’t appropriate the funds last month for the current fiscal year.

• Shell to Cut 6,500 Jobs as Prolonged Market Downturn Looms. Royal Dutch Shell Plc said it’s preparing for a “prolonged downturn” by cutting thousands of jobs and slashing billions of dollars in investments over the next two years. The shares gained the most in almost six months. The company, which in April said it was confident prices would return to $90 a barrel in three years, on Thursday said that “today’s oil price downturn could last for several years.” Shell is cutting 6,500 jobs this year and plans to reduce capital investment by $7 billion, it said in a statement.

• Why High-Yield Investors Are Worried About China. (video)

• $40 Oil May Force Russia Into an Emergency Rate Hike, Economists Say. If oil hits $40, Russia is in trouble. Already faced with recession and sanctions, a further drop in crude might force the country's central bank into an emergency rate hike — after four cuts already this year — according to 65 percent of economists surveyed by Bloomberg from July 24-29. Thirty-nine percent of analysts said the government might impose Greek-like capital controls and 22 percent predicted a takeover of at least some of the country's banks.   

• Mexican Peso’s Plunge Accelerates, and Central Bank Intervenes. The Mexican peso’s decline gathered speed, falling by the most in eight weeks to a new record and prompting the central bank to sell $200 million under a currency-intervention program. The peso slid 1.1 percent to 16.4708 per U.S. dollar as of 1:13 p.m. in Mexico City, sinking the most since June 5. Mexico’s currency has lost 10 percent this year. 

• Emerging Currencies Sink as U.S. Growth Stokes Fed Rate Concern. Emerging-market currencies slumped the most in 11 weeks and stocks retreated as accelerating U.S. economic growth rekindled concern that the Federal Reserve will raise interest rates sooner rather than later. South Africa’s rand led declines, weakening 1.6 percent against the dollar. The real ended a three-day advance as Brazilian policy makers signaled that they’re going to stop raising borrowing costs. A Bloomberg gauge of 20 developing-nation currencies slid 0.7 percent to a record low. The MSCI Emerging Markets Index fell for the sixth time in seven days, slipping 0.8 percent to 892.78 at 11:35 a.m. in New York, led by a 1.8 percent decline in technology stocks.

• Europe Stocks Rise for 3rd Day on Earnings as Shell, Nokia Gain. European stocks climbed amid better-than-forecast earnings. Royal Dutch Shell Plc rose 4.9 percent after saying it will cut jobs and sell a stake in a Japanese refiner. Nokia Oyj jumped 7.5 percent after profitability at its network-equipment business improved. Renault SA slid 8 percent after its profit gain failed to keep pace with rival PSA Peugeot Citroen. The Stoxx Europe 600 Index added 0.6 percent to 396.24 at the close of trading. 

• How China is Driving the Commodity Rout. (video)

• Oil Market Embraces Lower-for-Longer Price View as Futures Sink. The global oil surplus increasingly looks like a problem that’ll take years rather than months to solve — and the market is pricing that in. U.S. crude futures for delivery in five years have broken below levels seen during the financial crisis. With leading OPEC members pumping at a record, supplies from elsewhere holding up and Iran close to reviving exports, the market is signaling the glut will persist. The global oversupply has already prompted oil companies to warn that the price rout will continue. Royal Dutch Shell Plc said Thursday it’s braced for a “prolonged downturn,” echoing a forecast from BP Plc Chief Executive Officer Bob Dudley that prices will stay “lower for longer.”

• Commodities Set for Worst Month Since 2011 Amid Oversupply. Commodities are set for the biggest monthly loss since 2011 amid a price collapse that drove oil into a bear market and pushed gold to a five-year low. The Bloomberg Commodity Index is down 9.5 percent in July, the most since September 2011, after dropping to a 13-year low this week. Oil companies such as BP Plc have started a new round of cost cutting, while shares of Freeport-McMoRan Inc., the biggest publicly traded copper producer, fell the most on a weekly basis in six years through July 24. West Texas Intermediate is heading for its biggest monthly fall this year, while copper in London is set for the worst month since January.

• See You in September Is Bond Mantra for Fed to Reveal Rate Rise. Treasury two-year note yields reached the highest in six weeks after government reports showed signs that economic growth and inflation are picking up, raising the probability of a Federal Reserve interest-rate increase in September close to 50 percent. Fed policy makers said Wednesday they would be ready to raise rates when there had been “some further improvement in the labor market” and when they are “reasonably confident” inflation is moving toward 2 percent.

Fox News: 

• Call it 'research,' not 'business,' Planned Parenthood doc says in latest sting video. A Colorado Planned Parenthood doctor stresses calling the harvesting of fetal tissue "research" and not "business" -- and casually pokes around in a petri dish of aborted remains as a colleague exclaims, "Another boy!" -- in the latest video released Thursday by an activist group whose hidden camera stings have imperiled the embattled nonprofit's taxpayer funding.

CNBC:

• Stock market highs hiding 'bloodbath' within. The S&P 500 came within a whisker of a record high only 10 days ago. It remains within 2 percent of the all-time high reached in the middle of May. But the index is not telling the whole story. Underneath the surface some serious problems are lurking. 

• Get ready to relive the 2008 crisis: Albert Edwards. Central banks in the Western world have set the scene for an "even bigger version" of the 2007-2008 global financial crisis, Societe Generale's bearish strategist Albert Edwards has claimed.

• More homeowners drowning in debt. (video)

ZeroHedge:

• Fed Reporter Pedro Da Costa Is Leaving The Wall Street Journal After Asking Yellen "Uncomfortable" Questions.

• "The Virtuous Emerging Market Cycle Is Turning Vicious" Albert Edwards Remembers The 1997 Asian Crisis. (graph)

• Former FDIC Head Sheila Bair Resigns From Parent Of World's Largest Subprime Auto Lender.

• 3 Things: B2B, Warnings & Confidence. (graph)

• An Angry Paul Volcker Responds To Accusations He Caused The Bond Liquidity Crunch. (video)

• The Summation Of All Fears. (graph)

• "Say A Little Prayer" Bill Gross Warns, "Zombie Corporations Now Roam The Real Economy".

• 70% Of Americans See Economy Worsening, Consumer Comfort Collapses By Most In 10 Month. (graph)

• This Is How The Much Anticipated "Second Seasonal Adjustment" Affected Q1 GDP. (graph)

• US Economy Grew Less Than Expected In Q2: Worst Economic Recovery Since WWII Revised Even Weaker. (graph)

• Initial Jobless Claims Tick Up, Hover Near 42 Year Lows. (graph)

Business Insider:

• Steve Wynn nails the devastating mistake China is making with its stock market.

• FIDELITY: Baby Boomers own too much stock.

• Bill Gates dumped a huge amount of Microsoft(MSFT) stock this year.

• Whole Foods’(WFM) sales are at the worst point since the recession.

• A new poll has another batch of bad news for Hillary Clinton.

Telegraph: 

• Greece news live: IMF pulls out of new bail-out as Alexis Tsipras on collision course with Syriza dissenters. Staff at the Fund says Greece does not meet criteria for further bail-out cash as Tsipras tells party to hold a referendum on creditor conditions.

China National Radio:

• Politburo Says China to Step Up 'Targeted Control'. China still faces "relatively big" downward economic pressure, China National Radio reports, citing Communist Party Politburo meeting chaired by President Xi Jinping today.

Bear Radar

Style Underperformer:

• Large-Cap Value -.14%

Sector Underperformers:

• 1) Gold & Silver -3.72% 2) Steel -2.87% 3) Oil Service -1.75%

Stocks Falling on Unusual Volume:

• CMPR, GNCA, WFM, FOE, FMI, MMYT, NCR, OSK, BWA, SSYS, TASR, TAL, ASH, MCK, HTH, LLL, DATA, PTC, FMS, BUD, QRVO, THRM, FB, CHRS, MAR, CGI, HOT, HZO, DATA, PTC, CHRS, PG, SFLY, RUBI, MAR, CSH, AAC, BG, VAR, ESPR, WLL, RRC, MEMP, THRX, CNO, DDD, ARII, FOE, AAWW, NCR, MDXG, IXYS, FMI and ITG

Stocks With Unusual Put Option Activity:

• 1) TASR 2) WFM 3) HPQ 4) SSYS 5) NFX
  

Stocks With Most Negative News Mentions:

• 1) EBAY 2) MTW 3) COP 4) PG 5) WLL
  

Charts:

• ETFs Falling on Unusual Volume

• Stocks Falling on Unusual Volume

Bull Radar

Style Outperformer:

• Small-Cap Growth +.08%

Sector Outperformers:

• 1) Gaming +4.78% 2) Computer Hardware+1.04% 3) Software +.96%
  

Stocks Rising on Unusual Volume:

• NTRI, OTEX, HOLX, STAY, GNC, VA, SKX, ZGNX, HEES, RKUS, CAVM, CROX, PODD, WDC, DRII, NTRI, WWE, HOLX, IDXX, ENTG, VA, ACIW, MDAS, RYAM, PPC, MGM, TILE, WYNN, CPN, CRR, APD, MDLZ, BLDR, WRK, FIS and SEE

Stocks With Unusual Call Option Activity:

• 1) SPLS 2) CTL 3) USG 4) MDLZ 5) GNC
  

Stocks With Most Positive News Mentions:

• 1) SKX 2) MA 3) NOC 4) NEWM 5) MDLZ
  

Charts:

• ETFs Rising on Unusual Volume 

• Stocks Rising on Unusual Volume

Morning Market Internals

NYSE Composite Index:

• Volume Running 13.0% Above 100-day average
• 3 Sectors Rising, 7 Sectors Declining
• 47.7% of Issues Advancing, 49.4% Declining
• 60 New 52-Week Highs, 60 New Lows
• 37.8% of Issues Above 200-day Moving Average
• Average 14-Day RSI 40.0
• Vix 12.29
• Total Put/Call .64
• TRIN/Arms 1.14

Thursday Watch

Evening Headlines 

Bloomberg:  

• A Marriage on the Rocks? Saudis Look Beyond U.S. After Iran Deal. Former Saudi Foreign Minister Prince Saud al-Faisal once compared the bond with the U.S. to a “Muslim marriage,” or one that wasn’t necessarily monogamous. The kingdom’s recent overtures to other partners suggest the relationship is going through another reappraisal because of the landmark accord with regional rival Iran. After visiting Russia and France last month, Deputy Crown Prince Mohammed bin Salman returned home with $23 billion of aircraft and energy contracts. “Trust between Saudi Arabia and the U.S. has been damaged by the Iran nuclear deal,” said Paul Sullivan, a Middle East specialist at Georgetown University in Washington. “Many in Saudi Arabia feel abandoned by the U.S.”

• Japan’s Growth to 2020 Seen by IMF Worse Than in Deflation Years. Despite progress made under Abenomics, Japan’s medium-term economic outlook is for growth that’s actually weaker than during the nation’s period of deflation, according to the International Monetary Fund. The assessment reflects disappointing levels of business investment and slower-than-expected progress in reforming the labor market, said Giovanni Ganelli, a Tokyo-based economist at the IMF who helped compile the fund’s annual review of Japan. Policies in place now point to expansion stuck around 0.65 percent from 2018 to 2020, versus an average 0.9 percent from 2000 to 2012, when Japan was locked in a deflationary funk. The economy’s growth potential rate would be more like 1.5 percent if Prime Minister Shinzo Abe’s government delivered on a full package of structural reforms, Ganelli said in an interview on Wednesday.  

• Brazil Boosts Rate by Half-Point Saying Level Is High Enough. Brazil raised its benchmark interest rate by 50 basis points and signaled that borrowing costs are high enough to slow inflation toward its target next year. The bank’s board, led by President Alexandre Tombini, boosted the Selic rate to 14.25 percent as forecast by 50 of 58 economists surveyed by Bloomberg. It changed language in the communique for the first time this year, adding that “holding that interest rate level for a sufficiently prolonged period is necessary for the convergence of inflation toward the target at the end of 2016.”

• Russia Blocks Creation of Tribunal on Downed Malaysian Plane. Russia vetoed a United Nations Security Council resolution that would have set up an international tribunal to prosecute those suspected of downing a Malaysian Airlines plane over Ukraine last year. China, Angola and Venezuela abstained in support of Russia while the council’s remaining 11 members voted in favor. President Vladimir Putin called Dutch Prime Minister Mark Rutte earlier on Wednesday to say that the Russian government will not support the creation of an international court due to the “many questions” it has about the evidence in the case.

• Korea Ratings Deteriorate Most in Decade as Export Engine Stalls. The creditworthiness of South Korean companies is worsening at the fastest pace in at least a decade as the export-led economy falters. Korea Ratings Corp., the local affiliate of Fitch Ratings Ltd., cut the credit scores of 40 local borrowers in the first half and raised the ratings of 5, the worst ratio since 1999. Similar scores at Nice Investors Service and Korea Investors Service were the weakest since 1998 and data going back to 2004 respectively.

• Won Falls Most in a Week as Fed Outlook Adds to Capital Outflows. South Korea’s won declined the most in a week on speculation a U.S. interest-rate increase will exacerbate capital flight just as Asia’s fourth-largest economy is slowing. Global funds extended sales of Korean stocks this week, taking net outflows so far in July to $1.9 billion and teeing up the Kospi index of shares for its worst monthly slide of 2015. The Bloomberg U.S. Dollar Spot Index was trading 0.4 percent shy of a four-month high after the Federal Reserve showed no sign it will refrain from tightening monetary policy this year, only saying the decision will be data dependent. The won fell 0.6 percent, the most since July 23, to 1,165.07 a dollar as of 10:20 a.m. in Seoul, according to data compiled by Bloomberg. The currency is down 4.3 percent this month, while the Kospi has lost 2 percent.

• Asian Stocks Track Global Gains as Investors Weigh Earnings, Fed. Asian stocks rose, following gains in global shares, as profits topped estimates and the Federal Reserve said the U.S. economy was progressing toward an interest-rate increase. The MSCI Asia Pacific Index climbed 0.2 percent to 141.04 as of 9:01 a.m. in Tokyo.  

• MH370 Hunters Probe Aircraft Part Found on Reunion Island. Investigators leading the search for Malaysia Airlines Flight 370, missing for more than a year, are trying to determine whether debris that washed up on Reunion island off Madagascar belongs to the missing aircraft. French officials have forwarded photographs of what looks like part of an aircraft wing, Joe Hattley, a spokesman for the Australian Transport Safety Bureau, said by telephone Thursday. Based on photos, the wreckage appears to have come from a Boeing 777, the same model as the missing aircraft, although it isn’t yet clear if it’s from the plane, a person familiar with the investigation said.

• These Economic Reports Will Determine When the Fed Will Raise Rates. These are the data points to watch most closely between now and September.

Wall Street Journal: 

• Fed Preps Careful Path for Rate Hike. September move remains on table, but inflation remains a concern. Federal Reserve officials face a conflict as they plan to start raising interest rates later this year: There has been a lot of progress in their goal for U.S. job growth, but little in their objective of modestly rising consumer prices.

• Rising Rents Outpace Wages in Wide Swaths of the U.S. Question of supply and demand as recent net increase in household formation entirely due to renters, not owners; problem hitting cities like Denver, Atlanta and Nashville.

• Donald Trump Says His Past Politics Were Transactional. He once praised Hillary Clinton and donated to Democrats, something he says as a businessman, he had to do.

• Planned Parenthood’s Harvest. Abortion is legal, but taxpayers shouldn’t have to pay for it. Democrats have been picking fight after fight in the culture wars, believing they have the upper hand with socially liberal younger votes. But that assumption is now being tested in the wake of videos of Planned Parenthood doctors blithely discussing the harvesting of fetal body parts.

Fox News:

• Court bars anti-abortion group from releasing new videos. (video) A temporary restraining order has been issued preventing an anti-abortion group from releasing any video of leaders of a California company that provides fetal tissue to researchers. The group is the same one that previously shot viral covert video of a Planned Parenthood leader discussing the sale of aborted fetuses for research.

CNBC:

• Leidos team wins $4.34 bln contract for U.S. military health records. The U.S. Defense Department on Wednesday awarded a team led by Leidos Holdings Inc a contract valued at up to $4.34 billion to build a new electronic health record system for 9.6 million current and retired military service members. The Defense Healthcare Management System Modernization contract, included in the Pentagon's daily digest of major contract awards, runs for 10 years, including several options to extend the contract.

• Global financial markets a shell game: Bill Gross. (video) The global financial markets are a "shell game" thanks to government interventions like quantitative easing, and once the manipulation stops, the markets may drop, bond legend Bill Gross said Wednesday. 

• China stock crash will hit economy: Credit Suisse. A major investment firm has knocked down the theory that China's parabolic bear market won't affect the country's economy.

• China’s weakened property market could hit banks: S&P. The slump that hit China's property market this year could hit the country's banks according to ratings agency Standard & Poor's, in the latest warning to the world's second largest economy. While the housing market in China has started to see some recovery of late, with data released at the start of the month showing house prices rose at their fastest pace in 18 months, weakness seen earlier in the year could have "negative knock-on effects" for domestic Chinese lenders, S&P warned.

• Alan Greenspan: This is 'extremely dangerous'. (video) While markets hone in on the Federal Reserve's monetary policy hints, former Fed Chairman Alan Greenspan sees a bigger economic irritant—government spending. On Wednesday, Greenspan decried a rise in entitlement costs, which he contended have pressured the U.S. economy.

Zero Hedge:

• 1 In 5 US Stocks Now In Bear Market. (graph)

• Hillary Saves Capitalism!

• In Latest Market-Rigging Scandal, ITG Busted For Frontrunning Clients In Its Dark Pool.

• Meanwhile In Venezuela... The Socialist Paradise Has Arrived. (video)

• Congress Proposes Fraudulent New Law To "Fix" Social Security.

• China Rescue, VIX Crash, & Fed Pump Squeeze Shorts Most In 6 Months, Trannies Bounce Most Since 2011. (graph)

Business Insider:

• Whole Foods(WFM) shares are getting wrecked. Whole Foods reported third-quarter results after the market close on Wednesday, missing expectations on earnings and lowering guidance for future sales growth. Shares plunged 11% in after-hours trading.

• Americans' economic confidence is getting mauled.

• Donald Trump just took his most commanding lead yet. Reuters/Ipsos polling also shows that should Trump mount an independent bid next year and run in a three-way race, he will likely drain support from the Republican nominee and allow the Democrat to cruise to victory.

Reuters:

• Facebook(FB) profit falls 9 pct as costs soar. Facebook Inc reported quarterly revenue that beat forecasts but its profit fell 9 percent as the social media company sharply increased spending to boost mobile revenue and future growth. Expenses will grow 55 to 60 percent in 2015 from last year, including an 82 percent jump in the second quarter to $2.77 billion, it added. Facebook shares fell more than 3 percent in after-hours trading.

Telegraph:

• European 'alliance of national liberation fronts' emerges to avenge Greek defeat. For the pony-tailed leader of Spain's Podemos movement, the Leninist lesson of Greece is that revolutionary forces must show an iron fist.

China Securities Journal:

• Some Chinese Banks Examine Their Stock Exposure. Some Chinese banks started to examine their total stock exposure from end-June, citing a person familiar with the matter, without naming any banks. Exposure includes wealth-management products invested in equities through structured products and stock-pledged loans.

Evening Recommendations 

• None of note

Night Trading

• Asian equity indices are unch. to +1.25% on average.

• Asia Ex-Japan Investment Grade CDS Index 108.75 +.5 basis point.

• Asia Pacific Sovereign CDS Index 61.25 -.5 basis point.

• S&P 500 futures -.14%.

• NASDAQ 100 futures -.04%.

Morning Preview Links

Earnings of Note

Company/Estimate

• (APD)/1.58

• (ALXN)/1.39

• (BUD)/1.25

• (ACI)-.57

• (ADP)/.59

• (AVP)/.08

• (BG)/1.36

• (CAH)/.99

• (CI)/2.31

• (CME)/.92

• (CL)/.70

• (COP)/.04

• (DBD)/.39

• (IDXX)/.57

• (ESI)/.10

• (LLL)/1.70

• (MDLZ)/.39

• (MWW)/.08

• (OXY)/.22

• (PBI)/.44

• (POT)/.52

• (PG)/.95

• (RDS/A)/.56

• (RYL)/.73

• (SNE)/40.90

• (SWK)/1.45

• (HOT)/.74

• (SSYS)/.16

• (TWC)/1.80

• (VLO)/2.37

• (ZBH)/1.56

• (BRCM)/.75

• (DECK)/-1.5

• (EA)/.02

• (EXPE)/.84

• (FLR)/1.05

• (KLAC)/.91

• (LSCC)/-.17

• (LNKD)/.29

• (SKYW)/.26

• (SPF)/.18

• (WBMD)/.33

• (YRCW)/.24

Economic Releases

8:30 am EST

• 2Q GDP is estimated to rise +2.5% versus a -.2% decline in 1Q.

• 2Q Personal Consumption is estimated to rise +2.7% versus a +2.1% rise in 1Q.

• 2Q GDP Price Index is estimated to rise +1.5% versus unch. in 1Q.

• 2Q Core PCE is estimated to rise +1.6% versus a +.8% rise in 1Q.

• Initial Jobless Claims are estimated to rise to 270K versus 255K the prior week.

• Continuing Claims are estimated to fall to 2205K versus 2207K prior. 
  

Upcoming Splits

• None of note

Other Potential Market Movers

• The German Unemployment report, Japan CPI report, weekly Bloomberg Consumer Comfort Index, weekly EIA natural gas inventory report, $29B 7Y T-Note auction and the (KORS) general meeting could also impact trading today.

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