Today's Headlines

Bloomberg:

• Erdogan’s Putsch Purge Spreads Into Media, Energy, Finance. (video) Turkey’s post-putsch purge of dissent reached deeper into the economy as authorities shuttered scores of media outlets, detained the head of a major company and banned the chief strategist of a leading brokerage. More than 130 media organizations, including 16 television broadcasters and 45 newspapers, were ordered closed in a decree published late Wednesday. The Cihan news agency, which has more than 500 employees, and the newspapers Taraf, Zaman and its English-language Today’s Zaman were among them. Turkey has suspended or removed at least 60,000 people from jobs in the military, security services, judiciary, Finance Ministry and academia since the failed July 15-16 coup left more than 250 dead. Another 1,600 soldiers, including 149 generals and admirals, were dismissed just hours after President Recep Tayyip Erdogan huddled with the chief of the armed forces. “More than 40 percent of Turkey’s highest ranking officers have been discharged, suggesting that this coup attempt had considerable support, or acceptance, from the highest levels of the armed forces,” said Aaron Stein, resident senior fellow at the Washington-based Atlantic Council. “The implication is that they either were supportive of the coup attempt, or that the top civilian leaders felt that they couldn’t be trusted. Both are bad.”
• Households on the Hook for Italy’s Next Bailout. Vincenzo Imperatore wants you to know he was just following orders: Selling risky bonds to customers seeking safe retirement nest eggs was only part of the job. When financial markets shut during the financial crisis, depositors were Italian banks’ most reliable source of funding. “I was getting five, six calls a day from my bosses pushing me to sell them,” says Imperatore, who helped sell products to retail customers for six years at UniCredit SpA in the Naples region and has written two tell-all books about his experiences. “I was instructing the local salesmen to do the same.” The households that helped prop up the nation’s banks during the crisis are again on the front line of efforts to bolster Italy’s tottering financial system. The subordinated debt they hold may be first to take losses in a government-orchestrated recapitalization now being negotiated in Rome and Brussels. It’s a popularity-destroying outcome Prime Minister Matteo Renzi is trying to avoid before a referendum later this year to overhaul the political system -- a vote he needs to win to stay in power.
• Merkel Faces Critics After Attacks Leave Germans Stunned. Chancellor Angela Merkel is breaking off her vacation to defend herself against renewed criticism of her refugee policies following a rash of violent attacks in Germany. Merkel, who had planned to remain out of public view during the summer break, will answer questions on Thursday afternoon for the first time since the four assaults -- a shooting spree, ax attack, suicide bombing and machete assault -- left 13 dead this month. Three of the attacks were committed by asylum seekers. “The chancellor certainly can’t keep her head low after such events,” said Ulrich Sarcinelli, a politics professor at the University of Koblenz-Landau. While Merkel will have to address the terror threat, “she’ll do everything not to escalate the general agitation.”
• China Bank Regulator Said to Resist Push to Cut Loan Buffers. China’s banking regulator is resisting lobbying by the nation’s biggest lenders to lower a minimum threshold for bad-loan buffers which some of them breached earlier this year, people with knowledge of the matter said. The China Banking Regulatory Commission is instead urging banks whose provisions for covering nonperforming loans are below the 150 percent minimum ratio to take steps to restore their buffers, said the people, who asked not to be named discussing private information. The CBRC’s move is another signal that China’s regulators are toughening their stance on curbing risks in the country’s highly-leveraged financial system. Credit has roughly doubled as a proportion of gross domestic product over the past eight years to stand at 243 percent by the end of 2015, according to Fitch Ratings.
• China Politburo Flags Caution on Property Stimulus, Goldman Says. China’s top leaders signaled this week that they’re likely to be cautious on further easing measures even if the property market continues to cool. That’s the analysis by Goldman Sachs Group Inc. economists of a statement released this week following a Politburo meeting led by President Xi Jinping. The leaders also pledged to curb asset bubbles, according to a report from official Xinhua News Agency. "The mention of asset bubbles was new for a Politburo statement," Song Yu, the Beijing-based chief China economist at Beijing Gao Hua Securities Co., the mainland joint-venture partner of Goldman Sachs, wrote in a research note Thursday. "The near-term implication of such a view is that the government is likely to be very cautious with property loosening measures in the future even if the property market continues to cool down, and financial regulators might be increasingly hawkish to minimize the risks of asset bubbles."
• Deutsche Bank: Not Even Fiscal Stimulus Will Save Global Growth. The fiscal policy we need is not the fiscal policy we're likely to get. While monetary policy may be at — or beyond — the limits of its usefulness in stoking global growth, economists at Deutsche Bank AG say fiscal stimulus is unlikely to be much more effective. At least, not the kind that is politically possible.
• Shell Earnings Tumble to 11-Year Low on Oil, Weaker Refining. Royal Dutch Shell Plc reported the lowest quarterly earnings in 11 years and missed estimates by more than $1 billion as a mix of lower energy prices, weaker refining margins and production halts weighed on Europe’s largest oil company. Profit adjusted for one-time items and inventory changes sank 72 percent from a year earlier to $1.05 billion, The Hague-based Shell said Thursday. Analysts had expected a $2.16 billion result. Chief Executive Officer Ben Van Beurden, who this year completed Shell’s record purchase of BG Group Plc, has vowed to boost savings from the acquisition following a two-year slump in crude. While Brent’s 25 percent rebound last quarter provided some prospect of relief, the rally is now fading while the safety net provided by refining hasgiven way. Production shutdowns in Nigeria, Canada and the Netherlands increased the pain for Shell. “This is a very big surprise from Shell,” said Brendan Warn, a managing director at BMO Capital Markets in London. “Things are not looking up in the third quarter either, with weakness in the industry’s refining environment and Shell’s oil production still under pressure.”
• Europe Stocks Fall From 1-Month High Amid Lloyds, Shell Earnings. (video) European stocks dropped as investors assessed a slew of earnings reports and lenders fell before Friday’s stress-test results. Lloyds Banking Group Plc and Royal Dutch Shell Plc fell after releasing results, while Rolls-Royce Holdings Plc and Adidas AG rose. On one of the busiest day for earnings updates this season, with more than 70 companies reporting, the Stoxx Europe 600 Index lost 0.9 percent at the close. Banks posted the biggest declines among groups, before regulators publish their latest health check on the industry.
• Goldman(GS) Sees Oil Hurt by Dollar Gain, Not Gasoline Glut. (video) Ignore the gasoline glut, a stronger U.S. dollar presents the most risk to oil prices in the near term, according to Goldman Sachs Group Inc. Further dollar strength on economic uncertainty outside the U.S., along with a potential interest-rate increase by the Federal Reserve could push oil prices lower, Goldman analysts including Damien Courvalin said in an e-mailed report. The gain in gasoline stockpiles is not a catalyst for further price declines because it is supply and not demand driven.
• Hidden Message in Fed's Statement: U.S. Is at Full Employment. (video) Shift in language suggests slack in labor market has finally evaporated. 
• Wall Street Said to Face Renewed Pressure on Risky Lending. Wall Street banks are facing renewed pressure from federal regulators on their lending standards for risky corporate loans just as credit markets roar back, according to people with knowledge of the matter. Bankers who generally retreated from the riskiest corner of the leveraged lending market since new guidelines were issued three years ago are now being queried on their plans for loans that just sneak in as acceptable under the measures, the people said. Regulators are questioning how such loans would perform under adverse conditions, one of the people said, asking not to be identified as the information isn’t public.
• Ford(F) Profit Miss Imperils 2016 Target as U.S. Demand Stalls. (video) Ford Motor Co.’s second-quarter profit fell short of analysts’ estimates, driving shares down the most in 11 months, after the company warned that a stalling U.S. auto market threatens its full-year earnings target. “We’re committed to meeting our guidance, but it is at risk,” Chief Financial Officer Bob Shanks told reporters Thursday. The company now says it’s unlikely that U.S. vehicle sales will break last year’s record, and Shanks predicted further contraction in 2017. “We don’t see growth, at least in the near term.” Ford fell 9.5 percent to $12.52 at 12:05 p.m. New York time. The stock dropped as much as 10 percent, the most since Aug. 24 of last year. The shares had slipped 1.8 percent this year through yesterday.

Wall Street Journal:

• Islamic State Threat in Europe Shifts. Some U.S. officials see terror group benefitting from smaller attacks while continuing to plot. The mushrooming of small-scale terror attacks in Europe has allowed Islamic State and its adherents to keep people here on edge without having to train and equip teams to pull off highly sophisticated operations.

Fox News:

• Despite unity push, Sanders supporters now urge Dem 'exit'. (video) Despite the Democratic Party’s robust efforts this week to put forward a show of unity at their Philadelphia convention – including bringing Hillary Clinton onstage Wednesday night for a handoff hug from President Obama – a rowdy swath of disaffected voters is making clear the theatrics haven’t healed the fractured base. Anti-Clinton and other demonstrators are moving forward Thursday with at least one protest, and holding events encouraging voters to “de-register” from the party. They’re operating in part under the Twitter hashtag #DemExit, one that Green Party candidate Jill Stein has deftly been using as she openly appeals to Sanders supporters to join her team outside the Philly convention arena. “DNC wants your support for lying, undermining, and insulting you. They'll lock you out if you don't comply. #DemExit,” Stein tweeted.
• DNC Convention: Live Blog. 

CNBC:

• One Wall Street skeptic on Facebook(FB) emerges. Boutique research firm Monness Crespi Hardt downgraded the social network's stock to neutral from buy, telling investors to take profits due to a full valuation and rising costs related to video production.
• Wall Street banks bet on Federal Reserve increasing interest rates. (video) Financial giants are pricing in expectations that the Fed will increase rates before 2016 is out.

Zero Hedge:

• Did The DNC Hire Actors (At Below Minimum Wage) To Work At The Convention?
• Bernie Sanders Leaves The Democratic Party.
• Nobody Knows Who's Paying For The Privately Funded Democratic National Convention.
• USDJPY Surges On Headline Government Pressuring BOJ To Boost Stimulus; Bloomberg Denies. (graph)
• Monte Paschi Bailout In Peril As 3 Banks Walk Out: Are More "Pensioner Suicides" Next?
• Corrupt Or Just Stupid? Markets Hand Corporations An Unlimited Credit Card.
• Syria's al-Nusra Front Officially "Splits" From al-Qaeda.
• Crude Crashes Into Bear Market To April Doha Lows. (graph)
• Credit Suisse: We Have Never Had So Many Traders Saying "We Are Totally Lost".
• Islamist Terrorism, European Denial.
• US Homeownership Rate Crashes To Lowest Since 1965. (graph)
• Ford Plunges After Warning "We Don't See Growth", Warns US Auto Industry "Has Plateaued". (graph)
• Atlanta Fed Just Slashed its Q2 GDP Estimate To 1.8%, Cycle Low. (graph)
• If Everything Is So Great, Then Why Do Two-Thirds Of Americans Say The Country Is On The Wrong Track?
• Erdogan Closes 130 Media Organizations, Arrests CEO Of Oil Company.
• German Special Forces Raid Mosque, Apartments In Crackdown On Salafists. (pic)
• Oil Industry About To Be Burned Again By Fall In Oil Prices. (graph)
• Deutsche Bank: "There Is An Element Of Torture To The FOMC Cycle In This Broken Financial System".
• Don't Show President Obama This Chart. (graph)
• M&A Rush Continues: Oracle Buys "Very First Cloud Company" NetSuite For $9.3 Billion.

Business Insider:

• 'I literally almost fell out of my chair': Experts were shocked at Trump's comments on Russia hacking the US.
• A Rio doctor had a blunt description of the water where Olympic athletes will be competing.

Xinhua:

• China's Economy Faces Severe Challenges Currently. China's economy still faces difficulties and severe challenges currently in key period of restructuring, according to a report on the Sate Council's website. China should focus on structure in economic development, where earlier the focus was on pace, the report said.
• China's CBRC Says It's Drafting Rules on Wealth Products. China Banking Regulatory Commission says it's drafting rules governing China's market for wealth management products to prevent risks in the sector, citing the commission.

Bear Radar

Style Underperformer:

• Small-Cap Value -.4%

Sector Underperformers:

• 1) Oil Tankers -3.6% 2) Networking -2.4% 3) Alt Energy -1.9%

Stocks Falling on Unusual Volume:

• IVTY, PRLB, CNMD, AXTA, TGI, BCOR, GNC, WIRE, MD, FI, RCII, THRM, F, DLB, KEX, LDOS, TER, SNN, COMM, SXCP, MMLP, ULTI, ALSN, FN, LOB, ECPG, SFM, LVLT, CAB, ASGN, STAY, SERV, ULTI, ASGN, INT, EXR, KS, SXCP, ALSN, NEWM, CIEN, HEES, LEA, MINI, MD, COMM, KRA, KEX, ADPT and WFM

Stocks With Unusual Put Option Activity:

• 1) CRUS 2) WFM 3) F 4) UPS 5) FB

Stocks With Most Negative News Mentions:

• 1) INFN 2) FCAU 3) GM 4) CNMD 5) WIRE

Charts:

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

Bull Radar

Style Outperformer:

• Mid-Cap Value +.2%

Sector Outperformers:

• 1) Computer Hardware +1.6% 2) REITs +.7% 3) Road & Rail +.7%

Stocks Rising on Unusual Volume:

• HWAY, N, GRUB, ALR, NVDQ, CRUS, TPX, LOGI, GTLS, ABCO, TAP, GPRO, AZN, CAKE, ARRS, MOH, NTRI, TREE, TILE, OSK, DBD, FEYE, CBT, SPB and RPM

Stocks With Unusual Call Option Activity:

• 1) GRPN 2) GNC 3) ARIA 4) TPX 5) KR

Stocks With Most Positive News Mentions:

• 1) GRMN 2) CRUS 3) HOLX 4) MRVL 5) KONA

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running +9.2% Above 100-Day Average
• 1 Sector Rising, 9 Sectors Declining
• 43.0% of Issues Advancing, 53.2% Declining
• 105 New 52-Week Highs, 8 New Lows
• 61.2% of Issues Above 200-day Moving Average
• Average 14-Day RSI 44.0%
• Vix 13.2 +2.7%
• Total Put/Call .96 +5.5%
• TRIN/Arms 1.18 -11.4%

Thursday Watch

Evening Headlines
Bloomberg: 

• China's Central Bank Ends Its War With Yuan Bears. For traders betting on a weaker yuan, the People’s Bank of China is turning from foe to friend. Six months after the monetary authority intervened to crush short sellers, Bank of America Merrill Lynch, Pacific Investment Management Co. and Societe Generale SA say the PBOC is more likely to guide the currency lower than to prop it up. Despite official pledges of exchange-rate stability last weekend, bears argue that China’s leaders are growing more comfortable with yuan weakness after a 3.3 percent slump since March failed to spark a repeat of January’s market turmoil.
• Japan’s Helicopter-Money Ban Is Anchored in Occupation-Era Law. The law specifically prohibits the government from making the BOJ buy sovereign bonds or lend money to the state. A caveat allows for this to happen in special circumstances (without describing what these might be), and only up to an amount that must be approved by parliament. The central bank and government use the exception to directly sell debt to the BOJ to replace some bonds it holds that have matured. Under the "BOJ rollover" plan, the bankplans to buy 8 trillion yen ($76 billion) of bonds this fiscal year, according to the Ministry of Finance.
• Leveraged Investors Lose Faith in Abenomics, BOJ Easing or Not. The biggest local cheerleaders for Japan Prime Minister Shinzo Abe are losing faith in his economic policies even as the stock market rallies on expectations of further stimulus. Japanese individuals trading using borrowed money cut their bets on a rising equity market to the lowest since March 2013, shortly before central bank Governor Haruhiko Kuroda unleashed unprecedented bond-buying that sent the Nikkei 225 Stock Average to its biggest annual gain in four decades. Even as most economists predict the Bank of Japan will add to monetary easing when its two-day policy meeting ends on Friday, leveraged investors are speculating this time won’t have the same effect.
• Yen Rises as BOJ Easing Expectations Keep Traders on Tenterhooks. The yen strengthened against all except one of its 16 major peers as traders awaited Friday’s Bank of Japan decision on how much it will boost monetary easing to spur growth. Japan’s currency resumed gains after dropping on Wednesday when Prime Minister Shinzo Abe announced a 28 trillion yen ($267 billion) fiscal-stimulus package. A gauge of the greenback declined for a third day after the Federal Reserve said it expects to raise interest rates gradually. “The BOJ news tomorrow will trump the FOMC news last night,” said Imre Speizer, a market strategist at Westpac Banking Corp. in Auckland. “An above consensus amount of stimulus would surely push dollar-yen higher.” The yen advanced 0.5 percent to 104.87 per dollar as of 9:20 a.m. in Tokyo on Thursday, after sliding 0.7 percent on Wednesday. Japan’s currency rose 0.4 percent to 116.10 per euro.
• Asian Stocks Rise Amid Central Bank Meetings; Japan Shares Slip. Asian stocks rose for a fourth day, with the regional benchmark index trading near a nine-month high, as investors digested policy decisions from the Federal Reserve and awaited results from a Bank of Japan meeting. Shares in Tokyo retreated as the yen strengthened. The MSCI Asia Pacific Index gained 0.2 percent to 135.10 as of 9:13 a.m. in Tokyo.
• Deep Dive: Odds of Rate Hike, Copper Prices, CDS Spreads. (video)

Wall Street Journal:

• Attacks in Germany Amplify Fears of Refugees, Helpers. Some fear a backlash as violent acts increase, opposition to open-door policies mounts.
• How a Chinese Highway Became a Boulevard of Broken Dreams. Problem-plagued project shows why infrastructure spending is increasingly ineffective in spurring China’s economy. A highway project here that is four years behind schedule and hundreds of millions of dollars over budget helps explain why Beijing’s effort to raise infrastructure spending is an increasingly ineffective way to boost the​nation’s economy.
• The Other Clinton ‘Change’. No one in Philadelphia wants to talk about the Clinton Foundation. Bill Clinton on Tuesday portrayed his wife as a “change maker” whose life has overflowed with good intentions and commitment to others. No one can spin a yarn like Bill, and for the believers it was a touching portrait. But if it’s true, why do the polls show that 68% of Americans don’t trust Hillary Clinton? That has to do with the rest of the story, which is how the Clintons have used politics to enrich themselves and retain power.
• Trump’s Putin Illusions. Remember who mocked Mitt Romney for calling Russia a U.S. foe? Will someone—calling Ivanka—please tell Donald Trump that Vladimir Putin is no friend of America, or for that matter of Donald Trump? An intervention is needed after the Republican’s mouth-in-foot press conference Wednesday in which he invited Russia to turn over Hillary Clinton’s 33,000 missing emails from her private server.

Fox News:

• Europe terror attacks spotlight security failings amid refugee crisis. (video) The European policy Germans call “Willkommenskultur” -- the enthusiastic embrace of refugees from Syria and other Muslim-majority countries -- has morphed into a summer of terror. Loose screening of refugees, lax counter-terrorism policies and lenient treatment of those with terrorist links or sympathies has led to a spate of attacks by terrorists already flagged by authorities. Tuesday’s attack in France, where a jihadist already under house arrest slit a priest’s throat, came just two days after a suicide bombing in Germany by a terrorist who a medical expert had predicted would “commit suicide in a spectacular fashion.” Critics say such cases are piling up.
• DNC Convention: Live Blog.

MarketWatch:

• Facebook’s(FB) rapid growth is about to slow down.

Zero Hedge:

• IRS Launches Investigation Of Clinton Foundation. 
• Insanity In Japan.
• "Real, Imminent Threat" That Next World War Will Be Initiated By First Strike EMP Weapon.
• Obama To Federal Employees: If You Can't Take The Heat Then Just Stay Home, No Biggie.
• Goldman(GS) Raises September Rate Hike Odds To 30%, Sees 70% Probability Of Another Hike in 2016.
• "This One Is Very Surprising" - US Luxury Rental Market Turmoiling As EQR Cuts Guidance For 3rd Time.
• Facebook(FB) Soars After Smashing Expectations: The Quarter In Charts.
• Gold Jumps Most Since Brexit As 'Hawkish' Fed Sparks Dovish Bond Buying Spree.

Business Insider:

• The one note of caution in Facebook's(FB) insanely optimistic earnings.
• The foundations of the stock market have crumbled. That this time it’s different also shows up in other assumptions and dynamics: business sales have been declining since mid-2014. Earnings have been declining for about that long. Even “adjusted” ex-bad items earnings of the S&P 500 companies have booked four quarters in a row of declines. The S&P 500 aggregate price-earnings ratio, based on GAAP, has soared to over 25, a dizzying number that sets off all kinds of alarm bells. And yet, the global flood of liquidity keeps pouring into this market, and fundamentals no longer matter, sales and earnings no longer matter, risks no longer matter, and money is free, or nearly free, for institutional investors. But the foundations have crumbled. And all bets are off. That’s what this divergence of margin debt and stock prices tells us. It’s a very precarious position to be in.
• Whole Foods(WFM) shares fall after sales miss.
• The world is following Japan's lead at the worst possible time.
• Americans can't afford their houses, but the presidential candidates aren't talking about it.

Night Trading 

• Asian equity indices are -.5% to unch. on average.
• Asia Ex-Japan Investment Grade CDS Index 120.0 -.75 basis point.
• Asia Pacific Sovereign CDS Index 49.0 +.25 basis point.
• Bloomberg Emerging Markets Currency Index 71.97 +.12%. 
• S&P 500 futures +.14%. 
• NASDAQ 100 futures +.02%.

Morning Preview Links

Earnings of Note
Company/Estimate 

• (ALXN)/1.17
• (AMT)/1.28
• (APD)/1.90
• (AB)/.44
• (AZN)/.83
• (ADP)/.67
• (BZH)/.12
• (BWA)/.82
• (BSX)/.27
• (BMY)/.66
• (BG)/.41
• (CAB)/.62
• (CBG)/.52
• (CELG)/1.39
• (CLF)/.03
• (CME)/1.11
• (CL)/.69
• (COP)/-.61
• (CS)/-.02
• (DOW)/.86
• (FITB)/.38
• (F)/.60
• (HOG)/1.53
• (HCA)/1.56
• (HSY)/.78
• (IGT)/.46
• (IP)/.84
• (LLL)/1.69
• (LEA)/3.32
• (MA)/.90
• (OSK)/.99
• (PTEN)/-.62
• (POT)/.18
• (SEE)/.64
• (ZBH)/1.97
• (AFL)/1.68
• (GOOG)/8.04
• (AMZN)/1.12
• (BIDU)/1.20
• (CBS)/.86
• (DECK)/-2.07
• (FE)/.54
• (KLAC)/1.42
• (WDC)/.71
• (WYNN)/.96
• (YRCW)/.54 
  

Economic Releases 
8:30 am EST

• Advance Goods Trade Balance for June is estimated at -$61.0B versus -$60.6B in May.
• Initial Jobless Claims for last week are estimated to rise to 261K versus 253K the prior week.
• Continuing Claims are estimated to rise to 2136K versus 2128K prior.

11:00 am EST

• Kansas City Fed Manufacturing Activity Index for July is estimated to rise to 4.0 versus 2.0 in June.

Upcoming Splits 

• (EBIX) 3-for-1

Other Potential Market Movers

• The Eurozone Industrial Production report, the Japan Industrial report, weekly EIA natural gas inventory report and the Bloomberg weekly Consumer Comfort Index could also impact trading today.

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

Stocks Slightly Higher into Final Hour on Falling Fed Rate Hike Odds, Yen Weakness, Earnings Optimism, Biotech/Metals & Mining Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Slightly Lower
  

• Sector Performance: Most Sectors Declining
  

• Volume: Around Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 12.8 -2.0%

• Euro/Yen Carry Return Index 121.76 +1.39%

• Emerging Markets Currency Volatility(VXY) 9.85 -2.18%

• S&P 500 Implied Correlation 49.90 -.18%

• ISE Sentiment Index 94.0 +4.44%
  

• Total Put/Call .84 -7.69%

• NYSE Arms 1.20 +51.99% 

Credit Investor Angst:

• North American Investment Grade CDS Index 73.53 -1.23%
  

• America Energy Sector High-Yield CDS Index 763.0 +.51%

• European Financial Sector CDS Index 94.76 -2.52%

• Western Europe Sovereign Debt CDS Index 25.67 +.08%

• Asia Pacific Sovereign Debt CDS Index 49.09 +.42%

• Emerging Market CDS Index 259.76 -.20%
  

• iBoxx Offshore RMB China Corporate High Yield Index 131.16 -.08%

• 2-Year Swap Spread 22.25 -.25 basis point
  

• TED Spread 43.5 -.25 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -50.75 +2.75 basis points
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 71.89 +.16%
• 3-Month T-Bill Yield .28% -2.0 basis points

• Yield Curve 79.0 -2.5 basis points

• China Import Iron Ore Spot $58.63/Metric Tonne +.95%

• Citi US Economic Surprise Index 37.20 -5.9 points

• Citi Eurozone Economic Surprise Index 16.1 +5.3 points

• Citi Emerging Markets Economic Surprise Index -7.60 +.9 point

• 10-Year TIPS Spread 1.50% unch.
• 26.4% chance of Fed rate hike at Sept. 21 meeting, 28.0% chance at Nov. 2 meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating +45 open in Japan 
• China A50 Futures: Indicating -43 open in China

• DAX Futures: Indicating -10 open in Germany

Portfolio: 

• Higher: On gains in my biotech/tech sector longs
  

• Disclosed Trades: Added to my (IWM)/(QQQ) hedges, then covered some of them

• Market Exposure: 50% Net Long