Wednesday, May 05, 2010

Wednesday Watch

Evening Headlines

  • Greek Quarantine Tested as Spain Denounces Contagion 'Madness'. Investors are already testing the euro region’s efforts to contain the Greek crisis. Greek bond yields yesterday rose above their level before the government agreed on a European Union-led bailout on May 2 as escalating protests cast doubt on its ability to drive through austerity measures. Spanish and Portuguese bonds also renewed last week’s slide as investors question their ability to cut budget deficits that are among the highest in the euro area. “If the execution of the announced measures in Greece faltered it would certainly make it more difficult to bring the sovereign debt markets of Spain and Portugal into calmer waters,” said Kommer van Trigt, who helps oversee 140 billion euros ($183 billion) at Robeco Group in Rotterdam. “We want to see more evidence that measures are really being implemented.”
  • Dodd and Shelby Agree on Plan to Bar Bank Bailouts. Senate Banking Committee Chairman Christopher Dodd said he and Republican Senator Richard Shelby have agreed “conceptually” on changes to the financial- overhaul bill aimed at preventing bailouts of Wall Street firms. The deal would eliminate a proposed industry-paid $50 billion fund to cover the government’s costs of liquidating a failing financial firm, Dodd said today in an interview. Republicans said the fund would encourage bailouts rather than prevent them. Dodd said the compromise with Shelby of Alabama, along with an amendment by California Democrat Barbara Boxer that would prohibit spending taxpayer funds to keep failing firms in business, “takes that issue completely off the table.” “I’m satisfied, as I believe my colleague from Alabama is, that we’ve reached an agreement on the too-big-to-fail provisions,” said Dodd, a Connecticut Democrat.
  • Wyser-Pratte Says Euro May Reach Dollar Parity as Spain Looms. U.S. investor Guy Wyser-Pratte said the euro could drop to parity with the dollar and the Greek debt crisis will probably spread to Spain. “The key in Europe is not Greece or Portugal but Spain,” Wyser-Pratte, an activist investor in Europe for more than a decade, said yesterday at the Bloomberg Markets Hedge Fund Summit in New York. “They’re taking too long” to reorganize their banks, he said. Governments in the region are under pressure to slash spending as German Chancellor Angela Merkel’s coalition steps up calls for allowing “orderly” default of euro-region member states. Many of the region’s countries devalued their currencies in the past to make their economies more competitive, an instrument they can no longer use after joining the euro, said Pierre Lagrange, co-founder of GLG Partners Inc., a manager of hedge and mutual fund investments. Merkel faces elections on May 9 in North Rhine-Westphalia, Germany’s most populous state. She is campaigning on her refusal to rush aid to Greece, saying her firmness forced the Greek government to commit to bigger savings. Greece’s deficit was 13.6 percent of gross domestic product last year, the region’s second-biggest after Ireland, compared with 3.3 percent for Germany. Wyser-Pratte, founder of New York-based investment firm Wyser-Pratte & Co., said the elections will be a “referendum” on Merkel and German willingness to finance weaker European nations. “If that turns against her the whole thing could unravel,” he said. Investors considering buying assets in Europe should short the euro, betting on a decline, he said.
  • Ahmadinejad Hails U.S. Arms Disclosure, Warns Against Sanctions. The Obama administration, which took a “positive step forward” by disclosing the size of the U.S. nuclear arsenal, risks the failure of its diplomatic game plan by pursuing new sanctions on Iran, its President Mahmoud Ahmadinejad said. “We fear that a group of radicals may be willing to push Mr. Obama, who came to power with the motto of change, speedily toward an irreversible point,” Ahmadinejad said during a news conference in New York. “It is very clear that if the U.S. starts another sanction against Iran, it means it is the end of Mr. Obama’s efforts. We really don’t want to see that.” Even as he praised the first declaration of the size of the U.S. nuclear arsenal, Ahmadinejad called for an “independent supervisory body” to verify the figures. He questioned why the world should trust the accuracy of the U.S. statement, while the Obama administration doesn’t trust Iran’s own declaration of the peaceful aim of its nuclear program.
  • Mortgage Bond Spreads at Widest in Five Months: Credit Markets. Yields on Fannie Mae and Freddie Mac mortgage securities that guide home-loan rates climbed to the highest in five months relative to U.S. Treasuries as Europe’s worsening government finances led investors to shun all but the safest assets. Fannie Mae’s current-coupon 30-year fixed-rate mortgage bonds widened as much as 0.05 percentage point to about 0.78 percentage point more than 10-year Treasuries, the widest gap since Dec. 8, before closing at 0.75 percentage point, according to data compiled by Bloomberg. Spreads have climbed from 0.68 percentage point on April 26. Even with the U.S. promising to pump unlimited capital into Washington-based Fannie Mae and McLean, Virginia-based Freddie Mac through 2012 to ensure they can meet $4.6 trillion of guarantees on housing debt, speculation that Greece’s debt crisis will infect Portugal, Spain and the rest of the European Union and make interest rates more volatile is sending investors fleeing to the safety of Treasuries. “You hate to assign everything to Greece, but any time you get sovereign-debt risk issues, I think that gives MBS investors pause,” Walt Schmidt, a mortgage-bond strategist in Chicago at FTN Financial Capital Markets, said. “It’s not that far- fetched” to think that if multiple countries default, there’s a chance Fannie Mae and Freddie Mac eventually could too, he said.
  • U.S. Seen Attractive for Hedge Funds as Global Rules Tightened. The U.S. will remain more attractive for hedge funds and private-equity firms than Europe as regulators globally seek to tighten oversight of alternative- asset managers, said hedge-fund manager Frank Brosens. While details of the regulatory overhaul are still being worked out, the U.S. proposals are “not a bad direction,” Brosens said today at the Bloomberg Markets Hedge Fund Summit in New York. Europe has a less favorable environment, he said. European regulators said last year they may seek to restrict hedge funds’ use of debt and limit bonuses, rules that would apply to U.S. managers seeking to market themselves to European investors. “It’s going to make it quite complicated,” Brosens said. Brosens was a candidate to run the U.S. Treasury office overseeing the government’s $700 billion bank bailout program until he withdrew his name from consideration last March.
  • Cayne Said to Blame Market for 2008 Collapse of Bear Stearns. James “Jimmy” Cayne, the former chairman and chief executive officer of Bear Stearns Cos., will blame market forces and loss of confidence in his firm for its collapse in 2008, according to a person who has reviewed his Congressional testimony. “The market’s loss of confidence, even though it was unjustified and irrational, became a self-fulfilling prophecy,” Cayne said in written testimony to be presented to the Financial Crisis Inquiry Commission in Washington tomorrow, according to the person who declined to be identified since the remarks aren’t public until delivery. JPMorgan Chase & Co.(JPM) agreed to buy the firm through a forced sale in March 2008. Alan Schwartz, who succeeded Cayne as CEO and negotiated Bear Stearns’s fire sale to JPMorgan, also will testify, as will former President Warren J. Spector. Schwartz will tell the panel the firm was well capitalized and blame the fall on rumors, the person said. After guiding the company’s stock up more than 10-fold in 14 years, Cayne got $10 a share on the sale of the 85-year-old firm, 6 percent of the peak a year earlier. He was among the largest shareholders in Bear Stearns at the time of the sale, and about two thirds of the $1.5 billion he accumulated from stock awards was wiped out. Congress appointed the 10-member FCIC led by California Treasurer Phil Angelides to investigate the causes of the financial crisis and report its findings to lawmakers by December. Panel hearings in Washington have focused on companies including Citigroup Inc. and Fannie Mae, and the commission has heard from former Federal Reserve Chairman Alan Greenspan and former Treasury Secretary Robert Rubin. Former SEC Chairman Harvey Pitt called a January FCIC hearing a “parade of sound bites” that failed to shed any light on why U.S. taxpayers had to spend $700 billion to bail out the U.S. financial industry. The panel had taken testimony from Goldman Sachs Group Inc. CEO Lloyd Blankfein, JPMorgan CEO Jamie Dimon, Bank of America CEO Brian Moynihan and former Morgan Stanley CEO John Mack.
  • Commodities Plunge on Concern for China Growth, European Debt. Commodity prices plunged the most in two months as slowing Chinese manufacturing and budget gaps in Europe spurred speculation that the global economic recovery will slow, curbing demand for raw materials. The Reuters/Jefferies CRB Index of 19 raw materials fell 2.3 percent to 271.65 as of 2:38 p.m. in New York, heading for the biggest slide since Feb. Nickel plunged as much as 7.2 percent on the London Metal Exchange, leading today’s declines.
  • Leveraged-Loan Market Shrinks to 2007 Level Amid Lack of CLOs. The leveraged-loan market shrunk last month to its size in July 2007, right before the onset of the credit crunch, amid a lack of new issues of collateralized loan obligations, CreditSights Inc. said. The amount of loans on the S&P/LSTA Leveraged Loan Index, representing about 95 percent of the institutional market for U.S. bank debt, dropped by $9.95 billion to $500 billion in April, Chris Taggert, a New York-based loan strategist at the debt-research firm, said in a report published yesterday. High-yield, high-risk loan volume has declined from $594.2 billion in 2008 and will continue to shrink as repayments and restructurings outpace new issues of bank debt, he said. Lack of new CLOs, which bundle leveraged loans and slice them into securities of varying risk, is driving “major undercurrents” in the market such as amend-and-extend transactions, bond issues to repay loans and manager consolidations of CLOs, he said.
  • Calpers Suit Against Ratings Services Can Proceed. Standard & Poor’s, Moody’s Investors Service and Fitch Ratings must face the California Public Employees Retirement System’s lawsuit claiming their faulty risk assessments on structured investment vehicles caused $1 billion in losses.
  • Treasury Rally May Produce Breakouts: Technical Analysis. Treasury 10-year note yields, the yield curve and 10-year swap spreads are all on the brink of breaking through long-held technical ranges, according to Royal Bank of Scotland Group Plc. Ten-year note yields closing below 3.667 percent; the difference between two- and 10-year yields finishing the day less than 2.69 percentage points and a 10-year swap spread above 1 basis point would all represent “a confirmation of trend changes,” William O’Donnell, a U.S. government bond strategist at RBS Securities in Stamford, Connecticut, wrote today in a note to clients. “A lot has to do not just with the contagion fears and maybe fears about banks yet again, but also the announcement at 9 o’clock by the Treasury tomorrow that they’re likely to be cutting supply,” O’Donnell said in a telephone interview.
  • InterMune's(ITMN) Surprise U.S. Drug Rejection Sinks Shares. InterMune Inc.’s application for a potential $1-billion-a-year lung treatment was rejected by U.S. regulators, causing the drugmaker to plunge 79 percent in extended trading. The Food and Drug Administration asked for a new clinical trial of the medicine, Esbriet, to prove it delays progression of idiopathic pulmonary fibrosis, InterMune said today in a statement. The shares fell $35.76 to $9.68 at 5:33 p.m. New York time after the official close of the Nasdaq Stock Market.
  • News Corp.(NWSA) Profit Tops Estimates on 'Avatar,' Cable TV Gains. News Corp., owner of the Twentieth Century Fox film studio, reported fiscal third-quarter profit that beat analysts’ estimates on ticket sales from the 3-D blockbuster “Avatar” and improving cable network revenue. Revenue rose 19 percent to $8.79 billion, also topping estimates. Operating income increased 55 percent to $1.25 billion in the quarter ended March 31.
  • Buffett Turns Into One More Corporate Bubble: Alice Schroeder.
  • Obama's Fed Picks Promise More Keynesian Failure: Amity Shlaes.
  • CVS(CVS) Says Its Business Practices Probed by 24 States.
  • Brazil Yields Show Biggest Rate Increase Since '03 on Inflation. Brazilian traders are betting for the first time that the central bank will raise the benchmark lending rate by 1 percentage point next month after last week’s increase failed to tame rising inflation expectations. Yields on overnight interest rate futures contracts due in July climbed two basis points, or 0.02 percentage point, yesterday to an 11-month high of 9.7 percent. The futures rose 14 basis points since central bank President Henrique Meirelles raised the overnight Selic rate by a bigger-than-forecast 75 basis points from a record low 8.75 percent on April 28. Bets on the first full percentage-point increase since Meirelles’s second month in office in 2003 are growing after economists drove up their year-end inflation forecast for a 15th straight week in a central bank survey published May 3. The median estimate rose to 5.42 percent from 4.25 percent in November and above the bank’s 4.5 percent annual target, as the expansion in Latin America’s biggest economy quickens. “The front end of the curve has just blown out,” said Ram Bala Chandran, a Latin America currency and rates analyst at Citigroup Inc. in New York. “The momentum is so strong that it’s hard to step in front of it. As long as inflation is on the rise, the central bank has to go after it.”
  • Obama Backs 'Significantly' Higher Damage Cap After BP(BP) Spill. The Obama administration is backing “significantly” higher limits for damages BP Plc might face for the oil spill in the Gulf of Mexico and won’t rule out scaling back plans to expand offshore drilling. “Beyond clean-up and containment, BP must be held responsible for the damages this spill causes,” White House communications director Dan Pfeiffer wrote on the White House website yesterday. The administration “strongly supports” a move in Congress to raise an existing $75 million cap on damages under the Oil Pollution Act.
Wall Street Journal:
  • Suspect Admits Bomb Plot. A 30-year-old man pulled from a jetliner just before it was to take off for Dubai admitted that he tried to detonate a car bomb in New York's crowded Times Square after learning how to build bombs in a terrorist training camp in his native Pakistan, authorities say. Faisal Shahzad, a Connecticut resident who became a U.S. citizen a little more than a year ago, was charged with five terrorism-related charges Tuesday. The case quickly expanded overseas as Pakistani authorities arrested some half dozen people known to have been in recent contact with Mr. Shahzad.
  • Bloomberg Questions Security. 'Clearly, the Guy Was on the Plane and Shouldn't Have Been. And We Got Very Luckly,' He Says. Mayor Michael Bloomberg asked Tuesday why the suspect in a failed attempt to bomb Times Square, Faisal Shahzad, was able to board a flight at Kennedy Airport if he was supposed to be on a "no-fly" list. "Clearly, the guy was on the plane and shouldn't have been. And we got very lucky," the mayor said at a news conference.
  • Slick, Well Inundated With Dispersants. Agents That Break Up Oil Are Deployed From Air, at Seafloor. In addition to the dispersants, rough weather and shifting winds in the Gulf in recent days have helped to keep the spill offshore, bobbing the slick to and fro in the water, giving officials valuable time to prepare and to try to fight the spill. While the oil continues to gush, BP hopes to install a 70-ton dome that will funnel the oil up to a drilling rig. The containment dome is scheduled to leave an engineering yard in Port Fourchon, La., at noon Wednesday. The trip to the site of the leak will take 12 hours, and installing the device requires an additional two days. Pipes will then be installed connecting the dome to the rig, which will capture the oil, "hopefully" starting in six days, BP executive Doug Suttles said Tuesday. Meanwhile, BP and government authorities are using C-130 planes in the sky and remote-controlled robots a mile down on the seafloor to spray the oil with dispersants. They are scouring the globe for large stockpiles of the substance, bringing it in from Saudi Arabia and Malaysia on 747 cargo planes and from Hawaii on a ship. And they are working with dispersant manufacturers to increase production quickly.
  • SEC Probes Firms Doing Business in Terror Hubs. The Securities and Exchange Commission is conducting a broad investigation into companies doing business in nations designated as state sponsors of terrorism, as the U.S. government seeks to determine whether any operations were used to support terrorist activities, people familiar with the matter said. The SEC's enforcement division has sent letters to several companies in the pharmaceutical and energy industries, these people said. The State Department currently designates four countries—Cuba, Iran, Sudan and Syria—as state sponsors of terrorism. The letters, which were sent within the past two months, are part of an investigation by the SEC division that looks into potential violations of the Foreign Corrupt Practices Act. It isn't clear which companies received the letters.
  • What-Ifs for Goldman Sachs(GS). Behind Stiff Upper Lip, Some Executives, Alumni Consider Life After Blankfein.
  • For China, Attacks Shine a Light on Its Treatment of the Mentally Ill. The spate of recent attacks on children in China has raised questions about how the world's most populous country treats its mentally ill. Since late March, five separate incidents around the country have been reported where individual men attacked children with knives and other objects in or near schools. The horrific acts, which have left 11 people dead and some 70 injured, don't appear coordinated. But they have frightened the country and led to increased security in and around schools.
Bloomberg Businessweek:
  • China Exchange-Traded Fund's Short Sales Rise to 2-Year High. Foreign investors are short selling China’s stocks through a yuan-denominated exchange-traded fund at the highest rate in more than two years, underscoring concern that property curbs will slow the economy. The ratio of short selling to total turnover on the iShares FTSE/Xinhua A50 China Index ETF reached 39 percent yesterday, the highest level since Feb. 19, 2008, according to data compiled by Bloomberg. “Market sentiment is bearish due to the property crackdown by the government,” said Zhang Kun, Shanghai-based strategist at Guotai Junan Securities Co. “Investors are concerned about more severe measures down the road.” China’s stocks have plunged this year as the government unwound monetary stimulus and stepped up measures to prevent a housing bubble inflated by record lending last year. The Shanghai Composite has slumped 14 percent in 2010, Asia’s worst performer, while the FTSE/Xinhua China A50 Index, which tracks the 50 largest Shanghai and Shenzhen-traded companies by total market value, has declined 19 percent. BlackRock Inc., which owns iShares, is among money managers reducing their holdings on Chinese stocks on expectations that economic growth has peaked. State Street Global Advisors has an “underweight” position on China amid concern shares are expensive relative to smaller developing nations.
NY Times:
  • Debate Flares on Goldman's(GS) Role as Market Maker. Goldman Sachs insists that it did nothing wrong and was just acting as a middleman when it sold billions of dollars of securities that are at the center of the Securities and Exchange Commission’s fraud case against the firm. But John C. Coffee Jr., a professor of securities law at Columbia University, told a Senate hearing on Tuesday that Goldman was much more than a middleman and that it therefore had a duty to its clients that went beyond just filling orders. “Goldman was not a neutral dealer, but a soliciting placement agent,” Mr. Coffee told a Senate Judiciary subcommittee. “Acting as a placement agent for a securities offering that one has itself designed is very different from a dealer simply quoting a two-sided spread.” Mr. Coffee took issue with Goldman’s explanation, calling it a “straw man argument.” He argued that the firm was much more than a market maker in this case. By actively marketing the portfolio, Goldman owed its clients taking the long side of a synthetic C.D.O. the same level of care that they would get if they were buying a real C.D.O. made up of actual mortgages. “Put simply, this is why they came to Goldman: for its expertise and skill,” Mr. Coffee said, referring to the clients that went long on the portfolio. “That the C.D.O. was instead a synthetic one and thus inherently involved a short side, and a credit default swap, changes nothing; the investor in the synthetic C.D.O. should continue to be able to expect that Goldman is seeking attractive securities, not dogs, to place in its portfolio.” “Goldman should not have permitted one client to bias the deal in its own favor,” Mr. Coffee said. “Nor should it have represented that a neutral and objective portfolio manager was selecting the portfolio if it knew that the short side was heavily influencing the selection of the securities in the portfolio.”
  • Questions for Banks on Fudging the Books. It’s an open secret on Wall Street that many big banks routinely — and legally — fudge their quarterly books. But now Washington is taking a hard look at a range of maneuvers that help banks dress up their financial statements, and raising some uncomfortable questions about banks’ bookkeeping. The techniques in question, which are normally relegated to the shadows of finance, are expected to be thrust into a public spotlight on Wednesday by the federal committee that is investigating the causes of the financial crisis. The Financial Crisis Inquiry Commission is expected to focus most sharply on the way banks slim down their balance sheets before reporting their results and on loans they receive from entities like special-purpose vehicles and hedge funds, which are allowed to operate with little public disclosure.
Business Insider:
  • Chanos: China Has Been a Good Place to Be Short. We hope to bring you fuller video and coverage later, but Jim Chanos and Stephen Roach just concluded a very interesting debate on China on Bloomberg Television. Chanos, obviously, is a skeptic. Roach is a bull. Roach thinks migration from the rural areas to the city will continue. Chanos thinks we could see reverse migration, as the property boom ends and peasants are forced back to the countryside. Another point, which we can't agree with enough, is the absurdity of Western commenters going out of your way to praise Chinese government policy moves, while slamming government intervention in the economy domestically.
  • Here's What the Fed is Doing to Kill the Audit, And Here's How You Can Stand Up To Them.
  • Here is the Homegrown "Revolution" That Could Save Us From an Oil Crisis. Shale oil and natural gas has long been lauded as a potential savior for the U.S. energy market, but many don't realize just how substantial reserves of these materials are. What we have in the United States was either too costly or too difficult to acquire before, and now we have the tools capable of extracting the wealth of resources beneath our collective feet, according to Continental Resources.
  • Local Government Fiscal Emergency: Fresno, CA.
Zero Hedge:
The American Spectator:
  • Big Government vs. Small Business. As the owner of a small restaurant, it felt good the other morning to open the newspaper and read this sentence: "Be proud, small-business owners! You're now the most trusted group in America. Listen up, federal government! You're neglecting small business -- and most people think so." That was how Rhonda Abrams summarized the findings of a recent study by the Pew Research Center in USA Today.

New York Magazine:
  • Washington Post or Huffington Post? The once-cautious Washington Post has begun to invest heavily in the liberal blogosphere, transforming its online presence – a combination of accident and design – into a competitor of the Huffington Post and TalkingPointsMemo as much as the New York Times.
  • Holder: NYC Could Host Trial. The Obama administration is still considering New York City as a possible venue for the trial of Khalid Sheikh Mohammed, Attorney General Eric Holder said Tuesday. “Unfortunately, New York and Washington, D.C., remain targets of people who would do this nation harm,” he said at a briefing on the investigation into the attempted Times Square bombing. “Regardless of where a particular trial is ... that is going to remain true.”
USA Today:
Radio Television Hong Kong:
  • Property price increases in china will peak in the second half of this year on government tightening policies, the Chinese Academy of Social Sciences said. The rapid surge in prices has a negative effect on the economy and the rising ratio of investment in real estate by state-owned companies poses a risk of creating a future financial crisis, according to the academy's report.
China Ministry of Housing and Urban-Rural Development:
  • Qiu Baoxing, China's vice housing minister, said the nation must act to curb rising property prices and the formation of asset bubbles.
China Global Times:
  • Expo Attendance Falls Short. Attendance at the World Expo in Shanghai, in its first four days since opening, has fallen short of expectations, adding new concerns for organizers who have been already troubled by complaints about long queues and a lack of affordable food options. Tuesday was the first unofficial day of the Shanghai World Expo when visitors who hold standard tickets or appointed, unused day tickets could visit the Expo Park. A total of 146,100 visitors showed up at the park Tuesday, slightly more than Sunday. Organizers forecast an influx of 70 million visitors, mostly Chinese, over the next six months. To achieve this target, an average of 380,000 people need to visit the site daily. So far, the highest attendance was on Sunday, with 215,000. On Monday, the last day of the long public holiday, only 131,700 people, the lowest level so far, showed up at the site. Although officials said about 1,050,000 tickets for the three opening days had been sold, only half of that number showed up.
Evening Recommendations
  • Reiterated Buy on (BRCM), target $42.
  • Reiterated Buy on (OPEN), raised estimates, boosted target to $45.
Night Trading
  • Asian indices are -3.0% to -1.25% on average.
  • Asia Ex-Japan Investment Grade CDS Index 111.0 +10.5 basis points.
  • S&P 500 futures -.15%.
  • NASDAQ 100 futures -.08%.
Morning Preview Links

Earnings of Note
  • (PHM)/-.22
  • (VSH)/.22
  • (PWR)/.09
  • (WMB)/.37
  • (TWX)/.48
  • (TRW)/.73
  • (CECO)/.64
  • (CBS)/.05
  • (FLS)/1.30
  • (PRU)/1.30
  • (SPW)/.26
  • (BMC)/.70
  • (ICE)/1.31
  • (LVS)/.02
  • (SYMC)/.37
  • (KCP)/.04
  • (TIE)/.02
  • (DVN)/1.45
Economic Releases
8:15 am EST
  • ADP Employment Change for April is estimated at +30K versus -23K in March.
10:00 am EST
  • The ISM Non-Manufacturing report for April is estimated to rise to 56.0 versus a reading of 55.4 in March.
Upcoming Splits
  • None of note
Other Potential Market Movers
  • The Fed's Rosengren speaking, Fed's Lacker speaking, Challenger Job Cuts report, weekly MBA mortgage applications report, (NKE) investor meeting, (STT) investor forum, (IHS) investor day, (BPO) analyst meeting, Deutsche Bank Healthcare Conference and the UBS Ag Chemicals & Seed Biotech Conference could also impact trading today.
BOTTOM LINE: Asian indices are sharply lower, weighed down by technology and real estate shares in the region. I expect US stocks to open modestly higher and to weaken into the afternoon, finishing modestly lower. The Portfolio is 50% net long heading into the day.

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