Bull Radar

Style Outperformer:

• Small-Cap Value +.95%

Sector Outperformers:

• 1) Gold & Silver +3.66% 2) Airlines +2.09% 3) Steel +1.89%

Stocks Rising on Unusual Volume:

• DB, CPN, URBN, NDSN, REXX, PAAS, SSRI, FSLR, GSM, LCC, DSW, FCX, CHD and C
  

Stocks With Unusual Call Option Activity:

• 1) URBN 2) IMAX 3) NRG 4) BBY 5) GES
  

Stocks With Most Positive News Mentions:

• 1) LMT 2) HD 3) IRBT 4) HEES 5) CRY
  

Charts:

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

Tuesday Watch

Evening Headlines
Bloomberg:

• Euro Holds Gain Before Luxembourg’s Juncker Visits Greece. The euro remained higher before Luxembourg Prime Minister Jean-Claude Juncker visits Greece tomorrow to discuss the country’s request for an extension to its fiscal adjustment program. The 17-nation currency headed for an advance versus most of its 16 major counterparts this month after Spain’s benchmark yields slid to a seven-week low, supporting the outlook for a bill auction today. Demand for the euro was tempered after Germany’s Bundesbank criticized European Central Bank bond buying. Australia’s dollar climbed after minutes of the Reserve Bank’s last meeting showed that policy makers see domestic growth overshadowing a “fragile” global outlook. “The hurdles are still high, but European leaders do seem to be working towards more positive results,” said Callum Henderson, global head of currency research at Standard Chartered Plc in Singapore. “This is a period of calm before a resumption of the bear trend for the euro.” The bank predicts the euro will be at $1.18 by Sept. 30, Henderson said.
• Greece Must Decide If Best in Euro, Merkel Ally Tells Rheinische. Greece’s economic changes are too slow and the government must consider next month whether the country should stay in the euro area, Michael Meister, a senior lawmaker in German Chancellor Angela Merkel’s governing party, was quoted as saying by the Rheinische Post. Meister, the Christian Democratic Union’s deputy parliamentary leader, said the Greek government must ask itself in mid-September whether it has majority support in parliament and among the people for the required painful overhaul, according to the newspaper, which cited an interview. Meister said a Greek exit would be regrettable, Rheinische reported. Reports so far indicate that the speed of reform in Greece isn’t sufficient, with privatization lagging in particular, Meister was quoted as saying. Any proposal for a third international bailout for Greece wouldn’t get majority backing in Merkel’s governing coalition, he was quoted as saying in the comments e-mailed to other media in advance of publication.
• Kloppers Buys Time for BHP Revival as Profit Forecast Drops. BHP Billiton Ltd. (BHP) Chief Executive Officer Marius Kloppers, under investor scrutiny following the failure of three deals, bought himself some time by waiving his bonus after lopping $2.84 billion off the value of BHP’s shale gas assets. The question is, how much? The world’s biggest mining company is forecast to report a 38 percent drop in earnings to $14.6 billion in the year ended June 30, according to the average of 18 analyst estimates compiled by Bloomberg. That will include writedowns on shale and at the nickel unit, which Kloppers announced earlier this month along with his decision to forgo his bonus.
• Almost Half of Doctors Burned Out by Rising Workload. About 1 in 2 doctors are burned out, showing signs of emotional exhaustion and little interest in work as patient loads increase, U.S. researchers found. Doctors working in emergency, family and internal medicine were the most likely to feel drained, according to the study released today in the Archives of Internal Medicine. Researchers said burnout also was tied to long hours, with 37 percent of physicians working more than 60 hours a week. The number of doctors reporting feeling burned out is surprising and troubling, said Tait Shanafelt, a professor of medicine at the Mayo Clinic and lead study author. He said the trend may cause physicians to quit or reduce their workload just as demand for doctors is increasing with the aging population. The issue may get worse as 32 million Americans are expected to get health insurance by 2014 under a new U.S. law, increasing the number of people seeking medical care, he said. “Right at a time when we are trying to provide care to people who are uninsured and projecting workforce shortages we are seeing this burnout rate creep in, which may cause physicians to reduce workloads and consider early retirement,” Shanafelt said. He added that burnout has also been linked to medical errors and worse patient care in previous studies.
• U.S. Brokerage Audits Riddled With Deficiencies, Watchdog Finds. Auditors of U.S. brokerages failed to ensure the companies resolved deficiencies in safeguarding customer funds and meeting capital, according to a Washington- based watchdog crafting oversight under the Dodd-Frank Act. Reviews of 23 audits conducted by 10 firms found flaws in every one, the Public Company Accounting Oversight Board’s said today in a report on the Washington-based watchdog’s interim inspection program. In most cases, financial statements weren’t reviewed well enough to justify signing off on them, according to the PCAOB, which didn’t name the auditors and brokerages in the report and said they were all smaller firms.
• Wall Street Leaderless in Rules Fight as Dimon Diminished. Wall Street, the global financial community reeling from public outrage and increased regulation, is proving incapable of finding a champion to replace sidelined JPMorgan Chase & Co. (JPM) Chief Executive Officer Jamie Dimon. Dimon, 56, one of the industry’s most forceful advocates, has lost stature as his bank, the largest in the U.S. by assets, juggles multiple investigations and a $5.8 billion trading loss on wrong-way bets on credit derivatives. His peers at other big lenders are hobbled by poor performance, tarnished reputations or a reluctance to step into the breach.

Wall Street Journal:

• Australia’s Resource Boom Losing Steam. Australia’s multibillion-dollar spending boom on resources is losing momentum unexpectedly rapidly, with several projects on hold or cancelled as commodity prices fall and banks become less willing to lend. From copper mines in tropical Queensland state to the big iron-ore pits in the country’s arid west, mining companies are laying off workers and idling equipment until metal prices rise sufficiently. The cutbacks are largely in response to China, which needs vast amounts of coal for its power stations and iron ore for the steel frames in its high-rise buildings, but where demand for commodities has been slowing. Iron-ore prices, which hit a record last year, are now at a 2½-year low, and aluminum and nickel prices also are holding near multi-year lows.
• Buffett's Move Raises a Red Flag. A decision by Warren Buffett's Berkshire Hathaway Inc. to end a large wager on the municipal-bond market is deepening questions from some investors about the risks of buying debt issued by cities, states and other public entities. The Omaha, Neb., company recently terminated credit-default swaps insuring $8.25 billion of municipal debt. The termination, disclosed in a quarterly filing with regulators this month, ended five years early a bullish bet that Mr. Buffett made before the financial crisis that more than a dozen U.S. states would keep paying their bills on time, according to a person familiar with the transaction.
• When Kids Return Home. It's back-to-school time, but instead of sending their kids off to college, many parents are welcoming them home—particularly those in their 20s. The stagnant economy, slow hiring and college debt are some of the big factors driving people back home at a time when they used to strike out on their own. About 22% of 25- to 34-year-olds lived in multigenerational households in 2010, up from 11% in 1980, according to a Pew Research Center analysis of census data.

Business Insider:

• Early Facebook(FB) Investor Peter Thiel Has Sold The Majority Of His Stake.
• Obama Visited This Apple Farm, But The Management Was Not Happy About His 'You Didn't Build That' Comment.
• MITT ROMNEY, GOP: It's Time To Audit The Fed.

Zero Hedge:

• When Japan Goes Japanese: Presenting The Terminal Keynesian Endgame In 14 Charts.
• Career Risk Panic: Only 11% Of Hedge Funds Are Outperforming The S&P In 2012.
• Velocity of Money Worse Than The 1930s. (graph)
  

CNBC:

• BlackRock’s(BLK) Fisher: Time to End ‘Operation Twist’.

NY Times:

• Clash of Cultures Upends Spain’s Cajas.

Rasmussen Reports:

• Among Entrepreneurs, Romney Leads By 20. A new Rasmussen Reports national telephone survey shows that among those who are self-employed or own their own business, Mitt Romney enjoys a 20-point lead. Fifty-six percent (56%) favor Romney, and 36% prefer the president.

USA Today:

• Regional airlines face closings, bankruptcy. They face significant challenges, as the big airlines they often fly for are phasing out smaller and costlier regional jets and cutting some low-traffic regional routes to focus on those that are more lucrative.

Reuters:

• Expedia(EXPE), Marriott(MAR), others face U.S. price-fixing lawsuit. Expedia Inc, Hilton Worldwide Inc and other large hotel retailers and operators were accused in a federal lawsuit in California of conspiring to fix hotel room prices as they battled small online retailers who sold rooms more cheaply. Two consumers are seeking class action status for the suit filed on Monday in California federal court, which alleges the hotels teamed with online room sellers to set minimum rates on rooms and is seeking unspecified money damages.
• Urban Outfitters(URBN) beats as styles work with shoppers. Clothing retailer Urban Outfitters Inc's quarterly results handily b eat Wall Street expectations as its namesake store attracted more shoppers, sending its shares up 17 percent af t er the bell. Urban Outfitters, criticized for unattractive merchandise, especially at its Anthropologie unit, has been trying to turn around its business by improving merchandise, shuffling its management and stocking up prudently.
• U.S. muni market riled by Fed report on defaults. The Federal Reserve Bank of New York has riled analysts and other participants in the U.S. municipal bond market with a report issued last week finding that defaults are more prevalent than credit rating agencies suggest. The report, which included non-rated debt, found that muni defaults "happen much more frequently than most casual observers are aware".

MNI:

• No China RRR Cut Now. The PBOC's injection of liquidity via open market operations are adequate to ensure market liquidity for now, citing a person close to the State Council. The Chinese government is worried that overly aggressive easing will stoke property prices as authorities attempt to rein in housing bubbles.

Shanghai Securities News:

• The China Banking Regulatory Commission asked domestic banks to pay attention to overseas risk exposure.

Evening Recommendations

• None of note

Night Trading

• Asian equity indices are unch. to +.50% on average.
• Asia Ex-Japan Investment Grade CDS Index 145.50 -2.0 basis points.
• Asia Pacific Sovereign CDS Index 123.0 -2.0 basis points.
  
• FTSE-100 futures +.19%.
  
• S&P 500 futures +.01%.
  
• NASDAQ 100 futures +.06%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (TECD)/1.17
• (DSW)/.62
• (MDT)/.85
• (BKS)/-.90
• (ADI)/.56
• (INTU)/.06
• (DELL)/.45
• (WSM)/.41

Economic Releases

• None of note

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Fed's Lockhart speaking, Spanish Bill Auction and the weekly retail sales reports could also impact trading today.
  

BOTTOM LINE: Asian indices are mostly higher, boosted by technology and commodity 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 Rising Global Growth Fears, Eurozone Debt Angst, Rising Food Prices, Tech Sector Weakness

Broad Market Tone:

• Advance/Decline Line: Lower
  
• Sector Performance: Mixed
  
• Volume: Light
  
• Market Leading Stocks: Performing In Line

Equity Investor Angst:

• VIX 14.11 +4.91%
  
• ISE Sentiment Index 95.0 -35.81%
  
• Total Put/Call 1.01 +34.67%
  
• NYSE Arms .85 -26.21%
  

Credit Investor Angst:

• North American Investment Grade CDS Index 98.65 bps -.96%
  
• European Financial Sector CDS Index 234.74 bps -3.0%
  
• Western Europe Sovereign Debt CDS Index 229.92 -3.88%
  
• Emerging Market CDS Index 245.84 -.15%
  
• 2-Year Swap Spread 21.0 -.25 basis point
  
• TED Spread 34.75 -.5 basis point
  
• 3-Month EUR/USD Cross-Currency Basis Swap -35.25 +.25 basis point
  

Economic Gauges:

• 3-Month T-Bill Yield .09% +1 basis point
  
• Yield Curve 153.0 unch.
  
• China Import Iron Ore Spot $109.30/Metric Tonne -.82%
  
• Citi US Economic Surprise Index -16.10 +2.0 points
  
• 10-Year TIPS Spread 2.25 -1 basis point
  

Overseas Futures:

• Nikkei Futures: Indicating +14 open in Japan
• DAX Futures: Indicating +3 open in Germany
  

Portfolio:

• Slightly Lower: On losses in my Retail, Biotech and Tech sector longs
  
• Disclosed Trades: Added to my (IWM)/(QQQ) hedges, added to my (EEM) short, then covered some of them
  
• Market Exposure: 50% Net Long

BOTTOM LINE: Today's overall market action is just mildly bearish as the S&P 500 trades slightly lower despite eurozone debt angst, high food/energy prices, US "fiscal cliff" worries and rising global growth fears. On the positive side, Coal, Steel, HMO and Airline shares are especially strong, rising more than +.75%. Oil is falling -.4%. Brazilian shares are rising +.5%. The Germany sovereign cds is down -.7% to 55.72 bps, the France sovereign cds is down -2.1% to 126.33 bps, the Italy sovereign cds is down -.97% to 417.57 bps, the Spain sovereign cds is down -1.7% to 468.38 bps, the UK sovereign cds is falling -2.0% to 54.17 bps and the Israel sovereign cds is down -2.2% to 166.37 bps(+11.0% in 5 days). Moreover, the Spain 10Y Yld is falling -2.5% to 6.28%. On the negative side, Oil Tanker, Semi, Networking, Homebuilding and Retail shares are especially weak, falling more than -1.0%. Small-caps are underperforming. Homebuilding and tech shares have traded heavy throughout the day. Lumber is falling -1.9%, Gold is rising +.4%, Copper is falling -1.3% and the UBS-Bloomberg Ag Spot Index is gaining +1.5%. Major Asian indices were mostly lower overnight, led down by a -.4% decline in China. The Shanghai Property Stock Index fell another -1.3% and is down -14.2% in less than 6 weeks. Major European indices are lower today, led down by a -1.2% decline in Spain. The Bloomberg European Bank/Financial Services Index is -1.4% lower on the day.The UBS/Bloomberg Ag Spot Index is up +25.6% since 6/1. The benchmark China Iron/Ore Spot Index is down -39.6% since 9/7/11. Moreover, the China Hot Rolled Steel Sheet Spot Index is also picking up downside steam. As well, despite their recent bounces off the lows, the euro, copper and lumber all continue to trade poorly given equity investor perceptions that the Eurozone has successfully kicked-the-can and global central bank stimuli will boost economic growth in the near future. US weekly retail sales have decelerated to a sluggish rate at +1.9%. US Trucking Traffic continues to soften. Moreover, the weekly MBA Home Purchase Applications Index has declined for 5 straight weeks and has been around the same level since May 2010 despite investor perceptions of a big improvement in the nationwide housing market. The Baltic Dry Index has plunged around -65.0% from its Oct. 14th high and is now down around -55.0% ytd. Shanghai Copper Inventories have risen +218.0% ytd. Oil tanker rates have plunged recently, with the benchmark Middle East-to-US voyage down to 22.50 industry-standard worldscale points, which is the lowest since May, 2009. The CRB Commodities Index is now down -17.7% since May 2nd of last year despite the recent surge in food/energy prices. The 10Y T-Note continues to trade too well, despite recent mild weakness. There still appears to be a fairly high level of complacency among US investors regarding the deteriorating macro backdrop. It still remains unclear to me whether or not Germany will destroy its own balance sheet or allow the ECB to monetize debt in an attempt to "save" the euro even as investors have been pricing this outcome into stocks. Focus Magazine reported recently that a poll by TNS Emnid found that 52% of Germans don’t want European countries to share debt even if the EU takes control over budgets of individual countries, while 31% were in favor of this. The Citi Eurozone Economic Surprise Index is at -59.30 points. Massive tax hikes and spending cuts are still yet to hit in several key eurozone countries that are already in recession. A lack of competitiveness remains unaddressed. The European debt crisis is also really beginning to bite emerging market economies now, which will further pressure exports from the region and further raise the odds of more sovereign/bank downgrades. Uncertainty surrounding the effects on business of Obamacare, the "US fiscal cliff" and the election outcome uncertainty will likely become more and more of a focus for investors as the year progresses. Little if anything being discussed by global central bankers will actually boost global economic growth in any meaningful way over the intermediate-term, in my opinion. The odds of imminent QE3, which were already lower than perceived in my opinion, are likely plummeting with the recent surge in stock prices, inflation expectations, rising gas prices, worrisome food crisis headlines and less pessimistic US economic data. As well, I continue to believe a new massive China stimulus round isn’t as likely as perceived as worries over their real estate bubble and soaring food prices intensify. The quality of the recent stock rally remains poor as breadth, volume, leadership, lack of big volume/gainers and copper/transports divergences all continue to be concerns. Thus, recent market p/e multiple expansion on global central bank stimulus/action hopes, is creating an unstable situation for equities, which could become a big problem this fall unless a significant macro catalyst materializes soon. The explosion higher in the Israel sovereign cds(+32 bps in about 2 weeks) is another big red flag. The Mid-east appears to be unraveling again at an alarming rate. For this year's equity advance to regain traction, I would expect to see further European credit gauge improvement, a subsiding of hard-landing fears in key emerging markets, a rising 10-year yield, better volume, stable-to-lower food/energy prices, a US "fiscal cliff" solution, a calming in Mid-east tensions and higher-quality stock market leadership. I expect US stocks to trade mixed-to-lower into the close from current levels on eurozone debt angst, profit-taking, more shorting, high food/energy prices, US "fiscal cliff" concerns, growing Mid-east unrest and rising global growth fears.

Today's Headlines

Bloomberg:

• European Stocks Fall as Bundesbank Criticizes Bond Plan. European (SXXP) stocks fell as Germany’s Bundesbank criticized a European Central Bank plan to lower the region’s sovereign yields through bond purchases, highlighting the rift among policy makers over ways to end the debt crisis. Lonmin Plc (LMI) slid 4.6 percent on reports it may raise $1 billion in a rights issue after operations at its biggest mine were halted amid deadly violence, the Sunday Times reported. Bankia (BKIA) SA fell 4.6 percent.
• Spain May Raise Income Tax Again, Reduce Pensions, El Pais Says. Spain may raise income tax again and cut expenditure on pensions in order to meet its budget deficit target and avert a bailout, El Pais reported, citing unidentified people in the government. Government tax revenue, needed to reduce Spain’s deficit to 6.3 percent of gross domestic product by year end, has fallen despite increases in value added tax and personal income tax earlier this year, El Pais said.
• Iran Would Have ‘Crushing Response’ to Israel Attack, Mehr Says. Iran’s military is at the highest level of alert and will respond to any attack by Israel with a “crushing response,” the state-run Mehr News agency reported, citing Defense Minister Ahmad Vahidi. His remarks came after Tel Aviv-based Haaretz newspaper said on Aug. 10 that Israeli Prime Minister Benjamin Netanyahu and Defense Minister Ehud Barak are considering bombing Iran’s nuclear facilities before U.S. elections on Nov. 6. “There are intense disputes among the Zionist regime’s officials, and such statements are worthless,” Mehr cited Vahidi as saying. “The Zionists are even afraid of their own shadow, so they try to cover up their despair with making noise and waging psychological war.”
• Chicago Fed National Activity Index for July Falls Again. Following is the text of the Chicago Fed’s National Activity Index from the Federal Reserve Bank of Chicago. The index’s three-month moving average, CFNAI-MA3, decreased slightly from -0.18 in June to -0.21 in July--its fifth consecutive reading below zero. July’s CFNAI-MA3 suggests that growth in national economic activity was below its historical trend.
• Oil-Tanker Losses Persist on Declining Middle East Crude Exports. Losses for the biggest oil tankers hauling Middle East crude to Asia, the industry’s benchmark route, persisted amid declines in export cargoes. Very large crude carriers on the Saudi Arabia-to-Japan voyage are losing $6,083 daily, figures from the Baltic Exchange in London showed today, less than $6,383 on Aug. 17. The vessels, each able to haul 2 million barrels of oil, were earning $41,093 a day at this year’s high in April. Seaborne oil trade growth is expected to remain “weak” during the next 18 months, according to an e-mailed report from Oslo-based RS Platou Markets AS. VLCC returns reached the lowest level in at least four years on July 23. The VLCC fleet is poised to expand by 6.9 percent this year, exceeding 4.7 percent demand growth, according to data from Clarkson Research Services Ltd., a unit of the world’s largest shipbroker.
• Crop Outlook Dimming as July Heat Compounded Drought Damage. U.S. corn farmers hurt by the worst drought in a generation probably will harvest smaller crops than the government forecast this month, based an analysis of dry spells in the past 42 years. In the five drought years since 1970, farmers on average harvested 85.4 percent of the acres planted, U.S. Department of Agriculture data show. That’s below the 90.6 percent that the USDA predicted for this year on Aug. 10, when the agency cut its output forecast by 17 percent following the hottest July since 1936.
• Apple(AAPL) on Track to Top Microsoft(MSFT) Record Closing Market Cap. Apple Inc. (AAPL) rose as much as 2.6 percent to a record on optimism that the next version of the iPhone will meet with high demand, gaining a higher intraday market capitalization than Microsoft Corp. (MSFT), the previous U.S. record holder. The increase in Apple’s shares gave it a market value of $623.1 billion. That compares with $620.6 billion, the record intraday value reached by Microsoft on Dec. 30, 1999 during the Internet heyday, according to data compiled by S&P Dow Jones Indices.
• Calpers Defends Pension Benefits While Risking Losses. The California Public Employees’ Retirement System, the largest U.S. pension, is defending government workers against criticism of their benefits even while it risks losses as municipalities, faced with rising retirement costs, file for bankruptcy. The $239.1 billion fund is the largest creditor in bankruptcy cases filed by two California cities, Stockton and San Bernardino, since the end of June, with a total of $290.8 million at stake.
• UN Monitors Exit Syria as Brahimi Describes Civil War. United Nations monitors prepared to leave Syria today after the failure of their four-month mission, while the organization’s newly appointed envoy described the country’s conflict as a civil war. The 173-strong UN mission ended work yesterday and the last military observer will depart by Aug. 24, Edmond Mulet, assistant secretary general for peacekeeping operations, said after the Security Council decided not to renew its mandate on Aug. 16.

Wall Street Journal:

• Capping Yields a Major Threat to Germany. Capping yield spreads between peripheral debt and German benchmark yields is a disastrous idea that would backfire on the ECB, if it were to go down such a road. Once Spanish yields reach their maximum spread, savvy investors will sell German bonds instead, which will not affect the spread between Spanish and German bonds, but have the unintended consequence of shifting the yield curves higher for all of Europe. Investors limited to selling peripheral debt will sell core debt; what is to lose? — German bunds trade at a negative yield. The trade of a lifetime if the ECB were to proceed in this manner is to sell German and French debt and watch as Europe creates one more scheme doomed to not only fail, but make things worse.
• Spain, Greece and ECB All Pose Threat to Euro Now. The euro is sitting on a three-legged stool and all three of the legs could snap at any time. Greece’s deficit position is deteriorating even more rapidly than expected with Athens once again seeking an extension to its budget-cutting plans. Spain is still in a stand-off with the European Central Bank, hoping that by delaying a formal request for a bailout the country will be able to avoid any new onerous austerity measures. And the third leg is the ECB itself, with its proposal for using government bond purchases to help cap the funding costs of weaker debtor nations in the euro zone.

MarketWatch:

• Medical tax stirs debate over artificial joints. Medical-device manufacturers raise concerns over health-care surcharge. The many baby boomers considering hip or knee replacements in the coming years are likely to have to pay more to get them. The question is, How much more? And could the problems stretch beyond a higher price tag?

CNBC.com:

• 'Shadow Bank' System Will Thrive Under New Rules: Bove. Increased regulations are making it tougher on banks and the consumers they serve but easier on the financing system that helped create the 2008 credit crisis, analyst Dick Bove said in his latest broadside against government overreach.
• Augusta National Adds First Two Female Members. The home of the Masters, under increasing criticism the last decade because of its all-male membership, invited former Secretary of State Condoleezza Rice and South Carolina financier Darla Moore to become the first women in green jackets when the club opens for a new season in October. Both women accepted.
• France Likely to Slip Into Recession in 2013: Economist.

Business Insider:

• Greek Fund Manager Explains Why Greece Will Soon Be The Source Of 'Dramatic Headlines'.
• ART CASHIN: A Gigantic Cauldron Of Geo-Political Risk Is Bubbling.
• CHART OF THE DAY: The Chinese Stock Market Tumbles To A Post-Crisis Low.
• A Greek Fund Manager Explains Why Greece Will Soon Be The Source Of 'Dramatic Headlines'.
• French Bankers Are Moving To London To Escape Steep Taxes.

Zero Hedge:

• Egypt Prepares To Use Aircraft And Tanks In Sinai For First Time In 40 Years.
• Taxes Vs Debt: Where Does US Funding Come From - Chart Of The Day.
• Macro Hope Versus Micro Despair. (graphs)
  

Absolute Return + Alpha:

• Obama Adds Hedge Fund Bundlers. At least 25 people involved in hedge funds are fundraising for Barack Obama, according to an analysis of names released by the campaign for the second quarter.
  

Gallup:

• Swing-State Voters Say They Are No Better Off Than in 2008.

Rasmussen Reports:

• 52% Call for Repeal of Health Care Law, 39% Oppose Repeal.
  

Reuters:

• ECB says bond-buy speculation is misleading. Over the weekend, German magazine Der Spiegel said the ECB is considering setting interest rate thresholds for any purchases of struggling euro zone country's bonds so that it would buy such bonds if their interest rates exceeded a certain premium over German bonds. The European Central Bank on Monday sought to quash speculation about the shape its planned bond-buying program will take, saying that it is misleading to talk about decisions not yet taken. "It is absolutely misleading to report on decisions, which have not yet been taken and also on individual views, which have not yet been discussed by the ECB's Governing Council, which will act strictly within its mandate," an ECB spokesman said. "As far as recent statements by government officials are concerned, it is also wrong to speculate on the shape of future ECB interventions. Monetary policy is independent and undertaken strictly within the ECB mandate."
• Maersk sees 3 pct drop in Asia-Europe volumes-paper. The head of Maersk Line, the world's biggest container shipping company and a unit of Danish group A.P. Moller-Maersk, told Lloyd's List newspaper that container exports from Asia to Europe are likely to drop 3 percent this year. In its half-year report on Aug. 14, Maersk had said it expected a decline in inbound European volumes this year, but did not put a figure on the drop. "In 2012, growth rates have come down across the board," Maersk Line Chief Executive Soren Skou was quoted telling the shipping newspaper. "If lines keep piling on capacity, we are heading straight for a new rate war." Maersk expects zero growth overall in the Asia-Europe container market this year, with eastbound volumes likely to grow by around 6 percent, Lloyd's List said. But that will not compensate for an expected 3 percent drop in the larger westbound volumes, it said. "The Danish line's own internal forecasts will make grim reading for the whole industry, with north-south as well as east-west trades weakening," Lloyd's List said. "Only the intra-Asia market is still looking robust."
• Copper falls on euro zone disappointment, China worry. Copper fell on Monday on disappointment over lack of progress in solving the euro zone crisis and fears that top commodities consumer China will step up a campaign to curb inflation in the metals-intensive housing sector. Denting optimism, the European Central Bank poured cold water on a weekend report in German magazine Der Spiegel that said its new crisis fighting plan could include buying euro zone countries' bonds if their borrowing costs breached certain levels. Markets were also disappointed that Friday's comments from German Chancellor Angela Merkel supporting ECB efforts to address the crisis had not been followed up with concrete plans at the weekend.
• Fitch sees US local gov't downgrades outpacing upgrades. Fitch Ratings said on Monday a mix of soft property taxes and high labor costs will keep weighing on cities, counties and other local governments and produce more downgrades than upgrades for local bond issuers. "Inflexible labor contracts with onerous provisions or external arbiters that severely impede fiscal adjustments remain a key local government credit concern," Fitch said in a statement. "Local government revenues have not been rebounding as overall property tax revenue, linked on a lagged basis to real estate values, continue to drag in many locations."
• Holiday over for France's Hollande as hard times bite. As post-election euphoria wanes, French President Francois Hollande returns from vacation under pressure to show that beyond dismantling the legacy of his predecessor he can act decisively at home while grappling with recession in Europe. Awaiting him are the crisis that still haunts the euro zone, fragile relations with German Chancellor Angela Merkel, and French political opponents who accuse him of sunning himself on the beach while Syria slides into chaos.
• Lowe's(LOW) misses estimates, lags Home Depot(HD). Lowe's Cos Inc reported weaker-than-expected quarterly sales and earnings and cut its profit outlook for the year as the world's No. 2 home improvement chain lost market share to larger rival Home Depot. The results came just days after Home Depot Inc beat Wall Street profit estimates with the help of cost controls and market share gains, and raised its earnings forecast. Lowe's shares fell 4.3 percent to $26.67 in early trading.

Telegraph:

• Italian cash-for-gold shops quadruple as financial crisis deepens. Crisis-hit Italy has seen the number of cash-for-gold shops quadruple in the last two years, according to an Italian think tank, with some cash-strapped citizens forced to sell their gold teeth to make ends meet.

Xinhua:

• China's stockpiles of crude for commercial use rose to the highest level in at least 31 months in July, data from the official Xinhua News Agency show. Supplies of crude, excluding emergency reserves, climbed 3.1% at the end of July compared with June for a fifth monthly gain, according to Xinhua's China Oil, Gas & Petropchemicals newsletter today. That puts inventories at 32.28 million metric tons, the most since January 2010, when Bloomberg started compiling data.
  

Bear Radar

Style Underperformer:

• Small-Cap Growth -1.02%

Sector Underperformers:

• 1) Homebuilders -2.52% 2) Oil Tankers -1.63% 3) Networking -1.14%

Stocks Falling on Unusual Volume:

• LOW, HIBB, VECO, KLIC, INFA, OMCL, ELP, SIRO, ACOM, ASPS, ABCO, NXPI, ADSK, AVGO, TITN, ATHN, SINA, CNC, BBY and ELLI
  

Stocks With Unusual Put Option Activity:

• 1) EWA 2) EWH 3) XOP 4) LOW 5) MDT
  

Stocks With Most Negative News Mentions:

• 1) STX 2) TTC 3) PHM 4) GM 5) RIMM
  

Charts:

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

Bull Radar

Style Outperformer:

• Large-Cap Value -.11%

Sector Outperformers:

• 1) Airlines +2.29% 2) Gaming +.63% 3) HMOs +.59%

Stocks Rising on Unusual Volume:

• CVH, FSLR, VELT, UIS, LVS, AFFY and AET
  

Stocks With Unusual Call Option Activity:

• 1) AET 2) ABV 3) WM 4) VVUS 5) HP
  

Stocks With Most Positive News Mentions:

• 1) CVH 2) HD 3) PFE 4) T 5) TXN
  

Charts:

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