Stocks Rising into Final Hour on Central Bank Hopes, Investor Perforance Angst, Short-Covering, Metals/Healthcare Sector Strength

Broad Market Tone:

• Advance/Decline Line: About Even
  

• Sector Performance: Most Sectors Rising
  

• Volume: Below Average

• Market Leading Stocks: Performing In Line

Equity Investor Angst:

• VIX 12.94 +.86%

• ISE Sentiment Index 141.0 +46.88%

• Total Put/Call .88 -1.12%

• NYSE Arms .70 -39.33%

Credit Investor Angst:

• North American Investment Grade CDS Index 69.24 +.47%

• European Financial Sector CDS Index 133.07 +4.89%

• Western Europe Sovereign Debt CDS Index 91.40 +2.25%

• Emerging Market CDS Index 231.23 +.20%

• 2-Year Swap Spread 13.75 -.5 bp

• TED Spread 23.50 -1 bp

• 3-Month EUR/USD Cross-Currency Basis Swap -15.25 +.25 bp

Economic Gauges:

• 3-Month T-Bill Yield .04% +1 bp

• Yield Curve 154.0 -2 bps

• China Import Iron Ore Spot $130.20/Metric Tonne +.15%

• Citi US Economic Surprise Index -7.9 -3.0 points

• 10-Year TIPS Spread 2.28 -3 bps

Overseas Futures:

• Nikkei Futures: Indicating +115 open in Japan

• DAX Futures: Indicating +7 open in Germany

Portfolio: 

• Higher: On gains in my retail/tech/medical sector longs

• Disclosed Trades: None

• Market Exposure: 75% Net Long

Today's Headlines

Bloomberg:

• EU Warns of ‘Huge Shocks’ Without Bank Depositor Preference Rule. European Union deposit-insurance funds would be vulnerable to “huge shocks” unless depositors get preferred treatment over other unsecured creditors, a study on proposed rules for handling failing banks showed. The EU is weighing whether depositors should be paid back ahead of other unsecured creditors in new rules on bank resolution. If clear preference isn’t given to any depositors, national funds would stand in line with uninsured depositors, senior bondholders and other unsecured creditors to divide up a failed bank’s assets and share in absorbing losses, according to the confidential EU impact study. 
• Euro Gains Most in Three Weeks as German Industrial Output Rises. The euro rallied the most in three weeks against the dollar as German industrial production unexpectedly rose for a second month in March, a sign that Europe’s largest economy may be returning to growth.
• European Stocks Advance as ING Earnings Exceed Estimates. European stocks climbed, with the Stoxx Europe 600 Index extending its highest level since June 2008, as companies from ING Groep NV (INGA) to Deutsche Telekom AG (DTE) posted quarterly earnings that beat estimates.
• Issa Says Heads of Benghazi Review Panel Refused to Testify. Republican Representative Darrell Issa said the Obama administration has failed to cooperate with his probe of the attack on the U.S. mission in Benghazi, Libya. Issa of California, chairman of the House Oversight and Government Reform Committee, also said today at a hearing of the panel that leaders of the State Department’s review board refused to testify before the panel. Today’s hearing revives efforts by Republicans to show the Obama administration didn’t provide enough security to U.S. diplomats in Libya before the attack last Sept. 11 that killed U.S. Ambassador Christopher Stevens and three other Americans, failed to respond militarily during it and engaged in what Issa has called a “cover-up” afterward to hide the role of terrorists linked to al-Qaeda.
• Iron Ore Seen Dropping by BHP as Supply Growth Tops Demand. Global iron ore supplies will expand faster than demand over the long term, lowering prices and reducing volatility of the raw material used to make steel, according to BHP Billiton Ltd. (BHP), the largest mining company. New seaborne cargoes will replace more expensive output, mainly in China, Alan Chirgwin, general manager of iron ore marketing, told a conference in Singapore today. He didn’t give price forecasts or define long term. China is the world’s largest buyer of the biggest seaborne cargo after crude oil. Iron ore has lost 10 percent this year, nearing bear-market territory, amid forecasts for an increase in global supplies just as demand growth in China drops. As producers boost output, higher-cost Chinese supply will drop and the price will extend declines, Deutsche Bank AG said in report last month. Rio Tinto Group (RIO) is pressing ahead with its expansion, Alan Smith, president of iron ore Asia, said at the conference today. 
• China April Copper Imports Drop to 22-Month Low on Demand. Copper imports by China declined to the lowest level in 22 months in April, raising concern that demand is waning from the biggest user. Inbound shipments of the refined metal, alloy and products were 295,799 metric tons last month, the General Administration of Customs said on its website today. That was the lowest since June 2011, down 7.4 percent from March and 21 percent lower than a year earlier, according to data compiled by Bloomberg.
• Gold Futures Gain Amid Signs of Physical Demand in India, China. Gold rose for the second time in three days amid signs of increasing purchases in India and China, the world’s largest consumers of the metal.
• McDonald’s April Store Sales Drop 0.6% on Asia Slowdown. McDonald’s Corp. (MCD), the world’s biggest restaurant chain, said sales at stores open at least 13 months fell 0.6 percent last month as growth slowed in its Asia-Pacific region. Analysts estimated a 0.5 percent drop, the average of 11 estimates from Consensus Metrix. Sales at stores in the company’s Asia-Pacific, Middle East and Africa unit fell 2.9 percent, the Oak Brook, Illinois-based company said today in a statement. Analysts projected a 1.4 percent decline.

Wall Street Journal:  

• Live-Blogging the Ira Sohn Conference.
• In Beijing, Mass Gathering Draws Police. Beijing on Wednesday saw an unusually large public demonstration, according to eyewitnesses and images circulating on social media. The demonstration appeared to end without violence or conflict, the eyewitnesses said, after police ushered the protesters off the streets. Still, it underscored the tensions that can bubble over in China, even in tightly monitored Beijing.

Fox News:

• Benghazi witness describes effort to lure more Americans into 'trap,' says knew attack was terrorism. (video) A key Benghazi whistle-blower testified Wednesday that his team knew the Sept. 11 attack on the U.S. compound was terrorism, revealing that it appeared some were trying to lure even more U.S. personnel into a separate "ambush" while the attack was still being carried out. Greg Hicks, the deputy chief of mission in Libya who became the top U.S. diplomat in the country after Ambassador Chris Stevens was killed, revealed new details as he and other whistle-blowers delivered emotional testimony on Capitol Hill. He described how, as diplomatic officials were trying to find out what happened to Stevens, they were receiving phone calls from supposed tipsters saying they knew where the ambassador was and urging Americans to come get him. 

MarketWatch:

• Stodgy Netherlands is nation that’ll blow up euro. Commentary: Overindebted Dutch heading deeper into recession.

CNBC: 

• Fed's Fisher: Washington Is Holding Back Job Creation. (video)

Zero Hedge: 

• Stanley Druckenmiller: "Bernanke Running The Most Inappropriate Monetary Policy In History".
• Banks Warn Bernanke Of The First Two Bubbles: Student Loans And Farmland. (graph)
• Chart Of The Day: With "Recoveries" Like These Who Needs Wage Growth?
• Ira Sohn Conference Begins With Paul Singer And Kyle Bass Sticking To The Script.

Business Insider: 

• BREAKING: DEAL REACHED: Former Enron CEO Jeff Skilling Could Get Out Of Prison 10 Years Early.
• Italian Court Upholds Berlusconi Tax Fraud Verdict.
• BENGHAZI WHISTLEBLOWER: 'I Was Stunned' And 'Embarrassed' By Susan Rice's Talk Show Appearances.
• HTC's Facebook(FB) Phone Is Clearly A Flop.
• Another Car Company That Got A Federal Loan Is Shutting Down.
• KYLE BASS: Japan's Adding A Ponzi Scheme To A Ponzi Scheme.
• The Financial Products That Blew Up The Global Economy Are Sliding Into The Shadow Banking System.

Reuters:

• Seatbelt Sign. Aggressive aircraft orders have an inverse relationship with expansion in global GDP a year later. If that affiliation holds, big orders by Asian airlines point to rising risks of economic turbulence next year.
• Weaker Europe, iron ore price weigh on ArcelorMittal - CEO. The world's largest steelmaker ArcelorMittal suffered in the first quarter from "very weak" demand in Europe and falling iron ore prices, its chief executive said on Wednesday ahead of results due on Friday. The company, which makes some 6-7 percent of the world's steel, has said it sees global steel consumption up 3 percent this year, but European demand falling by between 0.5 and 1.5 percent after a 9 percent drop in 2012. "We are seeing it could be more minus 1.5 than minus 0.5 because the first quarter has been very weak. It started well, but as we entered it, it looks weak," Lakshmi Mittal told Reuters on the sidelines of the company's annual shareholder meeting. He said Chinese steel demand would probably grow by between 2.5 and 3 percent this year. In February, the company had forecast a 3 percent expansion. "It is strong in auto and construction, but recently there has been some credit squeeze and we are seeing some softening of the overall demand," Mittal said.
• U.S. can pursue case against Bank of America over mortgages. A federal judge ruled on Wednesday that the United States can pursue parts of a civil lawsuit against Bank of America Corp over its sale of toxic mortgages to Fannie Mae and Freddie Mac, boosting a largely untested legal theory the government used in the case. 
• McKesson(MCK) forecasts strong profit growth in fiscal 2014. Drug wholesaler McKesson Corp reported a smaller-than-expected fourth-quarter profit, but forecast strong 2014 adjusted earnings as it expects its technology solutions business and the acquisition of smaller peer PSS World Medical to significantly contribute to growth. 
• European banking union? Don't hold your breath. In June last year, European Union leaders made a great fanfare of committing to 'banking union', a three-step plan to shore up the region's 8,000 banks and prevent a repeat of the debt and financial crisis. Eleven months on, deep cracks have emerged in the visions member states have of the scheme, with Germany in particular raising doubts about its overall feasibility although both it and France have promised progress by the end of next month.

Telegraph: 

• Brussels' power grab will break up eurozone - Saxo Bank. The eurozone's financial sector will “drown” in “self-defeating” regulation, which will eventually "destroy" the healthy banks, as the single-currency bloc breaks apart, says the boss of Denmark’s Saxo Bank. 
• China may not overtake America this century after all. Doubts are growing about whether China can pass the US to become the world's biggest economy this century amid warnings that the country’s 30-year miracle is nearing exhaustion.  

Handelsblatt:

• Germany Should Sue ECB, State Minister Hahn Says. Germany should sue ECB at European Court of Justice in Luxembourg because announced bond-buying program violates mandate, Joerg-Uwe Hahn, Free Democrat minister in charge of Europe affairs in state of Hesse says in a guest commentary. ECB bond-buying would constitute monetary state financing and increase inflation risks, Hahn said. ECB has chosen to become a "political actor," Hahn said.

FAZ:

• EU to Impose Punitive Tariffs on Chinese Solar Panels. European Commission will implement tariffs averaging 456% today, citing people familiar with the matter.

Bear Radar

Style Underperformer:

• Small-Cap Value +.11%

Sector Underperformers:

• 1) Disk Drives -1.97% 2) Utilities -1.33% 3) Homebuilders -.67%

Stocks Falling on Unusual Volume:

• SKYW, KSS, REN, SALM, CIE, BANR, JMI, FIO, AXLL, VCLK, WBS, ESE, CIE, DCO, RLOC, JAZZ, WMB, THI, Z, PCRX, TRLA, MELI, INFI, ANDE, XPO, URS, PHMD, AOL, CHRW and CLMS

Stocks With Unusual Put Option Activity:

• 1) EA 2) CA 3) CHRW 4) ARUN 5) WFM
  

Stocks With Most Negative News Mentions:

• 1) VSI 2) ENDP 3) TWX 4) BAC 5) CA
  

Charts:

• ETFs Falling on Unusual Volume

• Stocks Falling on Unusual Volume

Bull Radar

Style Outperformer:

• Large-Cap Value +.42%

Sector Outperformers:

• 1) Gold & Silver +3.20% 2) Education +2.32% 3) Steel +2.02%
  

Stocks Rising on Unusual Volume:

• WTI, LMOS, OAS, JCP, CPA, PSE, LEDR, ICUI, AMAP, WBMD, LOPE, EA, WFM, OEH, YY, DVA, EZCH, MYGN, MCK, VVUS, WLT, WTI, CLF, TWO, ONXX, TFM and CTSH

Stocks With Unusual Call Option Activity:

• 1) WFM 2) LAMR 3) AFFY 4) CHRW 5) Z
  

Stocks With Most Positive News Mentions:

• 1) MYGN 2) MCK 3) APA 4) LOW 5) CTSH
  

Charts:

• ETFs Rising on Unusual Volume 

• Stocks Rising on Unusual Volume

Wednesday Watch

Evening Headlines 
Bloomberg: 

• Emerging Markets Growing at Slowest Pace Since 2011, HSBC Says. Emerging-market economic growth was probably the weakest since September 2011 last month as global demand for manufacturing and services declined, HSBC Holdings Plc said, citing a survey of purchasing managers. The HSBC Emerging Markets Index, which is compiled by London-based Markit Economics and tracks conditions at more than 5,000 companies, fell to 51.3 in April from 52.5 in March, HSBC said today in a report. A value above 50 indicates expansion and below 50 signals contraction.

• PBOC Signals It May Resume Bill Sales as Capital Inflows Rise. China’s central bank signaled it will resume sales of bills for the first time in 17 months as global funds pour money into the country to take advantage of the yuan’s rise. “The central bank’s gauging of demand shows it will resume bill sales soon,” said Shi Lei, Beijing-based head of fixed- income research at Ping An Securities Co., a unit of the nation’s second-biggest insurance company. “Foreign capital inflows are too big. The central bank needs more tools to mop up excess liquidity.”  

• Asian Stocks Climb Third Day. Komatsu Ltd. (6301), the world’s second-biggest maker of construction and mining equipment, advanced 3.3 percent in Tokyo, leading industrial companies higher. Wilmar International Ltd. (WIL), the world’s No. 1 palm-oil processor, climbed 3.9 percent in Singapore as first-quarter profit surged 23 percent. Toshiba Corp. (6502) slumped 3.9 percent in Tokyo after the Nikkei newspaper reported sales at the No. 2 maker of flash-memory will miss the company’s forecast. The MSCI Asia Pacific Index climbed 0.9 percent to 143.33 as of 11:01 a.m. in Tokyo, with all 10 industry groups on the gauge rising.

• Bond-Loan Inversion Exposes Fed-Induced Excesses: Credit Markets. Yields on junk-rated corporate bonds have fallen below loans that rank higher in the capital structure by the most ever, underscoring the anomalies being created by the Federal Reserve's unprecedented monetary policies. At about 5.08%, yields on speculative-grade bonds are 51 basis points less than rates on U.S. leveraged loans, according to data from JPMorgan Chase(JPM). Before this year, creditors had almost never accepted lower payments on junk bonds over loans, which get repaid first in a bankruptcy. Concerns that credit markets are overheating are rising as the Fed, which has pumped about $2.5 trillion into the financial system since the financial crisis, keeps its benchmark rate at about zero for a fifth year. Repressed investors are seeking out almost anything that generates higher yields regardless of the risk. "Junk-bond yileds are in freefall, and every time that is pointed out, you look like an alarmist," Martin Fridson, CEO of NY-based financial research firm FridsonVision LLC, said in an interview. "People think it's okay as long as they are the first ones out when things change direction. Of course, everybody is not going to be the first one out."

• Hedge Funds Rush to $108 Billion Trading Where Wall Street Tread. Hedge funds using debt-trading strategies honed on Wall Street are expanding at a record pace as they profit from risks big banks are no longer taking. BlueCrest Capital Management LLP doubled its New York staff in the two years through December, while Pine River Capital Management LP increased its global workforce by one-third in 2012. Hedge-fund firms are hiring from companies such as Deutsche Bank AG (DBK), Barclays Plc (BARC) and Bank of America Corp. as their credit funds have attracted $108 billion since 2009, data compiled by Chicago-based Hedge Fund Research Inc. show. 

• Egypt Investment Is Collapsing as Citizens Turn Into Vigilantes. In a dimly lit Cairo workshop, Hussein spins a metal pipe on a lathe, sending sparks flying. In a few minutes, it’ll become the barrel of a gun. Sometime after that it will join the growing arsenal of illegal weapons on the streets of Egypt. Artisans who make machine parts by day are turning into bootleg gunmakers at night, says Hussein, 54, who asked not to be identified by his full name for fear of prosecution.

• CIA’s Brennan Picks New Spy Chief Passing Over Woman Holding Job. John Brennan, director of the Central Intelligence Agency, picked an undercover officer as the new head of the agency’s national clandestine service, passing over a woman who had been serving as the acting chief. The acting chief wasn’t chosen because she was associated with the CIA’s interrogation program, which is said to have resorted to torture to elicit information from al-Qaeda suspects, said Reuel Marc Gerecht, a former CIA case officer who’s now a fellow at the Foundation for Defense of Democracies.

Wall Street Journal: 

• Pentagon Plans for the Worst in Syria. The Pentagon is stepping up plans to deal with a dangerous regional spillover from Syria's possible collapse—a scenario it had recently seen as remote—drawing up proposals including a Jordanian buffer zone for refugees secured by Arab troops, said U.S. officials familiar with the discussion. The plans seek to minimize direct U.S. involvement, but they reflect a reassessment of the Pentagon's hands-off approach. The shift comes after Defense Secretary Chuck Hagel's trip last month to the Middle East, during which Arab leaders appealed for the U.S. to focus on the danger of Syria's disintegration into warring sectarian fiefdoms. "The Syria message was loud and strong," said a senior diplomat briefed on Mr. Hagel's trip. "Everybody's scared. And nobody knows what the hell we are going to do there." 

• Boehner Says He 'Probably' Won't Support Online Sales-Tax Bill. House Speaker John Boehner said he "probably" wouldn't support a bill to give states the right to force out-of-state online retailers to collect sales tax for them, sounding more negative than fellow Republicans who have themselves been lukewarm on the measure.

• Egypt's Brotherhood Gains More Power. Egyptian President Mohammed Morsi swore in new cabinet ministers Tuesday in a reshuffle of his government that strengthened the position of the Muslim Brotherhood in key ministries and provoked complaints from the nation's disparate opposition. Members of the opposition had demanded that Mr. Morsi form a more inclusive government—one including liberals, moderates, Coptic Christians and women—ahead of parliamentary elections due to take place later this year. They also sought the removal of Prime Minister Hisham Qandil, who is viewed by his critics as lacking political experience and charisma. But Mr. Qandil retained his post in the reshuffle, helping to form the new cabinet that includes 10 officials belonging to the ruling Freedom and Justice Party, the political arm of the Muslim Brotherhood.

• Battery-Driven Tesla(TSLA) May Run Out of Juice. Without so much as a puff of smoke, Tesla Motors Inc.'s stock has rallied an incredible 64% this year. One catalyst: an announcement last month that it had reached "full profitability" for the quarter through March. Analysts don't seem so sure, though, projecting the company on Wednesday will report a loss of seven cents a share.

Fox News: 

• Republicans look to show 'cover-up' as whistle-blowers give Benghazi testimony. Republican lawmakers hounding the Obama administration for months over unanswered questions on the Benghazi attack will have their moment, on Wednesday, to demonstrate whether the internal response amounted to a cover-up -- as whistle-blowers give long-awaited testimony expected to challenge the White House's version of events. Two of the whistle-blowers' opening statements were obtained by Fox News, and in the statements they affirm their credentials and credibility in testifying about what happened last Sept. 11 in Libya. "I am a career public servant," Greg Hicks' statement reads. "Until the aftermath of Benghazi, I loved every day of my job." He was deputy chief of mission in Libya and became top U.S. diplomat in the country after Ambassador Chris Stevens was killed in the terror attack. The other statement, by Mark Thompson of the State Department Counterterrorism Bureau, is mostly biographical. Testimony also is due Wednesday from Eric Nordstrom, a diplomatic security officer who was formerly the regional security officer in Libya.

MarketWatch.com: 

• Muni defaults still rare, but alarming trend developing, Moody’s says. While in the past defaults were usually confined to specific projects like healthcare facilities and housing infrastructure, the most recent year saw general governments take three of the five spots. Rating analysts, led by Merxe Tudela, write:

CNBC: 

• Whole Foods(WFM) Beats on Earnings, Raises Outlook. Whole Foods on Tuesday beat on earnings and raised its full-year forecast, saying store sales had recently accelerated.

• Zillow(Z) Raises Revenue Forecast After Subscriptions Boost. Real estate website Zillow reported first-quarter revenue ahead of analysts' estimates after subscriptions were boosted by a recovering U.S. housing market, and the company raised its full-year revenue forecast.

• JC Penney(JCP) Cites Ousted CEO's Plans in Sales Miss. JC Penney on Tuesday said it expects first-quarter revenue to be down about 16 percent from a year earlier, which it attributed in part to strategies set up by recently ousted CEO Ron Johnson.

Zero Hedge: 

• Syria Traffic Goes "Dark" As Country Disappears From Internet. (graph)

• Lacy Hunt: Cyclical Hurdles For A Highly Over-Leveraged Economy.

• Debunking The Keynesian Policy Framework: The Myth Of The Magic Pendulum. 

• Extreme Complacency Trumps Macro's Biggest 5-Week Plunge In Two Years. (graphs)

• Jeremy Grantham: "We Have Been Conned". (video)

New York Times:

• Small Firm Could Turn the Vote on Dimon. The fate of Jamie Dimon of JPMorgan Chase(JPM) could hinge on a small, London-based firm that is virtually unknown, even on Wall Street.

• U.S. Weighs Wider Wiretap Laws to Cover Online Activity. The Obama administration, resolving years of internal debate, is on the verge of backing a Federal Bureau of Investigation plan for a sweeping overhaul of surveillance laws that would make it easier to wiretap people who communicate using the Internet rather than by traditional phone services, according to officials familiar with the deliberations.

LA Times:

• Gun crime has plunged, but Americans think it's up, says study. Gun crime has plunged in the United States since its peak in the middle of the 1990s, including gun killings, assaults, robberies and other crimes, two new studies of government data show. Yet few Americans are aware of the dramatic drop, and more than half believe gun crime has risen, according to a newly released survey by the Pew Research Center. In less than two decades, the gun murder rate has been nearly cut in half. Other gun crimes fell even more sharply, paralleling a broader drop in violent crimes committed with or without guns. Violent crime dropped steeply during the 1990s and has fallen less dramatically since the turn of the millennium.

ABC News:

• Authorities: 42 Dead in Nigeria Islamic Extremist Attacks. Coordinated attacks by Islamic extremists armed with heavy machine guns killed at least 42 people in northeast Nigeria, authorities said Tuesday, the latest in a string of increasingly bloody attacks threatening peace in Africa's most populous nation. The attack struck multiple locations in the hard-hit town of Bama in Nigeria's Borno state, where shootings and bombings have continued unstopped since an insurgency began there in 2010. Fighters raided a federal prison during their assault as well, freeing 105 inmates in another mass prison break to hit the country, officials said.

Mediaite:

• On CNN, Mother Of Slain Benghazi Victim Excoriates Hillary Clinton: ‘I Blame Her’. (video)

Real Clear Politics:

• The Depressing Future of American Health Care.

Reuters: 

• China April trade data beats expectations, scepticism remains. China's exports and imports grew more than expected in April from a year earlier, possibly easing some of the concerns about weakness in the recovery of the world's second-largest economy, though doubts remained over the strength of real demand and the accuracy of the figures. 

• Symantec(SYMC) beats estimates on demand for security products. Symantec Corp's results beat estimates for the fourth consecutive quarter driven by demand for its data loss prevention and information security products. 

• U.S. consumer credit posts smallest gain in 8 months. U.S. consumer credit recorded its smallest increase in eight months in March, a possible hint that Americans are still trying to pare their debts. Consumer installment credit rose by $7.97 billion to $2.81 trillion, the Federal Reserve said on Tuesday. It was the smallest increase since July and well below economists' expectations for a $16 billion rise.

Hong Kong Economic Times:

• Hong Kong Unattractive to Hot Money as Asset Prices High. Hong Kong stocks have high valuations and the property market has slowed since the govt's cooling measures, making the city unattractive to hot money, citing Stuart Gulliver, CEO at HSBC Holdings.

People's Daily:

• U.S. Is Real 'Hackers Empire'. The U.S. is the "real hacker empire" and has been strengthening Internet tools in recent years to engage in political subversion in other countries, a commentary said today. Pentagon report accusing the Chinese military of a cyber espionage creates an "imaginary enemy," the commentary said.

Evening Recommendations 
Bernstein:

• Rated (ETN) Outperform, target $76.

Night Trading

• Asian equity indices are +.25% to +1.0% on average.

• Asia Ex-Japan Investment Grade CDS Index 100.0 -1.0 basis point.

• Asia Pacific Sovereign CDS Index 80.75 -1.5 basis points.

• FTSE-100 futures +.31%.

• S&P 500 futures -.03%.

• NASDAQ 100 futures +.06%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (WEN)/.02

• (CTSH)/.92

• (AOL)/.46

• (NWSA)/.35

• (GMCR)/.73

• (ATVI)/.11

• (CXW)/.66

• (CF)/6.00

• (TSLA)/.04

• (MNST)/.46

• (GRPN)/.03

• (MDR)/.14

• (JOE)/.-01

• (MRX)/.71

• (SKYW)/-.01

• (MBI)/.15   

Economic Releases
10:30 am EST

• Bloomberg consensus estimates call for a weekly crude oil inventory build of +2,000,000 barrels versus a +6,696,000 barrel gain the prior week. Gasoline supplies are estimated to fall by -475,000 barrels versus a -1,818,000 barrel decline the prior week. Distillate supplies are estimated to rise by +500,000 barrels versus a +474,000 barrel gain the prior week. Finally, Refinery Utilization is estimated to rise by +.5% versus a +.9% gain the prior week.

Upcoming Splits

• None of note

Other Potential Market Movers

• The China Trade data, 10Y T-Note auction, China CPI data, weekly MBA mortgage applications report, Wells Fargo Industrial/Construction Conference and the (SNDK) investor day could also impact trading today.

BOTTOM LINE: Asian indices are mostly higher, boosted by automaker and technology shares in the region. I expect US stocks to open modestly higher and weaken into the afternoon, finishing mixed. The Portfolio is 75% net long heading into the day.

Stocks Rising into Final Hour on Central Bank Hopes, Less Eurozone Debt Angst, Short-Covering, Transport/Bank Sector Strength

Today's Market Take:

Broad Market Tone:

• Advance/Decline Line: Higher
  

• Sector Performance: Most Sectors Rising
  

• Volume: Below Average

• Market Leading Stocks: Performing In Line

Equity Investor Angst:

• VIX 12.87 +1.66%

• ISE Sentiment Index 104.0 -1.89%

• Total Put/Call .88 +12.82%

• NYSE Arms 1.10 +37.22%

Credit Investor Angst:

• North American Investment Grade CDS Index 68.82 -2.49%

• European Financial Sector CDS Index 128.25 -2.0%

• Western Europe Sovereign Debt CDS Index 89.39 -1.29%

• Emerging Market CDS Index 231.02 +.01%

• 2-Year Swap Spread 14.25 -.25 bp

• TED Spread 24.50 unch.

• 3-Month EUR/USD Cross-Currency Basis Swap -15.50 +1.0 bp

Economic Gauges:

• 3-Month T-Bill Yield .03% unch.

• Yield Curve 156.0 +1 bp

• China Import Iron Ore Spot $130.0/Metric Tonne+1.48%

• Citi US Economic Surprise Index -4.9 -1.8 points

• 10-Year TIPS Spread 2.31 unch.

Overseas Futures:

• Nikkei Futures: Indicating +90 open in Japan

• DAX Futures: Indicating +12 open in Germany

Portfolio: 

• Slightly Higher: On gains in my retail/tech sector longs

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

• Market Exposure: Moved to 75% Net Long