Weekly Scoreboard*

Indices

• S&P 500 1,838.63 +2.32%

• DJIA 16,154.33 +2.28%

• NASDAQ 4,244.02 +2.86%

• Russell 2000 1,149.21 +2.92%

• S&P 500 High Beta 30.54 +2.48%

• Wilshire 5000 19,355.70 +2.43%

• Russell 1000 Growth 866.31 +2.38%

• Russell 1000 Value 920.48 +2.40%

• S&P 500 Consumer Staples 429.19 +2.03%

• Morgan Stanley Cyclical 1,463.66 +2.78%

• Morgan Stanley Technology 922.82 +2.55%

• Transports 7,306.69 +.89%

• Utilities 519.51 +3.1%

• Bloomberg European Bank/Financial Services 111.39 +1.48%

• MSCI Emerging Markets 39.43 +2.1%

• HFRX Equity Hedge 1,167.91 +2.1%

• HFRX Equity Market Neutral 961.21 +.09%

Sentiment/Internals

• NYSE Cumulative A/D Line 205,116 +2.53%

• Bloomberg New Highs-Lows Index 376 +390

• Bloomberg Crude Oil % Bulls 29.41 +8.81%

• CFTC Oil Net Speculative Position 382,334 +6.14%

• CFTC Oil Total Open Interest 1,646,415 +5.46%

• Total Put/Call .82 +1.23%

• OEX Put/Call .70 -16.67%

• ISE Sentiment 96.0 -24.41%

• NYSE Arms 1.0 +36.99%

• Volatility(VIX) 13.57 -11.25%

• S&P 500 Implied Correlation 50.80 -3.75%

• G7 Currency Volatility (VXY) 7.79 -.76%

• Emerging Markets Currency Volatility (EM-VXY) 8.65 -7.59%

• Smart Money Flow Index 11,796.86 +2.76%

• ICI Money Mkt Mutual Fund Assets $2.713 Trillion +.30%

• ICI US Equity Weekly Net New Cash Flow -$1.564 Billion

• AAII % Bulls 40.2 +43.9%
• AAII % Bears 27.3 -24.9%

Futures Spot Prices

• CRB Index 293.24 +1.19%

• Crude Oil 100.30 +.16%

• Reformulated Gasoline 280.53 +2.23%

• Natural Gas 5.21 +9.22%

• Heating Oil 307.82 +1.05%

• Gold 1,318.60 +4.17%

• Bloomberg Base Metals Index 190.73 +.55%

• Copper 326.45 +.57%

• US No. 1 Heavy Melt Scrap Steel 397.73 USD/Ton -.32%

• China Iron Ore Spot 123.20 USD/Ton +1.90%

• Lumber 362.40 +2.29%

• UBS-Bloomberg Agriculture 1,383.67 +.85%

Economy

• ECRI Weekly Leading Economic Index Growth Rate 3.3% -90 basis points

• Philly Fed ADS Real-Time Business Conditions Index -.1192 +2.85%

• S&P 500 Blended Forward 12 Months Mean EPS Estimate 120.35 +.02%

• Citi US Economic Surprise Index 19.70 -3.9 points

• Citi Emerging Markets Economic Surprise Index 20.10 +9.7 points

• Fed Fund Futures imply 32.0% chance of no change, 68.0% chance of 25 basis point cut on 3/19

• US Dollar Index 80.14 -.66%

• Euro/Yen Carry Return Index 145.42 -.08%

• Yield Curve 243.0 +5 basis points

• 10-Year US Treasury Yield 2.74% +6 basis points

• Federal Reserve's Balance Sheet $4.077 Trillion +.25%

• U.S. Sovereign Debt Credit Default Swap 27.17 -8.76%

• Illinois Municipal Debt Credit Default Swap 152.0 -2.79%

• Western Europe Sovereign Debt Credit Default Swap Index 54.0 +1.89%

• Asia Pacific Sovereign Debt Credit Default Swap Index 105.17 -5.29%
  

• Emerging Markets Sovereign Debt CDS Index 270.0 +3.85%
  

• Israel Sovereign Debt Credit Default Swap 93.50 -2.83%

• South Korea Sovereign Debt Credit Default Swap 67.0 -5.57%

• China Blended Corporate Spread Index 354.44 -2.06%

• 10-Year TIPS Spread 2.17% unch.
  

• TED Spread 22.5 +7.25 basis points

• 2-Year Swap Spread 13.25 +1.0 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -5.25 -.5 basis point

• N. America Investment Grade Credit Default Swap Index 64.25 -5.89%
  

• European Financial Sector Credit Default Swap Index 88.29 -5.87%
  

• Emerging Markets Credit Default Swap Index 329.27 +2.57%
  

• CMBS AAA Super Senior 10-Year Treasury Spread  to Swaps 100.0 -10.0 basis points

• M1 Money Supply $2.795 Trillion +4.07%

• Commercial Paper Outstanding 991.0 +.10%

• 4-Week Moving Average of Jobless Claims 336,800 +2,800

• Continuing Claims Unemployment Rate 2.3% unch.

• Average 30-Year Mortgage Rate 4.28% +5 basis points

• Weekly Mortgage Applications 397.20 -1.97%

• Bloomberg Consumer Comfort -30.7 +2.4 points

• Weekly Retail Sales +2.80% -20 basis points

• Nationwide Gas $3.34/gallon +.07/gallon

• Baltic Dry Index 1,097 +.55%

• China (Export) Containerized Freight Index 1,170.59 +.49%

• Oil Tanker Rate(Arabian Gulf to U.S. Gulf Coast) 37.50 +25.0%

• Rail Freight Carloads 246,114 -.40%

Best Performing Style

• Small-Cap Value +3.1%

Worst Performing Style

• Large-Cap Growth +2.4%

Leading Sectors

• Gold & Silver +10.6%

• Computer Hardware +6.8%

• Biotech +4.7%

• Semis +4.4%

• Hospitals +3.7%

Lagging Sectors

• Restaurants +1.0% 

• Retail +.7%

• Road & Rail +.5%

• Homebuilders +.1%

• Oil Tankers -.6%

Weekly High-Volume Stock Gainers (40)

• RTRX, LGND, SUPX, FPRX, MRIN, LCI, CADX, MODN, GTT, MPAA, DWCH, TRIP, CTRL, FSL, KFRC, TAHO, SN, SCOR, LVNTA, ACO, OPHT, OUTR, IRBT, SALE, UVV, CAP, AAN, CYNO, PHH, NEWP, AFSI, NX, ZIGO, TWC, EXL, CNA, RKUS, KS, WCN and CLFD

Weekly High-Volume Stock Losers (17)

• CHTR, CAB, WCG, EEFT, DF, ECHO, BGS, CI, MDCO, BNNY, EGOV, RAX, ITRI, LNKD, NSP, RLOC and BLOX

Weekly Charts
ETFs

• High-Volume Gainers

• High-Volume Losers

Stocks

• High-Volume Gainers

• High-Volume Losers

*5-Day Change

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

Broad Equity Market Tone:

• Advance/Decline Line: Slightly Higher
  

• Sector Performance: Most Sectors Rising
  

• Volume: Slightly Below Average

• Market Leading Stocks: Underperforming

Equity Investor Angst:

• Volatility(VIX) 13.52 -4.38%

• Euro/Yen Carry Return Index 145.57 -.15%

• Emerging Markets Currency Volatility(VXY) 8.65 -2.59%

• S&P 500 Implied Correlation 50.64 -1.92%

• ISE Sentiment Index 118.0 +18.0%

• Total Put/Call .82 +3.80%

• NYSE Arms .96 +6.77% 

Credit Investor Angst:

• North American Investment Grade CDS Index 63.51 -1.57%

• European Financial Sector CDS Index 88.29 -2.89%

• Western Europe Sovereign Debt CDS Index 54.0 unch.

• Asia Pacific Sovereign Debt CDS Index 105.47 -2.53%

• Emerging Market CDS Index 331.07 +4.84%

• China Blended Corporate Spread Index 354.44 +.16%

• 2-Year Swap Spread 13.25 +.25 basis point

• TED Spread 22.50 +1.5 basis points

• 3-Month EUR/USD Cross-Currency Basis Swap -5.25 +.5 basis point

Economic Gauges:

• 3-Month T-Bill Yield .01% -2.0 basis points

• Yield Curve 243.0 +1.0 basis point

• China Import Iron Ore Spot $123.20/Metric Tonne +.98%

• Citi US Economic Surprise Index 19.70 -3.4 points

• Citi Emerging Markets Economic Surprise Index 20.10 +.2 point

• 10-Year TIPS Spread 2.17 -2.0 basis points

Overseas Futures:

• Nikkei Futures: Indicating +157 open in Japan

• DAX Futures: Indicating +13 open in Germany

Portfolio: 

• Slightly Lower: On losses in my biotech sector longs and emerging markets shorts

• Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges, then added them back

• Market Exposure: 50% Net Long

Today's Headlines

Bloomberg:

• State Bank of India Shares Drop as Profit Falls on Defaults. State Bank of India shares dropped to the lowest in five months after the country’s largest lender posted a bigger decline in third-quarter profit than analysts had estimated amid rising bad loans. Net income fell 34 percent to 22.3 billion rupees ($359 million), or 32.66 rupees a share, for the three months ended Dec. 31, from 34 billion rupees, or 50.61 rupees, a year earlier, the Mumbai-based lender said in an exchange filing today. The lowest profit in nine quarters missed the 25.2 billion-rupee median of 38 estimates compiled by Bloomberg. 

• Russia Holds Rate as Ruble Drop Compounds Inflation Above Target. Russia’s central bank refrained from cutting borrowing costs for a 17th month as the ruble’s record drop frustrates efforts to relax monetary policy. The one-week auction rate, the benchmark introduced in September, was kept at 5.5 percent at a meeting today, Bank Rossii in Moscow said in a website statement. That matched the forecasts of all 22 economists in a Bloomberg survey. The central bank said it “will be ready” to tighten policy if inflation risks worsen and the ruble depreciates further.

• Obama Bid for Russia Reset Slips Amid Cold War Iciness. If mounting U.S. frustration with Russia wasn’t clear enough after President Barack Obama blamed Moscow on Feb. 11 for the starvation of Syrian civilians, this week offered plenty of other signals. Director of National Intelligence James Clapper told Congress that “an assertive Russia” poses a risk to the U.S. and aired his anger over damage to national security caused by Edward Snowden, who’s in Russia under asylum after exposing classified American spy programs. Elsewhere on Capitol Hill, lawmakers voiced concern that Russia may have violated a nuclear-arms treaty and is undermining U.S. influence in the Middle East.

• European Banks Avoiding Risky-Loan Disclosure Face Review. A dark corner of European finance is about to be illuminated by European Central Bank inspectors who are sifting through loans that banks restructure for clients and don’t fully disclose. “What’s scaring investors is the question of whether banks are giving money to companies that deserve to go bankrupt and keeping them alive to avoid recording losses,” Mascia Bedendo, an assistant professor of finance at Bocconi University in Milan, said in a phone interview. “The amount of forborne and nonperforming loans is still very obscure.”   

• Europe Stocks Rise on Euro-Area GDP, U.S. Confidence Data. European stocks advanced, posting their biggest weekly gain this year, as better-than-forecast euro-area economic growth and U.S. consumer-confidence reports outweighed worse-than-estimated U.S. industrial output data. ThyssenKrupp AG rose the most since May after Germany’s largest steelmaker reported first-quarter profit that beat analyst predictions. Fresnillo Plc led a gauge of commodity producers higher as gold and silver prices increased. Schindler (SCHP) Holding AG dropped 1 percent after the maker of elevators said annual profit fell 37 percent. The Stoxx Europe 600 Index gained 0.6 percent to 333.32 at the close of trading.

• Gold Heads for Biggest Weekly Gain Since August on Haven Demand. Gold futures for April delivery rose 1.3 percent to $1,316.80 an ounce at 12:08 p.m. on the Comex in New York. Prices headed for a 4.3 percent weekly gain, the biggest such increase since the week ended Aug. 16.

• Fisher Backs QE Tapering Even With Weather Hurting U.S. Growth. Federal Reserve Bank of Dallas President Richard Fisher said the central bank should stick to its strategy of gradually reducing bond purchases even as harsh winter weather slows U.S. economic growth. “I am not persuaded continuing to taper should be altered,” Fisher said today in a Bloomberg Radio interview in Dallas with Kathleen Hays and Vonnie Quinn. “Obviously weather is playing a significant role here.”

• Treasury Lets Banks Offer Accounts to Pot Businesses. The Treasury Department today said it would allow banks to accept accounts from marijuana businesses, letting an industry that is illegal in a majority of U.S. states open business checking accounts and accept credit cards.

Wall Street Journal: 

• Jos. A. Bank to Acquire Eddie Bauer for $825 Million. Deal Adds to Takeover Battle Between the Suit Retailer and Men's Wearhouse.

Barron's:

• Trulia(TRLA) Drops 14%: Q4 Rev Beats, EPS Misses; Q1, Year Rev Views Beat.

Fox News:

• De Blasio digs in on liberal agenda, runs into pushback from fellow Dems.

MarketWatch:

• When push comes to shove, many think Cleveland Fed’s new president will be hawkish.

ZeroHedge:

• The Crisis Circle Is Complete: Wells Fargo Returns To Subprime. (graph)

• The "Sick Man Of Europe" Is Back - German Economy Barely Grows In 2013. (graph)

• Industrial Production Plunges, Fed Blames Weather. (graph)

• "Catastrophic" Winter Storms Send Consumer Confidence Outlook To 6-Month Highs. (graph)

• Peak Employment? (graph)

• The US Participation Rate Is At A 35 Year Low: This Is How It Looks Broken Down By State. (map)

ValueWalk: 

• Prem Watsa “China Reminds Me Of US Housing In Boom". China takes almost 40% to 50% of every commodity so of course China will have an impact on Canada and we’ll have an impact on many of the commodity producing countries like Australia and Brazil, other countries in the world. So we are focused on protecting ourselves first and foremost. Reminds me what happened in the housing crisis in 2003, ’04, ’05 the boom in housing reminds me of takes me back to the tech boom where companies big companies like Northern Telecom and others were buying companies small little companies for $10 billion and $20 billion with no sales, no revenues and nothing other than a few engineers together.

Business Insider:

• Venezuela's Central Bank Is Increasingly Disconnected From Reality.

• Foreclosures Suddenly Jump 57% in California (And Soar In Much Of The Country). (graph)

CNN:

• Snow burying parts of the Northeast in massive winter storm.

• Top 10 cities people are moving to. Whether it's the warm weather, jobs or cheap cost of living, these are the top 10 cities Americans are moving to, according Penske Truck Rental's annual list.

Reuters:

• Italy won't have leeway on investment spending in 2014-EU source. Italy will not be allowed to make use this year of a so-called "investment clause" which allows some flexibility on public spending because it failed to present a document requested by the European Commission, an EU source said on Friday. 

• Weak Brazil activity index raises specter of recession. Economic activity in Brazil fell sharply in December, raising the specter that Latin America's largest economy may have slipped into recession as the government phased out massive economic stimulus to battle inflation. The Brazilian central bank's IBC-Br economic activity index declined 1.35 percent in December from November in seasonally adjusted terms, more than most economists expected, central bank data released on Friday showed. The index, a rough reflection for gross domestic product data, rose 2.57 percent in 2013 as a whole but fell for two straight quarters, which characterizes a technical recession. It dropped 0.17 percent in the fourth quarter and fell 0.21 percent in the third quarter.

• U.S. to pursue trade dispute over Chinese, Taiwanese solar imports. The United States took a step on Friday towards potentially extending import duties on Chinese solar energy products to also cover panels made with parts from Taiwan in a case that could have a major impact on the fast-growing U.S. solar market.

Telegraph:

• Eurozone crisis is just getting started. The project to impose political union is bringing economic ruin, making the legitimacy of the EU project ever more vulnerable. 

• Why China's banking system is in so much trouble. The full transcript of the Telegraph interview with China expert Charlene Chu.

Bear Radar

Style Underperformer:

• Small-Cap Growth -.42%

Sector Underperformers:

• 1) Biotech -1.02% 2) I-Banking -.91% 3) Retail -.25%

Stocks Falling on Unusual Volume:

• CFX, GNC, NKA, OHRP, WTW, RTRX, TRLA, STMP, A, CGNX, SJM, OXM, MW, LXFT, MASI, DCO, MOVE, Z, PWRD, VFC, VSI, MRTX, AIG, FURX, KSU, IPG, EFX, TAL, RPXC, VFC, CTRL and GDP

Stocks With Unusual Put Option Activity:

• 1) WTW 2) AET 3) ITB 4) EWJ 5) Z
  

Stocks With Most Negative News Mentions:

• 1) BAC 2) GNC 3) A 4) DISH 5) PRESS
  

Charts:

• ETFs Falling on Unusual Volume

• Stocks Falling on Unusual Volume

Bull Radar

Style Outperformer:

• Large-Cap Value +.39%

Sector Outperformers:

• 1) Gold & Silver +1.79% 2) HMOs +1.68% 3) Coal +1.22%
  

Stocks Rising on Unusual Volume:

• LOGM, CRAY, JCOM, LIVE, ELLI, IM, FONR, RATE, MUR, CIEN, COTY, TRW, H, CLF and CPB

Stocks With Unusual Call Option Activity:

• 1) A 2) TRLA 3) BRCD 4) AUXL 5) RMTI

Stocks With Most Positive News Mentions:

• 1) GT 2) PEP 3) CPB 4) CLF 5) TWC
  

Charts:

• ETFs Rising on Unusual Volume 

• Stocks Rising on Unusual Volume

Friday Watch

Evening Headlines 
Bloomberg:

• China Hard Landing War-Gamed for World Economy. A hard landing in China would hobble global growth and buoy the dollar, says Societe Generale SA in a study that war-games the international implications of a steep decline in China’s expansion. A plunge to 2 percent from more than 10 percent in 2010 would be enough to slash 1.5 percentage points from worldwide economic growth in the first year as China’s troubles are transmitted through trade, banking and financial market channels, the French bank said in a Feb. 11 report.

• China Banks’ Bad Loans Rise to Highest Since Financial Crisis. Chinese banks’ bad loans increased for the ninth straight quarter to the highest level since the 2008 financial crisis, highlighting pressures on asset quality and profit growth as the world’s second-largest economy falters. Non-performing loans rose by 28.5 billion yuan ($4.7 billion) in the last quarter of 2013 to 592.1 billion yuan, the highest since Sept. 2008, the China Banking Regulatory Commission said in a statement on its website yesterday. Bad loans accounted for 1 percent of total lending, up from 0.97 percent three months earlier.

• China Inflation Stays Subdued as Producer Prices Extend Decline. China’s inflation stayed subdued in January while factory-gate prices extended the longest drop since the 1990s, in a sign of moderating demand in the world’s second-largest economy. The consumer price index rose 2.5 percent from a year earlier, the National Bureau of Statistics said today in Beijing, the same pace as in December. The producer-price index fell 1.6 percent.

• Pandemic Potential Seen in Gene Changes of Bird Flu. Genetic variations in the deadly bird flu virus circulating in China increase the potential for a pandemic strain to emerge, researchers in Shanghai said. Three new variants of the avian influenza type-A H7N9 virus have been found this winter, spurred by transmission in poultry and the adaption of genetic material from another strain called H9N2, scientists at the Shanghai Public Health Clinical Center and Institutes of Biomedical Sciences said. The new strains may be behind a wave of infections in Guangdong, the southern province bordering Hong Kong.

• Kiwi Will Drop With New Zealand Like Ireland in 2007, Jen Says. New Zealand is “like Ireland in 2007” and it’s only a matter of time before its currency enters a meaningful depreciation, according to Stephen Jen, a partner at London-based hedge fund SLJ Macro Partners LLP. While “the case for kiwi seems compelling,” the reality is “quite different,” Jen, a former International Monetary Fund official, and colleague Fatih Yilmaz wrote in a note to clients yesterday. “New Zealand has severe structural weaknesses that are very similar to those of crisis-hit Southern European and Southern emerging-market economies. Kiwi may be 20 percent overvalued.”

• SkyBridge Sees Up to $50 Billion in Emerging Outflows. Anthony Scaramucci’s SkyBridge Capital says the rout in emerging-market stocks will deepen, pitting the firm against calls by BlackRock Inc. and Templeton Asset Management that shares are cheap and will lure buyers. 

• Asian Stocks Head for Year’s First Weekly Gain; Rupiah Up. Asian stocks rose, with a regional benchmark index heading for its biggest weekly advance since September. The Australian dollar climbed, Indonesia’s rupiah led emerging-market currencies higher and gold extended a rally above $1,300 an ounce. The MSCI Asia Pacific Index added 0.6 percent as of 10:44 a.m. in Tokyo.

• Gold Extends Climb to Three-Month High as SPDR Holdings Increase. Bullion for immediate delivery rose as much as 0.3 percent to $1,307.16 an ounce, the highest price since Nov. 8, and traded at $1,306.08 at 10:13 a.m. in Singapore. Gold has traded above the 100-day moving average since Feb. 10, and is heading for a close above the 200-day moving average for the first time since February 2013. This week, bullion is up 3.1 percent.

Wall Street Journal:

• Taliban Take Toll on Pakistan's Biggest City. Militants Claim Responsibility for Deadly Karachi Blast, Extending Hold Despite Government Crackdown. 

• Malaise Mounts as Spending Slips. Decline of 0.4% in January, December Revised Downward.

Fox News:

• Battle for the Arctic? Concerns US ignoring resource-rich region as ice recedes. While the Obama administration focuses on hotspots like the Middle East and Asia, some lawmakers worry the U.S. is ignoring what could be a critical battleground – the Arctic Ocean.

CNBC:

• AIG(AIG) cuts workforce by 3% after earnings beat. American International Group reported quarterly earnings and revenue that easily beat analysts' expectations on Thursday and announced it will cut its workforce by 3 percent because of a charge taken in the fourth quarter. 

• Smartphone sales growth to slow this year: Gartner. Growth in global smartphone revenue is expected to slow this year as cheaper devices hit the market and weigh on average selling prices, research firm Gartner said on Thursday.

• Weight Watchers(WTW) shares plunge on drastic full-year guidance. Weight Watchers forecast a full-year profit far below estimates, sending the company's shares down 17 percent in extended trading.

Zero Hedge:

• The Tanks Are Rolling In Post-Devaluation Kazakhstan. (video)

• CBO 'Admits' Assumption That US Never Falls Into Recession Again Is Wrong.

• Bitcoin Crumbles To 3-Month Lows On Mt.Gox As CEO Defends Exchange. (graph)

• The European Debt Crisis Visualized. (video)

• Martin Armstrong Exclaims "The Entire Social Contract Is Collapsing". 
• A Walkthru Explaining Facebook's(FB) "Millions" Of Fake Users.
• Santelli Slams The "Self-Sustaining Recovery" Myth. (video)

Business Insider:

• European Revenue Expectations Have Been Tanking. (graph)

NY Times: 

• One-Fifth of New Enrollees Under Health Care Law Fail to Pay First Premium.

Reuters:

• Agilent Tech(A) cuts full-year adj profit forecast. Agilent Technologies Inc cut its full-year adjusted profit forecast, citing lower revenue from its electronic measurement business due to "challenges" in the aerospace and defense market. Shares of Agilent fell 7 percent in extended trading. 

• Apache(APA) Q4 profit misses estimates as output down sharply. U.S. oil and gas company Apache Corp on Thursday reported a bigger-than-expected decline in fourth-quarter profit as its output fell sharply on asset sales and a frigid winter in the United States. Apache warned of weak fourth-quarter output in January, saying that severe winter weather in November had disrupted production at its operations in Oklahoma, Texas and New Mexico. 

 Financial Times:

• T Rowe Price Fund Manager Warns on US Small Caps. Repeat of last year's performance by small caps "highly unlikely," citing Henry Ellenbogen, manager of New Horizons fund. "Small caps as an asset class will probably not outperform for another year," citing Ellenbogen. Doesn't see valuations going much higher.

The Guardian:

• Australia’s housing bubble ready to burst, US investment guru claims. House prices set to plummet by up to 50% as ‘demographic crisis’ and falling Chinese demand looms. If you are one of the many thousands of Australians at risk of being priced out of the property market, you had better wish that Harry Dent has got his sums right. Dent, an American investment guru who uses demographics to forecast economic cycles, thinks the soaring housing market is ready to burst any day now, perhaps reducing values by as much as 50% in some places. Dent, who was in Sydney this week to promote his book The Demographic Cliff, has a formidable record. He claims credit for predicting Japan’s deflationary decade and the US boom and bust of the past 20 years, and has now turned his numbers on Australia.

Yomiuri:

• Japan to Cancel Approvals for 670 Solar Projects.

China Securities Journal:

• China's Economic Growth Slowdown 'Inevitable'. A slowdown in China's economic growth is "inevitable" because of high growth rates can't be sustained, according to a front-page commentary by reporter Gu Xin. A recovery of the nation's exports may be hit by the simultaneous recovery in developed countries and the emerging market crisis, the commentary said.

Shanghai Securities News:

• China Can Allow 1-2 Local Govt Defaults. China can allow 1-2 local governments to default to "trigger adjustments in local government debt," Chen Daofu, a researcher at the State Council's Development Research Center, writes in a commentary. Existing vehicle debt should be separated from any subsequent financing necessary in risk management, the commentary says.

Evening Recommendations
 RBC Capital:

• Rated (WBMD) Top Pick, target $70.

Night Trading

• Asian equity indices are -.50% to +.50% on average.

• Asia Ex-Japan Investment Grade CDS Index 141.0 +2.0 basis points.

• Asia Pacific Sovereign CDS Index 108.25 +2.0 basis points.

• FTSE-100 futures -.15%.

• S&P 500 futures -.34%.

• NASDAQ 100 futures -.28%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (CPB)/.71

• (DTE)/.95

• (H)/.20

• (IPG)/.59

• (ITT)/.47

• (SJM)/1.68

• (LPNT)/.80

• (RRGB)/.59

• (RUTH)/.18

• (TRW)/1.66

• (VFC)/.84

• (WLH).52

Economic Releases
8:30 am EST

• The Import Price Index for January is estimated to fall -.1% versus unch. in December.

9:15 am EST

• Industrial Production for January is estimated to rise +.2% versus a +.3% gain in December.

• Capacity Utilization is estimated to rise to 79.3% versus 79.2% in December.

• Manufacturing Production is estimated to rise +.1% versus a +.4% gain in December.

9:55 am EST

• Preliminary Univ. of Mich. Consumer Confidence for February is estimated to fall to 80.2 versus 81.2 in January.

Upcoming Splits

• None of note

Other Potential Market Movers

• The Eurozone GDP report, (HAS) investor update and the (MAT) analyst presentation could also impact trading today.

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