Stocks Reversing Higher into Final Hour on Central Bank Hopes, Short-Covering, Oil Reversal, Biotech/Commodity Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Modestly Higher
  

• Sector Performance: Most Sectors Rising
  

• Volume: Around Average

• Market Leading Stocks: Underperforming

Equity Investor Angst:

• Volatility(VIX) 21.96 -2.62%

• Euro/Yen Carry Return Index 140.54 +.24%

• Emerging Markets Currency Volatility(VXY) 11.95 -.75%

• S&P 500 Implied Correlation 62.13 -.10%

• ISE Sentiment Index 81.0 -15.63%

• Total Put/Call 1.18 +24.21%

• NYSE Arms .70 -.21% 

Credit Investor Angst:

• North American Investment Grade CDS Index 94.25 -.84%

• America Energy Sector High-Yield CDS Index 1,125.0 +4.09%

• European Financial Sector CDS Index 94.47 -2.54%

• Western Europe Sovereign Debt CDS Index 21.20 +.14%

• Asia Pacific Sovereign Debt CDS Index 60.26 +.37%

• Emerging Market CDS Index 371.97 -1.80%
  

• iBoxx Offshore RMB China Corporates High Yield Index 119.69 +.03%

• 2-Year Swap Spread 12.75 unch.

• TED Spread 33.0 -2.0 basis points

• 3-Month EUR/USD Cross-Currency Basis Swap -26.50 +3.0 basis points

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 70.94 +.50%
• 3-Month T-Bill Yield -.01% +2.0 basis points

• Yield Curve 142.0 +3.0 basis points

• China Import Iron Ore Spot $53.14/Metric Tonne -5.17%

• Citi US Economic Surprise Index -29.7 -7.4 points

• Citi Eurozone Economic Surprise Index 31.3 -.3 point

• Citi Emerging Markets Economic Surprise Index -20.30 +.3 point

• 10-Year TIPS Spread 1.49 +3.0 basis points
• # of Months to 1st Fed Rate Hike(Morgan Stanley) 5.24 -.31

Overseas Futures:

• Nikkei 225 Futures: Indicating +67 open in Japan 
• China A50 Futures: Indicating n/a open in China

• DAX Futures: Indicating +67 open in Germany

Portfolio: 

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

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

• Market Exposure: Moved to 75% Net Long

Today's Headlines

Bloomberg:   

• Traders Don't See Fed Moving Until at Least March, Futures Show. The bond market is pushing back expectations for the first Federal Reserve interest-rate increase in almost a decade until March at the earliest. Traders pared bets on a 2015 hike and subsequent increases after the U.S. reported surprisingly weak labor data for September. The probability the futures market assigns for a boost at or before the Fed’s March meeting is now slightly better than a coin flip, at 53 percent, down from 66 percent Thursday. Traders see a 32 percent likelihood that the Fed raises rates by its December meeting, down from almost 60 percent a month ago, according to futures data compiled by Bloomberg. The probability of an increase by January is 40 percent, based on the assumption that the effective fed funds rate will average 0.375 percent after liftoff.  

• Macau Casinos Jump on Report China May Give Economic Support. Macau casino operators spiked after monthly gaming revenue in the world’s largest gambling hub fell in line with forecasts, and on reports China may move to support the city’s economy. Gross gaming revenue in Macau fell by a third in September, a 16th straight month of decline. 

• Merkel Approval Rating Drops to Four-Year Low on Refugee Crisis. German Chancellor Angela Merkel’s approval rating dropped to the lowest in almost four years in a monthly poll that suggests voters’ welcome for hundreds of thousands of refugees is exhausted. The share of Germans who are satisfied with Merkel’s handling of her job fell 9 percentage points to 54 percent in the Infratest Dimap poll, the lowest since December 2011, broadcaster ARD said in a statement Friday. Backing for Horst Seehofer, the Bavarian state premier who has called Merkel’s refugee policy a “mistake,” gained 11 points to 39 percent. 

• European Stocks Rebound Amid Speculation of U.S. Rate Rise Delay. In the end, European stocks rebounded as bad news for the U.S. economy fueled speculation that the Federal Reserve will delay raising interest rates. The Stoxx Europe 600 Index added 0.5 percent to 347.86 at the close of trading in London.

• Russian Oil Output Reaches Post-Soviet Record in September. Russian oil output rose to a post-Soviet record last month as producers took advantage of the weak ruble to push ahead with drilling. The nation’s production of crude and condensate climbed to 10.74 million barrels a day, 1 percent more than a year earlier and topping a record set in June, according to data from the Energy Ministry’s CDU-TEK unit. Soviet-era production peaked at 11.48 million barrels a day in 1987, according to BP Plc. The increase comes at a time when Organization of Petroleum Exporting Countries are defending market share rather than cutting production amid a global output glut. Russia, which gets about half of its budget income from oil and gas revenues, is maintaining its own supplies in the face of Brent crude prices that fell 50 percent in the past year.

• Oil Drillers Bet Choking Wells Will Keep Shale From Going Bust. Encana Corp. wants to ensure the shale-oil boom keeps booming. The Canadian producer is among a growing number of companies that are restricting initial output -- a process known as choking back -- in basins from North Dakota to Texas. They’re conceding huge up-front gushers of crude in exchange for smaller production declines over time so that the wells ultimately generate more oil. The strategy sacrifices one of the biggest benefits from shale. The early gushers paid back investments fast, allowing companies to pour capital into new projects. Instead, Encana and others envision a future with a more stable flow from wells, so that they don’t always have to keep drilling simply to maintain output. “You’re losing a barrel today to get two or three barrels tomorrow,” said Allen Gilmer, chief executive officer of consultant Drilling Info Inc. in Austin. “It’s not a zero-sum game.” 

• Bank Stocks Tumble as Jobs Report Threatens 2015 Rate Hike. Bank stocks tumbled as the U.S. jobs report fell short of forecasts and bond traders pushed back expectations for a Federal Reserve rate hike until next year. All 10 of the largest U.S. lenders dropped at least 2.3 percent at 11:22 a.m. in New York, led by Bank of America’s 3.8 percent drop. The Standard & Poor’s 500 Financials Index, the worst-performing industry in the broader S&P 500, fell as much as 3.1 percent to the lowest level since May 2014.

• Economists Can't Find the Silver Lining in Today's Jobs Report. Friday's job figures contain few positives.

• Hillary Clinton Lets Big Banks Off the Hook for Financial Crisis. Hillary Clinton's explanation of what caused the 2008 financial crisis contains a notable omission. Throughout the 2016 presidential primary campaign, Clinton has taken a markedly less critical view of large financial institutions like Citigroup Inc. than Democrats like Elizabeth Warren and presidential rival Bernie Sanders. Instead, Clinton has placed the blame on "shadow banking," a term she has used to describe hedge funds and high-frequency traders. “Her comments on their face are wrong,” said Christopher Whalen, senior managing director at Kroll Bond Rating Agency and author of Inflated: How Money and Debt Built the American Dream. “It is incorrect to blame the crisis on shadow banks. You can’t really differentiate between what they were doing and what Citi was doing.”

Wall Street Journal:

• Hilsenrath’s Take: Soft Jobs Numbers Likely to Stay Fed’s Hand in October. Still, Fed officials may be reluctant to drop their plan to raise interest rates this year.

• ‘Something We Should Politicize’. Candor from the president and Mrs. Clinton. “This is something we should politicize,” President Obama said yesterday. “This” referred to the deaths, a few hours earlier, of nine innocent people, murdered by an obviously disturbed young man at Umpqua Community College in Roseburg, Ore.

Fox News:

• 'Filled with hate': Witnesses say Oregon gunman targeted Christians in community college mass murder. (video)

CNBC:

• Cashin: This is not going to be a pleasant Christmas. (video)

• Jobs miss is the 'worst case scenario' for market.

Zero Hedge:

• Payrolls Disaster: Only 142K Jobs Added In September With Zero Wage Growth; August Revised Much Lower. (graph)

• The Feudal "Recovery" Continues: 21,000 Waiters Added; 9,000 Manufacturing Workers Lost. (graph)

• What If Expectations Of Our Central Bankers Are Simply Too High?

• Meet Oregon School Shooter Chris Harper-Mercer: "You're Going To See God In Just About One Second".

• Yen-Driven Buying-Panic Lifts Stocks Green Amid "The Most Aggresssive Buying I Have Ever Seen". (graph)

• Newly Published Clinton Email Reveals How Government Manipulates Media.

• Silver Spikes To Six-Week Highs On Heavy Volume - Biggest Jump Since Dec 2014. (graph)

• Goldman's NFP Post-Mortem: A December Rate Hike Is Now A "Close Call".

• Treasury Yields Are Crashing. (graph)

• The US Has Added Three Times More Foreign-Born Workers Than Native-Born Since December 2007. (graph)

• US Factory Orders Flash Recession Warning - Drop YoY For 10th Month In A Row. (graph)

• US Financials' Default Risk Spikes To 2-Year High. (graph)

• The Dangerous Illusion That Risk Can Be Offloaded Onto Others.

• Participation Rate Crashes To October 1977 Level: Americans Not In The Labor Force Soar By 579,000 To Record 94.6 Million. (graph)

Business Insider: 

• The new 'Yelp for people' app is a psychologist's nightmare.

• The Secret Service's latest scandal is beyond disturbing.

• Asia's 'recession barometer' is flashing.

• US Education Secretary Arne Duncan is suddenly stepping down.

• China's collapsing housing market is a massive threat to the economy.

Washington Post:

• Oregon shooter said to have singled out Christians for killing in ‘horrific act of cowardice’. Investigators including cyber-experts and hate crime specialists peered Friday into the life of a 26-year-old gunman whose massacre across an Oregon campus may have been driven by religious rage and a fascination with the twisted notoriety of high-profile killers. What is known so far about the attacker — identified by a U.S. law enforcement official as Chris Harper Mercer — appear only as loose strands that suggested an interest in firearms and the infamy gained by mass shooters. Witnesses also said he seemed to seek specific revenge against Christians, and police examined Web posts that hinted of wider antipathy toward organized faith. In one classroom, he appeared to single out Christian students for killing, according to witness Anastasia Boylan. “He said, ‘Good, because you’re a Christian, you’re going to see God in just about one second,'” Boylan’s father, Stacy, told CNN, relaying his daughter’s account while she underwent surgery to treat a gunshot to her spine. “And then he shot and killed them.” Another account came from Autumn Vicari, who described to NBC News what her brother J.J. witnessed in the room where the shootings occurred. According to NBC: “Vicari said at one point the shooter told people to stand up before asking whether they were Christian or not. Vicari’s brother told her that anyone who responded ‘yes’ was shot in the head. If they said ‘other’ or didn’t answer, they were shot elsewhere in the body, usually the leg.”

Telegraph: 

• IMF's mass debt relief call for Greece set to be rejected by Europe. Fund's bold recommendations for huge restructuring remain sticking poing in bail-out talks. 

Bear Radar

Style Underperformer:

• Small-Cap Value -.87%

Sector Underperformers:

• 1) Banks -2.56% 2) I-Banks -2.41% 3) Hospitals -1.56%

Stocks Falling on Unusual Volume:

• CIVI, PRGS, RGS, O, KND, CAA, CSWC, OAK, MTB, TDOC, VRX, DPLO, BAC, CBU, STE, AMTD, SCHW, PCAR, LPLA, RENT, IBKR, VSI, MYRG, CME, FMBI, USB, SCHW, FII, FMBI, KND and AIMT

Stocks With Unusual Put Option Activity:

• 1) KRE 2) SCHW 3) JNK 4) USB 5) XLK
  

Stocks With Most Negative News Mentions:

• 1) BAC 2) GILD 3) PWR 4) VRX 5) SWFT
  

Charts:

• ETFs Falling on Unusual Volume

• Stocks Falling on Unusual Volume

Bull Radar

Style Outperformer:

• Small-Cap Growth +.04%

Sector Outperformers:

• 1) Gaming +8.86% 2) Gold & Silver +5.18% 3) Oil Service +2.33%
  

Stocks Rising on Unusual Volume:

• CAMP, WYNN, LVS, TGTX, CUDA, INCY, VRTX, MUR and WFM

Stocks With Unusual Call Option Activity:

• 1) PMCS 2) WFM 3) DISH 4) JNPR 5) EMC
  

Stocks With Most Positive News Mentions:

• 1) JWN 2) MU 3) BMY 4) FCAU 5) PFE
  

Charts:

• ETFs Rising on Unusual Volume 

• Stocks Rising on Unusual Volume

Morning Market Internals

NYSE Composite Index:

• Volume Running 21.3% Above 100-Day Average
• 1 Sector Rising, 9 Sectors Declining
• 33.8% of Issues Advancing, 64.2% Declining
• 7 New 52-Week Highs, 242 New Lows
• 20.4% of Issues Above 200-day Moving Average
• Average 14-Day RSI 37.1
• Vix 23.4
• Total Put/Call 1.24
• TRIN/Arms .67

Friday Watch

Evening Headlines 

Bloomberg: 

• The Pain Trade: How Slumping Commerce Threatens Global Growth. The world’s biggest economies are finding it increasingly hard to trade their way out of trouble. Once the grease of global growth, international commerce failed to rebound completely from the 2009 recession and now is slowing anew. Chinese exports tumbled 5.5 percent in August from a year earlier, while those of the U.S. fell 3.5 percent. South Korea and Singapore witnessed double digit declines. Reflecting such weakness, the World Trade Organization this week cut its forecast for trade this year to 2.8 percent from 3.3 percent. It acknowledged its new prediction may be “over optimistic.”

• Distressed Bonds at 59 Cents Threaten Emerging Market Gains. Investors may struggle to profit from bonds of distressed companies in developing nations this year after a plunge last quarter, teamed with an increasingly uncertain outlook, looks set to erase 2015’s gains. The securities tumbled 13.4 percent in the three months to Sept. 30, paring annual returns to 0.95 percent, a Bank of America Merrill Lynch index shows. The market value of the gauge’s 156 notes has dropped by almost 30 percent since Dec. 31 to $54 billion, or about 58.8 cents on the dollar. Global high-yield bonds fell 4.51 percent in the third quarter, bringing year-to-date losses to 1.4 percent. They’re on track for their first negative return since 2008. “A broad recovery will be elusive,” David Tawil, a co-founder of New York-based Maglan Capital LP, said. “There will be increasing dislocation, mostly driven by companies with considerable leverage. That may lead to significant restructuring and defaults.”  

• China Slowdown Spurs Record Sales of Notes Tied to Nation's Debt. (video) Sales of structured notes tied to the sovereign debt of China are on track for a record year, as the climbing cost of insuring against a default by the country sweetens coupons on the securities. Banks sold $230 million of the notes in September, the busiest month ever, according to data compiled by Bloomberg, taking this year’s issuance to $642 million. That’s more than triple the $189 million banks sold during all of 2014. Concern that growth in China is slowing pushed credit-default swaps on the nation to their highest this week since 2013, according to Bloomberg data. As the cost of insuring against a Chinese default rose, so did coupons on the notes backed by the swaps contracts. The credit-linked notes, all denominated in U.S. dollars, yield 3.49 percent on average and mature in about seven years, the data show.

• Global Giants Listed in Hong Kong Crumble as Ties to China Backfire. International companies that listed shares in Hong Kong to highlight their ties with China are finding what once was a bragging right is now a burden. The city’s 20 biggest firms domiciled outside Hong Kong and the mainland have dropped an average 27 percent this year, versus a 12 percent decline in the Hang Seng Index. Macau casino operators and Prada SpA, an Italian handbag maker, have tumbled as China’s economy slowed and the government discouraged extravagant spending. Glencore Plc, the Swiss commodities group run by Ivan Glasenberg, is down 72 percent even after a record rally on Wednesday.

• Used-Car Values Become Chief Concern for Volkswagen Auto Bonds. A reduction in car values on Volkswagen AG models after its emissions scandal is the biggest risk to its bonds tied to auto loans, leases and dealerships worldwide, credit-rating companies said this week. The revelation of faked pollution controls is credit negative for the company’s asset-backed securities, Moody’s Investors Service said in a report Wednesday. A chief concern would be linked to declines in the automaker’s used-car values. “The full impact on car prices remains uncertain,”  Fitch Ratings analyst Andreas Wilgen said in an announcement Tuesday.

• Ringgit Leads Drop in Asia as Budget Woes Add to China Concern. The ringgit fell, leading losses among Asian currencies, amid concern Malaysia may miss its target of balancing the budget by 2020. The fiscal shortfall may be “in the region” of 1 percent of gross domestic product at the end of the decade, compared with a current deficit of 3.2 percent, the New Straits Times reported Thursday, citing comments by Prime Minister Najib Razak to fund managers and investors in New York. Malaysia remains committed to achieving a balanced budget by 2020, he was quoted as saying. The oil-exporting country’s finances have been sapped by a 49 percent drop in Brent crude over the past 12 months and allegations of corruption against Najib have shaken investor confidence and spurred outflows. The ringgit fell 0.9 percent, the biggest decline in more than a week, to 4.4395 a dollar as of 9:18 a.m. in Kuala Lumpur, according to prices from local banks compiled by Bloomberg. It’s dropped 1.2 percent this week and 21 percent so far in 2015, the worst performance in Asia, amid global headwinds including a worse-than-expected slowdown in China and the prospect of higher U.S. interest rates.

• Asian Stocks Retreat as Investors Await U.S. Employment Report. Asian stocks fell as investors awaited a monthly government report on U.S. jobs to gauge the strength of the world’s largest economy. The MSCI Asia Pacific Index dropped 0.5 percent to 125.22 as of 9:16 a.m. in Tokyo.

• Half of World's Coal Output Is Unprofitable, Moody's Says. The global metallurgical coal benchmark has fallen to the lowest level in a decade, settling last month at $89 a metric ton.“Further production cuts are necessary to bring the market back into balance,” Moody’s analysts including Anna Zubets-Anderson wrote in a report on Thursday.

• Williams Says Uncertainty Alone Shouldn't Stop Fed Rate Increase. Federal Reserve Bank of San Francisco President John Williams said risks to the economy from developments abroad haven’t worsened and that domestic conditions remain positive, while repeating his call to raise interest rates this year. "On the global side, I’m not seeing any obvious signs that those risks that were on my mind and the minds of others, I don’t see signs that those have gotten worse,” Williams, a voting member on the Fed’s policy committee this year, said in Salt Lake City on Thursday. He was answering questions from the audience after delivering a speech. “There’s always going to be risks, there’s always going to be uncertainties,” he said. Even so, “we’re going to have to take actions that we think are the appropriate ones given our goals.”

• Indecisive Fed has Investors Bouncing Off Walls, Principal Says. The Federal Reserve has sent mixed signals to investors, who need to be careful until they have more clarity about companies’ earnings prospects and the risk of losses tied to energy, according to Principal Global Equities. The central bank has investors “bouncing off the walls, shifting back and forth between dovish economic and inflationary views and hawkish statements” at the same time that some strategists are asking if the Fed will announce another program to expand its balance sheet, according to a blog post Thursday from Mustafa Sagun, chief investment officer at the firm, which is part of insurer Principal Financial Group Inc. 

• Ackman, Einhorn Lead Hedge Funds on Track to Rival 2008 Losses. There’s no big bank failure on the horizon. The housing market is booming, not melting. Yet for a handful of well-known hedge fund managers, 2015 is looking a lot like 2008, when their industry suffered record losses and investor withdrawals. David Einhorn and Michael Novogratz have slumped about 17 percent so far this year, and Bill Ackman declined almost 13 percent in a publicly traded fund. Sean Fahey and Michael Platt have seen billions of dollars flee their firms and are now managing less than a third of what they oversaw at their peaks. Every struggling hedge fund has struggled in its own way, yet September did a lot damage for many managers, including Ackman, who slumped as much as in all of 2008. Six of the stocks that were most popular with the hedge fund set fell more than 20 percent that month, according to a report by Novus Partners Inc.

Wall Street Journal:

• Russian Airstrikes Defend Strategic Assad Regime Stronghold on Coast. Raids appear to hew closely to an arc running on the fringes of Syria’s Alawite heartland. Russia’s first airstrikes in Syria showed a meticulously planned effort to eliminate any rebel threat to the coastal stronghold of Moscow ally President Bashar al-Assad and his Shiite-linked Alawite minority, officials and analysts said.

• Netanyahu Rebukes U.N. Over Iran Accord. Despite losing political ground to Obama, Israeli prime minister condemns nuclear deal, says Tehran’s threats have been met by ‘utter silence’ at global body. Israeli Prime Minister Benjamin Netanyahu on Thursday delivered a fiery address here condemning the Iranian nuclear deal, largely unbowed in his opposition despite losing steep political ground to President Barack Obama over the issue this year.

• FBI Chief ‘Very Concerned’ About Apparent Rise in Crime. Many police departments reporting jumps in shootings this year. The head of the Federal Bureau of Investigation said Thursday he is “very concerned” about apparent sharp rises in violent crime and murder in cities across the country, saying he doesn’t know why it is happening but wants to find the answer.

• A Clinton Email Scandal Checklist. It’s a challenge to keep track of all the dodges and untruths. Hillary Clinton hopes you are busy. Hillary Clinton hopes you are confused. Hillary Clinton hopes the endless stories about her private email server—and her endless, fabulist explanations—will make your head hurt, make your eyes cross, make you give up trying to figure it out.

• What U.S. Retreat Looks Like. Syria reveals the chaos of a world without American leadership. A friend of ours quipped amid the Iraq debate of 2003 that the only thing Europeans dislike more than U.S. leadership is a world without it. Well, we are now living in such a world, and the result is the disorder and rising tide of war in the Middle East that even the Obama Administration can no longer dismiss. How do you like it?

Fox News:

• O'Reilly Calls Out Obama: Stop 'Politicizing' Oregon Shooting. (video)

• Israeli intel thwarts first known ISIS plot inside Jewish state. An ISIS cell that trained in the forests near Galilee while plotting to attack Israeli police and military facilities -- as well as liquor stores -- was shattered by the intelligence agents in what experts say is the first known case of the black-clad terrorist army operating within the Jewish state, sources told FoxNews.com Thursday.

• Ten confirmed dead, seven injured in shooting at Oregon college. (video) Ten people are confirmed dead and seven injured in a shooting at Umpqua Community College in Roseburg, Ore, Sheriff John Hanlin announced Thursday night.

MarketWatch.com:

• Advanced Micro Devices(AMD) to cut 5% of workforce amid struggles. 

• Doctors brace for 70,000 insurance codes.

CNBC:

• Is this the mother of all warnings on EMs? (video) The last time emerging markets had it nearly this bad, Ronald Reagan was the U.S. President, KKR purchased RJR Nabisco, and a future popstar named Rihanna was born. Net capital flows for global emerging markets will be negative in 2015, the first time that has happened since 1988, the Institute of International Finance (IIF) said in its latest report. Net outflows for the year are projected at $541 billion, driven by a sustained slowdown in EM growth and uncertainty about China, it added. In other words, investors will pull out more money out of emerging markets than they will pump in.

• Experian data breach hits more than 15M T-Mobile customers, applicants. 

• Government to hit debt limit in November: Lew. The federal government will hit a legal debt limit and be unable to borrow more money around Nov. 5, U.S. Treasury Secretary Jack Lew said on Thursday.

Zero Hedge:

• Chinese Cash Flow Shocker: More Than Half Of Commodity Companies Can't Pay The Interest On Their Debt. (graph)

• "There Are Five Times More Claims On Dollars As Dollars In Existence" - Why This Matters. (graph)

• 72-Year-Old "Mad Dog" Wakabayashi Warns "Reversals Will Be Massive In Scope". (graph)

• Wall Street Banks Admit They Rigged CDS Prices Too.

• HFTs Have Devolved To Two-Bit Criminals Straight Out Of "Office Space".

• The Looming Medicaid Time-Bomb. (graph)

• If You Work Here, Quit Before You Are Fired: The 20 Largest US Layoff Announcements Of 2015. (graph)

• These Dramatic Before And After Images Of Syria Demonstrate "Success" Of US Foreign Policy.

• Deflation Warning: The Next Wave.

• In Latest Sign Of EM Chaos, Turkey's FX Reserves Fall Below Key Threshold Ahead Of Pivotal Elections. (graph)

• Credit & Crude Carnage Continues As Stocks Stop-Run, Slump, & Pump. (graph)

Business Insider:

• A big investment-banking business is a horror show, and traders are trying to get out.

• Oregon community-college shooter asked people to state their religion, according to one student's account.

• Bernie Sanders is fighting a near-blackout in the media despite his surging campaign.

• Russia's moves in Syria have the Obama administration confused.

• 1,000 voters were asked to describe the Democratic candidates with a single word.

• 12 dead after a C-130 military transport plane crashes in Afghanistan.

Dallas Morning News:

• Neiman Marcus laid off 500 employees, or 3 percent of its workforce.

Reuters:

• Chicago businesses brace for potential doubling of property taxes. Chicago Mayor Rahm Emanuel has disclosed that his record property tax hike plan entails significant cuts for nearly 300,000 homeowners, leaving Chicago businesses predicting they will face hikes of up to 50 percent. The second-term mayor last week proposed a $544 million property tax increase, the city's biggest ever, to help fix one of the worst-funded city pension systems in America and vowed "struggling" homeowners, whose residences are worth $250,000 or less, would not see an increase.

• Chipmaker Micron's profit, revenue beat estimates. Memory chipmaker Micron Technology Inc reported a lower-than-expected fall in quarterly revenue, welcome relief for an industry that has been battered by a drop in demand and prices. The company's shares rose as much 8.3 percent at $15.99 in after-hours trading.

Evening Recommendations 

• None of note

Night Trading

• Asian equity indices are -.75% to +.25% on average.

• Asia Ex-Japan Investment Grade CDS Index 159.75 -.75 basis point.

• Asia Pacific Sovereign CDS Index 90.0 -2.5 basis points.

• S&P 500 futures +.12%.

• NASDAQ 100 futures +.26%.

Morning Preview Links

Earnings of Note

Company/Estimate

• None of note

Economic Releases

8:30 am EST

• The Change in Non-Farm Payrolls for September is estimated at 201K versus 173K in August.

• The Unemployment Rate for September is estimated to remain at 5.1%.

• Average Hourly Earnings for September are estimated to rise +.2% versus a +.3% gain in August.
  

9:45 am EST

• ISM New York for September.

10:00 am EST

• Factor Orders for August are estimated to fall -1.2% versus a +.4% gain in July.
  

Upcoming Splits

• None of note

Other Potential Market Movers

• The Fed's Fischer speaking, Fed's Rosengren speaking, Fed's Kocherlakota speaking, Fed's Mester speaking and the Fed's Bullard speaking could also impact trading today.

BOTTOM LINE: Asian indices are mostly lower, weighed down by industrial and commodity 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.