Thursday Watch

Evening Headlines
Bloomberg: 

• Final Brexit Appeals Made as Polls Diverge on Referendum’s Eve. Brexit’s advocates and opponents made 11th-hour appeals to voters on the eve of the U.K.’s referendum on European Union membership, with opinion polls on the last day of campaigning suggesting the ballot could go either way. Three of four surveys published Wednesday depicted a contest that’s too close to call, with two percentage points or less separating the camps. A fourth poll showed a clear lead for Remain, which is also favored by Britain’s bookmakers. The pound, which has tended to slide when the Leave campaign showed signs of momentum, extended gains to reach its highest level this year against the dollar. With voting booths set to open at 7 a.m. on Thursday -- and with a record 46.5 million Britons registered to cast ballots -- the rivals in an often-vitriolic debate made their closing pitches.
• Brexit Watch Indicators. 
• Christie’s Auction in London Sinks on Eve of Brexit Referendum. It was a tough night for Christie’s. The auction house sold 25.6 million pounds ($37.8 million) of Impressionist and modern art on Wednesday in London, its smallest tally for a major evening sale in the category in more than a decade.
• Stealth China Stimulus Means Fiscal Gap Over 10%, Economists Say. China is stepping up stimulus by stealth in its efforts to ensure hitting the leadership’s growth target this year, with moves that will enhance the role of the state even as policy makers say they want a bigger role for the market. The fiscal deficit when taking off-budget spending into account will exceed 10 percent of gross domestic product this year -- more than triple the government’s stated ratio of 3 percent, according to economists at UBS Group AG and JPMorgan Chase & Co.
• Japan Negative Rates Drive Biggest Lenders From Overnight Market. A majority of Japan’s biggest private lenders are still unwilling to borrow from the market for overnight loans almost six months after the Bank of Japan announced its negative interest-rate policy. Three of Japan’s five largest lenders by market capitalization said they were not tapping the unsecured overnight call market for funding, according to a Bloomberg survey this month of Bank of Tokyo-Mitsubishi UFJ Ltd., Sumitomo Mitsui Banking Corp., Mizuho Bank Ltd., Sumitomo Mitsui Trust Holdings Inc. and Resona Holdings Inc. Two said they are raising funds from the market to maintain relationships with clients.
• Kim: North Korea Capable of Missile 'Attack' on U.S. Military in Pacific. North Korea said its launch Wednesday of an intermediate-range ballistic missile was successful, claiming the projectile is capable of hitting U.S. military operations in the Pacific.
• Currency Traders Face 3 a.m. Singapore Start for Brexit Results. As the U.K. decides on its future in or out of the European Union, currency traders and analysts thousands of miles away in Asia, will be at their desks well before dawn. Voting is scheduled to close at 10 p.m. in the U.K. on Thursday, or 5 a.m. in Singapore on Friday. Traders and analysts in the region’s biggest foreign-exchange center are bracing for potential turmoil in the 24-hour global foreign-exchange market as the bulk of the results are expected to be in by 10:30 a.m. in the Asian city. With the outcome too close to call based on the latest polls, they are preparing for global fallout should Britons vote to withdraw from the world’s largest trading bloc.UBS Group AG, the world’s third-biggest currency trader, will have a fully-staffed trading desk in Singapore by 5 a.m. on Friday as traders start work about an hour earlier than usual.
• Asian Stocks Advance as Investors Await Start of Brexit Voting. Asian stocks edged higher with voting due to start as Britons decide whether to stay in the European Union. The MSCI Asia Pacific Index gained 0.1 percent to 129.71 as of 9:02 a.m. in Tokyo. Three of four polls published Wednesday depicted a referendum that’s too close to call, with two percentage points or less separating the camps. Bookmakers’ odds imply a chance of about one-in-four of a vote to leave.“Markets seem to have almost entirely priced in a “Remain” vote win, meaning that the market moves and volatility around the vote may be far less than many had been expecting,” said Angus Nicholson, Melbourne-based analyst at IG Ltd.
• Obamacare Reprieve Won't Cure Biotech's Fear Factor.
• Bed Bath & Beyond(BBBY) Tumbles After Profit Misses Analyst Estimates. Bed Bath & Beyond Inc. fell as much as 7.1 percent in late trading after posting a surprise sales decline and disappointing earnings, a sign the home-products store is struggling to cope with online competition.

Wall Street Journal:

• Bank of America(BAC) Nearing SEC Settlement in Client-Accounts Probe. Regulator had been investigating if bank had proper controls for some customer accounts and retail-brokerage funds. Bank of America Corp. has been in discussions with U.S. regulators about paying $400 million to $450 million to settle allegations it violated rules designed to safeguard client accounts, according to people familiar with the matter.
• Elon Musk’s Subsidy Aggregation. The billionaire tries to integrate his taxpayer-backed business model. Elon Musk didn’t become a billionaire without brass, and this week he floated one of his most outrageous bets: an offer by his taxpayer-subsidized Tesla Motors to buy his taxpayer-subsidized SolarCity. Tesla shareholders and Wall Street analysts are howling, but didn’t they always know they were buying a business model that depended on the kindness of politicians?

Barron's:

• Red Hat(RHT) Drops 5% on In-Line FYQ1 Earnings, In-Line Forecast; Sets $1B Buyback Plan .

Fox News:

• Immigration boss who barred feds from terror suspect up for award, but agency won't say why. A U.S. immigration official blamed in a federal report for barring law enforcement agents from a suspect in the San Bernardino terror attack has been nominated for a prestigious agency award – but her bosses in Washington refuse to say what she did to earn consideration.

MarketWatch: 

• The reason everyone says Apple is a one-trick pony is because it is.

CNBC:

• Twilio prices IPO at $15 a share.
• Record buybacks fail to lift S&P 500. U.S. companies in the S&P 500 bought their own stock at a record pace the 12 months ending in March, new data show, but the buyback tidal wave did little to lift the stock market as the benchmark was actually down about 1 percent during the period. During the March 2015 to March 2016 period, U.S. companies spent a record $589.4 billion in share repurchases, according to figures released Wednesday by S&P Dow Jones Indices. That eclipsed the previous record of $589.1 billion set during the market peak in 2007. 
• Dow 11,500 is a matter of when, not if: Advisor. (video) The market is overvalued and it's only a matter of time before the Dow Jones industrial average drops to 11,500, one market expert said Wednesday. Stocks are being held up by confidence in the central banks' ability to solve every problem that can come up, Ken Moraif, a senior advisor at wealth management and investment firm Money Matters, said in an interview with "Closing Bell." If that confidence is shaken, he thinks the market will plunge.

Zero Hedge:

• Why The Just Released YouGov Poll May Have Sealed The Outcome Of The UK Referendum.
• This Is What Yellen Told Congress When Asked If The Fed Is Boosting The Stock Market.
• China Warns The US That It Is "The Wrong Opponent To Play Games With".
• China's Petro-State "Lender Of Last Resort" Conundrum.
• Pound Spikes After Two Latest Brexit Polls Show Remain In Lead, JPM Poll Finds "Small Lead For Remain".
• Hillary Clinton's IT Aide Pleads The Fifth Over 125 Times.
• IRS Admits To Illegally Seizing Bank Accounts; Agrees To Give The Money Back.
• "It's An Alice In Wonderland World" - GRI Warns "Debt Is Being Piled Upon Debt Being Piled Upon Debt".
• Hedges Soar, Markets Snore As Traders Brace For Big Brexit Day. (graph)

Business Insider:

• Wall Street is turning its back on Elon Musk.
• A controversial hedge fund has been raided by federal agents.
• Emails show key security features were disabled on Hillary Clinton's private server.

@Callum_Thomas:

• Global container throughput index - brexit or not, global trade is looking sick... (graph)

Reuters:

• Gundlach says considering selling European equities on 'Bremain' vote. Jeffrey Gundlach, the chief executive officer at DoubleLine Capital, said Wednesday that his firm is considering selling its position in European equities early Friday on a "Bremain" vote that keeps Britain in the European Union. Gundlach, who oversees $100 billion at the Los Angeles-based DoubleLine, also said the Tesla-SolarCity deal is "a complete confidence destroyer" for Tesla Motors Inc shareholders. Gundlach, whose DoubleLine purchased beaten-down European stocks a week ago, said in a telephone interview that the firm expects Britain to vote on Thursday to stay in the EU "so you want to sell on the pop. European stocks have been rising, so we are expecting one more push into the vote." Gundlach also chimed in on Tesla's proposed acquisition of SolarCity Corp, which Tesla's Chief Executive Officer Elon Musk called a "no-brainer." "This is a poor idea for Elon Musk," Gundlach said. "This is damaging to his reputation and to the way he operates."

Financial Times:

• US to hike duties on Chinese steel to over 500%.

Night Trading 

• Asian equity indices are -.50% to +.25% on average.
• Asia Ex-Japan Investment Grade CDS Index 139.25 -2.25 basis points 
• Asia Pacific Sovereign CDS Index 51.75 -.5 basis point.
• Bloomberg Emerging Markets Currency Index 72.58 +.09%. 
• S&P 500 futures +.53%. 
• NASDAQ 100 futures +.52%.

Morning Preview Links

Earnings of Note
Company/Estimate 

• (ACN)/1.41
• (BBRY)/-.08
• (CMC)/.29
• (SONC)/.42

Economic Releases  
8:30 am EST

• The Chicago Fed Nat Activity Index for May is estimated to rise to .11 versus .1 in Arpil.
• Initial Jobless Claims for last week are estimated to fall to 270K versus 277K the prior week.
• Continuing Claims are estimated to fall to 2159K versus 2157K prior. 

9:45 am EST

• The Preliminary Markit US Manufacturing PMI for June is estimated to rise to 50.9 versus 50.7 in May.

10:00 am EST

• New Home Sales for May are estimated to fall to 560K versus 619K in April.
• The Leading Index for May is estimated to rise +.1% versus a +.6% gain in April.    

11:00 am EST

• The Kansas City Fed Manufacturing Activity Index for June is estimated at -5 versus -5 in May.

Upcoming Splits 

• (SSNC) 2-for-1

Other Potential Market Movers

• The Brexit vote results, Fed's Kaplan speaking, Eurozone Manufacturing PMI report, weekly  (LUV) investor day, (EQIX) analyst day, (KR) general meeting and the (BKS) investor day could also impact trading today.

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

Stocks Slightly Higher into Final Hour on Diminished Brexit Fears, Less European/Emerging Markets/US High-Yield Debt Angst, Technical Buying, Biotech/Healthcare Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Modestly Lower
  

• Sector Performance: Mixed
  

• Volume: Light

• Market Leading Stocks: Underperforming
  

Equity Investor Angst:

• Volatility(VIX) 19.78 +7.03%

• Euro/Yen Carry Return Index 123.27 +.14%

• Emerging Markets Currency Volatility(VXY) 10.63 +.38%

• S&P 500 Implied Correlation 58.32 +.47%

• ISE Sentiment Index 111.0 -11.9%
  

• Total Put/Call .93 -7.92%

• NYSE Arms .90 +11.79% 

Credit Investor Angst:

• North American Investment Grade CDS Index 79.01 +.67%
  

• America Energy Sector High-Yield CDS Index 779.0 -1.1%

• European Financial Sector CDS Index 99.0 -4.7%

• Western Europe Sovereign Debt CDS Index 28.92 -1.0%

• Asia Pacific Sovereign Debt CDS Index 51.57 -1.15%

• Emerging Market CDS Index 281.82 -.74%
  

• iBoxx Offshore RMB China Corporate High Yield Index 129.93 +.20%

• 2-Year Swap Spread 13.0 unch.
  

• TED Spread 37.75 +.25 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -39.0 -4.25 basis points
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 72.43 +.34%
• 3-Month T-Bill Yield .27% unch.

• Yield Curve 94.0 unch.
  

• China Import Iron Ore Spot $52.29/Metric Tonne +2.79%

• Citi US Economic Surprise Index -16.0 unch.

• Citi Eurozone Economic Surprise Index -1.30 -.1 point

• Citi Emerging Markets Economic Surprise Index -5.8 -.5 point

• 10-Year TIPS Spread 1.48% +1.0 basis point
  
• 24.8% chance of Fed rate hike at Sept. 21 meeting, 28.0% chance at Nov. 2 meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating -10 open in Japan 
• China A50 Futures: Indicating -45 open in China

• DAX Futures: Indicating -4 open in Germany

Portfolio: 

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

• Disclosed Trades: None

• Market Exposure: 50% Net Long

Today's Headlines

Bloomberg:   

• Final Brexit Appeals Made as ‘Leave’ Edges Ahead in Two Polls. (video) Campaigners issued 11th-hour appeals as Britain prepares to vote on its membership of the European Union, with the two latest opinion polls showing a narrow lead for “Leave.” An online survey by TNS on Wednesday put “Leave” two points ahead on 43 percent. It sampled 2,320 adults June 16-22. Luke Taylor of the polling company cautioned that “a late swing to the status quo” was possible. According to the survey, the voting intention figure for those likely to vote based on a turnout model from the last general election is 49 percent for “Leave” and 42 percent for “Remain.” An earlier online poll published by Opinium showed 45 percent of respondents for “Leave” and 44 percent for “Remain,” a lead the company called “a statistical dead heat.” The poll, with a sample of 3,011 people, was conducted June 20-22.
• Brexit Matters Less Than Yuan Devaluation on VIX Index: Chart. Just before the U.K.’s referendum vote, a one-week measure of the Chicago Board Options Exchange Volatility Index shows it’s barely registering compared with other market shocks including last year’s yuan devaluation, the Russian ruble crisis, the downgrade of U.S. debt and the global financial crisis of 2008. Traders may be tracking odds offered by bookmakers more than what polls indicate, with Ladbrokes’ odds implying a 78% chance the U.K. will remain within the European Union.  
• Yuan Extends Declines Versus Peers on Economic Outlook Concern. The yuan extended a slide against its trade-weighted peers for a fourth day amid concern the outlook for the world’s second-largest economy will deteriorate. A Bloomberg replica of the CFETS RMB Index dropped 0.1 percent against the basket that includes the yen and euro, taking its four-day loss to 0.7 percent. The Chinese currency has fallen against all but one of 17 major global peers in the past month, including losses of about 6 percent versus the yen and the South African rand. The yuan added 0.1 percent to 6.5808 per dollar at 4:48 p.m. local time.
• The $83 Billion Danish Fund Preparing for a European Debt Bubble. Denmark’s biggest commercial pension fund says Europe’s debt market is in the grip of a bubble and is avoiding bonds from the region ahead of Britain’s June 23 vote on European Union membership. Instead, PFA has bought U.S. Treasuries and convertible Danish mortgage bonds to prepare for the market shock that might be triggered by this week’s referendum. The fund, which oversees $83 billion in assets, prefers debt from the U.S. because “it’s one of the few countries that’s not in a bubble,” said Anders Damgaard, chief financial officer at Copenhagen-based PFA. “European sovereign debt is in a bubble because of the artificially low interest rates caused by quantitative easing,” he said by phone. “I can’t say how overpriced it is, but for us there’s no doubt that we’re looking at a bubble.”
• H&M Earnings Decline on Weakest Sales Growth in Three Years. Hennes & Mauritz AB reported earnings that missed analysts’ estimates as the Swedish fashion retailer was hampered by Europe’s unusually wet and wintry spring. Second-quarter pretax profit fell to 7 billion kronor ($846 million), H&M said Wednesday, compared with the 7.23 billion-kronor estimate of analysts polled by Bloomberg. Earnings were also hurt by increased discounting and the strength of the dollar, which H&M said will continue to add to purchasing costs in the third quarter.
• European Stocks Pare Gains as Poll Damps ‘Remain’ Win Optimism. (video) European stocks pared gains in the final minutes of trading as a fresh poll damped investor optimism that the U.K. will vote to stay in the European Union. RSA Insurance Group Plc rose 2.1 percent, leading a gauge of insurers to the best performance of the 19 industry groups on the Stoxx Europe 600 Index after Barclays Plc said the company is confident of meeting its 2018 targets and well placed in the event of a Brexit. Rio Tinto Group and Glencore Plc paced miners higher as base metals climbed. The Stoxx 600 rose 0.4 percent to 341.32 at the close of trading.
• IMF Cuts U.S. Growth Forecast, Urges ‘Very Gradual’ Rate Hikes. The International Monetary Fund cut its forecast for U.S. growth this year, urging the Federal Reserve to lean toward modestly overshooting its inflation target in considering whether the economy can handle higher interest rates. The IMF said the U.S. economy will grow 2.2 percent this year, less than its projection of 2.4 percent in April. The fund left unchanged its forecast for a 2.5 percent expansion in 2017.
• Nearly Half of Sanders Supporters Won't Support Clinton. (video) The Vermont senator says he'll work to defeat Trump, but has yet to endorse the presumptive Democratic presidential nominee.
• Drug Stocks Surge After U.S. Says Cost Panel Will Wait Until 2017. Drug and biotechnology stocks surged Wednesday after the U.S. government said a cost-cutting mechanism created under Obamacare, known as the Independent Payment Advisory Board, or IPAB, will likely be triggered in 2017, not this year as some investors had feared. The 2017 projection is in line with estimates from last year by Medicare’s Board of Trustees, which on Wednesday released its annual report on the U.S. health-care program’s long-term finances. The trustees also said that Medicare’s hospital insurance trust fund, which finances some care under the program, will be unable to meet all of its obligations in 2028, two years earlier than projected.
• Musk Fails to Assure Investors Rattled About SolarCity(SCTY) Takeover. (video) Tesla(TSLA) investors haven’t embraced the news. The shares opened on Wednesday down 9.8 percent to $198.13 at 9:31 a.m. New York time after falling as much as 14 percent in extended trading Tuesday. In a sign of skepticism for the deal, SolarCity shares rose 7.5 percent to $22.77 at 9:55 a.m., well below the range of $26.50 to $28.50 Musk said Tesla would likely pay. Analysts raised concerns about management focus, the solar company’s debt and corporate governance issues between the two businesses that share the same chairman and largest shareholder -- Musk, who is also chief executive officer of the electric-car company. Oppenheimer & Co. analysts including Colin Rusch downgraded Tesla to perform from outperform in a research note published late Tuesday, saying they expect “a robust shareholder fight over this acquisition centered on corporate governance.” “We believe investors are likely to view this transaction as a bailout for SCTY and a distraction to Tesla’s own production hurdles,” Rusch said in the note. 

Wall Street Journal:

• House Republicans to Unveil Health-Insurance Proposal. GOP aims to give voters a chance to consider an alternative plan before the November elections.
• The $50 Billion Oil Bear. Driscoll believes we are in 10-year to 15-year bear market in energy and commodities.
• House Republicans Grill Janet Yellen Over Fed Operations, Independence. Fed Chairwoman’s testimony produces sharp exchanges over a host of issues.

Fox News:

• Trump hammers Clinton foreign policy record, foundation donations. (video) Donald Trump delivered a blistering attack Wednesday on Hillary Clinton's record as secretary of state, accusing the presumptive Democratic presidential nominee of milking oppressive regimes of tens of millions of dollars to benefit the Clinton Foundation -- while sleeping through her own "3 a.m. phone call" as terrorists were murdering four Americans in Libya, including Ambassador Chris Stevens. Speaking at his New York City hotel, Trump said Clinton “perfected the politics of personal profit” and “doesn’t have the temperament ... or the judgment to be president.”

CNBC:

• Chanos: ‘Brazen' SolarCity(SCTY) deal is ‘corporate governance at its worst’. (video) High-profile investment manager Jim Chanos blasted Tesla Motors' proposed acquisition of SolarCity on Wednesday, telling CNBC that the "brazen Tesla bailout of SolarCity" is a "shameful example of corporate governance at its worst." "SolarCity, whose bonds were yielding 20 percent yesterday, is a company headed toward financial distress. It is burning hundreds of millions in cash every quarter, a burden that now Tesla shareholders will have to bear, at a total cost of over $8 billion," said Chanos, who has previously disclosed bets against both firms. "And if you don't want to believe me, consider this: The combined market drop in the value of both companies is more than the equity value of the deal itself — which means that Tesla shareholders think SolarCity shares are essentially worthless," Chanos said. "Finally, it is hard for me to believe that this deal was not being contemplated when Tesla, and Mr. (Elon) Musk himself, sold shares just a few weeks ago." 
• What are the world's wealthiest worried about? (video)
• Banks may have a subprime auto loan problem. Negative subprime auto data from CarMax'sKMX) earnings is bad news for regional banks, according to investment firm Piper Jaffray. "CarMax is the largest used car dealer in the country, we believe these developments indicate we will continue to see more pressure on used car prices in the coming months," Piper Jaffray's Kevin Barker wrote in a note to clients Tuesday.

Zero Hedge:

• Something Strange Emerges When Looking Behind The "Brexit" Bookie Odds. In other words, a few large bettors are skewing the bookie odds dramatically in the favor of Remain, even as the mass of bettors is betting on Leave, albeit with smaller cash amounts. Another way of putting it: a substantially outsized influence by a wealthy minority over the poor majority, just like in every other aspect of life.
• Here Is The "Mad" Thing Brexit Watchers Are Suddenly Obsessing About.
• Fake Jobs Plague The U.S. Economy.
• In Extensive Interview, UK Political Giant Explains Why He Is Voting For Brexit. (video)
• WTI Slides Below $50 After DOE Data Disappointment Despite Production Drop.
• Existing Home Sales Highest Since Feb 2007 As Prices Hit Record High. (graph)
• IMF Urges Obama To "Tackle Poverty" As It Tells Yellen To Overshoot Inflation Target.
• Forget Brexit: According To Albert Edwards, There Is A Far Bigger Risk To The Global Economy.
• Desperate Sellers Resort To Dramatic Price Cuts In Manhattan's Luxury Real Estate Market.

Business Insider:

• 'A bailout for SolarCity'(SCTY): Here's what Wall Street is saying about Tesla's offer to buy the company.
• Costco(COST) just made a huge change — and furious customers are threatening to cancel memberships.
• Marco Rubio just took a big swipe at Donald Trump in his reelection announcement.
• Social commerce is failing.
• This is the best research we've seen on the state of the US consumer, and it makes for a grim reading.
• FEDEX(FDX) CEO: Both Trump and Clinton are 'worrisome'.
• GOLDMAN SACHS(GS): Relax, Brexit will be nowhere near as bad as Lehman Brothers.
• The Iranian Navy is holding 20 military drills in a display of strength.

USA Today:

• When will we know the result of the 'Brexit' vote? The short answer is Friday morning, with lots of caveats. Here's why:​

Financial Times:

• Industrial robot sales hit record.

The Telegraph:

• The risks of Remain are unacceptable to the British psyche. The British electorate collectively, when inspired to vote, has a canny instinct of getting things right. It has a natural instinct to do what is needed for the future and not what is easier to do now. Both Remain or Leave have risks but one has more of a future, by placing the opportunities for success in our own hands and allowing further changes in the way our country is governed. In my opinion, the risks of Remain are incalculable and therefore unacceptable to the British psyche.

Caixin:

• China Should Phase Out 'Zombie Cos.,' PBOC Adviser Says. To let "zombie cos." go bankruptcy in an orderly way is crucial to China's supply-side reform, PBOC adviser Huang Yiping says in an article published on Caixin's website. Zombie cos. are still using credit resources without generating new economic activities, Huang said. China should strengthen "market disciplines" and ensure fair competition principle to cut overcapacity, Huang said. China should prevent risks and have contingency plan for financial instability.

Bear Radar

Style Underperformer:

• Small-Cap Value -.2%

Sector Underperformers:

• 1) Disk Drives -2.1% 2) Computer Hardware -1.0% 3) Restaurants -.9%

Stocks Falling on Unusual Volume:

• CVTI, TSLA, COT, QEP, ADBE, GBT, FDX, PLNT, FTRPR, AVXS, SWNC, LILA, INO, STRP, ATU, PRTA, KMX, ANTM, MVG, SCAI, ALXN, BIS, BKS, POST and EBS

Stocks With Unusual Put Option Activity:

• 1) TSLA 2) BBBY 3) FXE 4) REGN 5) KBH

Stocks With Most Negative News Mentions:

• 1) CVTI 2) ACAD 3) SCAI 4) HTLD 5) AMCX

Charts:

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

Bull Radar

Style Outperformer:

• Small-Cap Growth +.3%

Sector Outperformers:

• 1) Hospitals +1.6% 2) Biotech +1.0% 3) Airlines +.7%

Stocks Rising on Unusual Volume:

• WGO, SCTY, LZB, RH and EXAS

Stocks With Unusual Call Option Activity:

• 1) AMJ 2) WNR 3) EMC 4) SCTY 5) SIRI

Stocks With Most Positive News Mentions:

• 1) SUNW 2) PCLN 3) ATSG 4) CP 5) TTOO

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running -28.7% Below 100-Day Average
• 6 Sectors Rising, 4 Sectors Declining
• 55.1% of Issues Advancing, 40.8% Declining
• 64 New 52-Week Highs, 6 New Lows
• 57.2% of Issues Above 200-day Moving Average
• Average 14-Day RSI 42.6%
• Vix 18.4 -.7%
• Total Put/Call 1.08 +6.9%
• TRIN/Arms .58 -29.0%