Today's Headlines

Bloomberg:

• China's Stocks Extend Worst Rout Since 2008 on Growth Concerns. (video) Chinese stocks extended the steepest monthly selloff since the global financial crisis after an official factory gauge slumped to a three-year low, some of the nation’s largest companies warned of disappointing earnings and traders unwound margin debt. The Shanghai Composite Index slid 1.8 percent to 2,688.85 at the close, extending its loss this year to 24 percent. PetroChina Co., which has the biggest weighting on the benchmark gauge, dropped after saying annual net income probably fell as much as 70 percent. China Life Insurance Co. declined to a 14-month low after reporting earnings for last year that trailed forecasts. Leveraged bets on Chinese stock exchanges fell for a record 21st day on Friday to the lowest level since the depths of the last year’s rout.
• OECD's Gurria: China's Economy to Be Turbulent for Years. (video)
• Emerging Market ETF Losses Top $4B in January, Most in 5 Months. Investors withdrew $272 million from U.S. exchange traded funds that buy emerging markets stocks and bonds last week, bringing January’s losses to more than $4 billion, the most since August. Redemptions from emerging-market ETFs that invest across developing nations as well as those that target specific countries totaled $4.13 billion, compared with inflows of $1.36 billion in December, according to data compiled by Bloomberg. Last month’s declines were the worst since August, when they reached $6.13 billion.
• China Construction Bank Fund Price Falls After `Massive' Outflow. The price of a mutual fund managed by a unit of China Construction Bank Corp. fell by more than two-thirds in one day as investors rushed for the exit. The unit price of the Jianxin Xinfeng C fund fell to 0.337 yuan Friday from 1.039 yuan on Thursday because of a "massive redemption," its manager, CCB Principal Asset Management, said in a statement Monday. Those who redeemed were paid a per-unit rate rounded to the third digit after the decimal point and above fair value, leaving the remaining investors with a loss, CCB Principal said in the filing to Cninfo.com.cn, the website designated for disclosures by the China Securities Regulatory Commission.
• Canadian Bonds Lurch to Worst January Since 2009 in Energy Rout. A global financial rout that wiped US$7 trillion from equities markets worldwide and sent oil plunging to a 12-year low in January didn’t spare Canada’s bond market. An index of Canadian investment grade, high-yield and government debt issued in U.S. dollars is on track for its worst performance in the first month of the year since 2009, according to Bank of America Merrill Lynch indexes.
• World's Worst Currency Sparking Outflows From Mexico's Stock ETF. Traders are pulling money from Mexico’s biggest exchange-traded stock fund at the fastest pace in seven months, tracking the tumble in the nation’s currency. The iShares MSCI Mexico Capped ETF has posted $118.9 million in outflows so far in 2016, the most among similar funds from major emerging markets after Taiwan, according to data compiled by Bloomberg. While the Latin American nation’s benchmark IPC equity gauge has climbed 1.5 percent in the span, it’s slumped 4.8 percent when measured in dollars. The peso has slid 6.3 percent this year, the most among major currencies.
• Emerging-Asset Rally Ends as China Growth Concern Resurfaces. The MSCI Emerging Markets Index declined 0.1 percent to 741.63 at 11:42 a.m. in New York. While the gauge jumped last week, it retreated 6.5 percent in January. A measure tracking 20 developing-nation currencies depreciated 0.1 percent on Monday after falling 1.5 percent last month.
• Europe Shares Drop as Disappointing China, U.S. Data Damp Mood. (video) European stocks retreated as deteriorating Chinese and U.S. data dented the investor optimism that helped trim January losses last week. The Stoxx Europe 600 Index slid 0.2 percent to 341.61 at the close, paring earlier declines of as much as 1.2 percent in late trading.
• S&P Lowers Shell's Rating, Puts Other Oil Majors on Watch. Standard & Poor’s lowered its rating on Royal Dutch Shell Plc and sees a significant likelihood of downgrades for several Europe-based integrated oil and gas majors in the next weeks. "We lowered our ratings on Royal Dutch Shell Plc to ’A+/A-1’ from ’AA-/A-1+’ and placed the long-term rating on CreditWatch with negative implications," S&P said in an e-mailed statement. "We also placed on CreditWatch negative our ratings on BP Plc, Eni SpA, Repsol S.A., Statoil ASA, Statoil Forsikring AS, Statoil US Holdings Inc., and Total S.A."
• Traders Seeking High-Quality Stocks Is Bearish Market Signal. In the worst start for the U.S. stock market since 2009, investors have been aggressively loading up on shares of companies with the sturdiest earnings momentum. And that’s raising concerns. Animal spirits are out as qualities that define winning investments no longer include the high-risk, high-reward potential of shares backed by debt-laden balance sheets. History shows that such a shift has been a bearish signal for stocks in the past, often marking the end of bull markets.
• Iowa Senator Ernst Questions Trump’s Conservative Credentials. “Judging from what he said just a few years ago, I would not have agreed that he was a conservative." The prospect of Trump winning has unnerved some Republican leaders. Ads opposing him on air in Iowa highlight the billionaire businessman’s previous statements on abortion and guns, in which he sounds more like a Democrat.

Wall Street Journal:

• Gulf States Shy Away From OPEC Meeting to Cut Production. Delegates say they want to wait to see the effect of Iran’s return to market. Persian Gulf Arab oil producers don’t support holding an emergency meeting of the Organization of the Petroleum Exporting Countries, officials said, dampening expectations that the group will act to prop up sagging crude prices. Persian Gulf Arab OPEC delegates said they want to wait until the next scheduled OPEC meeting in June, when they will have a clearer picture of how new barrels of Iranian oil are affecting the market now that Western sanctions have ended. Iran has pledged to increase production by a million...

Fox News: 

• Official: Withheld Clinton emails contain 'operational' intel, put lives at risk. (video) EXCLUSIVE: Highly classified Hillary Clinton emails that the intelligence community and State Department recently deemed too damaging to national security to release contain “operational intelligence” – and their presence on the unsecure, personal email system jeopardized “sources, methods and lives,” a U.S. government official who has reviewed the documents told Fox News.

Zero Hedge:

• Meet China's Latest $1.8 Trillion "Problem". (graph)
• These Are Still The Most Disturbing Charts For The Stock Market. (graph)
• "The February Air Pocket": Buybacks Are Back But No Central Banks To Hold Traders' Hands. (graph)
• Is This China & USA's "Thelma & Louise" Moment?
• Oil Is Crashing After Hedge Fund Bulls Pile In At Fastest Pace Since 2010. (graph)
• Hillary: "I'm Asking People To Hold Me Accountable". (video)
• Atlanta Fed Sees Q1 GDP Growth At Just 1.2%, 50% Below Wall Street Consensus. (graph)
• JPM Says Window To Buy Has Closed: "Start Fading The Bounce Within Days". (graph)
• US Manufacturing Remains In Recession As ISM Misses, Contracts For Fourth Month. (graph)
• IEX Strikes Back: Charges NYSE With "Tiering" Order Flow, Shows "Latency Arbitrage" Is Real.
• The Best And Worst Performing Assets Of A Miserable January. (graph)
• Savings Rate Surges To Highest Since 2012 As Spending Disappoints. (graph)
• Crude Sinks To Day Lows After Goldman(GS) Explains Why No Oil Production Cuts Are Coming.

Business Insider:

• Hedge funds are promising something they probably won't be able to deliver. The logical extension of this is that there could be an increase in redemption suspensions, where funds are overwhelmed with redemption requests, find that they are unable to sell assets quickly enough to meet them in the time available to them, and freeze redemptions.
• The untreatable Zika virus has been declared an international public health emergency.
• FISCHER SPEAKS: Janet Yellen's closest ally just delivered his latest comments on the future of Fed policy.
• The credit markets are setting up for the greatest bust we've ever seen. Considering the fact that we just witnessed 7 full years of ZIRP (zero interest rate policy), I probably shouldn’t be surprised just how massive the investor migration into risk assets, like junk bonds and leveraged loans, has been. But I am. Another way to look at the incredible appetite for risk we saw during the recent boom is the volume of “covenant-lite” issuance as a percentage of the total. Never before have investors been so eager to take so much risk AND with so little recourse.

RedState: 

• Every Day Trump Brings me Closer to Casting a Vote for Hillary. Incidents like last night’s infantile howling over Ben Sasse’s criticism push me strongly towards not only not voting for Trump, but actually voting for his opposition, whoever it might be. Ben Sasse is without a doubt a good conservative. If Trump acts like a Republican front runner, and stays [at least allegedly] pro-life, and campaigns for other Republicans and just in general cleans up his act, I will vote for him. If he continues being a moronic oaf and/or backtracks on his promise that he’s pro-life, I’ll probably just stay home. If he keeps attacking and insulting other Republicans, I’ll vote Hillary and be glad about doing it. Of course, there’s a pretty good chance that’s the entire point of the Donald Trump 2016 campaign.

Washington Times: 

• Obama misled Congress on debt limit: House report. Debt fight won’t lead to default, could embolden conservatives. The government could have continued to pay Social Security and other critical payments in the event it reached its debt limit, but the Obama administration intentionally misled Congress about that to force Republicans to hike the borrowing ceiling, a House panel said Monday, citing internal Treasury Department documents. The stunning revelation could fundamentally change the battleground between Capitol Hill and the White House heading into the next debt showdown early next year, because it means a president could no longer use the threat of a full government shutdown to win a debt hike.

PredictIt:

• Odds for GOP Nomination:  Donald Trump .44 -.04, Marco Rubio .36 +.05 and Ted Cruz .15 +.01.
• Odds for Dem Nomination:  Hillary Clinton .74 +.02, Bernie Sanders .29 unch. and Joe Biden .05 unch.

Reuters:

• Shanghai Stock Exchange warns securities firms on corporate bond, ABS risks - sources. The Shanghai Stock Exchange has warned several securities firms to strengthen risk control in their corporate bond and asset-backed securities (ABS) businesses, two sources with direct knowledge of the matter said on Monday. Two sources told Reuters that they saw a document from the exchange requesting stronger risk management.

Telegraph:

• World index of economic freedom tells us that EU should be broken up. The startling finding of the Heritage Foundation index for 2016 is how chronically 'unfree' the European Union still is.

Handelsblatt:

• Citigroup Economist Expects 2.5% Growth in China in 2016. Citigroup's Chief Economist Willem Buiter expects growth in China to slow more drastically than many think and will come close to a recession, citing interview. Though official data show China growth at 6.9% last year, Buiter says was closer to 4%. Further drop would result in rising unemployment, bankruptcies, and need by Chinese govt to bail out banks and borrowers. Slowdown will hit exporting nations Germany, South Korea and Japan.

Bear Radar

Style Underperformer:

• Small-Cap Value -1.1%

Sector Underperformers:

• 1) Oil Service -3.8% 2) Energy -3.1% 3) Banks -1.5%

Stocks Falling on Unusual Volume:

• ROP, NEOS, HUBB, PFPT, DM, D, NTCT, SOHU, HAR, SLG, DWA, WUBA, AFL, AGU, GTT, RPM, GFF, AEL, KMX, GIMO, AME, CS, CYOU, APEI, OII, AXLL, QLGC, EEFT, JOE, AEL, DWA and ROP

Stocks With Unusual Put Option Activity:

• 1) BRK/B 2) GE 3) AET 4) FL 5) UPS

Stocks With Most Negative News Mentions:

• 1) VALE 2) GPRO 3) RH 4) PBR 5) BK

Charts:

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

Bull Radar

Style Outperformer: 

• Mid-Cap Growth -.2% 

Sector Outperformers:

• 1) Gold & Silver +1.6% 2) Computer Hardware +1.0% 3) Utilities +.9% 

Stocks Rising on Unusual Volume: 

• ALR, AYA, STR, SYY, QSII, TWTR and SMCI

Stocks With Unusual Call Option Activity: 

• 1) LL 2) HLT 3) LC 4) KR 5) SYY

Stocks With Most Positive News Mentions: 

• 1) APD 2) NOC 3) CNH 4) MNST 5) TWTR

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running +9.7% Above 100-Day Average
• 2 Sectors Rising, 8 Sectors Declining
• 29.9% of Issues Advancing, 67.5% Declining
• 53 New 52-Week Highs, 30 New Lows
• 22.5% of Issues Above 200-day Moving Average
• Average 14-Day RSI 42.2%
• Vix 21.0 +4.0%
• Total Put/Call 1.0 +11.1%
• TRIN/Arms .9 +32.6%

Monday Watch

Today's Headlines
Bloomberg:

• China Factory Gauge Signals a Record Streak of Deterioration. (video) China’s official factory gauge signaled conditions deteriorated for a sixth month as an index of services continued to hold up, illustrating the widening divergence in the two-speed economy. The purchasing managers index dropped to a three-year low of 49.4 in January, the National Bureau of Statistics said Monday. That compared with a median estimate of 49.6 in a Bloomberg survey of economists, and represents the longest stretch of readings remaining below 50 on record. Numbers below 50 indicate deterioration.
• China's Efforts to Squeeze Bets Against the Yuan Haven't Achieved Much. The cost of betting against the yuan in Hong Kong is back to where it was at the start of the year, highlighting the shortcomings of China’s attempt to starve the offshore market of funds while flooding domestic banks with cash to support the economy. The Hong Kong InterBank Offered Rate for three-month yuan loans fell to 4.87 percent on Friday, 59 basis points lower than the Dec. 31 fixing and down from a record 10.42 percent on Jan. 12. The comparable rate in Shanghai is 3.10 percent and Chris Morrison at $965 million hedge fund Omni Partners says funds will flow offshore, providing a pool of yuan to be borrowed and sold, unless China imposes draconian capital controls.
• China Bears Miss Worst Selloff Since 2008 After Cutting Short Bets. Talk about mistimed trading: Bears on Chinese equities just missed the biggest sell-off in seven years. Short sellers abandoned their bearish bets against the biggest A-share ETF listed in the U.S. just as mainland stocks tumbled the most in January since the global financial crisis. Shares borrowed and sold on expectations of a decline in the exchange-traded fund fell to a one-year low of 4.2 percent of stock outstanding on Jan. 11, down from a record of 38 percent on Dec. 9, according to data compiled by Bloomberg and Markit. The trades were unwound as the fund, which tracks the CSI 300 Index of companies traded in Shanghai and Shenzhen, lost as much as 28 percent from a peak in late 2015 through last week. 
• BOJ Rate Cut No Solace for Top Japan Fund That's Staying in Cash. J Flag Investment Co., an investment advisory firm which helps run among the top five funds in Japan, says the Bank of Japan’s move to negative interest rates won’t assuage investor anxiety or damp volatility in the nation’s stocks. The firm, which advises on 25 billion yen ($210.8 million) in assets, boosted cash last year and has no plans to get back in the market because it expects stocks to remain volatile over the next three to six months even after the central bank lowered its interest rates to minus 0.1 percent on certain holdings. J Flag’s long-only fund rose 24 percent in 2015, the fourth best-performing fund among 26 Japan-focused peers tracked by Eurekahedge Pte.
• HSBC Says Hiring, Salaries to Be Frozen in 2016 in Cost-Cut Plan. HSBC Holdings Plc will impose a hiring and pay freeze this year as part of its drive to cut as much as $5 billion in costs by the end of 2017, a spokeswoman for the bank said Sunday. The actions were outlined in a memorandum received by employees on Friday, the bank’s Gillian James said in an e-mail statement. “As flagged in our Investor Update we have targeted significant cost reductions by the end of 2017,” James said. HSBC Chief Executive Officer Stuart Gulliver in June outlined a three-year plan to pare back a sprawling global network by shutting money-losing businesses and eliminating jobs as he pushes to improve earnings amid surging compliance costs. Other major European lenders from Credit Suisse Group AG to Deutsche Bank AG are cutting thousands of jobs as they battle to adapt to tougher regulatory demands on capital.
• Korean Won Weakens Most in Three Weeks as Export Outlook Worsens. The won suffered its biggest drop in three weeks after South Korea’s exports shrank the most since August 2009 and the yen’s slide worsened the outlook for shipments. Government bonds rose, pushing yields to record lows, after official data on Monday showed overseas sales contracted 18.5 percent in January from a year earlier, more than the median estimate for a 10.3 percent decline in a Bloomberg survey. The yen weakened after the Bank of Japan adopted negative interest rates on Friday, boosting the competitiveness of Japanese goods. The two nations compete in global markets to sell everything from cars to electronics. The won weakened 0.5 percent to 1,205.38 a dollar as of 10:47 a.m. in Seoul, data compiled by Bloomberg show. It fell as much as 1 percent, the most since Jan. 11, and is Asia’s worst performer this year with a 2.7 percent loss.
• Gulf Arab Stocks Trim Worst Start in 10 Years After Oil Rebounds. Gulf Arab equities trimmed their worst January in at least a decade after oil capped its second weekly advance. Dubai’s DFM General Index led gains in the region, climbing to the highest in more than three weeks as the number of shares traded was almost double the six-month average. Abu Dhabi’s ADX General Index had the biggest increase in more than a year. Saudi Arabia’s Tadawul All Share Index rose a fourth day, the longest streak since November. The Bloomberg GCC 200 Index, a gauge of 200 of the region’s biggest companies, added 2.1 percent, gaining for a third day. The measure has lost 9.2 percent this month, the worst start to a year since the index was created 10 years ago. 
• Asian Stocks Advance for Fourth Day Amid Central Bank Optimism. Asian stocks rose, with the regional benchmark index heading for its fourth day of advances, as shares in Tokyo extended Friday’s rally after the Bank of Japan stepped up its monetary stimulus. The MSCI Asia Pacific Index gained 0.4 percent to 121.82 as of 9:05 a.m. in Tokyo.
• Oil Declines as Kuwait to Nigeria Boost OPEC Crude Production. Oil halted its longest run of gains this year as Kuwait and Nigeria helped boost crude production from OPEC, exacerbating a global glut. Futures lost as much as 1.7 percent in New York after earlier rising as much as 1.7 percent. Output from the Organization of Petroleum Exporting Countries climbed to 33.11 million barrels a day in January as Iran pumped a further 60,000 barrels a day, according to data compiled by Bloomberg. China’s purchasing managers index dropped to 49.4 in January, the National Bureau of Statistics said Monday. Numbers below 50 indicate deterioration.
• BofA Says Sharp Yuan Devaluation Will Depress Commodity Prices. A depreciation of 1 percent in the Chinese yuan leads to a decline of 0.6 percent in commodity prices, according to Bank of America Corp. This relationship with the currency is the strongest for commodities such as copper and platinum, of which China is the world’s dominant consumer, the U.S. bank’s strategists wrote in a report dated Jan. 25. A cheaper yuan will erode the purchasing power of the Chinese, pushing prices down and outweighing any benefit from easier financial conditions that a devaluation may bring, they said.
• Singer, Griffin Give Combined $5 Million to Super-PAC Backing Rubio. Rubio also scored some Bush defectors.

Wall Street Journal:

• Oil-Price Poker: Why the Saudis Won’t Fold ‘Em. Don’t underestimate the impact of Middle East politics. The game being played in the global oil market today bears more than a passing resemblance to poker. Nobody wants to quit while they’re losing. That is important for investors to keep in mind as they ponder what have become almost daily spikes and drops in the price of crude. So, too, is the role of Saudi Arabia in the game.
• Trump and the Obama Power Temptation. A history of using lawsuits or government to silence critics and rivals raises the question: How would he behave in office? Of all the Republicans campaigning in Iowa, perhaps none is campaigning harder than Ben Sasse, a Republican senator from Nebraska. Mr. Sasse isn’t running for president. He’s running against Donald Trump. The particular focus of his opposition deserves a lot more attention. 
• Medals for U.S. Humiliation. Iran honors the commanders who captured U.S. sailors. In other news from the receding tide of war, the Ayatollah Ali Khamenei has given medals to the Iranian Revolutionary Guards who recently captured and humiliated American sailors. Iran state media reported Sunday that the Supreme Leader had awarded the Fath, or Victory, medal to the head of the Revolutionary Guards navy and four commanders who were involved in seizing two U.S. Navy boats in January. The two patrol boats were seized after they somehow entered Iran’s territorial waters. The Pentagon hasn’t publicly...

 MarketWatch:

• Apple(AAPL) CEO Tim Cook acts like he’s insane, analyst says. Apple is destroying shareholder value by using up cash and raising debt, analyst says.
• European Union could ‘fall apart within months'. The ‘great experiment’ is at a crossroads, and the future looks dire. 
• Are global markets losing faith in central banks? ‘Solid central bank credibility was long taken as a given’.
• 10 best, 10 worst U.S. stocks so far in 2016. The January stock market rout is broad-based, with the biggest loser in the S&P 500 Index tumbling 36%.
• 42% of Democrats are in favor of socialism.

 Zero Hedge:

• "This Is Much Larger Than Subprime" - Here Are The Legendary Hedge Funds Fighting The Chinese Central Bank.
• Global Trade Collapsed In January: Bellwether South Korea Exports Crash "Most Since Lehman". (graph)
• Shining A Light On Sociopaths In Politics.
• "Stable" China's Economic Bounce Is Over: PMIs Plunge In January. (graph)
• Bloomberg Op-Ed Calls For An End Of Cash. 
• "The Fed Suspended The Laws Of The Market In Order To Save It" - What Happens Next.
• America's #1 Import: Deflation. (graph)
• This Question Should Not Be A Difficult One To Answer.
• Did A Central Banker Just Margin Call All Other Central Banks' Credibility?
• Who Warned "Be Careful What You Wish For... If Interest Rates Go Negative". (graph)
• 60 Dead In Massive ISIS Suicide Attack On Syrian Capital.
• "As Goes January"... What Happens When Bullish Seasonals Fail. (graph)
• The Biggest (Vote) Loser. (cartoon)
• The Last (Policy-Induced) Gasp Of Speculative Excess.
• How The Masses Deal With Risk (And Why They Remain Poor).
• Citi On Why Negative Rates Are Like Potato Chips: "No One Can Have Just One".
• Obama To Make First Ever Mosque Visit To "Celebrate Muslim Contributions To America".
• Forget About "Stocks For The Long Run".

 Business Insider:

• It's officially a lost decade for the US economy. (graph)
• Some of the biggest hedge fund names in the world are loading up on bets against China's currency.
• China's economic weakness is a threat to US allies in the Pacific.
• The real problem with high-frequency trading.
• Here are the top 20 hedge fund managers of all time.
• Iran awarded medals to the navy commanders involved in capturing US sailors.
• The Federal Reserve and Congress are playing 'a very dangerous game'.
• Hillary Clinton and Bernie Sanders are locked in a razor-thin race, according to the most respected poll in Iowa.
• Hillary Clinton and Bernie Sanders are both saying the other would be a disaster in the general election.

New York Post:

• ‘This was all planned’: Former IG says Hillary, State Dept. are lying. The State Department is lying when it says it didn’t know until it was too late that Hillary Clinton was improperly using personal e-mails and a private server to conduct official business — because it never set up an agency e-mail address for her in the first place, the department’s former top watchdog says. “This was all planned in advance” to skirt rules governing federal records management, said Howard J. Krongard, who served as the agency’s inspector general from 2005 to 2008.

Washington Post:

• Donald Trump and Hillary Clinton are Two of the Least Favorably Viewed Presidential Candidates Since at Least 1992. (graph)

Reuters:

• Mid-tier Chinese banks piling up trillions of dollars in shadow loans. Mid-tier Chinese banks are increasingly using complex instruments to make new loans and restructure existing loans that are then shown as low-risk investments on their balance sheets, masking the scale and risks of their lending to China's slowing economy. The size of this 'shadow loan' book rose by a third in the first half of 2015 to an estimated $1.8 trillion, equivalent to 16.5 percent of all commercial loans in China, a UBS analysis shows. For smaller banks, the rate is much faster.
• Moody's sees higher costs for Australian banks on mining downturn. Ratings agency Moody's Investors Service said on Monday it expects credit costs to increase "moderately" for Australian banks as a deep downturn in the resources sector aggravates macroeconomic risks. Moody's said regions and sectors most exposed to mining are starting to see some signs of stress and while Australian banks' direct exposure to the resources sector was relatively low, they faced "high second-order risks".

 Financial Times:

• Gilead(GILD) risks becoming victim of its own success. During the past two years, Gilead, a California-based drugmaker, has emerged as the undisputed leader of the four large US biotech companies. Its hepatitis C medicines, Harvoni and Sovaldi, set a new record for the most successful drug launch, thanks in part to a contentious price tag that works out at roughly $1,000 per pill.

 The Times of India:

• ISIS Yazidi sex slaves subjected to traumatic 'virginity tests' after escaping. Yazidi women and girls who manage to escape ISIS after being captured as sex slaves have been undergoing traumatic "virginity tests" to prove they were abused. Human Rights Watch interviewed victims who survived organised rape, captivity and forced marriage only to be subjected to the "abusive" examinations after believing they had reached safety in Iraqi Kurdistan. Rothna Begum, a researcher at the group's women's rights division, said she spoke to a woman called Luna who had been kidnapped by ISIS as the group swept through northern Iraq in 2014, sold four times and raped by all her "owners". She was one of hundreds of Yazidi women and girls believed to have since undergone painful "virginity tests" as a method of proving the rapes to Iraqi officials documenting ISIS crimes.

Night Trading

• Asian indices are -.25% to +.75% on average.
• Asia Ex-Japan Investment Grade CDS Index 152.0 -.5 basis point.
• Asia Pacific Sovereign CDS Index 76.75 +3.5 basis points.
• Bloomberg Emerging Markets Currency Index 68.18 +.05%.
• S&P 500 futures -.12%.
• NASDAQ 100 futures -.09%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (AET)/1.22
• (CAH)/1.26
• (SOHU)/-.42
• (SYY)/.41
• (AFL)/1.48
• (GOOG)/8.09
• (APC)/-1.07
• (BRCM)/.71
• (IDTI)/.35
• (MAT)/.61
• (TSO)/2.09

Economic Releases
8:30 am EST

• Personal Income for December is estimated to rise +.2% versus a +.3% gain in November.
• Personal Spending for December is estimated to rise +.1% versus a +.3% gain in November.
• Real Personal Spending for December is estimated to rise +.1% versus a +.3% gain in November.
• The PCE Core MoM for December is estimated to rise +.1% versus a +.1% gain in November.

9:45 am EST

• Final Markit US Manufacturing PMI for January is estimated at 52.7 versus a prior estimate of 52.7.

10:00 am EST

• ISM Manufacturing for January is estimated to rise to 48.4 versus 48.2 in December.
• ISM Prices Paid for January is estimated to rise to 35.0 versus 33.5 in December.
• Construction Spending MoM for December is estimated to rise +.6% versus a -.4% decline in November.

Upcoming Splits

• (AFSI) 2-for-1

Other Potential Market Movers

• The Bank of Australia rate decision and the Eurozone PMI report could also impact trading today.

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

Weekly Outlook

Week Ahead by Bloomberg.

Wall St. Week Ahead by Reuters.

Weekly Economic Calendar by Briefing.com.

BOTTOM LINE: I expect US stocks to finish the week mixed as earnings outlook concerns, rising European/Emerging Markets/US High-Yield debt angst and commodity weakness offset short-covering, yen weakness and central bank hopes. My intermediate-term trading indicators are giving neutral signals and the Portfolio is 50% net long heading into the week.