Today's Headlines

Bloomberg:

• China's Equities Plunge Most in a Month as Volatility Reignites. (video) China’s stocks tumbled the most in a month as surging money-market rates signaled tighter liquidity and the offshore yuan declined for a fifth day. The Shanghai Composite Index sank 6.4 percent at the close, with about 70 stocks falling for each that rose. Industrial and technology companies led losses. The overnight money rate, a gauge of liquidity in the financial system, climbed the most since Feb. 6. The plunge in equities underscores the challenge for China’s policy makers as they seek to project an image of stability in the nation’s financial markets as the economy slows. Finance chiefs and central bankers from the Group of 20 will meet in Shanghai on Friday, while the annual meeting of the legislature begins in Beijing next week.
• MKM's Chief Economist: China Has Serious Challenges. (video)
• Cheapest-Ever Chinese Banks Aren't Cheap Enough. It’s going to take more than record-low valuations to convince David Herro that now’s the time to buy shares of Chinese banks. The manager of about $30 billion at Harris Associates LP, who’s been scouring global markets for beaten-down stocks during this year’s selloff, says lenders from Asia’s biggest economy aren’t cheap enough after they sank to all-time lows relative to net assets, earnings and dividends this month. While such gauges of value would normally be irresistible to bargain-hunting investors, these aren’t normal times for Chinese banks. Bad debts are surging after the economy slowed to its weakest pace in a quarter century last year, and analysts say the problem will only get worse after banks ramped up lending to record levels in January. As loan losses erode capital buffers, shareholders face the unpleasant prospect of lower dividend payouts, dilution from the issuance of new equity, or a combination of both. “We still have concerns about credit quality,” Herro, one of Morningstar Inc.’s money managers of the decade in 2010, said in an e-mailed reply to questions.
• China's Slump Casts a Pall on Dealers of Asian Art. Dealers prepare for Asia Week New York. Lally has a fairly bearish outlook for Asia Week, a 10-day event during which 45 dealers and multiple auction houses throw an Asian-art selling bonanza. “I think we’ve already seen a moderation in activity on the international market for Chinese art,” he said. “The buyers are not as euphoric as they were five years ago.”
• Europe’s Economies React to China’s Slowdown. (video)
• Citi: Here Comes a Global Recession. (video) Growth is likely to fall apart. After a few years of reasonably calm markets and stable growth around the world, Citigroup Inc. says the chances of a global recession are already high and only going up. "In our view, global growth is at a highly precarious point, after 2-3 years of relative calm," the team of economists led by Willem Buiter said in their note, which is likely to exacerbate concerns about the world's ability to withstand a pause in China's stunning economic growth. "The long-standing fragilities in the world economy relate to the structural and cyclical slowdowns in China and its unsustainable exchange rate regime, the excessive level of debt across many countries and sectors and ongoing regional and geopolitical uncertainty," the economists said. The economists have accordingly revised their forecast for growth this year in advanced economies, from a 2.4 percent in January 2015 to 1.6 percent currently, and warned that the 2016 figure "could well be lower."  
• Most-Volatile February for Currencies in Six Years Hints at More. Currency traders are enduring the most-volatile February in six years, and implied price swings suggest more fluctuations ahead. Realized three-month volatility for the yen has risen to 10.5 percent, the highest since March, and a measure of future volatility is approaching the highest since 2013. For the British pound, historic volatility has shot up to 9 percent and implied fluctuations are nearing 12 percent, the highest in almost a year.
• Lloyds Leads Lender Gains to Help Europe Stocks Snap 2-Day Drop. (video) Gains in lenders after earnings from Lloyds Banking Group Plc pushed European stocks higher for the first time in three days. Lloyds jumped 14 percent after raising its dividend and introducing a special payment. RSA Insurance Group Plc surged 9.8 percent after its annual operating profit rose 43 percent. The Stoxx Europe 600 Index added 2 percent at the close of trading.
• Stock Strategists' Optimism Dims as Well Fargo Cuts Estimates. Add Wells Fargo Securities LLC to the list of equity forecasters reining in optimism as losses mount in U.S. stocks. Gina Martin Adams, equity strategist at the world’s largest bank by market value, lowered her target for the Standard & Poor’s 500 Index by 6.5 percent. Tumbling oil prices, tighter credit conditions and a flatter yield curve spurred Martin Adams to lower her forecast for the benchmark in the next 12 months to 2,100, down from a previous call of 2,245. Her projection still implies about a 9 percent jump from the benchmark’s current level of 1,930. “Stocks will move higher over the next 12 months, but perhaps not as robustly as we forecast in early December,” Martin Adams wrote in a research note to clients Thursday. “There is likely also a lid on multiples given deteriorating credit quality. It will thus likely be largely up to the earnings recovery to drive the index price higher.” In 2016, nine of 22 strategists tracked by Bloomberg have already lowered projections for the S&P 500.
• U.S. Consumers See Rising Unemployment Risk, New York Fed Says. U.S. consumers have become increasingly concerned over the last year about the possibility of the unemployment rate reversing its downward trend, according to new data from the Federal Reserve Bank of New York. In January, consumers on average saw a 38 percent chance that the unemployment rate would be higher in a year, up from 33 percent in December 2014 and a high of 44 percent in October 2013. The increase was mostly accounted for by respondents under the age of 40 and those with college degrees, according to data going back to mid-2013 which the New York Fed has been collecting as part of a monthly survey. It published the new data for the first time Thursday.

Wall Street Journal:

• Chinese Share Selloff Drags Down Copper. Fears for health of world’s second largest economy hit prices for base metals. Copper prices fell along with other base metals on Thursday, driven down by a selloff in Chinese equity markets. Copper futures for May delivery fell 1.2% to $2.0760 a pound at the COMEX division of CME Group. Prices were higher in London before giving back the gains.

CNBC:

• Recession sign is in play and has 81% accuracy. (video)

Zero Hedge:

• A Teachable Moment: The Young Person Complaining About Her Job At Yelp Discovers Real Minimum Wage Is $0.
• Here Is The Reason For The Sudden Buying Spree. (graph)
• Where Negative Interest Rates Will Lead Us.
• Treasury Yields Are Crashing (Again). (graph)
• Do-Over Election Looms In Spain, As Dueling Leftists Can't Decide Who's A Better Socialist. (graph)
• Why Traders Are Frustrated: "At Any Given Time There Are No Rational Explanations For What’s Going On".
• Business Is "Worst Since The 80s Recession" - Kansas City Fed Survey Crashes To 7-Year Lows. (graph)
• Is The Selling Over? An Answer In 4 Charts. (graph)
• NatGas Tumbles To 16-Year Lows. (graph)
• U.S. Unable To Halt ISIS March Towards Libyan Oil.
• Durable Goods Stage Strong January Rebound After December Collapse; CapEx Shipments Continue To Drag. (graph)
• If Initial Jobless Claims Are So Awesome, Explain This. (graph)
• The WSJ's Modest Proposal: The Bank Of Japan Should Buy Oil.

Business Insider:

• Sears(SHLD) chairman says every retailer is screwed.
• The hottest hedge fund strategy tells you everything you need to know about markets right now.
• Mitt Romney invokes Shakespeare to fire back at Donald Trump. Either he's not anywhere near as wealthy as he says he is, or he hasn't been paying the kind of taxes we would expect him to pay. Or perhaps he hasn't been giving money to the vets or the disabled, like he's been telling us he's been doing.
• A GOP congressman is pleading for Ted Cruz or Marco Rubio to drop out to stop Donald Trump. He said one of the two must drop out and join together with the other as the vice president on their ticket. "For the sake of our country, the conservative cause, and future generations, we adjure you both to unite," he wrote. "Only time will tell" whether Trump remains as conservative as his campaign rhetoric. "Accordingly, the stakes are too high to make his first public office President of the United States," he wrote.  In contrast, Franks said Cruz and Rubio both have "proven, full spectrum conservative records".
• ISIS is using a metal tool called 'the Biter' to clip the flesh of women who disobey its dress code.
• This chart shows very clearly why people are disappointed by Apple(AAPL) Watch sales.
• Volunteering in America is at its lowest level in over a decade.

Quartz:

• Donald Trump polls dead last among US Latinos. (graph) Republican presidential frontrunner Donald Trump reportedly won the Latino Republican vote in the Nevada primary, but that doesn’t mean Latinos nationwide like him much. A recent poll conducted by The Washington Post and Spanish-language broadcaster Univision shows that Trump is resoundingly unpopular among Latino voters. Though he polls second, behind Florida senator Marco Rubio, among Republican Latinos, most Latinos support Democratic candidates, leaving Trump with a net unfavorability of -64%.

The Blaze: 

• John Kerry: Terrorist Released From Guantanamo Who Rejoined Al Qaeda Is ‘Not Supposed to Be Doing That’.

Reuters:

• Brazil's Vale reports worst loss in 20 years on commodity slump. Brazilian miner Vale SA reported a fourth-quarter net loss of $8.57 billion, its worst ever as a private company, as weak commodity prices and hefty writedowns heaped further pressure on the world's largest producer of iron ore. The loss, reported early Thursday, is Vale's fifth in the past six quarters, with the company hit by a collapse in the price of its principle profit driver, iron ore, just as it entered a period of heavy investment in large projects. Falling far short of a loss of $56 million predicted by analysts in a Reuters poll, the result is Vale's worst since at least 1997 when it was privatized. It comes despite record iron ore and nickel production, highlighting treacherous market conditions.

Telegraph:

• The EU is like the Titanic, and we need to jump off before it sinks. 
• Energy price war spreads to gas as US shale storms global market, stalks Russia.

Bear Radar

Style Underperformer:

• Small-Cap Growth +.2%

Sector Underperformers:

• 1) Coal -3.8% 2) Disk Drives -1.8% 3) Road & Rail -1.2%

Stocks Falling on Unusual Volume:

• RH, CNL, SMLP, FRGI, OMF, IMAX, FLTX, SEAS, NTES, AMCX, SERV, TILE, XPO, RLYP, ZBRA, ANSS, VIPS, CSGP, KRA, ZEN, CLUB, LQ, KMPH, HTWR, AAC, GOGO, KRA, CVRR and FRGI

Stocks With Unusual Put Option Activity:

• 1) HLT 2) CHS 3) BTU 4) MCHP 5) VWO

Stocks With Most Negative News Mentions:

• 1) RH 2) RATE 3) ECA 4) HPQ 5) APA

Charts:

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

Bull Radar

Style Outperformer: 

• Mid-Cap Value +.3%

Sector Outperformers:

• 1) Homebuilders +1.6% 2) REITs +1.4% 3) Foods +1.1% 

Stocks Rising on Unusual Volume: 

• POWR, DRII, TFX, CHS, DPZ, NRF, ABCO, GTLS, CRI, CRM, SIRO, TREE, MYCC, AVG, XRAY, SFM, TMH, CHS, RGR, CAR and TUMI

Stocks With Unusual Call Option Activity: 

• 1) MPC 2) DRII 3) CAG 4) NRF 5) SGMS

Stocks With Most Positive News Mentions: 

• 1) LB 2) TGT 3) CCOI 4) JNJ 5) CRM

Charts:

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

Morning Market Internals

NYSE Composite Index:

• Volume Running +8.0% Above 100-Day Average
• 4 Sectors Rising, 6 Sectors Declining
• 54.7% of Issues Advancing, 42.6% Declining
• 59 New 52-Week Highs, 18 New Lows
• 25.4% of Issues Above 200-day Moving Average
• Average 14-Day RSI 44.0%
• Vix 21.05 +1.59%
• Total Put/Call .88 -15.36%
• TRIN/Arms .97 -29.86%

Thursday Watch

Evening Headlines
Bloomberg:

• China Money Rate Jumps as Reserve Limits Hit Preferential Banks. China’s overnight money rate climbed by the most since the Lunar New Year holiday as some banks were obliged to set aside more funds as reserves at a time when open-market operations are draining cash from the financial system. Effective Thursday, the People’s Bank of China normalized reserve requirements for some lenders that had been assigned preferential terms. The monetary authority has added 580 billion yuan ($88.8 billion) to the financial system this week via auctions of seven-day reverse-repurchase agreements, less than the 960 billion yuan of contracts that mature through Friday. 
• Hedge Funds See No Respite Ahead in Asia After Brutal Start. Hedge funds in Asia, which struggled with a brutal market selloff last month, don’t see a respite anytime soon. The $241 million Orchid China Master Fund extended January’s 11.2 percent decline to slump another 2.6 percent this month through Feb. 15 and is bracing for more market swings, according to a letter to investors. The $33 million Truston Falcon Asia Fund has reduced unhedged positions amid extreme volatility and an uncertain outlook, it said in an investor letter. Open Door Capital Group, which suffered a 23 percent loss in its $188 million A-share fund last month, said in a letter that China’s slower growth “cannot provide any positive support for the capital market."
• Nikkei 225 in `Eerie' Parallel to Lehman Prelude in 2008: Chart. Japan’s Nikkei 225 gauge is tracing chart patterns seen in the 12 months through April 2008. A series of Federal Reserve rate cuts that began in September 2007 appeared too late, Norihiro Fujito, a strategist at Mitsubishi UFJ Morgan Stanley Securities, says in an interview today. The Nikkei fell 36% in the remaining eight months of 2008. The “eerie” parallel is unnerving, and may continue should U.S. and Japanese policy makers take the wrong actions, he said, referring to the recent Fed rate hike and a planned increase in Japan’s consumption tax.
• Australian Firms' Investment Plans Weakest in Nine Years. Australian companies’s annual investment plans fell to the lowest level in nine years as an expected pickup in spending by non-mining industries remains elusive. Firms plan to outlay A$82.6 billion of investment in the financial year beginning July 1, the weakest reading since 2007-08, government data showed Wednesday. The currency fell. The Reserve Bank of Australia had hoped that as mining investment and commodity prices retreated from record highs, easier monetary policy and a lower currency would encourage non-resources firms to open their pocket books. Yet it hasn’t been quite that simple. Governor Glenn Stevens acknowledged as much when he lamented this month the failure of “animal spirits” to really take hold. “Capital spending outside of mining is considerably weaker now than I would have expected,” Stevens told a parliamentary panel Feb. 12. “There is very little sign at this point of intentions to invest more.”
• China's Stocks Fall as Technology, Industrial Companies Retreat. Chinese stocks fell amid speculation recent gains for the benchmark index were overdone relative to the outlook for the economy and earnings. The Shanghai Composite Index slid 1.1 percent to 2,897.53 at 9:52 a.m. , led by technology and industrial companies. The benchmark gauge rebounded 10 percent from last month’s low through Wednesday as the government stepped up policy support ahead of the annual National People’s Congress. Agile Property Holdings Ltd. plunged the most in a month in Hong Kong after estimating a 70 percent drop in profits. The Hang Seng China Enterprises Index retreated for a third day.
• Most Asian Stocks Rise After Crude Rally as Japan Leads Advance. Most Asian stocks rose, following U.S. shares higher, as Japanese shares climbed and a turnaround in oil boosted energy companies. About three shares climbed for each that fell on the MSCI Asia Pacific Index, which traded little changed at 119.63 as of 9:05 a.m. in Tokyo. Energy and material shares led gains, while consumer companies dropped. Volatility over the past 30 days on the regional benchmark index remains near the highest level in four years amid tumbling oil prices and concern over the slowdown in China’s economy. U.S. crude erased a slump of more than 4 percent Wednesday to close above $32 a barrel.
• Rio Tinto(RIO) Dividend Cut Plan Fails to Prevent Moody's Downgrade. Rio Tinto Group had its credit rating cut by Moody’s Investors Service even after the miner announced plans to slash its dividend in response to plunging commodity prices. The world’s second biggest metal producer had its credit score lowered one level to Baa1, Moody’s third-lowest investment-grade rating, with a negative outlook. The downgrade follows a slide in energy and metals prices that’s put pressure on producers around the world and seen some, including Anglo American Plc, lose their investment-grade status. With profits falling, Rio Tinto has sought to shore up its balance sheet and announced earlier this month that it would lower its payment to shareholders by as much as half. “There has been a fundamental downward shift in the mining sector with the downturn being deeper and prospects for a recovery extended,” Moody’s said in a statement. “Ratings need to be re-calibrated to reflect expected performance over a more protracted challenging operating environment.”
• Islamic State Releases Video Targeting Facebook(FB), Twitter(TWTR) CEOs. Islamic State has released a new video that targets the chief executive officers of Facebook Inc. and Twitter Inc. The 25-minute clip shows the faces of Facebook’s Mark Zuckerberg and Twitter’s Jack Dorsey riddled with mock bullet holes, according to the Guardian newspaper and tweets by Rita Katz, director of the SITE Intelligence Group -- a company that monitors jihadist movements. The video was purportedly made by a group called the "Sons Caliphate Army." In January, the administration of U.S. President Barack Obama asked companies including Facebook and Twitter for help in the fight against terrorism. That gathering took place as Obama announced a new counterterrorism task force to thwart extremists and their use of social media after recent deadly attacks in Paris and San Bernardino, California.

Wall Street Journal:

• The Big New Threat to Oil Prices: A Glut of Gasoline. Several refineries in the Midwest have opted to reduce activity for economic reasons. Refineries in the U.S. Midwest are losing their thirst for oil, posing a new risk for the battered crude market. The Midwest accounts for nearly a quarter of the crude processed in the U.S. and is home to shale producers that have few other outlets for their oil. But refiners there are already swimming in gasoline and other fuel, forcing them to cut back production until the excess can be worked off.
• Sharp Accepts Foxconn’s $6.24 Billion Takeover Offer.
• U.S. Warns Banks Off Russian Bonds. State, Treasury say helping sell debt would undermine sanctions on country. 
• S&P 500 Earnings: Far Worse Than Advertised. The gap between reported and pro forma earnings last year reached its widest level since the financial crisis.
• The Donald Doesn’t Have a Lock—Yet. There is still time for a non-Trump majority to coalesce around a single candidate. Donald Trump scored a very impressive win in Nevada, taking 45.9% and 14 of the state’s 30 delegates to the GOP convention. But the Republican nomination is far from settled. After four contests, only 133 of the convention’s 2,472 delegates have been selected. The choices made by late-deciding voters would be a sign of consolidation, but in South Carolina Mr. Trump drew only 17% of those who made up their mind in the final week of the campaign. Among the 30% in Nevada who decided in the final week, Sen. Marco Rubio carried 42%, far more than any candidate. Donald Trump could well have a lock on the nomination after March 15 if a fragmented opposition gives him an absolute majority of delegates on that day. There is still time for the non-Trump GOP majority to coalesce around a single candidate, but not much.

CNBC:

• HP earnings fall on 'tough' PC and printer markets. (video) HP Inc. reported quarterly earnings that met analysts' expectations on Wednesday, but revenues in its printing and personal systems segments fell slightly more than Wall Street had estimated. The company posted fiscal first-quarter adjusted earnings per share of 36 cents on $12.25 billion in revenue. Analysts had expected HP to report earnings of about 36 cents per share on $12.2 billion in revenue, according to a consensus estimate from Thomson Reuters. HP shares wavered in after-hours trading after the announcement.
• Oil may push banks to boost reserves. (video) After JPMorgan announced Tuesday that it would increase reserves to offset losses on loans in the energy sector, Wall Street is waiting for more shoes to drop.

Zero Hedge:

• "Credit Risk Is Growing," FDIC Warns As Loss Provisions Jump $3.8 Billion In 3 Months. (graph)
• Canary, Meet Coal Mine: These Are The Tranches Where The CLO 2.0 Meltdown Begins. (graph)
• According To Morgan Stanley(MS) This Is The Biggest Threat To Deutsche Bank's Survival. (graph)
• Japanese 'Margin' Traders Suffer Biggest Losses "Since Lehman". (graph)
• Jim Rogers Warns "Governments Plan Is To Destroy The People Who Save". (video)
• When Currency Pegs Break, Global Dominoes Fall. (graph)
• Norway Warns Sweden Will Collapse, PM Will Defy Geneva Convention To Protect Border.
• Restoration Hardware(RH) Stock Crashes After Terrible Earnings; Company Blames Crashing Stock Price. (graph)
• Wedbush Goes There: "Beware The Panics And Crashes Of March".
• Citi: "We Have A Problem". (graph)
• What Could Go Wrong? Brazil Plans To Kill Zika With Gamma Radiation Burst.
• Here Are 100 Reasons Why We Need To Audit The Federal Reserve.
• Worst US Economy Since Government Shutdown Sparks Panic-Buying In Stocks. (graph)

Business Insider:

• MITT ROMNEY: There's good reason to believe there's a 'bombshell' in Donald Trump's taxes.
• Al-Qaeda is taking control of a pivotal Middle East country.
• Carl Icahn has lost billions on energy trades this year.
• US spy agencies are saying Clinton's emails should have been 'top secret' because of their content.
• 'Do you want to divide Europe?' Hungary's provocative prime minister discusses Europe's refugee crisis.
• 'China is clearly militarizing the South China Sea and you’d have to believe in the flat Earth to think otherwise'.
• Here’s your first look at the super cheap phone that will take on the iPhone in China. (video)
• Salesforce(CRM) shares soar after Q4 beat.

Reuters:

• Ackman's fund off 17.3 percent for year, erases banner gains from 2014.

Financial Times:

• S&P warns of Asia’s corporate repayment risk. Asia-Pacific companies are on the hook to repay almost $1tn of debt over the next four years — more than half of it priced in US dollars — according to Standard & Poor’s.

Night Trading 

• Asian equity indices are -1.25% to +.25% on average.
• Asia Ex-Japan Investment Grade CDS Index 157.25 +.75 basis point. 
• Asia Pacific Sovereign CDS Index 77.75 -1.25 basis points. 
• Bloomberg Emerging Markets Currency Index 68.54 +.02%. 
• S&P 500 futures -.14%. 
• NASDAQ 100 futures -.13%.

Morning Preview Links

Earnings of Note
Company/Estimate 

• (ALKS)/-.24
• (BUD)/1.61
• (APA)/-.46
• (BBY)/1.39
• (CVC)/.17
• (CPB)/.80
• (CRI)/1.29
• (CHS)/.00
• (DPZ)/1.11
• (KSS)/1.56
• (ZEUS)/-.17
• (PWR)/.28
• (SAFM)/.45
• (SHLD)/-2.62
• (SFM)/.16
• (TD)/1.19
• (VC)/.77
• (AIRM)/.64
• (ADSK)/.11
• (BIDU)/1.21
• (GPS)/.57
• (GG)/.00
• (HLF)/.97
• (MHK)/2.73
• (MNST)/.81
• (PANW)/.39
• (WTW)/.02
• (ZOES)/-.06 

Economic Releases 
8:30 am EST

• Initial Jobless Claims for last week are estimated to rise to 270K versus 262K the prior week.
• Continuing Claims are estimated to fall to 2253K versus 22723K prior. 
• Preliminary Durable Goods Orders for January are estimated to rise +2.9% versus -5.0% in December.
• Preliminary Durables Ex Transports for January are estimated to rise +.3% versus a -1.0% decline in December.
• Preliminary Cap Goods Orders Non-Defense Ex Air for January are estimated to rise +1.0% versus a -4.3% decline in December.

9:00 am EST

• The House Price Purchase Index for 4Q. 
• The FHFA House Price Index MoM for December is estimated to rise +.5% versus a +.5% gain in November. 

11:00 am EST

• Kansas City Fed Manufacturing for February is estimated to rise to -6.0 versus -9.0 in January.

Upcoming Splits 

• None of note

Other Potential Market Movers

• The Fed's Lockhart speaking, Fed's Williams speaking, UK GDP report, China Property Price report, $28B 7Y T-Note auction, weekly Bloomberg Consumer Comfort Index, weekly EIA natural gas inventory report, Cantor Internet/Tech Conference and the (ZION) investor conference could also impact trading today.

BOTTOM LINE: Asian indices are mostly lower, weighed down by financial and real estate 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.

Stocks Reversing Higher into Final Hour on on China Stimulus Hopes, Oil Reversal, Short-Covering, Tech/Telecom Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Slightly Higher
  

• Sector Performance: Mixed
  

• Volume: Slightly Below Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 21.05 +.33%

• Euro/Yen Carry Return Index 128.62 -.36%

• Emerging Markets Currency Volatility(VXY) 12.29 +.24%

• S&P 500 Implied Correlation 62.87 -.62%

• ISE Sentiment Index 89.0 +27.14%

• Total Put/Call 1.03 -8.04%

• NYSE Arms 1.56 -15.96% 

Credit Investor Angst:

• North American Investment Grade CDS Index 116.25 +.22%

• America Energy Sector High-Yield CDS Index 2,339.0 +2.67%

• European Financial Sector CDS Index 122.88 +4.57%

• Western Europe Sovereign Debt CDS Index 32.83 +1.77%

• Asia Pacific Sovereign Debt CDS Index 77.99 -1.38%

• Emerging Market CDS Index 367.32 -.57%
  

• iBoxx Offshore RMB China Corporate High Yield Index 123.70 +.15%

• 2-Year Swap Spread 4.75 -1.0 basis point
  

• TED Spread 30.5 -.75 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -24.0 +.75 basis point
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 68.54 -.14%
• 3-Month T-Bill Yield .33% +1.0 basis point

• Yield Curve 99.0 -1.0 basis point
  

• China Import Iron Ore Spot $51.64/Metric Tonne +.08%

• Citi US Economic Surprise Index -38.60 -2.7 points

• Citi Eurozone Economic Surprise Index -54.30 +1.3 points

• Citi Emerging Markets Economic Surprise Index -8.70 -.5 point

• 10-Year TIPS Spread 1.37% +4.0 basis points
• 15.4% chance of Fed rate hike at April 27 meeting, 25.5% chance at June 15 meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating -25 open in Japan 
• China A50 Futures: Indicating -34 open in China

• DAX Futures: Indicating +92 open in Germany

Portfolio: 

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

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

• Market Exposure: Moved to 50% Net Long