• Global stocks are mixed with the European Euro Stoxx 50 Index up +0.92% and Sep S&Ps down -1.30 points. European stocks gained and the euro strengthened to a 1-3/4 month high on speculation stress tests on European banks will show narrower losses than estimated. European bank stocks led financial shares higher after Credit Suisse Group AG raised their recommendation for lenders to "benchmark," saying European sovereign-debt risk is overstated, the financial industry is undervalued and the European Union stress tests "may be a positive catalyst." Stocks and most commodities also received a boost after the IMF raised its estimate for global economic growth. The IMF now estimates the world economy will expand 4.6% this year; the biggest increase since 2007, from an April forecast of 4.2% after a stronger-than-expected first half. The IMF warned however, "recent turbulence in financial markets, reflecting a drop in confidence about fiscal sustainability, policy responses, and future growth prospects, has cast a cloud over the outlook." As expected, the BOE kept its benchmark interest rate unchanged at 0.50% and kept its asset purchase target unchanged at 200 billion pounds.

• The Asian markets today closed mostly higher with Japan up +2.76%, Hong Kong +0.97%, China -0.18%, Taiwan +0.99%, Australia +2.40%, Singapore +1.26%, South Korea +1.53%, India +1.03%. Japanese exporters rallied as the yen fell against the dollar and after the ICSC said that US retail sales in June grew at the fastest pace in 4 years, easing concern that growth in the world's biggest economy is faltering. NEC Corp., Japan's largest personal computer maker, led gains in Asian technology stocks after it jumped 2.6% when it said it aims to double its share of the world's supercomputer market in the next 4 years. Australian job growth in Jun rose a more-than-expected 45,900, boosting stocks and the Australian dollar, and heightening odds that the RBA will have to resume raising interest rates. Australia's jobless rate held steady in June at 5.1%, marking the first time it's below Japan's jobless rate since at least 1978. China's Shanghai Stock Index closed lower, led by industrial companies and energy producers, as concern the government will step up tightening measures overshadowed rising earnings. Energy producers were undercut after the government said it would extend a resource tax to the entire nation, while industrial companies weakened after UBS AG said that China will "intensify" enforcement on land policies.

• Sep S&Ps this morning are trading down -1.30 points. The US stock market yesterday bolted higher early and never looked back as it settled sharply higher on its high (Dow Jones +2.82%, S&P 500 +3.13%, Nasdaq Composite +3.13%). Bullish factors included (1) carry-over support from a jump in European equity markets after European Union regulators hinted that stress tests on the region's banks will show smaller losses than expected, (2) strength in retailers after ICSC said it expected Jun sales less Wal-Mart to be up 3 to 4% over the same month a year ago, the fastest pace of sales in 4 years, and a sign that consumers may be overcoming unemployment concerns and depressed home values, (3) a rally in energy producers after crude oil gained, (4) gains in regional bank stocks after the report from the American Bankers Association that said delinquencies on home-equity loans fell to 4.12% in Q1 from 4,32% in Q4 and past-due credit-card payments fell to 3.88% in Q1 from 4.39% in Q4, their first declines since 2008, and (5) the 6.7% increase in weekly MBA mortgage applications to their highest level in 9 months, which may lead to increased spending power for the American consumer who will save money by refinancing into a cheaper mortgage.

• Bearish factors included (1) the action by UBS AG to cut its year-end forecast for the S&P 500 Index to 1,150, down from a previous forecast of 1,350 as it cites slower profit growth and an unwillingness among investors to pay higher valuations for earnings, (2) the prediction from Kansas City Fed President Hoenig that he expects the US economy to grow "about 3% this year," lower than his earlier forecast for growth "above 3%," and (3) early weakness from a fall in European equity markets after May German factory orders unexpectedly declined for the first time in 5 months, which raised concern that the European sovereign-debt crisis was beginning to slow the Euro-Zone economy.

• Symantec (SYMC) fell 1.4% in European trading after the world's biggest maker of computer-security software said the president of its enterprise product group has resigned.

• September 10-year T-notes this morning are trading down -1.5 ticks. T-note prices yesterday opened slightly higher but soon moved lower and continued lower the rest of the day and settled down -9.5 ticks at 122-140. Bearish factors included (1) reduced safe-haven demand for Treasuries after the stock market rallied and after European Union regulators hinted that stress tests on the region's banks will show smaller losses than expected, (2) hawkish comments from Kansas City Fed President Hoenig who said that the Fed should raise the funds rate to 1.00%, even as some economic reports indicate the recovery is slowing, and (3) comments from Dallas Fed President Fisher who said that while the economy is slowing, there's little risk it will sink back into recession and policy makers have "done enough" to spur growth. Bullish factors included (1) comments from China's State Administration of Foreign Exchange (SAFE) who said on its website that concern China might consider using the "nuclear" option of dumping its Treasury holdings is "completely unnecessary," and (2) the prediction from Royal Bank of Scotland Group Plc that the global economy faces deflation as world central banks extend their 2-year policy of flooding the financial system with cash to stimulate growth.

• The dollar index this morning is higher with the dollar/yen +0.44 yen and the euro/dollar +0.18 cents. The dollar index yesterday slipped to a 1-3/4 month low and closed moderately lower. Bearish factors included (1) reduced safe-haven demand for dollars after a sharp rally in stocks, (2) strength in the euro after European Union regulators told the region's banks that planned stress tests may assume a 17% loss on Greek government bonds and a 3% haircut on Spanish bonds, lower than most analysts' predicted, and (3) the prediction from UBS AG that the yen will strengthen over the next 3 months against the dollar as odds decrease for US interest rate increases and the continuation of the European debt crisis prompts safe-haven demand for yen. Bullish factors included (1) comments from Kansas City Fed President Hoenig who said that that the Fed should raise the Fed funds rate to 1.0%, which would improve the dollar's interest rate differentials, (2) the unexpected decline in May German factory orders, their first drop in the last 5 months and is euro negative, and (3) the recommendation from Societe Generale for investors to "sell the euro against the dollar" on its prediction that the euro will resume its decline after a brief period of consolidation.

• August crude oil prices this morning are up +58 cents and August gasoline is +1.56 cents. Aug crude oil prices yesterday closed higher for the first session in the last seven as they settled up +$2.09 per barrel. Aug gasoline closed higher by +5.40 cents per gallon. Bullish factors included (1) the weaker dollar, (2) the rally in the stock market which improves confidence in the economic outlook and energy demand, (3) the action by the US Energy Department to raise its outlook for global oil consumption this year to 85.82 million barrels a day from a June forecast of 85.51 million barrels a day, and (4) the outlook for weekly crude oil supplies to decline when they are released by the DOE on Thursday. Bearish factors included (1) the action by the US Energy Department to cut its 2010 crude oil price forecast to $78.69 a barrel from $78.75 a barrel a month ago, and (2) the unexpected decline in May German factory orders, which heightens concern that the European sovereign-debt crisis may be starting to slow the European economy and fuel demand. Expectations for Thursday's weekly DOE inventory report (released 1 day late due to Monday's Independence Day holiday) is for crude oil supplies to fall -2.13 million bbl, gasoline stockpiles to remain unchanged, distillate inventories to climb +1.6 million bbl and the refinery capacity rate to increase +0.2 to 88.6%.

Earnings reports (confirmed releases, sorted by mkt cap) ISCA-International Speedway (BEST earnings consensus $0.29), LWSN-Lawson Software (0.12), HELE-Helen of Troy (0.57), SHLM-A Schulman (0.41).

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