With the first hour of trading in February behind us we see a sell off in equity markets as weak domestic data as well as economic data from abroad weigh on U.S. markets. E-mini S&P 500 futures are currently trading lower by 13.50 points but are off the lows. January ISM numbers were released this morning missing consensus estimates and showing a much slower than expected pace of manufacturing growth. Global markets were under pressure as well as a release of China’s PMI index for January came in weak adding to the concerns of an economic slowdown in China. Large moves lower in Asian equities may have been partly explained by thin trading dues to the holiday but the data still shows factory growth slowing the most it has in 6 months. U.S. equities seem to have slowed their decline, but the VIX did trade above 20 briefly this morning. Yum! Brands Inc. (YUM) earnings are set to be released tonight and will be closely watched due to their large China exposure. We continue to be cautious about new longs at these levels and have begun to look for small hedges where we can. We still believe that the market can head higher this quarter but is likely to be under pressure in the short term.