In the land of vague, rumors that that the European Central Bank would unveil an unlimited, sterilized program of bond purchases.
What are the conditions attached to such a bond-buying program? There seems to be two different camps on the ECB (learn more) board: One wants an aggressive program with few strings attached, and another wants one with a lot of strings attached.
It's likely to work a lot like Greece: There will be a Memorandum of Understanding (MOU) that will be negotiated with each country separately. It will likely include some kind of oversight of the budget process.
That is a big problem. To get an MOU, the European Union/European Central Bank will have to get a look at Spain's books. I'll bet Spain does not want them to come in and let them look at its books. Who knows what skeletons are in the closets?
They looked at the Greek books ... guess what they found? The losses were much bigger than everyone expected, with deficits much bigger than its leaders had reported. For years. (Read More: EU Says Greeks Should Work Six-Day Week: Report.)
Will the same be found in Spain? I bet it will. The Greeks aren't the only ones who know how to cook books. (Read More: Spaniards Pull Out Their Cash and Get Out of Spain.)
That is not Mario Draghi's problem, however. Draghi's problem is to lay out a program that is big, bold, and unlimited. Will anyone actually agree to its terms? Who knows? But that is not his worry right now.
Regardless: We are not far from the point where the markets will know where the ECB and the EU stand regarding the bond-buying program. We will know quickly if the market thinks this is enough.
1) Earlier today, Germany had a failed 10-year bond auction, where it tried to sell 5 billion euros ($6.3 billion), but only auctioned off 3.6 billion euros ($4.5 billion). This is more normal than you think, but it plays into what the ECB wants. It's really a good sign: Investors are expecting the opportunity to get higher yields elsewhere. German Bunds are a thermostat of demand for bonds. To the extent that demand for these low-yield instruments are waning, it means there is less anxiety in the markets.
2) Weaker global demand and higher jet fuel prices weigh on FedEx. FedEx opens at a three-month low, after the economic bellwether slashed its first-quarter earnings outlook. FedEx now estimates first-quarter earnings per share of between $1.37 and $1.43, blaming the weak global economy for constraining its express business. The Street expects first-quarter earnings per share from FedEx of $1.56; it previously forecast $1.45 to $1.60 per share. (Read More: UPS Profit, Revenue Miss Estimates; Outlook Cut.)
Weakness in China is having an impact on volumes intra-Asia.
Unlike most companies, FedEx quarter ends in August, so this is the most up-to-date information we have. There are several other companies that have quarters that end in August that should be watched, including Oracle, Adobe Systems, Jefferies Group, and Discover Financial Services.
3) Speaking of China: The bulls are very much on the defensive. After the weak PMI report over the weekend, almost everyone believes China's gross domestic product (learn more) in the third quarter will be lower than the previous quarter. The evidence is now quite clear: Demand from Europe and the U.S. is weaker, and internal demand is weaker, as well. That means less production, excess capacity, and less capital investment in new plants.
Earlier in the year, the dividing line between bulls and bears was 8 percent growth on GDP. Now that third-quarter growth may be lower than the second quarter, the dividing line is moving below 8 percent.
That is not the so-called hard landing some bears are predicting, but low 7 percent GDP will keep the Chinese stock market down near those 3.5-year lows.
Stimulus? Where is it? The Chinese seem reluctant to do anything. Yes, there will be lower interest rates and bank reserve requirements will be lower, but big infrastructure spending? China is worried about that ... it would have done it already if it wasn't. (Read More: China Stimulus May ease Slowdown: Roach.)
4) Financial newsletter writers are bullish, but still no equity fund inflows. Bulls rose to 51 percent from 48.9 percent, the highest level since March while Bears were unchanged at 24.5 percent. Last week AMG Data reported another week of outflows from equity mutual funds. (Read More: Cash No Longer King? Investors Buying Stocks Again.)
—By CNBC’s Bob Pisani
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