Both Brent and WTI crude are breaking out today, gaining 2% each as the street has woken up to the potential risks to production with the ISIS jihadist group taking control of Mosul and Tikrit and threatening to march on Baghdad as fighting that started in Syria spreads. The VIX recently falling under 12 to its lowest levels since 2007 indicates that a lot of complacency has seeped into the market and with many indices at or near all-time highs, investors could be in for a rude awakening with risks increasing from a number of directions. Today’s announcement that US retail sales came in below expectations combined with the World Bank’s GDP forecast cuts from yesterday indicate that global economic conditions may not be quite as rosy as some appear to be thinking. Meanwhile, in addition to increased political risk in Iraq, the defeat of House Minority leader Cantor in a primary vote earlier this week and the recent European Parliament election results indicate the potential for surprises even in the US and Europe. Following the recent run to all-time highs for major indices like the Dow and the Dax , many markets may be getting priced to perfection, raising the risk of a significant correction and reversals that could create trading opportunities. The 2.7% drop in Platinum and 3.6% drop in Palladium today on an agreement to end a 20-week strike in South Africa indicates that any news has the potential to move markets in this type of environment. Corporate News Lululemon $0 13 vs street $0.32, cut full year adjusted EPS forecast to $1.71-$1.76 from $1.09, CFO planning to retire, plus strife at board level between company founder and newer members including current Chair Economic News Economic reports released overnight and this morning include: US retail sales 0.3% vs street 0.6% US retail ex auto 0.1% vs street 0.4% US jobless claims 317K vs street 310K Canada new house prices 0.2% as expected New Zealand interest rate 0.25% increase to 3.25% as expected South Korea interest rate 2.50% no change as expected Australia employment change (5K) vs street 10K Australia full-time jobs 22K vs previous 14K Australia part-time jobs (27K) vs previous 0K Australia unemployment rate 5.8% as expected China new Yuan loans 870B vs street 700B China M2 money supply 13.4% vs street 13.1% Japan machine orders 17.6% vs street 13.3% India consumer prices 8.28% vs street 8.40% India industrial production 3.4% vs street 1.9% France consumer prices 0.7% as expected Sweden consumer prices (0.2%) as expected Greece unemployment rate 27.8% vs previous 27.5% Eurozone industrial production 1.4% vs street 0.9% Economic reports due later today include: 9:00 am EDT Canada house prices street 4.9% 10:30 am EDT US natural gas storage street 110 BCF