Stocks Falling into Final Hour on US Policy-Induced Stagflation Fears, Diminished US Debt Ceiling Agreement Hopes, Earnings Outlook Jitters, Medical/Gambling Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Around Even
  

• Sector Performance: Most Sectors Declining
  

• Volume: Around Average

• Market Leading Stocks: Outperforming
  

Equity Investor Angst:

• Volatility(VIX) 18.4 +6.8%
• DJIA Intraday % Swing .59%
  
• Bloomberg Global Risk On/Risk Off Index 57.4 -1.4%

• Euro/Yen Carry Return Index 156.6 -.3%

• Emerging Markets Currency Volatility(VXY) 9.5 -.3%

• CBOE S&P 500 Implied Correlation Index 30.7 +4.2% 

• ISE Sentiment Index 97.0 -8.0 points
  

• Total Put/Call .91 +7.1%

• NYSE Arms .74 -12.9%

Credit Investor Angst:

• North American Investment Grade CDS Index 77.92 +.9%
  

• US Energy High-Yield OAS 394.91 -.17%
• Bloomberg TRACE # Distressed Bonds Traded 427.0 unch.
  

• European Financial Sector CDS Index 93.7 -.46% 
• Deutsche Bank Subordinated 5Y Credit Default Swap 312.40 -1.4%
  

• Italian/German 10Y Yld Spread 185.0 basis points -1.0 basis point
  

• Asia Ex-Japan Investment Grade CDS Index 124.5 -1.3%
  

• Emerging Market CDS Index 256.80 -.89%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 25.8 -.14%

• 2-Year Swap Spread 18.25 basis points unch.
  

• TED Spread 11.0 basis points -6.5 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -18.75 -.25 basis point
  
• MBS  5/10 Treasury Spread 177.0 +1.0 basis point
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 718.0 +2.0 basis points
  
• Avg. Auto ABS OAS 94.0 +1.0 basis point
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 47.1 -.12%
• 3-Month T-Bill Yield 5.27% +4.0 basis points
  

• China Iron Ore Spot 98.9 USD/Metric Tonne -1.0%
• Dutch TTF Nat Gas(European benchmark) 29.1 euros/megawatt-hour  -2.0%

• Citi US Economic Surprise Index 1.6 -1.4 points

• Citi Eurozone Economic Surprise Index -35.9 -7.2 points
  

• Citi Emerging Markets Economic Surprise Index 13.9 -2.8 points
• S&P 500 Current Quarter EPS Growth Rate YoY(473 of 500 reporting) -3.4% unch.
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 228.57 +.03:  Growth Rate +2.4% unch., P/E 18.3 unch.
  
• S&P 500 Current Year Estimated Profit Margin 12.24% unch.
  
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(8 of 10 reporting) -2.1% unch.
  
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 199.82 +.06: Growth Rate +29.0% unch., P/E 34.1 unch.
  
• Bloomberg US Financial Conditions Index -.04 -6.0 basis points
• Bloomberg Euro-Zone Financial Conditions Index -4.59 -7.0 basis points
  
• US Yield Curve -64.0 basis points (2s/10s) -3.5 basis points
• US Atlanta Fed 2Q GDPNow Forecast +2.89% unch.
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +4.65% unch.: CPI YoY +4.12% -1.0 basis point
  
• 10-Year TIPS Spread 2.26 +1.0 basis point
  
• Highest target rate probability for July 26th FOMC meeting: 57.7%(-5.5 percentage points) chance of 5.0%-5.25%. Highest target rate probability for Sept. 20th meeting: 50.4%(-2.6 percentage points) chance of 5.0%-5.25%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -242 open in Japan 
• China A50 Futures: Indicating -55 open in China

• DAX Futures: Indicating -51 open in Germany

Portfolio:

• Slightly Higher:  On gains in my index hedges and emerging market shorts
  

• Disclosed Trades:  Added to my (IWM)/(QQQ) hedges and to my emerging market shorts
  

• Market Exposure: Moved to 25% Net Long