Stocks Slightly Higher into Afternoon on US Debt Ceiling Agreement Hopes, Diminishing Regional Bank Contagion Fears, Short-Covering, Alt Energy/Financial Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Higher
  

• Sector Performance: Mixed
  

• Volume: Around Average

• Market Leading Stocks: Outperforming
  

Equity Investor Angst:

• Volatility(VIX) 17.1 +1.7%
• DJIA Intraday % Swing .91%
  
• Bloomberg Global Risk On/Risk Off Index 58.0 +.7%

• Euro/Yen Carry Return Index 157.0 +.56%

• Emerging Markets Currency Volatility(VXY) 9.6 +.9%

• CBOE S&P 500 Implied Correlation Index 29.4 -2.4% 

• ISE Sentiment Index 105.0 +15.0 points
  

• Total Put/Call .76 -16.5%

• NYSE Arms .77 -31.6%

Credit Investor Angst:

• North American Investment Grade CDS Index 77.40 -2.7%
  

• US Energy High-Yield OAS 395.66 -2.6%
• Bloomberg TRACE # Distressed Bonds Traded 427.0 -11.0
  

• European Financial Sector CDS Index 94.2 -2.0% 
• Deutsche Bank Subordinated 5Y Credit Default Swap 316.5 -.5%
  

• Italian/German 10Y Yld Spread 186.0 basis points +2.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 126.3 -.8%
  

• Emerging Market CDS Index 259.09 +.65%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 25.9 unch.

• 2-Year Swap Spread 18.25 basis points -1.0 basis point
  

• TED Spread 17.5 basis points +.2 basis point
  

• 3-Month EUR/USD Cross-Currency Basis Swap -18.55 -.25 basis point
  
• MBS  5/10 Treasury Spread 176.0 +3.0 basis points
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 716.0 unch.
  
• Avg. Auto ABS OAS 93.0 -1.0 basis point
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 47.2 +.1%
• 3-Month T-Bill Yield 5.23% -1.0 basis point
  

• China Iron Ore Spot 101.8 USD/Metric Tonne -.33%
• Dutch TTF Nat Gas(European benchmark) 29.7 euros/megawatt-hour  -1.5%

• Citi US Economic Surprise Index 3.0 -2.5 points

• Citi Eurozone Economic Surprise Index -28.7 -1.2 points
  

• Citi Emerging Markets Economic Surprise Index 16.7 -.3 point
• S&P 500 Current Quarter EPS Growth Rate YoY(471 of 500 reporting) -3.4% -.6 percentage point
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 228.54 +.30:  Growth Rate +2.4% +.1 percentage point, P/E 18.3 -.1
  
• S&P 500 Current Year Estimated Profit Margin 12.24% +2.0 basis points
  
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(8 of 10 reporting) -2.1% unch.
  
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 199.76 +.02: Growth Rate +29.0% unch., P/E 34.1 unch.
  
• Bloomberg US Financial Conditions Index .04 +1.0 basis point
• Bloomberg Euro-Zone Financial Conditions Index -4.52 +2.0 basis points
  
• US Yield Curve -61.5 basis points (2s/10s) -2.5 basis points
• US Atlanta Fed 2Q GDPNow Forecast +2.89% unch.
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +4.65% unch.: CPI YoY +4.13% unch.
  
• 10-Year TIPS Spread 2.25 unch.
  
• Highest target rate probability for July 26th FOMC meeting: 61.7%(-18.9 percentage points) chance of 5.0%-5.25%. Highest target rate probability for Sept. 20th meeting: 51.9%(-6.6 percentage points) chance of 5.0%-5.25%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +184 open in Japan 
• China A50 Futures: Indicating -13 open in China

• DAX Futures: Indicating +29 open in Germany

Portfolio:

• Slightly Higher:  On gains in my tech/medical/utility sector longs
  

• Disclosed Trades:  None
  

• Market Exposure: 50% Net Long