Stocks Surging into Afternoon on US Debt Ceiling Agreement Hopes, Diminished Regional Bank Contagion Fears, Short-Covering, Financial/Airline Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Higher
  

• Sector Performance: Most Sectors Rising
  

• Volume: Around Average

• Market Leading Stocks: Outperforming
  

Equity Investor Angst:

• Volatility(VIX) 17.2 -4.4%
• DJIA Intraday % Swing .67%
  
• Bloomberg Global Risk On/Risk Off Index 54.3 +.6%

• Euro/Yen Carry Return Index 156.0 +.55%

• Emerging Markets Currency Volatility(VXY) 9.4 unch.

• CBOE S&P 500 Implied Correlation Index 30.7 -4.9% 

• ISE Sentiment Index 109.0 +5.0 points
  

• Total Put/Call .85 -7.6%

• NYSE Arms .74 -49.0%

Credit Investor Angst:

• North American Investment Grade CDS Index 81.0 -1.98%
  

• US Energy High-Yield OAS 414.99 -1.9%
• Bloomberg TRACE # Distressed Bonds Traded 437.0 +4.0
  

• European Financial Sector CDS Index 100.63 -.46% 
• Deutsche Bank Subordinated 5Y Credit Default Swap 365.3 -2.5%
  

• Italian/German 10Y Yld Spread 185.0 basis points -2.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 132.2 +1.6%
  

• Emerging Market CDS Index 261.1 -1.0%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 26.1 unch.

• 2-Year Swap Spread 19.25 basis points -.75 basis point
  

• TED Spread 13.25 basis points -3.75 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -20.75 -.75 basis point
  
• MBS  5/10 Treasury Spread 172.0 -3.0 basis points
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 713.0 +2.0 basis points
  
• Avg. Auto ABS OAS 93.0 +1.0 basis point
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 47.4 -.14%
• 3-Month T-Bill Yield 5.21% +8.0 basis points
  

• China Iron Ore Spot 107.7 USD/Metric Tonne -.45%
• Dutch TTF Nat Gas(European benchmark) 31.9 euros/megawatt-hour +.4%

• Citi US Economic Surprise Index 1.4 -.8 point

• Citi Eurozone Economic Surprise Index -27.3 unch.
  

• Citi Emerging Markets Economic Surprise Index 17.0 +1.6 points
• S&P 500 Current Quarter EPS Growth Rate YoY(461 of 500 reporting) -3.3% unch.
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 228.26 +.15:  Growth Rate +2.3% +.1 percentage point, P/E 18.0 -.1
  
• S&P 500 Current Year Estimated Profit Margin 12.25% +1.0 basis point
  
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(8 of 10 reporting) -2.1% unch.
  
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 199.36 +.37: Growth Rate +28.8% +.3 percentage point, P/E 32.5 -.1
  
• Bloomberg US Financial Conditions Index .06 +13.0 basis points
• Bloomberg Euro-Zone Financial Conditions Index -4.54 -5.0 basis points
  
• US Yield Curve -59.0 basis points (2s/10s) -6.5 basis points
• US Atlanta Fed 2Q GDPNow Forecast +2.89% +28.0 basis points
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +4.65% unch.: CPI YoY +4.13% unch.
  
• 10-Year TIPS Spread 2.23 +2.0 basis points
  
• Highest target rate probability for July 26th FOMC meeting: 61.9%(+.8 percentage point) chance of 5.0%-5.25%. Highest target rate probability for Sept. 20th meeting: 43.6%(+4.2 percentage points) chance of 5.0%-5.25%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +392 open in Japan 
• China A50 Futures: Indicating -34 open in China

• DAX Futures: Indicating +78 open in Germany

Portfolio:

• Higher:  On gains in my industrial/tech sector longs
  

• Disclosed Trades:  Covered some of my (IWM)/(QQQ) hedges
  

• Market Exposure: Moved to 75% Net Long