Stocks Reversing Lower into Final Hour on US Policy-Induced Stagflation Fears, Fed "Higher for Longer" Worries, Diminishing FANG+ Stock Frenzy, Tech/Pharma Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Higher
  

• Sector Performance: Mixed
  

• Volume: Above Average

• Market Leading Stocks: Outperforming
  

Equity Investor Angst:

• Volatility(VIX) 13.9 -.6%
• DJIA Intraday % Swing .42%
  
• Bloomberg Global Risk On/Risk Off Index 61.5 +2.6%

• Euro/Yen Carry Return Index 1575 +.5%

• Emerging Markets Currency Volatility(VXY) 9.67 +1.4%

• CBOE S&P 500 Implied Correlation Index 20.8 -2.5% 

• ISE Sentiment Index 131.0 +18.0 points
  

• Total Put/Call .75 -18.5%

• NYSE Arms .91 +9.6%

Credit Investor Angst:

• North American Investment Grade CDS Index 71.80 -+61%
  

• US Energy High-Yield OAS 385.99 -1.8%
• Bloomberg TRACE # Distressed Bonds Traded 409.0 +11.0
  

• European Financial Sector CDS Index 87.55 +.01% 
• Deutsche Bank Subordinated 5Y Credit Default Swap 296.56 -1.6%
  

• Italian/German 10Y Yld Spread 183.0 basis points +5.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 117.4 +.32%
  

• Emerging Market CDS Index 221.8 -2.1%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 26.07 +.04%

• 2-Year Swap Spread 20.75 basis points +3.0 basis points
  

• TED Spread 23.0 basis points -2.0 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -22.75 +1.75 basis point
  
• MBS  5/10 Treasury Spread 170.0 +1.0 basis point
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 729.0 +3.0 basis points
  
• Avg. Auto ABS OAS 89.0 -1.0 basis point
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 45.2 -2.1%
• 3-Month T-Bill Yield 5.28% +3.0 basis points
  

• China Iron Ore Spot 109.5 USD/Metric Tonne +.2%
• Dutch TTF Nat Gas(European benchmark) 26.3 euros/megawatt-hour  +5.9%

• Citi US Economic Surprise Index 26.9 -1.1 points

• Citi Eurozone Economic Surprise Index -88.5 -.4 point

• Citi Emerging Markets Economic Surprise Index 14.6 -5.2 points
• S&P 500 Current Quarter EPS Growth Rate YoY(498 of 500 reporting) -3.4% +.1 percentage point
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 230.20 -.04:  Growth Rate +2.9% -.1 percentage point, P/E 18.6 unch.
  
• S&P 500 Current Year Estimated Profit Margin 12.25% -1.0 basis point
  
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(10 of 10 reporting) -2.9% unch.
  
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 206.57 -.06: Growth Rate +35.7% -.1 percentage point, P/E 35.6 -.6
  
• Bloomberg US Financial Conditions Index .19 +10.0 basis points
• Bloomberg Euro-Zone Financial Conditions Index -4.28 +11.0 basis points
  
• US Yield Curve -77.0 basis points (2s/10s) +5.75 basis points
• US Atlanta Fed 2Q GDPNow Forecast +2.22% +26.0 basis points
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +4.71% unch.: CPI YoY +4.13% unch.
  
• 10-Year TIPS Spread 2.26 +5.0 basis points
  
• Highest target rate probability for July 26th FOMC meeting: 51.8%(-.8 percentage point) chance of 5.25%-5.5%. Highest target rate probability for Sept. 20th meeting: 48.%(-.2 percentage point) chance of 5.25%-5.5%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +102 open in Japan 
• China A50 Futures: Indicating -71 open in China

• DAX Futures: Indicating -2 open in Germany

Portfolio:

• Higher:  On gains in my utility/industrial sector longs and emerging market shorts
  

• Disclosed Trades:  Added to my (IWM)/(QQQ) hedges
  

• Market Exposure: Moved to 50% Net Long