Stocks Surging into Close on US Economic "Soft-Landing" Hopes, Fed Pause Expectations, China Stimulus Optimism, Financial/Homebuilding Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Higher
  

• Sector Performance: Almost Every Sector Rising
  

• Volume: Around Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 14.4 +3.5%
• DJIA Intraday % Swing 1.58%
  
• Bloomberg Global Risk On/Risk Off Index 63.8 +1.2%

• Euro/Yen Carry Return Index 161.5 +1.3%

• Emerging Markets Currency Volatility(VXY) 9.0 -1.9%

• CBOE S&P 500 Implied Correlation Index 19.4 +1.6% 

• ISE Sentiment Index 130.0 +19.0 points
  

• Total Put/Call .81 -19.8%

• NYSE Arms .63 -41.1%

Credit Investor Angst:

• North American Investment Grade CDS Index 70.3 -.9%
  

• US Energy High-Yield OAS 373.49 -.58%
• Bloomberg TRACE # Distressed Bonds Traded 403.0 -1.0
  

• European Financial Sector CDS Index 90.21 +.57% 
• Deutsche Bank Subordinated 5Y Credit Default Swap 295.3 +1.7%
  

• Italian/German 10Y Yld Spread 163.0 basis points -1.0 basis point
  

• Asia Ex-Japan Investment Grade CDS Index 113.12 +.23%
  

• Emerging Market CDS Index 214.57 +.29%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 26.1 -.3%

• 2-Year Swap Spread 21.5 basis points +.5 basis point
  

• TED Spread 32.75 basis points +1.25 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -18.5 +1.75 basis points
  
• MBS  5/10 Treasury Spread 157.0 -7.0 basis points
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 731.0 +2.0 basis points
  
• Avg. Auto ABS OAS 85.0 +1.0 basis point
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 45.3 +.16%
• 3-Month T-Bill Yield 5.20% -2.0 basis points
  

• China Iron Ore Spot 112.0 USD/Metric Tonne -1.2%
• Dutch TTF Nat Gas(European benchmark) 41.1 euros/megawatt-hour  +7.4%

• Citi US Economic Surprise Index 18.2 -1.3 points

• Citi Eurozone Economic Surprise Index -91.3 -.1 point

• Citi Emerging Markets Economic Surprise Index 7.1 -2.9 points
• S&P 500 Current Quarter EPS Growth Rate YoY(500 of 500 reporting) -3.6% -.9 percentage point
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 230.50 unch.:  Growth Rate +3.1% unch., P/E 19.1 +.1
  
• S&P 500 Current Year Estimated Profit Margin 12.23% -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 207.93 +.24: Growth Rate +36.8% +.2 percentage point, P/E 37.5 +.4
  
• Bloomberg US Financial Conditions Index .09 -2.0 basis points
• Bloomberg Euro-Zone Financial Conditions Index -4.03 +7.0 basis points
  
• US Yield Curve -91.5 basis points (2s/10s) +1.0 basis point
• US Atlanta Fed 2Q GDPNow Forecast +1.77% -43.0 basis points
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +4.70% unch.: CPI YoY +3.22% unch.
  
• 10-Year TIPS Spread 2.22 unch.
  
• Highest target rate probability for Sept. 20th FOMC meeting: 62.2%(+4.6 percentage points) chance of 5.25%-5.5%. Highest target rate probability for  Nov. 1st meeting: 60.4%(+5.3 percentage points) chance of 5.25%-5.5%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +95 open in Japan 
• China A50 Futures: Indicating +24 open in China

• DAX Futures: Indicating +40 open in Germany

Portfolio:

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

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

• Market Exposure: Moved to 75% Net Long