Stocks Higher into Final Hour on More Dovish Fed Hopes, Loosening US Financial Conditions, Short-Covering, Consumer Discretionary/Commodity Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Higher
  

• Sector Performance: Most Sectors Rising
  

• Volume: Below Average

• Market Leading Stocks: Outperforming
  

Equity Investor Angst:

• Volatility(VIX) 15.0 -.7%
• DJIA Intraday % Swing .60%
  
• Bloomberg Global Risk On/Risk Off Index 66.1 +.44%

• Euro/Yen Carry Return Index 162.7 -.65%

• Emerging Markets Currency Volatility(VXY) 8.5 -1.1%

• CBOE S&P 500 Implied Correlation Index 20.5 -.24% 

• ISE Sentiment Index 169.0 +48.0 points
  

• Total Put/Call .64 -26.4%

• NYSE Arms 1.0 +6.38%

Credit Investor Angst:

• North American Investment Grade CDS Index 66.9 -2.32%
  

• US Energy High-Yield OAS 357.4 -2.1%
• Bloomberg TRACE # Distressed Bonds Traded 363.0 +8.0
  

• European Financial Sector CDS Index 83.19 -3.5% 
• Deutsche Bank Subordinated 5Y Credit Default Swap 277.98 -2.9%
  

• Italian/German 10Y Yld Spread 177.0 basis points +2.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 116.9 -1.4%
  

• Emerging Market CDS Index 214.70 -2.24%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 25.77 +.12%

• 2-Year Swap Spread 20.75 basis points -1.0 basis point
  

• TED Spread 18.5 basis points -2.5 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -13.75 +1.0 basis point
  
• MBS  5/10 Treasury Spread 173.0 +3.0 basis points
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 715.0 +1.0 basis point
  
• Avg. Auto ABS OAS 77.0 +1.0 basis point
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 43.46 +.20%
• 3-Month T-Bill Yield 5.37% +2.0 basis points
  

• China Iron Ore Spot 106.3 USD/Metric Tonne +.46%
• Dutch TTF Nat Gas(European benchmark) 29.1 euros/megawatt-hour  -3.9%

• Citi US Economic Surprise Index 70.6 +.1 point

• Citi Eurozone Economic Surprise Index -135.7 -.3 point

• Citi Emerging Markets Economic Surprise Index -1.5 +6.0 points
• S&P 500 Current Quarter EPS Growth Rate YoY(16 of 500 reporting) -20.6% unch.
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 231.50 +.02:  Growth Rate +3.5% unch., P/E 19.1 +.1 point
  
• S&P 500 Current Year Estimated Profit Margin 12.21% -1.0 basis point
  
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(0 of 10 reporting) n/a
  
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 215.58 +.29: Growth Rate +41.7% +.2 percentage point, P/E 35.7 +.4
  
• Bloomberg US Financial Conditions Index .33 +2.0 basis points
• Bloomberg Euro-Zone Financial Conditions Index -4.22 +5.0 basis points
  
• US Yield Curve -91.25 basis points (2s/10s) -4.25 basis points
  
• US Atlanta Fed 2Q GDPNow Forecast +2.29% +16.0 basis points
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +4.35% unch.: CPI YoY +3.22% unch.
  
• 10-Year TIPS Spread 2.24 -1.0 basis point
  
• Highest target rate probability for Sept. 20th FOMC meeting: 70.3%(-2.1 percentage points) chance of 5.25%-5.5%. Highest target rate probability for  Nov. 1st meeting: 54.9%(-2.1 percentage points) chance of 5.25%-5.5%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +62 open in Japan 
• China A50 Futures: Indicating -128 open in China

• DAX Futures: Indicating +122 open in Germany

Portfolio:

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

• Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges and some of my emerging market shorts
  

• Market Exposure: Moved to 75% Net Long