Stocks Rising into Final Hour on Lower Long-Term Rates, Earnings Outlook Optimism, Dollar Weakness, Tech/Financial 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) 13.5 unch.
• DJIA Intraday % Swing .34%
  
• Bloomberg Global Risk On/Risk Off Index 65.5 -.5%

• Euro/Yen Carry Return Index 163.2 +.44%

• Emerging Markets Currency Volatility(VXY) 8.3 -1.77%

• CBOE S&P 500 Implied Correlation Index 17.0 -3.9% 

• ISE Sentiment Index 140.0 +17.0 points
  

• Total Put/Call .78 -8.2%

• NYSE Arms 1.01 -30.8%

Credit Investor Angst:

• North American Investment Grade CDS Index 64.5 +.71%
  

• US Energy High-Yield OAS 347.9 +.03%
• Bloomberg TRACE # Distressed Bonds Traded 396.0 +21.0
  

• European Financial Sector CDS Index 80.2 +.1% 
• Deutsche Bank Subordinated 5Y Credit Default Swap 263.3 -1.1%
  

• Italian/German 10Y Yld Spread 165.0 basis points -3.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 111.0 -2.5%
  

• Emerging Market CDS Index 201.3 -2.5%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 25.98 +.19%

• 2-Year Swap Spread 21.75 basis points unch.
  

• TED Spread 20.0 basis points +2.0 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -11.25 +2.0 basis points
  
• MBS  5/10 Treasury Spread 156.0 -7.0 basis points
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 718.0 +2.0 basis points
  
• Avg. Auto ABS OAS 79.0 +2.0 basis points
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 43.9 +.53%
• 3-Month T-Bill Yield 5.38% -1.0 basis point
  

• China Iron Ore Spot 111.8 USD/Metric Tonne +1.7%
• Dutch TTF Nat Gas(European benchmark) 26.6 euros/megawatt-hour  -.12%

• Citi US Economic Surprise Index 67.8 +2.1 points

• Citi Eurozone Economic Surprise Index -135.9 -1.4 points

• Citi Emerging Markets Economic Surprise Index .2 -1.7 points
• S&P 500 Current Quarter EPS Growth Rate YoY(22 of 500 reporting) -7.0% +13.6 percentage points
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 231.23 -.32:  Growth Rate +3.4% -.2 percentage point, P/E 19.5 +.3 point
  
• S&P 500 Current Year Estimated Profit Margin 12.17% -4.0 basis points
  
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(0 of 10 reporting) n/a
  
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 216.24 +.27: Growth Rate +42.1% +.2 percentage point, P/E 36.9 +1.2
  
• Bloomberg US Financial Conditions Index .35 +1.0 basis point
  
• Bloomberg Euro-Zone Financial Conditions Index -4.12 +3.0 basis points
  
• US Yield Curve -88.75 basis points (2s/10s) unch.
  
• US Atlanta Fed 2Q GDPNow Forecast +2.29% unch.
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +4.19% unch.: CPI YoY +3.35% unch.
  
• 10-Year TIPS Spread 2.25 -1.0 basis point
  
• Highest target rate probability for Sept. 20th FOMC meeting: 83.3%(+.3 percentage point) chance of 5.25%-5.5%. Highest target rate probability for  Nov. 1st meeting: 71.5%(+4.8 percentage points) chance of 5.25%-5.5%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +370 open in Japan 
• China A50 Futures: Indicating +2 open in China

• DAX Futures: Indicating +121 open in Germany

Portfolio:

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

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

• Market Exposure: Moved to 100% Net Long