Stocks Slightly Higher into Afternoon on Lower Long-Term Rates, Dollar Weakness, Short-Covering, Consumer Discretionary/Alt Energy Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Higher
  

• Sector Performance: Most Sectors Rising
  

• Volume: Below Average

• Market Leading Stocks: Outperforming
  

Equity Investor Angst:

• Volatility(VIX) 15.3 +2.8%
• DJIA Intraday % Swing .75%
  
• Bloomberg Global Risk On/Risk Off Index 65.5 -.25%

• Euro/Yen Carry Return Index 163.7 -.31%

• Emerging Markets Currency Volatility(VXY) 8.9 +.7%

• CBOE S&P 500 Implied Correlation Index 21.0 +.4% 

• ISE Sentiment Index 116.0 -18.0 points
  

• Total Put/Call .81 -1.2%

• NYSE Arms .88 -3.3%

Credit Investor Angst:

• North American Investment Grade CDS Index 68.8 -1.9%
  

• US Energy High-Yield OAS 365.45 +.99%
• Bloomberg TRACE # Distressed Bonds Traded 355.0 -19.0
  

• European Financial Sector CDS Index 86.32 -1.6% 
• Deutsche Bank Subordinated 5Y Credit Default Swap 286.44 -.66%
  

• Italian/German 10Y Yld Spread 175.0 basis points +3.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 118.4 +.8%
  

• Emerging Market CDS Index 219.88 +.29%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 25.71 -.41%

• 2-Year Swap Spread 21.75 basis points unch.
  

• TED Spread 21.0 basis points -1.25 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -14.75 +.75 basis point
  
• MBS  5/10 Treasury Spread 170.0 -3.5 basis points
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 714.0 -2.0 basis points
  
• Avg. Auto ABS OAS 76.0 -1.0 basis point
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 43.4 +.07%
• 3-Month T-Bill Yield 5.35% +1.0 basis point
  

• China Iron Ore Spot 105.4 USD/Metric Tonne +1.84%
• Dutch TTF Nat Gas(European benchmark) 30.2 euros/megawatt-hour  -9.7%

• Citi US Economic Surprise Index 70.5 -1.5 points

• Citi Eurozone Economic Surprise Index -135.4 +.7 point

• Citi Emerging Markets Economic Surprise Index -7.5 -3.1 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 231.48 +.04:  Growth Rate +3.5% -.1 percentage point, P/E 19.0 -.2 point
  
• S&P 500 Current Year Estimated Profit Margin 12.22% +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 215.29 +.84: Growth Rate +41.5% -.7 percentage point, P/E 35.3 -1.1
  
• Bloomberg US Financial Conditions Index .32 -3.0 basis points
• Bloomberg Euro-Zone Financial Conditions Index -4.27 +12.0 basis points
  
• US Yield Curve -87.0 basis points (2s/10s) +2.0 basis points
  
• US Atlanta Fed 2Q GDPNow Forecast +2.13% +19.0 basis points
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +4.35% unch.: CPI YoY +3.22% unch.
  
• 10-Year TIPS Spread 2.25 -1.0 basis point
  
• Highest target rate probability for Sept. 20th FOMC meeting: 72.0%(+1.4 percentage points) chance of 5.25%-5.5%. Highest target rate probability for  Nov. 1st meeting: 56.8%(+.6 percentage point) chance of 5.25%-5.5%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +110 open in Japan 
• China A50 Futures: Indicating -90 open in China

• DAX Futures: Indicating +99 open in Germany

Portfolio:

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

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

• Market Exposure: Moved to 50% Net Long