Stocks Slightly Higher into Afternoon on Earnings Outlook Optimism, Lower Long-Term Rates, Short-Covering, Financial/Telecom Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Higher
  

• Sector Performance: Most Sectors Rising
  

• Volume: Around Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 13.5 +1.4%
• DJIA Intraday % Swing .69%
  
• Bloomberg Global Risk On/Risk Off Index 64.2 +.1%

• Euro/Yen Carry Return Index 165.0 +.31%

• Emerging Markets Currency Volatility(VXY) 8.6 +1.5%

• CBOE S&P 500 Implied Correlation Index 16.4 +3.1% 

• ISE Sentiment Index 163.0 +48.0 points
  

• Total Put/Call .80 +1.3%

• NYSE Arms .91 -22.2%

Credit Investor Angst:

• North American Investment Grade CDS Index 66.0 +.7%
  

• US Energy High-Yield OAS 341.7 +.16%
• Bloomberg TRACE # Distressed Bonds Traded 388.0 -9.0
  

• European Financial Sector CDS Index 79.4 -.9% 
• Deutsche Bank Subordinated 5Y Credit Default Swap 260.18 -.85%
  

• Italian/German 10Y Yld Spread 164.0 basis points +1.0 basis point
  

• Asia Ex-Japan Investment Grade CDS Index 108.7 -.94%
  

• Emerging Market CDS Index 203.97 +.98%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 25.6 -.84%

• 2-Year Swap Spread 21.25 basis points -.5 basis point
  

• TED Spread 18.25 basis points -1.5 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -11.5 +1.25 basis points
  
• MBS  5/10 Treasury Spread 163.0 +3.0 basis points
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 718.0 +3.0 basis points
  
• Avg. Auto ABS OAS 77.0 -1.0 basis point
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 43.6 +.11%
• 3-Month T-Bill Yield 5.41% +3.0 basis points
  

• China Iron Ore Spot 112.3 USD/Metric Tonne +1.8%
• Dutch TTF Nat Gas(European benchmark) 26.9 euros/megawatt-hour  -.4%

• Citi US Economic Surprise Index 63.7 -4.7 points

• Citi Eurozone Economic Surprise Index -121.9 +6.1 points

• Citi Emerging Markets Economic Surprise Index -9.1 +.1 point
• S&P 500 Current Quarter EPS Growth Rate YoY(48 of 500 reporting) +9.0% -2.0 percentage points
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 231.59 +.09:  Growth Rate +3.6% +.1 percentage point, P/E 19.8 +.2
  
• S&P 500 Current Year Estimated Profit Margin 12.17% -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 217.74 +.77: Growth Rate +43.1% +.5 percentage point, P/E 38.0 +.5
  
• Bloomberg US Financial Conditions Index .43 +2.0 basis points
  
• Bloomberg Euro-Zone Financial Conditions Index -4.19 +13.0 basis points
  
• US Yield Curve -100.75 basis points (2s/10s) -3.5 basis points
  
• US Atlanta Fed 2Q GDPNow Forecast +2.42% +3.0 basis points
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +4.19% unch.: CPI YoY +3.36% unch.
  
• 10-Year TIPS Spread 2.21 -2.0 basis points
  
• Highest target rate probability for Sept. 20th FOMC meeting: 87.9%(+3.4 percentage points) chance of 5.25%-5.5%. Highest target rate probability for  Nov. 1st meeting: 73.5%(+4.1 percentage points) chance of 5.25%-5.5%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -46 open in Japan 
• China A50 Futures: Indicating -38 open in China

• DAX Futures: Indicating +100 open in Germany

Portfolio:

• Slightly Lower:  On losses in my tech/medical sector longs
  

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

• Market Exposure: Moved to 75% Net Long