Stocks Lower into Final Hour on China Economy Worries, Rising Long-Term Rates, Surging European/Emerging Markets Debt Angst, Commodity/Financial Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Lower
  

• Sector Performance: Almost Every Sector Declining
  

• Volume: Around Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 16.1 +8.4%
• DJIA Intraday % Swing .69%
  
• Bloomberg Global Risk On/Risk Off Index 71.2 -.46%

• Euro/Yen Carry Return Index 167.98 +.06%

• Emerging Markets Currency Volatility(VXY) 9.44 +2.6%

• CBOE S&P 500 Implied Correlation Index 22.4 +6.6% 

• ISE Sentiment Index 113.0 +15.0 points
  

• Total Put/Call 1.01 +5.2%

• NYSE Arms .90 -15.9%

Credit Investor Angst:

• North American Investment Grade CDS Index 67.1 +1.95%
  

• US Energy High-Yield OAS 322.8 +1.9%
• Bloomberg TRACE # Distressed Bonds Traded 344.0 +2.0
  

• European Financial Sector CDS Index 83.3 +1.8% 
• Deutsche Bank Subordinated 5Y Credit Default Swap 244.3 +.3%
  

• Italian/German 10Y Yld Spread 168.0 basis points +4.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 115.1 +12.7%
  

• Emerging Market CDS Index 215.3 +3.6%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 25.1 -.08%

• 2-Year SOFR Swap Spread -11.25 basis points +.25 basis point
  

• TED Spread 21.5 basis points +.75 basis point
  

• 3-Month EUR/USD Cross-Currency Basis Swap -10.75 -1.0 basis point
  
• MBS  5/10 Treasury Spread 179.0 +1.0 basis point
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 748.0 +2.0 basis points
  
• Avg. Auto ABS OAS 68.0 unch.
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 42.3 -.05%
• 3-Month T-Bill Yield 5.42% unch.
  

• China Iron Ore Spot 100.6 USD/Metric Tonne -.39%
• Dutch TTF Nat Gas(European benchmark) 38.8 euros/megawatt-hour +12.7%

• Citi US Economic Surprise Index 68.6 -1.5 points

• Citi Eurozone Economic Surprise Index -75.6 +1.7 points

• Citi Emerging Markets Economic Surprise Index 4.2 +5.0 points
• S&P 500 Current Quarter EPS Growth Rate YoY(457 of 500 reporting) -8.2%  +.1 percentage point
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 234.44 +.04:  Growth Rate +7.0% unch., P/E 19.0 -.1
  
• S&P 500 Current Year Estimated Profit Margin 12.11% unch.
  
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(8 of 10 reporting) +17.0% unch.
  
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 232.29 +.15: Growth Rate +41.6% +.1 percentage point, P/E 32.9 +.1
  
• Bloomberg US Financial Conditions Index .34 -5.0 basis point
  
• Bloomberg Euro-Zone Financial Conditions Index -.02 +8.0 basis points
  
• US Yield Curve -73.75 basis points (2s/10s) +4.75 basis points
  
• US Atlanta Fed 2Q GDPNow Forecast +5.03% +91.0 basis points
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +4.23% unch.: CPI YoY +3.82% +1.0 basis point
  
• 10-Year TIPS Spread 2.33 -3.0 basis points
  
• Highest target rate probability for Nov. 1st FOMC meeting: 64.6%(+3.8 percentage points) chance of 5.25%-5.5%. Highest target rate probability for  Dec. 13th meeting: 62.0%(+3.3 percentage points) chance of 5.25%-5.5%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -238 open in Japan 
• China A50 Futures: Indicating -98 open in China

• DAX Futures: Indicating +35 open in Germany

Portfolio:

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

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

• Market Exposure: Moved to 50% Net Long