Stocks Closing Substantially Lower on Rising Long-Term Rates, Tightening US Financial Conditions, European/Emerging Markets/US High-Yield Debt Angst, Tech/Utility Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Lower
  

• Sector Performance: Almost Every Sector Declining
  

• Volume: Below Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 19.1 +12.8%
• DJIA Intraday % Swing .66%
  
• Bloomberg Global Risk On/Risk Off Index 69.5 -1.7%

• Euro/Yen Carry Return Index 167.4 -.12%

• Emerging Markets Currency Volatility(VXY) 8.39 +.96%

• CBOE S&P 500 Implied Correlation Index 29.0 +13.4% 

• ISE Sentiment Index 77.0 -8.0 points
  

• Total Put/Call 1.11 +2.8%

• NYSE Arms .96 +45.5%

Credit Investor Angst:

• North American Investment Grade CDS Index 74.96 +2.7%
  

• US Energy High-Yield OAS 335.58 +2.9%
• Bloomberg TRACE # Distressed Bonds Traded 325 +2
  

• European Financial Sector CDS Index 91.98 +3.7% 
• Deutsche Bank Subordinated 5Y Credit Default Swap 299.11 +2.8%
  

• Italian/German 10Y Yld Spread 193.0 basis points +7.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 127.6 +1.5%
  

• Emerging Market CDS Index 220.40 +2.9%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 25.0 -.3%

• 2-Year SOFR Swap Spread -11.75 basis points -.75 basis point
  

• TED Spread 20.5 basis points +1.0 basis point
  

• 3-Month EUR/USD Cross-Currency Basis Swap -11.0 +.25 basis point
  
• MBS  5/10 Treasury Spread 175.0 +6.0 basis points
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 910.0 +2.0 basis points
  
• Avg. Auto ABS OAS 80.0 +1.0 basis point
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 41.77 -.47%
• 3-Month T-Bill Yield 5.44% -3.0 basis points
  

• China Iron Ore Spot 114.7 USD/Metric Tonne -.31%
• Dutch TTF Nat Gas(European benchmark) 40.3 euros/megawatt-hour -9.3%

• Citi US Economic Surprise Index 44.24-1.8 points

• Citi Eurozone Economic Surprise Index -47.3 +.9 point

• Citi Emerging Markets Economic Surprise Index 11.5 -.1
• S&P 500 Current Quarter EPS Growth Rate YoY(9 of 500 reporting) +8.4% unch.
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 239.72 +.04:  Growth Rate +9.1% +.1 percentage point, P/E 17.9 -.1
  
• S&P 500 Current Year Estimated Profit Margin 12.13% unch.
  
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(0 of 10 reporting) n/a
  
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 262.99 +.10: Growth Rate +58.6% +.1 percentage point, P/E 27.7 -.2
  
• Bloomberg US Financial Conditions Index .06 -17.0 basis points
  
• Bloomberg Euro-Zone Financial Conditions Index -.10 -39.0 basis points
  
• US Yield Curve -57.75 basis points (2s/10s) +2.75 basis points
  
• US Atlanta Fed 2Q GDPNow Forecast +4.86% unch.
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +3.95% unch.: CPI YoY +3.69% unch.
  
• 10-Year TIPS Spread 2.32 -5.0 basis points
  
• Highest target rate probability for Dec. 13th FOMC meeting: 62.3%(+1.4 percentage points) chance of 5.25%-5.5%. Highest target rate probability for Jan. 31st meeting: 59.7%(+2.6 percentage points) chance of 5.25%-5.5%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -440 open in Japan 
• China A50 Futures: Indicating -6 open in China

• DAX Futures: Indicating +76 open in Germany

Portfolio:

• Slightly Higher:  On gains in my index hedges and emerging market shorts
  

• Disclosed Trades: Added to my (IWM)/(QQQ) hedges, then covered some
  

• Market Exposure: 25% Net Long