Stocks Reversing Lower into Afternoon on Surging Long-Term Rates, US Govt Shutdown Concerns, US Auto Strike Impact Worries, Financial/Restaurant Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Around Even
  

• Sector Performance: Mixed
  

• Volume: Around Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 19.0 +.3%
• DJIA Intraday % Swing .93% +41.0%
  
• Bloomberg Global Risk On/Risk Off Index 69.6 +.1%

• Euro/Yen Carry Return Index 166.97 -.31%

• Emerging Markets Currency Volatility(VXY) 8.5 +1.1%

• CBOE S&P 500 Implied Correlation Index 29.1 +3.1% 

• ISE Sentiment Index 95.0 +25.0 points
  

• Total Put/Call 1.06 -5.4%

• NYSE Arms .95 -31.7%

Credit Investor Angst:

• North American Investment Grade CDS Index 75.3 +1.5%
  

• US Energy High-Yield OAS 334.13 -.6%
• Bloomberg TRACE # Distressed Bonds Traded 334 +9
  

• European Financial Sector CDS Index 92.61 +.7% 
• Deutsche Bank Subordinated 5Y Credit Default Swap 309.30 +3.4%
  

• Italian/German 10Y Yld Spread 195.0 basis points +2.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 128.1 +.26%
  

• Emerging Market CDS Index 225.90 +2.5%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 24.8 -.13%

• 2-Year SOFR Swap Spread -7.25 basis points +4.25 basis points
  

• TED Spread 17.75 basis points -2.75 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -12.0 -1.0 basis point
  
• MBS  5/10 Treasury Spread 180.0 +5.0 basis points
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 913.0 +3.0 basis points
  
• Avg. Auto ABS OAS 80.0 unch.
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 41.56 -.52%
• 3-Month T-Bill Yield 5.48% +4.0 basis points
  

• China Iron Ore Spot 115.8 USD/Metric Tonne -.64%
• Dutch TTF Nat Gas(European benchmark) 39.3 euros/megawatt-hour -2.5%

• Citi US Economic Surprise Index 48.3 +3.9 points

• Citi Eurozone Economic Surprise Index -46.5 +.8 point

• Citi Emerging Markets Economic Surprise Index 11.3 -.2
• S&P 500 Current Quarter EPS Growth Rate YoY(11 of 500 reporting) +9.7% +1.3 percentage points
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 239.77 +.05:  Growth Rate +9.1% unch., P/E 17.8 -.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 263.27 +.28: Growth Rate +58.8% +.2 percentage point, P/E 27.4 -.3
  
• Bloomberg US Financial Conditions Index .12 +6.0.0 basis points
  
• Bloomberg Euro-Zone Financial Conditions Index -.07 +3.0 basis points
  
• US Yield Curve -51.75 basis points (2s/10s) +6.0 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 2.35 +3.0 basis points
  
• Highest target rate probability for Dec. 13th FOMC meeting: 56.4%(-5.9 percentage points) chance of 5.25%-5.5%. Highest target rate probability for Jan. 31st meeting: 52.9%(-6.8 percentage points) chance of 5.25%-5.5%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -440 open in Japan 
• China A50 Futures: Indicating +10 open in China

• DAX Futures: Indicating +59 open in Germany

Portfolio:

• Higher:  On gains in my commodity/industrial sector longs, index hedges and emerging market shorts
  

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

• Market Exposure: 25% Net Long