Stocks Reversing Lower into Afternoon on US Auto Strike Concerns, US Govt Shutdown Worries, Technical Selling, Energy/Homebuilding Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Modestly Higher
  

• Sector Performance: Mixed
  

• Volume: Around Average

• Market Leading Stocks: Outperforming
  

Equity Investor Angst:

• Volatility(VIX) 17.4 +.2%
• DJIA Intraday % Swing 1.3% +58.9%
  
• Bloomberg Global Risk On/Risk Off Index 71.8 -2.1%

• Euro/Yen Carry Return Index 168.0 +.17%

• Emerging Markets Currency Volatility(VXY) 8.6 -1.3%

• CBOE S&P 500 Implied Correlation Index 26.8 +3.8% 

• ISE Sentiment Index 97.0 +8.0 points
  

• Total Put/Call .99 +1.0%

• NYSE Arms 1.24 +53.1%

Credit Investor Angst:

• North American Investment Grade CDS Index 73.18 +.01%
  

• US Energy High-Yield OAS 330.12 -.18%
• Bloomberg TRACE # Distressed Bonds Traded 342 +2
  

• European Financial Sector CDS Index 90.53 -.47% 
• Deutsche Bank Subordinated 5Y Credit Default Swap 302.57 -.39%
  

• Italian/German 10Y Yld Spread 194.0 basis points unch.
  

• Asia Ex-Japan Investment Grade CDS Index 127.5 -1.2%
  

• Emerging Market CDS Index 225.5 +1.7%
  

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

• 2-Year SOFR Swap Spread -7.75 basis points +.25 basis point
  

• TED Spread 21.0 basis points +3.0 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -35.5 +.25 basis point
  
• MBS  5/10 Treasury Spread 172.0 -2.0 basis points
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 907.0 -7.0 basis points
  
• Avg. Auto ABS OAS 79.0 unch.
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 41.8 +.23%
• 3-Month T-Bill Yield 5.45% unch.
  

• China Iron Ore Spot 120.5 USD/Metric Tonne +.5%
• Dutch TTF Nat Gas(European benchmark) 41.9 euros/megawatt-hour -2.9%

• Citi US Economic Surprise Index 45.1 -3.8 points

• Citi Eurozone Economic Surprise Index -54.0 -13.2 points

• Citi Emerging Markets Economic Surprise Index 11.9 -1.0 point
• S&P 500 Current Quarter EPS Growth Rate YoY(16 of 500 reporting) +1.5% +12.7 percentage points
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 239.50 -.05:  Growth Rate +9.0% unch., P/E 18.0 unch.
  
• S&P 500 Current Year Estimated Profit Margin 12.14% unch.
  
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(0 of 10 reporting) n/a
  
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 263.91 +.29: Growth Rate +59.2% +.2 percentage point, P/E 28.1 +.2
  
• Bloomberg US Financial Conditions Index .09 +1.0 basis point
  
• Bloomberg Euro-Zone Financial Conditions Index -.73 -58.0 basis points
  
• US Yield Curve -48.75 basis points (2s/10s) -.5 basis point
  
• US Atlanta Fed 2Q GDPNow Forecast +4.92% unch.
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +3.73% -22.0 basis points: CPI YoY +3.69% unch.
  
• 10-Year TIPS Spread 2.34 -4.0 basis points
  
• Highest target rate probability for Dec. 13th FOMC meeting: 65.6%(+1.6 percentage points) chance of 5.25%-5.5%. Highest target rate probability for Jan. 31st meeting: 64.3%(+.3 percentage points) chance of 5.25%-5.5%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -70 open in Japan 
• China A50 Futures: Indicating +104 open in China

• DAX Futures: Indicating +100 open in Germany

Portfolio:

• Slightly Higher:  On gains in my tech sector longs, index hedges and emerging market shorts
  

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

• Market Exposure: Moved to 50% Net Long