Stocks Reversing Lower into Final Hour on Inflation Worries, Earnings Outlook Jitters, Technical Selling, Tech/Homebuilding Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Around Even
  

• Sector Performance: Mixed
  

• Volume: Below Average

• Market Leading Stocks: Outperforming
  

Equity Investor Angst:

• Volatility(VIX) 14.1 +2.0%
• DJIA Intraday % Swing .84%
  
• Bloomberg Global Risk On/Risk Off Index 72.2 +.2%

• Euro/Yen Carry Return Index 167.5 +.19%

• Emerging Markets Currency Volatility(VXY) 8.6 -.6%

• CBOE S&P 500 Implied Correlation Index 20.3 +4.1% 

• ISE Sentiment Index 105.0 -4.0 points
  

• Total Put/Call .88 -15.4%

• NYSE Arms .68 -23.6%

Credit Investor Angst:

• North American Investment Grade CDS Index 64.2 +1.1%
  

• US Energy High-Yield OAS 309.10 -.12%
• Bloomberg TRACE # Distressed Bonds Traded 339.0 +12
  

• European Financial Sector CDS Index 82.3 +1.4% 
• Deutsche Bank Subordinated 5Y Credit Default Swap 271.9 +.47%
  

• Italian/German 10Y Yld Spread 176.0 basis points unch.
  

• Asia Ex-Japan Investment Grade CDS Index 118.5 -2.5%
  

• Emerging Market CDS Index 205.65 +2.0%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 24.93 -.08%

• 2-Year SOFR Swap Spread -10.5 basis points +.25 basis point
  

• TED Spread 25.25 basis points +3.25 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -10.75 +.5 basis point
  
• MBS  5/10 Treasury Spread 168.0 +2.0 basis points
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 866.0 +59.0 basis points
  
• Avg. Auto ABS OAS 75.0 unch.
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 42.3 -.05%
• 3-Month T-Bill Yield 5.42% -2.0 basis points
  

• China Iron Ore Spot 117.9 USD/Metric Tonne -.97%
• Dutch TTF Nat Gas(European benchmark) 34.7 euros/megawatt-hour -3.2%

• Citi US Economic Surprise Index 57.2 -1.3 points

• Citi Eurozone Economic Surprise Index -68.4 +2.9 points

• Citi Emerging Markets Economic Surprise Index 10.5 +1.1 points
• S&P 500 Current Quarter EPS Growth Rate YoY(497 of 500 reporting) -5.6%  +.2 percentage point
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 238.84 +.24:  Growth Rate +8.7% +.1 percentage point, P/E 18.7 unch.
  
• S&P 500 Current Year Estimated Profit Margin 12.14% +1.0 basis point
  
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(10 of 10 reporting) +25.4% unch.
  
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 246.76 +.45: Growth Rate +48.8% +.3 percentage point, P/E 31.9 -.1
  
• Bloomberg US Financial Conditions Index .42 -6.0 basis points
  
• Bloomberg Euro-Zone Financial Conditions Index .20 -1.0 basis point
  
• US Yield Curve -74.0 basis points (2s/10s) -3.25 basis points
  
• US Atlanta Fed 2Q GDPNow Forecast +5.57% unch.
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +4.03% unch.: CPI YoY +3.82% unch.
  
• 10-Year TIPS Spread 2.34 -1.0 basis point
  
• Highest target rate probability for Nov. 1st FOMC meeting: 56.4%(-2.3 percentage points) chance of 5.25%-5.5%. Highest target rate probability for Dec. 13th meeting: 55.8%(+.7 percentage point) chance of 5.25%-5.5%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -126 open in Japan 
• China A50 Futures: Indicating +43 open in China

• DAX Futures: Indicating +2 open in Germany

Portfolio:

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

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

• Market Exposure: Moved to 50% Net Long