Stocks Reversing Slightly Lower into Afternoon on Rising Long-Term Rates, Dollar Strength, Technical Selling, Utility/Food Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Higher
  

• Sector Performance: Almost Every Sector Rising
  

• Volume: Below Average

• Market Leading Stocks: Outperforming
  

Equity Investor Angst:

• Volatility(VIX) 13.1 -3.2%
• DJIA Intraday % Swing .74%
  
• Bloomberg Global Risk On/Risk Off Index 70.1 +2.2%

• Euro/Yen Carry Return Index 167.0 -.13%

• Emerging Markets Currency Volatility(VXY) 8.6 -.35%

• CBOE S&P 500 Implied Correlation Index 18.8 -.84% 

• ISE Sentiment Index 103.0 -23.0 points
  

• Total Put/Call .92 -3.2%

• NYSE Arms .70 -46.6%

Credit Investor Angst:

• North American Investment Grade CDS Index 63.6 +.44%
  

• US Energy High-Yield OAS 312.12 -1.57%
• Bloomberg TRACE # Distressed Bonds Traded 364.0 +18.0
  

• European Financial Sector CDS Index 80.3 -1.2% 
• Deutsche Bank Subordinated 5Y Credit Default Swap 261.3 -.27%
  

• Italian/German 10Y Yld Spread 169.0 basis points +4.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 123.2 -4.5%
  

• Emerging Market CDS Index 198.67 -1.5%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 24.94 +.69%

• 2-Year SOFR Swap Spread -10.25 basis points -.25 basis point
  

• TED Spread 24.25 basis points +2.5 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -11.5 -.75 basis point
  
• MBS  5/10 Treasury Spread 163.0 -6.0 basis points
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 804.0 +7.0 basis points
  
• Avg. Auto ABS OAS 73.0 -1.0 basis point
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 42.6 -.08%
• 3-Month T-Bill Yield 5.42% -3.0 basis points
  

• China Iron Ore Spot 116.1 USD/Metric Tonne +1.8%
• Dutch TTF Nat Gas(European benchmark) 35.6 euros/megawatt-hour +1.7%

• Citi US Economic Surprise Index 52. +5.7 points

• Citi Eurozone Economic Surprise Index -62.1 -4.0 points

• Citi Emerging Markets Economic Surprise Index 6.1 +8.8 points
• S&P 500 Current Quarter EPS Growth Rate YoY(496 of 500 reporting) -5.6%  +.4 percentage point
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 237.79 +.05:  Growth Rate +8.2% unch., P/E 18.9 -.1
  
• S&P 500 Current Year Estimated Profit Margin 12.21% +1.0 basis point
  
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(10 of 10 reporting) +24.3% unch.
  
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 243.88 +.27: Growth Rate +47.1% +.2 percentage point, P/E 32.0 -.3
  
• Bloomberg US Financial Conditions Index .47 +3.0 basis points
  
• Bloomberg Euro-Zone Financial Conditions Index .10 -7.0 basis points
  
• US Yield Curve -69.0 basis points (2s/10s) +9.0 basis points
  
• US Atlanta Fed 2Q GDPNow Forecast +5.63% unch.
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +4.03% unch.: CPI YoY +3.82% unch.
  
• 10-Year TIPS Spread 2.27 +2.0 basis points
  
• Highest target rate probability for Nov. 1st FOMC meeting: 63.9%(+5.0 percentage points) chance of 5.25%-5.5%. Highest target rate probability for Dec. 13th meeting: 61.3%(+4.2 percentage points) chance of 5.25%-5.5%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +20 open in Japan 
• China A50 Futures: Indicating +88 open in China

• DAX Futures: Indicating +39 open in Germany

Portfolio:

• Higher:  On gains in my tech/industrial/transport sector longs
  

• Disclosed Trades: None
  

• Market Exposure: 75% Net Long