Stocks Higher into Final Hour on Lower Long-Term Rates, More Massive US Deficit Spending Expectations, Short-Covering, Alt Energy/Transport Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Higher
  

• Sector Performance: Almost Sector Rising
  

• Volume: Around Average

• Market Leading Stocks: Outperforming
  

Equity Investor Angst:

• Volatility(VIX) 17.0 -4.2%
• DJIA Intraday % Swing .87% -59.3%
  
• Bloomberg Global Risk On/Risk Off Index 71.7 +1.4%

• Euro/Yen Carry Return Index 167.8 +.46%

• Emerging Markets Currency Volatility(VXY) 8.9 -.23%

• CBOE S&P 500 Implied Correlation Index 24.5 -4.6% 

• ISE Sentiment Index 104.0 +13.0 points
  

• Total Put/Call .88 -18.5%

• NYSE Arms .66 -40.0%

Credit Investor Angst:

• North American Investment Grade CDS Index 74.1 -1.6%
  

• US Energy High-Yield OAS 352.6 -1.2%
• Bloomberg TRACE # Distressed Bonds Traded 380 unch.
  

• European Financial Sector CDS Index 95.2 -5.3% 
• Deutsche Bank Subordinated 5Y Credit Default Swap 314.4 -4.7%
  

• Italian/German 10Y Yld Spread 195.0 basis points -11.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 129.9 -3.8%
  

• Emerging Market CDS Index 228.09 -1.6%
• Israel Sovereign CDS 97.3 +4.5%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 24.8 +.6%

• 2-Year SOFR Swap Spread -10.5 basis points -.5 basis point
  

• TED Spread 18.5 basis points +2.5 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -30.25 +.25 basis point
  
• MBS  5/10 Treasury Spread 180.0 +2.0 basis point
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 909.0 unch.
  
• Avg. Auto ABS OAS 82.0 unch.
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 41.25 +.24%
• 3-Month T-Bill Yield 5.48% -2.0 basis points
  

• China Iron Ore Spot 111.8 USD/Metric Tonne  +.9%
• Dutch TTF Nat Gas(European benchmark) 49.5 euros/megawatt-hour +12.5%

• Citi US Economic Surprise Index 56.8 -1.5 points

• Citi Eurozone Economic Surprise Index -39.3 +1.1 points

• Citi Emerging Markets Economic Surprise Index 12.3 -.7 point
• S&P 500 Current Quarter EPS Growth Rate YoY(21 of 500 reporting) +4.9% +1.5 percentage points
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 240.13 +.02:  Growth Rate +9.2% unch., P/E 18.3 +.4
  
• S&P 500 Current Year Estimated Profit Margin 12.19% unch.
  
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(0 of 10 reporting) n/a
  
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 266.66 +.97: Growth Rate +57.3% -2.9 percentage points, P/E 29.1 +.5
  
• Bloomberg US Financial Conditions Index -.02 -9.0 basis points
  
• Bloomberg Euro-Zone Financial Conditions Index -1.03 -93.0 basis points
  
• US Yield Curve -32.75 basis points (2s/10s) -4.25 basis points
  
• US Atlanta Fed 2Q GDPNow Forecast +4.86% unch.
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +3.73% unch.: CPI YoY +3.69% unch.
  
• 10-Year TIPS Spread 2.32 unch.
  
• Highest target rate probability for Dec. 13th FOMC meeting: 72.5%(-2.4 percentage points) chance of 5.25%-5.5%. Highest target rate probability for Jan. 31st meeting: 69.6%(+1.1 percentage points) chance of 5.25%-5.5%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +139 open in Japan 
• China A50 Futures: Indicating +108 open in China

• DAX Futures: Indicating +79 open in Germany

Portfolio:

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

• Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges and some of my emerging market shorts
  

• Market Exposure: Moved to 75% Net Long