Stocks Reversing Lower into Afternoon on Surging Long-Term Rates, European/Emerging Markets/US High-Yield Debt Angst, Dollar Strength, Utility/Alt Energy Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Lower
  

• Sector Performance: Most Sectors Declining
  

• Volume: Around Average

• Market Leading Stocks: Underperforming
  

Equity Investor Angst:

• Volatility(VIX) 18.0 +2.7%
• DJIA Intraday % Swing .87% +67.5%
  
• Bloomberg Global Risk On/Risk Off Index 72.6 +5.2%

• Euro/Yen Carry Return Index 167.2 -.15%

• Emerging Markets Currency Volatility(VXY) 8.6 unch.

• CBOE S&P 500 Implied Correlation Index 27.4 +3.0% 

• ISE Sentiment Index 90.0 -8.0 points
  

• Total Put/Call 1.03 -1.9%

• NYSE Arms 1.37 +29.9%

Credit Investor Angst:

• North American Investment Grade CDS Index 75.4 +2.3%
  

• US Energy High-Yield OAS 337.99 +1.9%
• Bloomberg TRACE # Distressed Bonds Traded 345 +3
  

• European Financial Sector CDS Index 93.2 +2.98% 
• Deutsche Bank Subordinated 5Y Credit Default Swap 312.15 +3.2%
  

• Italian/German 10Y Yld Spread 188.0 basis points -6.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 127.77 -.13%
  

• Emerging Market CDS Index 231.44 +2.3%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 24.74 -.26%

• 2-Year SOFR Swap Spread -7.75 basis points unch.
  

• TED Spread 21.25 basis points +.25 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -31.5 +4.0 basis points
  
• MBS  5/10 Treasury Spread 178.0 +6.0 basis points
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 910.0 -3.0 basis points
  
• Avg. Auto ABS OAS 81.0 +2.0 basis points
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 41.5 -.63%
• 3-Month T-Bill Yield 5.47% +2.0 basis points
  

• China Iron Ore Spot 117.4 USD/Metric Tonne -.68%
• Dutch TTF Nat Gas(European benchmark) 39.3 euros/megawatt-hour -6.0%

• Citi US Economic Surprise Index 47.3 +2.2 points

• Citi Eurozone Economic Surprise Index -49.8 +4.2 points

• Citi Emerging Markets Economic Surprise Index 12.4 +.5 point
• S&P 500 Current Quarter EPS Growth Rate YoY(16 of 500 reporting) +1.5% unch.
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 240.50 +1.00:  Growth Rate +9.4% +.4 percentage point, P/E 17.8 -.2
  
• S&P 500 Current Year Estimated Profit Margin 12.23% +9.0 basis points
  
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(0 of 10 reporting) n/a
  
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 264.31 +.40: Growth Rate +59.4% +.2 percentage point, P/E 28.1 unch.
  
• Bloomberg US Financial Conditions Index .11 +5.0 basis points
  
• Bloomberg Euro-Zone Financial Conditions Index -.06 +67.0 basis points
  
• US Yield Curve -42.75 basis points (2s/10s) +6.0 basis points
  
• US Atlanta Fed 2Q GDPNow Forecast +4.87% -5.0 basis points
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +3.73% unch.: CPI YoY +3.69% unch.
  
• 10-Year TIPS Spread 2.35 +1.0 basis point
  
• Highest target rate probability for Dec. 13th FOMC meeting: 55.1%(-9.7 percentage points) chance of 5.25%-5.5%. Highest target rate probability for Jan. 31st meeting: 55.1%(-9.7 percentage points) chance of 5.25%-5.5%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -180 open in Japan 
• China A50 Futures: Indicating +69 open in China

• DAX Futures: Indicating +81 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