Stocks Reversing Lower into Afternoon on Escalating Mid-East Regional War Worries, Rising Fed Rate-Hike Odds, Surging Long-Term Rates, Tech/Pharma Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Higher
  

• Sector Performance: Most Sectors Rising
  

• Volume: Around Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 17.4 +1.2%
• DJIA Intraday % Swing .86% +13.1%
  
• Bloomberg Global Risk On/Risk Off Index 72.7 +2.1%

• Euro/Yen Carry Return Index 168.7 +.32%

• Emerging Markets Currency Volatility(VXY) 8.39 -1.1%

• CBOE S&P 500 Implied Correlation Index 25.1 +4.6% 

• ISE Sentiment Index 104.0 -5.0 points
  

• Total Put/Call .94 -13.0%

• NYSE Arms .66 +65.0%

Credit Investor Angst:

• North American Investment Grade CDS Index 75.1 unch.
  

• US Energy High-Yield OAS 354.4 -.58%
• Bloomberg TRACE # Distressed Bonds Traded 361 -3
  

• European Financial Sector CDS Index 96.43 -.4% 
• Deutsche Bank Subordinated 5Y Credit Default Swap 299.5 +.3%
  

• Italian/German 10Y Yld Spread 201.0 basis points +3.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 127.3 +.43%
  

• Emerging Market CDS Index 233.02 +.01%
• Israel Sovereign CDS 127.7 -1.3%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 24.78 unch.

• 2-Year SOFR Swap Spread -12.75 basis points -.75 basis point
  

• TED Spread 17.75 basis points -.25 basis point
  

• 3-Month EUR/USD Cross-Currency Basis Swap -26.75 +.75 basis point
  
• MBS  5/10 Treasury Spread 186.0 -1.0 basis point
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 909.0 -4.0 basis points
  
• Avg. Auto ABS OAS 88.0 +2.0 basis points
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 41.3 -.02%
• 3-Month T-Bill Yield 5.49% +1.0 basis point
  

• China Iron Ore Spot 118.2 USD/Metric Tonne +.6%
• Dutch TTF Nat Gas(European benchmark) 48.9 euros/megawatt-hour +.9%

• Citi US Economic Surprise Index 55.5 +3.7 points

• Citi Eurozone Economic Surprise Index -37.4 +4.4 points

• Citi Emerging Markets Economic Surprise Index 18.4 -.7 point
• S&P 500 Current Quarter EPS Growth Rate YoY(39 of 500 reporting) +7.7% -4.6 percentage points
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 236.22 -3.32:  Growth Rate +8.3% -.8 percentage point, P/E 18.5 +.2
  
• S&P 500 Current Year Estimated Profit Margin 12.27% +2.0 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 267.38 +.10: Growth Rate +57.7% unch., P/E 28.6 -.1
  
• Bloomberg US Financial Conditions Index .13 unch.
  
• Bloomberg Euro-Zone Financial Conditions Index -.20 +6.0 basis points
  
• US Yield Curve -37.5 basis points (2s/10s) +2.0 basis points
  
• US Atlanta Fed 2Q GDPNow Forecast +5.15% unch.
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +3.70% unch.: CPI YoY +3.36% -6.0 basis points
  
• 10-Year TIPS Spread 2.41 +3.0 basis points
  
• Highest target rate probability for Dec. 13th FOMC meeting: 55.9%(-9.8 percentage points) chance of 5.25%-5.5%. Highest target rate probability for Jan. 31st meeting: 47.8%(-15.2 percentage points) chance of 5.25%-5.5%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +50 open in Japan 
• China A50 Futures: Indicating -33 open in China

• DAX Futures: Indicating +90 open in Germany

Portfolio:

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

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

• Market Exposure: Moved to 25% Net Long