Stocks Reversing Lower into Afternoon on Escalating Mid-East Regional War Fears, US Policy-Induced Stagflation Concerns, Earnings Outlook Worries, Regional Bank/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) 21.1 +2.0%
• DJIA Intraday % Swing .73% -20.9%
  
• Bloomberg Global Risk On/Risk Off Index 62.2 -3.7%

• Euro/Yen Carry Return Index 168.6 -.51%

• Emerging Markets Currency Volatility(VXY) 8.26 -1.3%

• CBOE S&P 500 Implied Correlation Index 34.6 +9.5% 

• ISE Sentiment Index 108.0 -6.0
  

• Total Put/Call 1.16 +2.7%

• NYSE Arms 1.22 +45.2%

Credit Investor Angst:

• North American Investment Grade CDS Index 82.0 +2.0%
  

• US Energy High-Yield OAS 374.28 +.55%
• Bloomberg TRACE # Distressed Bonds Traded 346 +4
  

• European Financial Sector CDS Index 102.1 -.95% 
• Deutsche Bank Subordinated 5Y Credit Default Swap 293.08 -1.5%
  

• Italian/German 10Y Yld Spread 197.0 basis points -4.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 138.2 -.14%
  

• Emerging Market CDS Index 239.76 +.4%
• Israel Sovereign CDS 144.08 -.11%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 24.7 unch.

• 2-Year SOFR Swap Spread -11.5 basis points -.5 basis point
  

• TED Spread 20.25 basis points -1.0 basis point
  

• 3-Month EUR/USD Cross-Currency Basis Swap -25.5 -1.0 basis point
  
• MBS  5/10 Treasury Spread 187.0 -1.0 basis point
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 926.0 -6.0 basis points
  
• Avg. Auto ABS OAS 93.0 unch.
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 41.2 +.09%
• 3-Month T-Bill Yield 5.45% -1.0 basis point
  

• China Iron Ore Spot 119.2 USD/Metric Tonne -.43%
• Dutch TTF Nat Gas(European benchmark) 50.5 euros/megawatt-hour -.6%

• Citi US Economic Surprise Index 63.7 +2.5 points

• Citi Eurozone Economic Surprise Index -44.1 -1.5 points

• Citi Emerging Markets Economic Surprise Index 26.4 -1.0 point
• S&P 500 Current Quarter EPS Growth Rate YoY(246 of 500 reporting) +5.8% -5.3 percentage points
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 240.15 +.06:  Growth Rate +9.2% unch., P/E 17.3 unch.
  
• S&P 500 Current Year Estimated Profit Margin 12.11% unch.
  
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(6 of 10 reporting) +51.9% +16.9 percentage points
  
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 269.87 +1.48: Growth Rate +59.2% +.9 percentage point, P/E 26.7 -.7
  
• Bloomberg US Financial Conditions Index -.30 -1.0 basis point
  
• Bloomberg Euro-Zone Financial Conditions Index -.11 -7.0 basis points
  
• US Yield Curve -17.0 basis points (2s/10s) -.5 basis point
  
• US Atlanta Fed 3Q GDPNow Forecast +2.26% n/a
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +3.63% -7.0 basis points: CPI YoY +3.32% unch.
  
• 10-Year TIPS Spread 2.43 +1.0 basis point
  
• Highest target rate probability for Dec. 13th FOMC meeting: 72.1%(-8.0 percentage points) chance of 5.25%-5.5%. Highest target rate probability for Jan. 31st meeting: 65.1%(-6.7 percentage points) chance of 5.25%-5.5%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -432 open in Japan 
• China A50 Futures: Indicating -73 open in China

• DAX Futures: Indicating +3 open in Germany

Portfolio:

• Higher:  On gains in my tech sector longs and index hedges
  

• Disclosed Trades: Added to my (IWM)/(QQQ) hedges and to my emerging market shorts
  

• Market Exposure: Moved to Market Neutral