Stocks Reversing Modestly Higher into Afternoon on Falling Fed Rate-Hike Odds, Lower Long-Term Rates, Dollar Weakness, Tech/Homebuilding Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Modestly Higher
  

• Sector Performance: Most Sectors Rising
  

• Volume: Around Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 18.9 -4.4%
• DJIA Intraday % Swing .79% -36.6%
  
• Bloomberg Global Risk On/Risk Off Index 71.6 +.1%

• Euro/Yen Carry Return Index 166.6 +.35%

• Emerging Markets Currency Volatility(VXY) 8.9 +1.8%

• CBOE S&P 500 Implied Correlation Index 28.0 -2.9% 

• ISE Sentiment Index 99.0 +12.0 points
  

• Total Put/Call 1.17 +3.5%

• NYSE Arms 1.62 +126.7%

Credit Investor Angst:

• North American Investment Grade CDS Index 77.79 +.7%
  

• US Energy High-Yield OAS 361.91 +3.4%
• Bloomberg TRACE # Distressed Bonds Traded 368 +19
  

• European Financial Sector CDS Index 98.46 +2.5% 
• Deutsche Bank Subordinated 5Y Credit Default Swap 320.20 +.1%
  

• Italian/German 10Y Yld Spread 194.0 basis points -3.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 134.2 +3.6%
  

• Emerging Market CDS Index 237.82 -1.9%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 24.65 -.15%

• 2-Year SOFR Swap Spread -8.5 basis points +.25 basis point
  

• TED Spread 18.0 basis points +1.5 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -29.75 +2.75 basis points
  
• MBS  5/10 Treasury Spread 183.0 +1.0 basis point
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 913.0 -2.0 basis points
  
• Avg. Auto ABS OAS 81.0 unch.
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 41.2 unch.
• 3-Month T-Bill Yield 5.50% +2.0 basis points
  

• China Iron Ore Spot 115.2 USD/Metric Tonne -.27%
• Dutch TTF Nat Gas(European benchmark) 38.4 euros/megawatt-hour +3.9%

• Citi US Economic Surprise Index 50.3 +4.3 points

• Citi Eurozone Economic Surprise Index -48.0 +2.6 points

• Citi Emerging Markets Economic Surprise Index 16.5 +3.8 points
• S&P 500 Current Quarter EPS Growth Rate YoY(17 of 500 reporting) +1.4% unch.
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 239.88 -.79:  Growth Rate +9.1% -.5 percentage point, P/E 17.6 unch.
  
• S&P 500 Current Year Estimated Profit Margin 12.19% -6.0 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 264.76 +.31: Growth Rate +59.7% +.2 percentage point, P/E 28.1 +.3
  
• Bloomberg US Financial Conditions Index -.02 +2.0 basis points
  
• Bloomberg Euro-Zone Financial Conditions Index -.19 -7.0 basis points
  
• US Yield Curve -30.75 basis points (2s/10s) +4.0 basis points
  
• US Atlanta Fed 2Q GDPNow Forecast +4.87% unch.
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +3.73% unch.: CPI YoY +3.69% unch.
  
• 10-Year TIPS Spread 2.34 -1.0 basis point
  
• Highest target rate probability for Dec. 13th FOMC meeting: 64.2%(+10.9 percentage points) chance of 5.25%-5.5%. Highest target rate probability for Jan. 31st meeting: 61.9%(+8.5 percentage points) chance of 5.25%-5.5%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +80 open in Japan 
• China A50 Futures: Indicating -209 open in China

• DAX Futures: Indicating +137 open in Germany

Portfolio:

• Slightly Higher:  On gains in my tech/transport sector longs and emerging market shorts
  

• Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges
  

• Market Exposure: Moved to 75% Net Long