Stocks Reversing Modestly Higher into Close on Falling Fed Rate-Hike Odds, US Debt Flight to Safety Hopes, More Massive US Deficit Spending Expectations, Energy/Defense Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Modestly Lower
  

• Sector Performance: Most Sectors Rising
  

• Volume: Below Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 17.7 +1.4%
• DJIA Intraday % Swing 2.15% +35.5%
  
• Bloomberg Global Risk On/Risk Off Index 70.7 -1.8%

• Euro/Yen Carry Return Index 167.0 -.75%

• Emerging Markets Currency Volatility(VXY) 8.86 +.5%

• CBOE S&P 500 Implied Correlation Index 25.9 -2.9% 

• ISE Sentiment Index 109.0 +12.0 points
  

• Total Put/Call .98 unch.

• NYSE Arms 1.20 +56.6%

Credit Investor Angst:

• North American Investment Grade CDS Index 75.29 -.92%
  

• US Energy High-Yield OAS 356.98 -1.4%
• Bloomberg TRACE # Distressed Bonds Traded 380 -3
  

• European Financial Sector CDS Index 100.54 +1.3% 
• Deutsche Bank Subordinated 5Y Credit Default Swap 330.0 +.4%
  

• Italian/German 10Y Yld Spread 206.0 basis points +3.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 134.8 -.23%
  

• Emerging Market CDS Index 234.9 +.4%
• Israel Sovereign CDS 93.10 +57.6%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 24.69 -.08%

• 2-Year SOFR Swap Spread -10.0 basis points -.5 basis point
  

• TED Spread 16.0 basis points unch.
  

• 3-Month EUR/USD Cross-Currency Basis Swap -32.5 -6.25 basis points
  
• MBS  5/10 Treasury Spread 178.0 +1.0 basis point
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 909.0 -1.0 basis point
  
• Avg. Auto ABS OAS 82.0 -2.0 basis points
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 41.2 -.11%
• 3-Month T-Bill Yield 5.51% unch.
  

• China Iron Ore Spot 110.6 USD/Metric Tonne  -1.6%
• Dutch TTF Nat Gas(European benchmark) 43.9 euros/megawatt-hour +15.0%

• Citi US Economic Surprise Index 58.3 -1.4 points

• Citi Eurozone Economic Surprise Index -40.4 +2.9 points

• Citi Emerging Markets Economic Surprise Index 13.0 -2.5 points
• S&P 500 Current Quarter EPS Growth Rate YoY(20 of 500 reporting) +3.4% unch.
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 240.11 +.10:  Growth Rate +9.2% unch., P/E 17.9 unch.
  
• S&P 500 Current Year Estimated Profit Margin 12.19% -1.0 basis point
  
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(0 of 10 reporting) n/a
  
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 265.69 +.36: Growth Rate +60.2% +.2 percentage point, P/E 28.6 unch.
  
• Bloomberg US Financial Conditions Index .7 -4.0 basis points
  
• Bloomberg Euro-Zone Financial Conditions Index -.10 +3.0 basis points
  
• US Yield Curve -28.5 basis points (2s/10s) +2.0 basis points
  
• US Atlanta Fed 2Q GDPNow Forecast +4.86% -1.0 basis point
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +3.73% unch.: CPI YoY +3.69% unch.
  
• 10-Year TIPS Spread 2.32 +1.0 basis point
  
• Highest target rate probability for Dec. 13th FOMC meeting: 74.9%(+17.3 percentage points) chance of 5.25%-5.5%. Highest target rate probability for Jan. 31st meeting: 69.1%(+12.4 percentage points) chance of 5.25%-5.5%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +310 open in Japan 
• China A50 Futures: Indicating +12 open in China

• DAX Futures: Indicating +180 open in Germany

Portfolio:

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

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

• Market Exposure: Moved to 50% Net Long