Stocks Reversing Lower into Final Hour on Less Dovish FOMC Commentary, Surging Long-Term Rates, European/Emerging Markets/US High-Yield Debt Angst, Financial/Healthcare Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Lower
  

• Sector Performance: Mixed
  

• Volume: Around Average

• Market Leading Stocks: Underperforming
  

Equity Investor Angst:

• Volatility(VIX) 15.0 +3.9%
• DJIA Intraday % Swing .73% -2.6%
  
• Bloomberg Global Risk On/Risk Off Index 63.7 -.25%

• Euro/Yen Carry Return Index 172.6 -.08%

• Emerging Markets Currency Volatility(VXY) 7.7 -1.3%

• CBOE S&P 500 Implied Correlation Index 24.3 +3.9% 

• ISE Sentiment Index 123.0 +4.0
  

• Total Put/Call .99 -16.8%

• NYSE Arms 1.08 -29.0% 
• NYSE Non-Block Money Flow +$1.4M 
  

Credit Investor Angst:

• North American Investment Grade CDS Index 70.36 +1.2%
  

• US Energy High-Yield OAS 346.09 -.37%
• Bloomberg TRACE # Distressed Bonds Traded 368 -8
  

• European Financial Sector CDS Index 87.2 -.59% 
• Deutsche Bank Subordinated 5Y Credit Default Swap 266.3 +.1%
  

• Italian/German 10Y Yld Spread 187.0 basis points +1.0 basis point
  

• Asia Ex-Japan Investment Grade CDS Index 114.1 +.79%
  

• Emerging Market CDS Index 215.46 +2.21%
• Israel Sovereign CDS 121.66 -.98%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 24.8 unch.

• 2-Year SOFR Swap Spread -16.25 basis points -1.0 basis point
  

• TED Spread 21.25 basis points +1.0 basis point
  

• 3-Month EUR/USD Cross-Currency Basis Swap -17.5 +1.25 basis points
  
• MBS  5/10 Treasury Spread 171.0 +1.0 basis point
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 909.0 +1.0 basis point
  
• Avg. Auto ABS OAS 99.0 +1.0 basis point
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 41.50 -.18%
• 3-Month T-Bill Yield 5.42% unch.
  

• China Iron Ore Spot 125.2 USD/Metric Tonne +.02%
• Dutch TTF Nat Gas(European benchmark) 48.1 euros/megawatt-hour +5.1%

• Citi US Economic Surprise Index 49.6 -1.0 point

• Citi Eurozone Economic Surprise Index -44.9 +.3 point

• Citi Emerging Markets Economic Surprise Index 22.5 +.3 point
• S&P 500 Current Quarter EPS Growth Rate YoY(453 of 500 reporting) +2.7% +.5 percentage point
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 239.80 -.04:  Growth Rate +8.5% +.1 percentage point, P/E 18.3 +.1
  
• S&P 500 Current Year Estimated Profit Margin 12.14% unch.
  
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(7 of 10 reporting) +38.4% unch.
  
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 274.74 -.10: Growth Rate +62.1% unch., P/E 28.8 +.4
  
• Bloomberg US Financial Conditions Index .17 +4.0 basis points
  
• Bloomberg Euro-Zone Financial Conditions Index .24 -57.0 basis points
  
• US Yield Curve -39.0 basis points (2s/10s) +1.75 basis points
  
• US Atlanta Fed 3Q GDPNow Forecast +2.06% -3.0 basis points
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +3.63% unch.: CPI YoY +3.28% unch.
  
• 10-Year TIPS Spread 2.36 unch.
  
• Highest target rate probability for Jan. 31st FOMC meeting: 74.9%(-8.0 percentage points) chance of 5.25%-5.5%. Highest target rate probability for March 20th meeting: 66.7%(-1.5 percentage points) chance of 5.25%-5.5%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -6 open in Japan 
• China A50 Futures: Indicating -40 open in China

• DAX Futures: Indicating +5 open in Germany

Portfolio:

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

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

• Market Exposure: Moved to 50% Net Long