Stocks Lower into Final Hour on Declining Fed Rate-Cut Odds, Escalating Mid-East Regional War Concerns, European/Emerging Markets/US High-Yield Debt Angst, Consumer Discretionary/Regional Bank 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) 13.6 +3.3%
• DJIA Intraday % Swing .59% -20.6%
  
• Bloomberg Global Risk On/Risk Off Index 52.3 -5.8%

• Euro/Yen Carry Return Index 168.4 +.8%

• Emerging Markets Currency Volatility(VXY) 8.15 -.12%

• CBOE S&P 500 Implied Correlation Index 20.4 +6.1% 

• ISE Sentiment Index 146.0 +8.0
  

• Total Put/Call 1.04 +11.8%

• NYSE Arms .91 +13.8% 
• NYSE Non-Block Money Flow -$219.2M 
  

Credit Investor Angst:

• North American Investment Grade CDS Index 59.7 +2.9%
  

• US Energy High-Yield OAS 358.05 +1.8%
• Bloomberg TRACE # Distressed Bonds Traded 250 -3
  

• European Financial Sector CDS Index 74.4 +5.7% 
• Deutsche Bank Subordinated 5Y Credit Default Swap 220.0 +3.5%
  

• Italian/German 10Y Yld Spread 168.0 basis points +3.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 96.24 +6.9%
  

• Emerging Market CDS Index 182.2 +3.7%
• Israel Sovereign CDS 111.92 +.39%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 24.1 unch.

• 2-Year SOFR Swap Spread -17.75 basis points +.5 basis point
  

• TED Spread 19.5 basis points +2.5 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -2.5 -.25 basis point
  
• MBS  5/10 Treasury Spread 147.0 -2.0 basis points
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 966.0 unch.
  
• Avg. Auto ABS OAS 77.0 +1.0 basis point
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 41.32 -.26%
• 3-Month T-Bill Yield 5.39% +2.0 basis points
  

• China Iron Ore Spot 141.4 USD/Metric Tonne -.92%
• Dutch TTF Nat Gas(European benchmark) 32.80 euros/megawatt-hour +7.3%

• Citi US Economic Surprise Index .4 -.7 point

• Citi Eurozone Economic Surprise Index -40.0 +.5 point

• Citi Emerging Markets Economic Surprise Index 14.4 +.6 point
• S&P 500 Current Quarter EPS Growth Rate YoY(17 of 500 reporting) +13.5% unch.
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 243.42 +.06:  Growth Rate +11.8% unch., P/E 19.4 -.1
  
• S&P 500 Current Year Estimated Profit Margin 12.04% unch.
  
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(0 of 10 reporting) +0.0% -0.0 percentage points
  
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 289.62 +.07: Growth Rate +35.8% +.1 percentage point, P/E 29.1 -.4
  
• Bloomberg US Financial Conditions Index n/a
  
• Bloomberg Euro-Zone Financial Conditions Index .44 -30.0 basis points
  
• US Yield Curve -42.0 basis points (2s/10s) -2.75 basis points
  
• US Atlanta Fed 4Q GDPNow Forecast +2.03% unch.
  
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 65.8% -1.2 percentage points
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +3.02% unch.: CPI YoY +3.32% unch.
  
• 10-Year TIPS Spread 2.20 -1.0 basis point
  
• Highest target rate probability for March 20th FOMC meeting: 68.1%(-1.5 percentage points) chance of 5.0%-5.25%. Highest target rate probability for May 1st meeting: 60.6%(-4.3 percentage points) chance of 4.75%-5.0%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -249 open in Japan 
• China A50 Futures: Indicating -18 open in China

• DAX Futures: Indicating +159 open in Germany

Portfolio:

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

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

• Market Exposure: Moved to 50% Net Long