Stocks Modestly Higher into Afternoon on Rising Fed Rate-Cut Odds, US Economic "Soft-Landing" Hopes, Technical Buying, Financial/Homebuilding Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Modestly Lower
  

• Sector Performance: Mixed
  

• Volume: Around Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 13.7 -3.3%
• DJIA Intraday % Swing .74% -5.2%
  
• Bloomberg Global Risk On/Risk Off Index 57.6 +2.9%

• Euro/Yen Carry Return Index 170.6 +.2%

• Emerging Markets Currency Volatility(VXY) 7.98 -.50%

• CBOE S&P 500 Implied Correlation Index 21.1 +.4% 

• ISE Sentiment Index 145.0 +1.0
  

• Total Put/Call 1.24 +31.9%

• NYSE Arms .89 +18.7% 
• NYSE Non-Block Money Flow -$219.3M 
  

Credit Investor Angst:

• North American Investment Grade CDS Index 59.0 -1.8%
  

• US Energy High-Yield OAS 346.4 -.57%
• Bloomberg TRACE # Distressed Bonds Traded 297 +26
  

• European Financial Sector CDS Index 72.66 -1.5% 
• Deutsche Bank Subordinated 5Y Credit Default Swap 223.47 +.54%
  

• Italian/German 10Y Yld Spread 170.0 basis points +1.0 basis point
  

• Asia Ex-Japan Investment Grade CDS Index 102.5 +3.6%
  

• Emerging Market CDS Index 181.73 -1.3%
• Israel Sovereign CDS 112.61 -.44%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 24.27 +.51%

• 2-Year SOFR Swap Spread -16.75 basis points +.25 basis point
  

• TED Spread 22.25 basis points +1.5 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -4.5 -1.25 basis points
  
• MBS  5/10 Treasury Spread 149.0 unch.
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 966.0 unch.
  
• Avg. Auto ABS OAS 75.0 -1.0 basis point
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 41.36 +.02%
• 3-Month T-Bill Yield 5.37% -1.0 basis point
  

• China Iron Ore Spot 138.5 USD/Metric Tonne -.06%
• Dutch TTF Nat Gas(European benchmark) 34.55 euros/megawatt-hour +3.4%

• Citi US Economic Surprise Index 6.1 -.3 point

• Citi Eurozone Economic Surprise Index -31.3 -.9 point

• Citi Emerging Markets Economic Surprise Index 15.5 unch.
• S&P 500 Current Quarter EPS Growth Rate YoY(21 of 500 reporting) +9.1% +.1 percentage point
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 243.48 +.05:  Growth Rate +11.9% unch., P/E 19.3 -.1
  
• S&P 500 Current Year Estimated Profit Margin 12.04% -1.0 basis point
  
• 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 290.03 +.13: Growth Rate +36.0% +.1 percentage point, P/E 29.1 unch.
  
• Bloomberg US Financial Conditions Index n/a
  
• Bloomberg Euro-Zone Financial Conditions Index .40 +7.0 basis points
  
• US Yield Curve -35.5 basis points (2s/10s) +4.25 basis points
  
• US Atlanta Fed 4Q GDPNow Forecast +2.51% unch.
  
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 63.0% -2.7 percentage points
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +3.02% unch.: CPI YoY +3.32% unch.
  
• 10-Year TIPS Spread 2.23 +1.0 basis point
  
• Highest target rate probability for March 20th FOMC meeting: 62.1%(-.2 percentage point) chance of 5.0%-5.25%. Highest target rate probability for May 1st meeting: 53.2%(+4.3 percentage points) chance of 4.75%-5.0%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +48 open in Japan 
• China A50 Futures: Indicating -14 open in China

• DAX Futures: Indicating +137 open in Germany

Portfolio:

• Slightly Lower:  On losses in my index hedges and emerging market shorts
  

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

• Market Exposure: Moved to 50% Net Long