Stocks Slightly Lower into Final Hour on US Policy-Induced Stagflation Fears, Rising European Debt Angst, Earnings Outlook Worries, Alt Energy/Transport Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Lower
  

• Sector Performance: Almost Every Sector Declining
  

• Volume: Below Average

• Market Leading Stocks: Underperforming
  

Equity Investor Angst:

• Volatility(VIX) 12.6 +5.1%
• DJIA Intraday % Swing .73 +5.2%
  
• Bloomberg Global Risk On/Risk Off Index 58.2 -4.5%

• Euro/Yen Carry Return Index 184.3 -.2%

• Emerging Markets Currency Volatility(VXY) 7.7 +2.1%

• CBOE S&P 500 Implied Correlation Index 9.7 +5.1% 

• ISE Sentiment Index 133.0 -4.0
  

• Total Put/Call .99 -2.0%

• NYSE Arms 1.31 -2.2%
  
• NYSE Non-Block Money Flow -$359.3M 
  

Credit Investor Angst:

• North American Investment Grade CDS Index 53.5 +4.8%
  

• US Energy High-Yield OAS 292.1 +4.7%
• Bloomberg TRACE # Distressed Bonds Traded 288 -12
  

• European Financial Sector CDS Index 74.6 +16.2%
  
• Deutsche Bank Subordinated 5Y Credit Default Swap 187.5 +7.2%
  

• Italian/German 10Y Yld Spread 157.0 basis points +10.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 98.7 +3.4%
  

• Emerging Market CDS Index 171.0 +2.6%
  
• Israel Sovereign CDS 124.8 +1.5%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 24.86 -.06%

• 2-Year SOFR Swap Spread -16.25 basis points -1.75 basis points
  

• Treasury Repo 3M T-Bill Spread 6.75 basis points -.25 basis point
  

• 3-Month EUR/USD Cross-Currency Basis Swap -6.0 -1.5 basis points
  
• MBS  5/10 Treasury Spread 145.0 +4.0 basis points
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 724.0 unch.
  
• Avg. Auto ABS OAS 60.0 +2.0 basis point
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 39.0 -.81%
• 3-Month T-Bill Yield 5.38% unch.
  

• China Iron Ore Spot 107.0 USD/Metric Tonne -.4%
• Dutch TTF Nat Gas(European benchmark) 35.4 euros/megawatt-hour -1.0%

• Citi US Economic Surprise Index -19.9 -5.7 points

• Citi Eurozone Economic Surprise Index 25.4 -.2 point

• Citi Emerging Markets Economic Surprise Index 6.2 unch.
• S&P 500 Current Quarter EPS Growth Rate YoY(499 of 500 reporting) +7.9% +.1 percentage point
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 259.10 +.20:  Growth Rate +13.6% +.1 percentage point, P/E 20.9 unch.
  
• S&P 500 Current Year Estimated Profit Margin 12.83% unch.
  
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(9 of 10 reporting) +52.9% unch.
  
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 333.94 +1.82: Growth Rate +24.5% +.7 percentage point, P/E 33.5 unch.
  
• Bloomberg US Financial Conditions Index 1.04 -5.0 basis points
  
• Bloomberg Euro-Zone Financial Conditions Index .82 -19.0 basis points
  
• US Yield Curve -47.5 basis points (2s/10s) -2.75 basis points
  
• US Atlanta Fed 2Q GDPNow Forecast +3.1% unch.
  
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 55.7% +5.5 percentage points
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +2.56% unch.: CPI YoY +3.15% unch.
  
• 10-Year TIPS Spread 2.18 -4.0 basis points
  
• Highest target rate probability for Sept. 18th FOMC meeting: 59.9%(-1.2 percentage points) chance of 5.0%-5.25%. Highest target rate probability for Nov. 7th meeting: 47.2%(-2.5 percentage points) chance of 5.0%-5.25%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -344 open in Japan 
• China A50 Futures: Indicating -48 open in China

• DAX Futures: Indicating +10 open in Germany

Portfolio:

• Slightly Lower:  On losses in my biotech/industrial/consumer discretionary sector longs
  

• Disclosed Trades: None
  

• Market Exposure: 100% Net Long