Stocks Slightly Higher into Final Hour on Stable Long-Term Rates, Sector Rotation, Short-Covering, Commodity/Financial Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Modestly Higher
  

• Sector Performance: Most Sectors Rising
  

• Volume: Below Average

• Market Leading Stocks: Outperforming
  

Equity Investor Angst:

• Volatility(VIX) 13.4 +1.4%
• DJIA Intraday % Swing .99 +97.7%
  
• Bloomberg Global Risk On/Risk Off Index 57.2 +.5%

• Euro/Yen Carry Return Index 187.7 +.3%

• Emerging Markets Currency Volatility(VXY) 7.6 -.7%

• CBOE S&P 500 Implied Correlation Index 11.3 +10.7% 

• ISE Sentiment Index 147.0 +19.0
  

• Total Put/Call .95 +11.8%

• NYSE Arms .99 -7.5%
  
• NYSE Non-Block Money Flow +$127.9M 
  

Credit Investor Angst:

• North American Investment Grade CDS Index 52.9 -.6%
  

• US Energy High-Yield OAS 275.3 -.29%
• Bloomberg TRACE # Distressed Bonds Traded 258 +6
  

• European Financial Sector CDS Index 70.2 -4.3%
  
• Deutsche Bank Subordinated 5Y Credit Default Swap 183.3 -2.6%
  

• Italian/German 10Y Yld Spread 151.0 basis points -2.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 100.1 +.5%
  

• Emerging Market CDS Index 171.9 -.07%
  
• Israel Sovereign CDS 132.2 +2.0%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 24.9 -.16%

• 2-Year SOFR Swap Spread -18.25 basis points -.5 basis point
  

• Treasury Repo 3M T-Bill Spread 5.0 basis points -.75 basis point
  

• 3-Month EUR/USD Cross-Currency Basis Swap -5.5 -.5 basis point
  
• MBS  5/10 Treasury Spread 144.0 +1.0 basis point
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 717.0 -1.0 basis point
  
• Avg. Auto ABS OAS 61.0 +1.0 basis point
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 39.1 +.2%
• 3-Month T-Bill Yield 5.35% -1.0 basis point
  

• China Iron Ore Spot 103.2 USD/Metric Tonne +.6%
• Dutch TTF Nat Gas(European benchmark) 34.1 euros/megawatt-hour +.4%

• Citi US Economic Surprise Index -26.7 -1.1 point

• Citi Eurozone Economic Surprise Index -14.2 -4.4 points

• Citi Emerging Markets Economic Surprise Index 10.3 +.4 point
• S&P 500 Current Quarter EPS Growth Rate YoY(9 of 500 reporting) +2.0% -1.8 percentage points
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 260.12 +.60:  Growth Rate +14.0% +.2 percentage point, P/E 21.1 unch.
  
• S&P 500 Current Year Estimated Profit Margin 12.83% unch.
  
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(0 of 10 reporting) n/a
  
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 336.15 +1.53: Growth Rate +25.3% +.6 percentage point, P/E 33.0 -.9
  
• Bloomberg US Financial Conditions Index .97 -1.0 basis point
  
• Bloomberg Euro-Zone Financial Conditions Index .54 -2.0 basis points
  
• US Yield Curve -49.0 basis points (2s/10s) -1.0 basis point
  
• US Atlanta Fed 2Q GDPNow Forecast +3.0% -10.0 basis points
  
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 52.9% -2.0 percentage points
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +2.56% unch.: CPI YoY +3.13% unch.
  
• 10-Year TIPS Spread 2.23 unch.
  
• Highest target rate probability for Sept. 18th FOMC meeting: 61.1%(+1.6 percentage points) chance of 5.0%-5.25%. Highest target rate probability for Nov. 7th meeting: 50.3%(-.2 percentage point) chance of 5.0%-5.25%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +40 open in Japan 
• China A50 Futures: Indicating +24 open in China

• DAX Futures: Indicating +101 open in Germany

Portfolio:

• Modestly Higher:  On gains in my industrial/consumer discretionary/biotech/financial sector longs
  

• Disclosed Trades: None
  

• Market Exposure: 75% Net Long