Stocks Slightly Higher into Final Hour on Earnings Outlook Optimism, Rotation into FANG, Technical Buying, Transport/Regional Bank Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Lower
  

• Sector Performance: Most Sectors Declining
  

• Volume: Below Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 12.6 -1.8%
• DJIA Intraday % Swing .66 -38.5%
  
• Bloomberg Global Risk On/Risk Off Index 57.8 +2.6%

• Euro/Yen Carry Return Index 188.0 +.3%

• Emerging Markets Currency Volatility(VXY) 7.8 +2.2%

• CBOE S&P 500 Implied Correlation Index 9.6 -7.5% 

• ISE Sentiment Index 165.0 +19.0
  

• Total Put/Call .70 -22.2%

• NYSE Arms .86 -47.2%
  
• NYSE Non-Block Money Flow -$355.5M 
  

Credit Investor Angst:

• North American Investment Grade CDS Index 53.98 +.06%
  

• US Energy High-Yield OAS 271.43 -.64%
• Bloomberg TRACE # Distressed Bonds Traded 265 +6
  

• European Financial Sector CDS Index 72.5 +2.2%
  
• Deutsche Bank Subordinated 5Y Credit Default Swap 184.2 +.32%
  

• Italian/German 10Y Yld Spread 154.0 basis points +2.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 100.0 -.9%
  

• Emerging Market CDS Index 172.4 +.43%
  
• Israel Sovereign CDS 134.4 +.6%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 24.87 -.12%

• 2-Year SOFR Swap Spread -13.75 basis points +4.25 basis points
  

• Treasury Repo 3M T-Bill Spread 5.5 basis points -.25 basis point
  

• 3-Month EUR/USD Cross-Currency Basis Swap -3.5 +.75 basis point
  
• MBS  5/10 Treasury Spread 148.0 +1.0 basis point
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 718.0 -3.0 basis points
  
• Avg. Auto ABS OAS 62.0 -1.0 basis point
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 38.97 -.14%
• 3-Month T-Bill Yield 5.37% +1.0 basis point
  

• China Iron Ore Spot 106.6 USD/Metric Tonne -.08%
• Dutch TTF Nat Gas(European benchmark) 33.8 euros/megawatt-hour -3.0%

• Citi US Economic Surprise Index -26.9 -.9 point

• Citi Eurozone Economic Surprise Index -13.7 -.3 point

• Citi Emerging Markets Economic Surprise Index 10.7 -.1 point
• S&P 500 Current Quarter EPS Growth Rate YoY(13 of 500 reporting) +6.2% -.8 percentage point
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 260.67 +.08:  Growth Rate +14.3% +.1 percentage point, P/E 21.0 unch.
  
• S&P 500 Current Year Estimated Profit Margin 12.86% unch.
  
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(0 of 10 reporting) n/a
  
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 328.61 +.26: Growth Rate +22.5% +.1 percentage point, P/E 34.3 +.4
  
• Bloomberg US Financial Conditions Index .96 +2.0 basis points
  
• Bloomberg Euro-Zone Financial Conditions Index .55 -4.0 basis points
  
• US Yield Curve -43.25 basis points (2s/10s) +7.0 basis points
  
• US Atlanta Fed 2Q GDPNow Forecast +3.0% unch.
  
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 53.6% -.1 percentage point
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +2.56% unch.: CPI YoY +3.12% unch.
  
• 10-Year TIPS Spread 2.26 +4.0 basis points
  
• Highest target rate probability for Sept. 18th FOMC meeting: 56.3%(-2.7 percentage points) chance of 5.0%-5.25%. Highest target rate probability for Nov. 7th meeting: 50.3%(+.4 percentage point) chance of 5.0%-5.25%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -247 open in Japan 
• China A50 Futures: Indicating -208 open in China

• DAX Futures: Indicating +183 open in Germany

Portfolio:

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

• Disclosed Trades: None
  

• Market Exposure: 100% Net Long