Stocks Sharply Higher into Afternoon on Diminished Yen Carry Trade Unwind Fears, Fed Rate-Cut Hopes, Bargain-Hunting, Tech/Transport Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Higher
  

• Sector Performance: Almost Every Sector Rising
  

• Volume: Above Average
  

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 26.2 -32.0%
• DJIA Intraday % Swing 1.58 +13.1%
  
• Bloomberg Global Risk On/Risk Off Index 32.5 +38.6%

• Euro/Yen Carry Return Index 174.5 +.41%

• Emerging Markets Currency Volatility(VXY) 9.3 unch.

• CBOE S&P 500 Implied Correlation Index 28.3 -20.3% 

• ISE Sentiment Index 144.0 +49.0
  

• Total Put/Call 1.07 -16.4%

• NYSE Arms .85 -34.1%
  
• NYSE Non-Block Money Flow +$122.0M 
  

Credit Investor Angst:

• North American Investment Grade CDS Index 60.1 -1.5%
  

• US Energy High-Yield OAS 331.60 -5.4%
• Bloomberg TRACE # Distressed Bonds Traded 288 +14
  

• European Financial Sector CDS Index 74.4 +.02%
  
• Deutsche Bank Subordinated 5Y Credit Default Swap 195.2 +.44%
  

• Italian/German 10Y Yld Spread 145.0 basis points -4.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 105.0 +.8%
  

• Emerging Market CDS Index 186.1 -.7%
  
• Israel Sovereign CDS 143.9 +2.1%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 24.9 +.97%

• 2-Year SOFR Swap Spread -19.25 basis points -.75 basis point
  

• Treasury Repo 3M T-Bill Spread -12.0 basis points -.5 basis point
  

• 3-Month EUR/USD Cross-Currency Basis Swap -2.25 +1.5 basis points
  
• MBS  5/10 Treasury Spread 140.0 +2.0 basis points
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 701.0 +11.0 basis points
  
• Avg. Auto ABS OAS 63.0 +1.0 basis point
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 38.8 -.23%
• 3-Month T-Bill Yield 5.2% -1.0 basis point
  

• China Iron Ore Spot 102.3 USD/Metric Tonne -.2%
• Dutch TTF Nat Gas(European benchmark) 36.7 euros/megawatt-hour +3.3%

• Citi US Economic Surprise Index -37.6 +1.5 points

• Citi Eurozone Economic Surprise Index -51.5 +4.4 points

• Citi Emerging Markets Economic Surprise Index -5.5 -1.5 points
• S&P 500 Current Quarter EPS Growth Rate YoY(407 of 500 reporting) +10.8% -.4 percentage point
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 263.53 -.05:  Growth Rate +15.4% unch., P/E 19.7 -.1
  
• S&P 500 Current Year Estimated Profit Margin 12.78% +1.0 basis point
  
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(7 of 10 reporting) +25.9% unch.
  
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 340.31 -.18: Growth Rate +26.9% unch., P/E 29.8 -.2
  
• Bloomberg US Financial Conditions Index -.44 -60.0 basis points
  
• Bloomberg Euro-Zone Financial Conditions Index -.09 -31.0 basis points
  
• US Yield Curve -11.0 basis points (2s/10s) +.5 basis point
  
• US Atlanta Fed 3Q GDPNow Forecast +2.55% unch.
  
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 70.3% -2.6 percentage points
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +2.73% unch.: CPI YoY +3.01% unch.
  
• 10-Year TIPS Spread 2.12 +5.0 basis points
  
• Highest target rate probability for Nov. 7th FOMC meeting: 54.9%(+9.9 percentage points) chance of 4.5%-4.75%. Highest target rate probability for Dec. 18th meeting: 49.1%(+14.1 percentage points) chance of 4.25%-4.5%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -700 open in Japan 
• China A50 Futures: Indicating -63 open in China

• DAX Futures: Indicating +133 open in Germany

Portfolio:

• Slightly Higher:  On gains in my tech/industrial/biotech/consumer discretionary/utility sector longs
  

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

• Market Exposure: Moved to 50% Net Long