Stocks Substantially Lower into Final Hour on US Policy-Induced Stagflation Fears, Escalating Mid-East Tensions, VP Harris "Poll Gains", Tech/Energy Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Lower
  

• Sector Performance: Almost Every Sector Declining
  

• Volume: Heavy

• Market Leading Stocks: Underperforming
  

Equity Investor Angst:

• Volatility(VIX) 26.8 +44.3%
• DJIA Intraday % Swing 1.78 -19.8%
  
• Bloomberg Global Risk On/Risk Off Index 36.0 -24.0%

• Euro/Yen Carry Return Index 176.2 -.6%

• Emerging Markets Currency Volatility(VXY) 8.2 +6.1%

• CBOE S&P 500 Implied Correlation Index 25.5 +45.3% 

• ISE Sentiment Index 110.0 +4.0
  

• Total Put/Call 1.16 +27.5%

• NYSE Arms 1.60 +9.6%
  
• NYSE Non-Block Money Flow -$669.9M 
  

Credit Investor Angst:

• North American Investment Grade CDS Index 58.2 +6.5%
  

• US Energy High-Yield OAS 334.0 +11.4%
• Bloomberg TRACE # Distressed Bonds Traded 260 -2
  

• European Financial Sector CDS Index 71.2 +7.8%
  
• Deutsche Bank Subordinated 5Y Credit Default Swap 183.4 +6.9%
  

• Italian/German 10Y Yld Spread 146.0 basis points +6.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 98.9 +3.3%
  

• Emerging Market CDS Index 182.8 +4.9%
  
• Israel Sovereign CDS 139.1 +7.3%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 24.9 -.33%

• 2-Year SOFR Swap Spread -18.5 basis points -1.25 basis points
  

• Treasury Repo 3M T-Bill Spread -15.5 basis points -7.5 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -3.25 -1.5 basis points
  
• MBS  5/10 Treasury Spread 134.0-7.0 basis points
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 688.0 unch.
  
• Avg. Auto ABS OAS 62.0 unch.
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 39.0 +.1%
• 3-Month T-Bill Yield 5.19% -7.0 basis points
  

• China Iron Ore Spot 102.8 USD/Metric Tonne -1.0%
• Dutch TTF Nat Gas(European benchmark) 36.6 euros/megawatt-hour -.9%

• Citi US Economic Surprise Index -40.6 -6.2 points

• Citi Eurozone Economic Surprise Index -49.7 -1.4 points

• Citi Emerging Markets Economic Surprise Index -5.0 +.9 point
• S&P 500 Current Quarter EPS Growth Rate YoY(376 of 500 reporting) +11.0% -.5 percentage point
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 263.48 +.35:  Growth Rate +15.4% +.2 percentage point, P/E 20.3 -.5
  
• S&P 500 Current Year Estimated Profit Margin 12.78% -4.0 basis points
  
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(7 of 10 reporting) +25.9% +2.3 percentage points
  
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 338.49 +1.86: Growth Rate +26.2% +.7 percentage point, P/E 31.4 -1.3
  
• Bloomberg US Financial Conditions Index .56 +2.0 basis points
  
• Bloomberg Euro-Zone Financial Conditions Index .51 -4.0 basis points
  
• US Yield Curve -8.75 basis points (2s/10s) +9.25 basis points
  
• US Atlanta Fed 3Q GDPNow Forecast +2.55% -28.0 basis points
  
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 65.4% unch.
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +2.73% unch.: CPI YoY +3.01% unch.
  
• 10-Year TIPS Spread 2.03 -16.0 basis points
  
• Highest target rate probability for Nov. 7th FOMC meeting: 46.0%(+46.0 percentage points) chance of 4.25%-4.5%. Highest target rate probability for Dec. 18th meeting: 46.3%(+43.7 percentage points) chance of 4.0%-4.25%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -1,080 open in Japan 
• China A50 Futures: Indicating -58 open in China

• DAX Futures: Indicating +149 open in Germany

Portfolio:

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

• Disclosed Trades: Added to my (IWM)/(QQQ) hedges and to my emerging market shorts, then covered some of my (IWM)/(QQQ) hedges
  

• Market Exposure: Moved to 25% Net Long