Stocks Reverse Lower into Close on US Policy-Induced Stagflation Fears, Higher Long-Term Rates, Escalating Middle-East War Concerns, Tech/Alt Energy Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Higher
  

• Sector Performance: Mixed
  

• Volume: Around Average
  

• Market Leading Stocks: Outperforming
  

Equity Investor Angst:

• Volatility(VIX) 17.0 +2.7%
• DJIA Intraday % Swing .99 unch.
  
• Bloomberg Global Risk On/Risk Off Index 49.5 -2.1%

• Euro/Yen Carry Return Index 172.8 +.25%

• Emerging Markets Currency Volatility(VXY) 8.61 +.7%

• CBOE S&P 500 Implied Correlation Index 18.5 +4.6% 

• ISE Sentiment Index 120.0 -13.0 points
  

• Total Put/Call .84 -8.7%

• NYSE Arms .87 -3.3%
  
• NYSE Non-Block Money Flow +$244.5M 
  

Credit Investor Angst:

• North American Investment Grade CDS Index 49.3 -1.2%
  

• US Energy High-Yield OAS 336.3 +.43%
• Bloomberg TRACE # Distressed Bonds Traded 276 -11
  

• European Financial Sector CDS Index 61.1 -.1%
  
• Deutsche Bank Subordinated 5Y Credit Default Swap 163.0 -.2%
  

• Italian/German 10Y Yld Spread 136.0 basis points unch.
  

• Asia Ex-Japan Investment Grade CDS Index 96.7 -.6%
  

• Emerging Market CDS Index 162.1 -1.3%
  
• Israel Sovereign CDS 133.6 +2.0%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 24.76 +.03%

• 2-Year SOFR Swap Spread -20.75 basis points unch.
  

• 3M T-Bill Treasury Repo Spread -45.5 basis points -4.0 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -2.0 -.25 basis point
  
• MBS  5/10 Treasury Spread 122.0 -4.0 basis points
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 707.0 unch.
  
• Avg. Auto ABS OAS 65.0 -1.0 basis point
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 39.0 +.03%
• 3-Month T-Bill Yield 4.75% -10.0 basis points
  

• China Iron Ore Spot 91.05 USD/Metric Tonne +.36%
• Dutch TTF Nat Gas(European benchmark) 35.24 euros/megawatt-hour +.85%

• Citi US Economic Surprise Index -12.3 +1.8 points
  

• Citi Eurozone Economic Surprise Index -28.2 +5.4 points

• Citi Emerging Markets Economic Surprise Index -7.0 -.4 point
• S&P 500 Current Quarter EPS Growth Rate YoY(3 of 500 reporting) +13.3% -2.4 percentage points
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 266.83 +.14:  Growth Rate +14.0% -.1 percentage point, P/E 21.1 -.1
  
• S&P 500 Current Year Estimated Profit Margin 12.66% -1.0 basis point
  
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(0 of 10 reporting) n/a n/a
  
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 350.26 +.17: Growth Rate +23.0% +.2 percentage point, P/E 31.7 -.4
  
• Bloomberg US Financial Conditions Index .59 +5.0 basis points
  
• Bloomberg Euro-Zone Financial Conditions Index .67 -3.0 basis points
  
• US Yield Curve 8.75 basis point (2s/10s) +4.0 basis points
  
• US Atlanta Fed 3Q GDPNow Forecast +2.93% -6.0 basis points
  
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 69.5% -.9 percentage point
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +2.77% unch.: CPI YoY +2.27% unch.
  
• 10-Year TIPS Spread 2.12 +1.0 basis point
  
• Highest target rate probability for Dec. 24th FOMC meeting: 49.0%(+40.9 percentage points) chance of 4.5%-4.75%. Highest target rate probability for Jan. 29th meeting: 44.7%(+40.6 percentage points) chance of 4.25%-4.5%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +210 open in Japan 
• China A50 Futures: Indicating -18 open in China

• DAX Futures: Indicating +14 open in Germany

Portfolio:

• Lower:  On losses in my consumer discretionary/tech/utility sector longs
  

• Disclosed Trades: Added to my (IWM)/(QQQ) hedges
  

• Market Exposure: Moved to 75% Net Long