Stocks Reversing Slightly Higher into Final Hour on Fed Rate-Cut Hopes, Lower Long-Term Rates, Technical Buying, Financial/Healthcare Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Modestly Higher
  

• Sector Performance: Most Sectors Rising
  

• 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 -.07%
• 3-Month T-Bill Yield 4.87% -3.0 basis points
  

• China Iron Ore Spot 92.7 USD/Metric Tonne +1.6%
• Dutch TTF Nat Gas(European benchmark) 34.1 euros/megawatt-hour -4.4%

• Citi US Economic Surprise Index -17.1 +4.7 points
  

• Citi Eurozone Economic Surprise Index -31.1 +6.2 points

• Citi Emerging Markets Economic Surprise Index -6.3 -1.9 points
• S&P 500 Current Quarter EPS Growth Rate YoY(2 of 500 reporting) +15.7% n/a
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 266.91 +.27:  Growth Rate +14.2% +.1 percentage point, P/E 21.0 -.1
  
• S&P 500 Current Year Estimated Profit Margin 12.67% unch.
  
• 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 349.75 +.62: Growth Rate +22.8% +.2 percentage point, P/E 31.7 -.4
  
• Bloomberg US Financial Conditions Index .57 -7.0 basis points
  
• Bloomberg Euro-Zone Financial Conditions Index .79 +7.0 basis points
  
• US Yield Curve 5.75 basis point (2s/10s) -1.25 basis points
  
• US Atlanta Fed 3Q GDPNow Forecast +2.47% unch.
  
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 70.9% -1.8 percentage points
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +2.77% unch.: CPI YoY +2.29% unch.
  
• 10-Year TIPS Spread 2.09 +1.0 basis point
  
• Highest target rate probability for Nov. 7th FOMC meeting: 50.7%(+.7 percentage point) chance of 4.5%-4.75%. Highest target rate probability for Dec. 18th meeting: 44.2%(+2.9 percentage points) chance of 4.0%-4.25%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +14 open in Japan 
• China A50 Futures: Indicating +19 open in China

• DAX Futures: Indicating +90 open in Germany

Portfolio:

• Higher:  On gains in my biotech/industrial/consumer discretionary/utility sector longs and index hedges
  

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

• Market Exposure: Moved to 100% Net Long