Stocks Reversing Slightly Higher into Close on Yen Weakness, China Stimulus Hopes, Short-Covering, Tech/Alt Energy Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Modestly Lower
  

• Sector Performance: Mixed
  

• Volume: Around Average
  

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 18.9 -1.8%
• DJIA Intraday % Swing .69 -9.5%
  
• Bloomberg Global Risk On/Risk Off Index 57.1 +2.2%

• Euro/Yen Carry Return Index 178.7 +1.7%

• Emerging Markets Currency Volatility(VXY) 9.0 +1.0%

• CBOE S&P 500 Implied Correlation Index 19.0 -1.1% 

• ISE Sentiment Index 148.0 -5.0 points
  

• Total Put/Call 1.0 +12.4%

• NYSE Arms .61 -39.0%
  
• NYSE Non-Block Money Flow -$329.8M 
  

Credit Investor Angst:

• North American Investment Grade CDS Index 53.9 -.8%
  

• US Energy High-Yield OAS 331.6 -.72%
• Bloomberg TRACE # Distressed Bonds Traded 249 -6
  

• European Financial Sector CDS Index 67.5 -.5%
  
• Deutsche Bank Subordinated 5Y Credit Default Swap 176.3 -.9%
  

• Italian/German 10Y Yld Spread 133.0 basis points unch.
  

• Asia Ex-Japan Investment Grade CDS Index 71.0 +2.8%
  

• Emerging Market CDS Index 163.7 -.44%
  
• Israel Sovereign CDS 159.7 +2.1%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 25.1 unch.

• 2-Year SOFR Swap Spread -20.0 basis points +.75 basis point
  

• 3M T-Bill Treasury Repo Spread -33.5 basis points -4.25 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -8.75 -1.0 basis point
  
• MBS  5/10 Treasury Spread 127.0 -1.0 basis point
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 717.0 +3.0 basis points
  
• Avg. Auto ABS OAS 67.0 unch.
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 38.8 -.11%
• 3-Month T-Bill Yield 4.59% unch.
  

• China Iron Ore Spot 108.8 USD/Metric Tonne +.6%
• Dutch TTF Nat Gas(European benchmark) 38.6 euros/megawatt-hour -1.7%

• Citi US Economic Surprise Index 3.8 +1.2 points
  

• Citi Eurozone Economic Surprise Index -45.3 +2.8 basis points

• Citi Emerging Markets Economic Surprise Index -3.2 +.3 point
• S&P 500 Current Quarter EPS Growth Rate YoY(21 of 500 reporting) +18.5% -6.4 percentage points
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 266.19 -.76:  Growth Rate +14.3% unch., P/E 21.5 +.1
  
• S&P 500 Current Year Estimated Profit Margin 12.65% -2.0 basis points
  
• 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 365.02 +.17: Growth Rate +28.2% +.1 percentage point, P/E 31.0 +.2
  
• Bloomberg US Financial Conditions Index .67 -4.0 basis points
  
• Bloomberg Euro-Zone Financial Conditions Index .72 -11.0 basis points
  
• US Yield Curve 14.75 basis point (2s/10s) +2.5 basis points
  
• US Atlanta Fed 3Q GDPNow Forecast +2.54% unch.
  
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 61.8 +.6 percentage point
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +2.58% unch.: CPI YoY +2.25% unch.
  
• 10-Year TIPS Spread 2.22 +3.0 basis points
  
• Highest target rate probability for Dec. 18th FOMC meeting: 48.5%(-.4 percentage point) chance of 4.0%-4.25%. Highest target rate probability for Jan. 29th meeting: 45.7%(-.2 percentage point) chance of 3.75%-4.0%. (current target rate is 4.75-5.0%)
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +1,062 open in Japan 
• China A50 Futures: Indicating +1,013 open in China

• DAX Futures: Indicating +145 open in Germany

Portfolio:

• Slightly Higher:  On gains in my industrial/tech sector longs and index hedges
  

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

• Market Exposure: Moved to 50% Net Long