Stocks Rising into Final Hour on US-Global Trade Deal Optimism, Technical Buying, Short-Covering, Energy/Homebuilding Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Higher
  

• Sector Performance: Mixed

• Volume: Around Average

• Market Leading Stocks: Performing In Line

Equity Investor Angst:

• Volatility(VIX) 17.9 +4.8%
• S&P 500 Intraday % Swing .34 -55.0%
• Bloomberg Global Risk On/Risk Off Index 72.0 -2.4% 
• Swiss Franc/Offshore Chinese Renminbi Cross 8.74 -.04%

• Euro/Yen Carry Return Index 186.2 +.27%

• Emerging Markets Currency Volatility(VXY) 7.96 -2.1%

• CBOE S&P 500 Implied Correlation Index 19.9 -.7% 

• ISE Sentiment Index 143.0 +5.0

• Total Put/Call .86 +13.2%

• NYSE Arms 1.21 -8.33%
• NYSE Non-Block Money Flow +$60.0M 
  

Credit Investor Angst:

• North American Investment Grade CDS Index 53.5 -.5%
  

• US Energy High-Yield OAS 375.0 -4.0%
• Bloomberg TRACE # Distressed Bonds Traded 210.0 -8.0

• European Financial Sector CDS Index 59.6 -.5%
  
• Deutsche Bank Subordinated 5Y Credit Default Swap 138.7 -.6%
  

• Italian/German 10Y Yld Spread 91.0 basis points -1.0 basis point

• Asia Ex-Japan Investment Grade CDS Index 72.70 -1.1%
  

• Emerging Market CDS Index 161.2 -1.3%
• Israel Sovereign CDS 97.2 -.3%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 23.87 +.4%

• 2-Year SOFR Swap Spread -22.25 basis points unch.

• 3M T-Bill Treasury Repo Spread 6.25 basis point -1.25 basis points

• 3-Month EUR/USD Cross-Currency Basis Swap -1.75 unch.
• MBS  5/10 Treasury Spread 152.0 unch.
• Bloomberg CMBS Investment Grade Bbb Average OAS 606.0 +1.0 basis point
• Avg. Auto ABS OAS 56.0 unch.

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 37.1 +.03% 
• US 10-Year T-Note Yield 4.47% -1.0 basis point
• 3-Month T-Bill Yield 4.33% -1.0 basis point

• China Iron Ore Spot 94.8 USD/Metric Tonne +.5%
• Dutch TTF Nat Gas(European benchmark) 34.6 euros/megawatt-hour -2.7%

• Citi US Economic Surprise Index -4.3 +.9 point

• Citi Eurozone Economic Surprise Index 27.7 +1.7 points

• Citi Emerging Markets Economic Surprise Index 34.8 -.2 point
• S&P 500 Current Quarter EPS Growth Rate YoY(499 of 500 reporting) +12.7% unch.
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 277.46 +.01:  Growth Rate +9.2% unch., P/E 21.7 unch.
• S&P 500 Current Year Estimated Profit Margin 13.23% -1.0 basis point
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(10 of 10 reporting) +33.0% unch.
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 430.68 +.17: Growth Rate +15.3% unch., P/E 32.8 -.2
• Bloomberg US Financial Conditions Index .46 -3.0 basis points
• Bloomberg Euro-Zone Financial Conditions Index 1.53 +8.0 basis points
• Bloomberg Global Trade Policy Uncertainty Index 5.4 -.4
• US Yield Curve 46.0 basis points (2s/10s) -1.75 basis points
• US Atlanta Fed GDPNow Q2 Forecast +3.8% unch.
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 38.4% +1.1 percentage points

• Cleveland Fed Inflation Nowcast Core PCE YoY +2.65% unch.: CPI YoY +2.40% unch.
• 1-Year TIPS Spread 2.74 -3.0 basis points
• 10-Year TIPS Spread 2.30 -2.0 basis points
• Highest target rate probability for July 30th FOMC meeting:  85.5% (+2.2 percentage points) chance of 4.25%-4.5%. Highest target rate probability for Sept. 17th meeting: 53.6%(+.5 percentage point) chance of 4.0%-4.25%. (current target rate is 4.25-4.5%)
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +313 open in Japan 
• China A50 Futures: Indicating -72 open in China

• DAX Futures: Indicating +32 open in Germany

Portfolio:

• Slightly Higher: On gains in my tech/financial/utility/consumer discretionary sector longs
• Disclosed Trades: None
• Market Exposure: 100% Net Long