Stocks Slightly Higher into Final Hour on Falling Long-Term Rates, Rising Fed Rate-Cut Odds, Earnings Outlook Optimism, Tech/Homebuilding Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Lower
  

• Sector Performance: Mixed

• Volume: Below Average

• Market Leading Stocks: Performing In Line

Equity Investor Angst:

• Volatility(VIX) 17.0 -1.1%
• S&P 500 Intraday % Swing .40 -54.8%
• Bloomberg Global Risk On/Risk Off Index 78.6 -1.6% 
• Swiss Franc/Offshore Chinese Renminbi Cross 8.88 +.1%

• Euro/Yen Carry Return Index 195.0 -.01%

• Emerging Markets Currency Volatility(VXY) 7.10 -.4%

• CBOE S&P 500 Implied Correlation Index 17.1 +2.5% 

• ISE Sentiment Index 141.0 +1.0

• Total Put/Call .83 -9.8%

• NYSE Arms 1.46 +108.5%
• NYSE Non-Block Money Flow -$220.4M 
  

Credit Investor Angst:

• North American Investment Grade CDS Index 51.3 +.4%
  

• US Energy High-Yield OAS 370.1 -.5%
• Bloomberg TRACE # Distressed Bonds Traded 200.0 -11.0

• European Financial Sector CDS Index 59.6 -2.8%
  
• Deutsche Bank Subordinated 5Y Credit Default Swap 132.6 -.6%
  

• Italian/German 10Y Yld Spread 87.0 -1.0 basis point

• Asia Ex-Japan Investment Grade CDS Index 65.2 -.6%
  

• Emerging Market CDS Index 146.8 -.1%
• Israel Sovereign CDS 73.4 -.5%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 24.31 +.06%

• 2-Year SOFR Swap Spread -23.0 basis points unch.

• 3M T-Bill Treasury Repo Spread -24.5 basis points -4.25 basis points

• 3-Month EUR/USD Cross-Currency Basis Swap 1.5 +.5 basis point
• MBS  5/10 Treasury Spread 137.0 -1.0 basis point
• Bloomberg CMBS Investment Grade Bbb Average OAS 580.0 -3.0 basis points
• Avg. Auto ABS OAS 50.0 -1.0 basis point

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 36.43 +.06%
• US 10-Year T-Note Yield 4.21% -5.0 basis points
• 3-Month T-Bill Yield 4.12% -1.0 basis point

• China Iron Ore Spot 103.3 USD/Metric Tonne +.06%
• Dutch TTF Nat Gas(European benchmark) 32.1 euros/megawatt-hour +1.1%

• Citi US Economic Surprise Index 25.8 -5.4 points

• Citi Eurozone Economic Surprise Index 25.8 -5.4 points

• Citi Emerging Markets Economic Surprise Index 12.4 +2.3 points
• S&P 500 Current Quarter EPS Growth Rate YoY(491 of 500 reporting) +12.4% unch.
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 290.03 +.08:  Growth Rate +10.8% unch., P/E 22.2 +.3
• S&P 500 Current Year Estimated Profit Margin 13.51% -1.0 basis point
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(9 of 10 reporting) +27.9% unch.
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 476.37 +.10: Growth Rate +16.6% +.1 percentage point, P/E 32.3 +.8
• Bloomberg US Financial Conditions Index .53 -4.0 basis points
• Bloomberg Euro-Zone Financial Conditions Index 1.31 -71.0 basis points
• Bloomberg Global Trade Policy Uncertainty Index 4.3 -.1
• US Yield Curve 59.75 basis points (2s/10s) -1.75 basis points
• US Atlanta Fed GDPNow Q2 Forecast +3.0% unch.
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 41.8% -2.6 percentage points

• Cleveland Fed Inflation Nowcast Core PCE YoY +2.95% unch.: CPI YoY +2.84% unch.
• 1-Year TIPS Spread 2.72 -3.0 basis points
• 10-Year TIPS Spread 2.41 -1.0 basis point
• Highest target rate probability for Oct. 29th FOMC meeting: 53.0% (+5.4 percentage points) chance of 3.75%-4.0%. Highest target rate probability for Dec. 10th meeting: 46.3%(-2.3 percentage points) chance of 3.75%-4.0%. (current target rate is 4.25-4.5%)
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +20 open in Japan 
• China A50 Futures: Indicating +36 open in China

• DAX Futures: Indicating -9 open in Germany

Portfolio:

• Slightly Higher: On gains in my tech/consumer discretionary/utility sector longs
• Disclosed Trades: None
• Market Exposure: 75% Net Long