Stocks Falling Substantially into Final Hour on Growing Fed Rate-Cut Uncertainty, AI Infrastructure Buildout Worries, Profit-Taking, Tech/Alt Energy Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Lower
  

• Sector Performance: Most Sectors Declining

• Volume: Around Average

• Market Leading Stocks: Underperforming

Equity Investor Angst:

• Volatility(VIX) 20.8 +18.9%
• S&P 500 Intraday % Swing 1.03 +74.7%
• Bloomberg Global Risk On/Risk Off Index 82.6 -2.6% 
• Swiss Franc/Offshore Chinese Renminbi Cross 8.96 +.5%

• Euro/Yen Carry Return Index 203.5 +.16%

• Emerging Markets Currency Volatility(VXY) 6.38 +2.1%

• CBOE S&P 500 Implied Correlation Index 18.6 +17.9% 

• ISE Sentiment Index 135.0 -18.0

• Total Put/Call .80 +1.3%

• NYSE Arms .87 -2.3%
• NYSE Non-Block Money Flow -$228.8M 
  

Credit Investor Angst:

• North American Investment Grade CDS Index 53.5 +2.5%
  

• US Energy Sector High-Yield OAS Index 355.8 +2.0%
• US Tech Sector High-Yield OAS Index 430.54 +3.1%
• Bloomberg TRACE # Distressed Bonds Traded 221.0 -24.0

• European Financial Sector CDS Index 58.57 +1.8%
  

• Italian/German 10Y Yld Spread 73.0 unch.

• Asia Ex-Japan Investment Grade CDS Index 65.6 +.8%
  

• Emerging Market CDS Index 136.0 +1.2%

• China Corp. High-Yield Bond USD ETF(KHYB) 24.4 -.25%

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

• 3M T-Bill Treasury Repo Spread -6.75 basis points -.5 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -4.0 -.75 basis point
• MBS  5/10 Treasury Spread 128.0 +2.0 basis points
• Bloomberg CMBS Investment Grade Bbb Average OAS 613.0 +2.0 basis points
• Avg. Auto ABS OAS 58.0 unch.

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 36.3 -.09%
• US 10-Year T-Note Yield 4.10% +3.0 basis points
• 3-Month T-Bill Yield 3.88% +1.0 basis point

• China Iron Ore Spot 102.7 USD/Metric Tonne -.1%
• Dutch TTF Nat Gas(European benchmark) 30.5 euros/megawatt-hour -1.5%

• Citi US Economic Surprise Index 10.3 -.5 point

• Citi Eurozone Economic Surprise Index 31.3 -2.3 points

• Citi Emerging Markets Economic Surprise Index 31.0 -.9
• S&P 500 Current Quarter EPS Growth Rate YoY(459 of 500 reporting) +11.6% -.1 percentage point
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 301.77 +.22:  Growth Rate +15.3% +.1 percentage point, P/E 22.5 -.2
• S&P 500 Current Year Estimated Profit Margin 13.49% unch.
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(7 of 10 reporting) +10.0% unch.
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 497.30 +.59: Growth Rate +22.4% +.2 percentage point, P/E 33.0 -.5
• Bloomberg US Financial Conditions Index .60 -3.0 basis points
• Bloomberg Euro-Zone Financial Conditions Index 1.36 -49.0 basis points
• Bloomberg Global Trade Policy Uncertainty Index 1.9 -.1
• US Yield Curve 52.0 basis points (2s/10s) +2.0 basis points
• US Atlanta Fed GDPNow Q2 Forecast +4.0% unch.
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 35.8% -.1 percentage point

• Cleveland Fed Inflation Nowcast Core PCE YoY +2.85% unch.: CPI YoY +2.96% unch.
• 1-Year TIPS Spread 2.66 +1.0 basis point
• 10-Year TIPS Spread 2.29 unch.
• Highest target rate probability for Jan. 28th FOMC meeting: 49.9% (-2.2 percentage points) chance of 3.5%-3.75%. Highest target rate probability for March 18th meeting: 41.5%(+2.6 percentage points) chance of 3.5%-3.75%. (current target rate is 3.75-4.0%)
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -1,121 open in Japan 
• China A50 Futures: Indicating -126 open in China

• DAX Futures: Indicating -25 open in Germany

Portfolio:

• Lower: On losses in my industrial/tech/biotech/utility/consumer discretionary sector longs 
• Disclosed Trades: Added to my (IWM)/(QQQ) hedges and to my emerging market shorts
• Market Exposure: Moved to 50% Net Long