Stocks Reversing Substantially Lower into Final Hour on Fed Behind The Curve Fears, Crypto Plunge Worries, Technical Selling, Tech/Financial Sector Weakness

Credit Investor Angst:

• North American Investment Grade CDS Index 54.5 +2.2%
  

• US Energy Sector High-Yield OAS Index 355.3 +.9%
• US Tech Sector High-Yield OAS Index 434.9 +1.5%
• Bloomberg TRACE # Distressed Bonds Traded 223.0 +2.0

• European Financial Sector CDS Index 59.3 +.8%
  

• Italian/German 10Y Yld Spread 74.0 +1.0 basis point

• Asia Ex-Japan Investment Grade CDS Index 66.3 -1.4%
  

• Emerging Market CDS Index 137.6 +.5%

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

• 2-Year SOFR Swap Spread -22.0 basis points -1.25 basis points

• 3M T-Bill Treasury Repo Spread -5.5 basis points -1.25 basis points

• 3-Month EUR/USD Cross-Currency Basis Swap -4.5 -.5 basis point
• MBS  5/10 Treasury Spread 132.0 +4.0 basis points
• Bloomberg CMBS Investment Grade Bbb Average OAS 613.0 unch.
• Avg. Auto ABS OAS 56.0 -2.0 basis points

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 36.2 -.2%
• US 10-Year T-Note Yield 4.13% -2.0 basis points
• 3-Month T-Bill Yield 3.86% -2.0 basis points

• China Iron Ore Spot 103.7 USD/Metric Tonne -.7%
• Dutch TTF Nat Gas(European benchmark) 31.4 euros/megawatt-hour -.5%

• Citi US Economic Surprise Index 10.2 -.1 point

• Citi Eurozone Economic Surprise Index 28.1 -3.2 points

• Citi Emerging Markets Economic Surprise Index 29.0 -2.0 points
• S&P 500 Current Quarter EPS Growth Rate YoY(460 of 500 reporting) +11.5% -.1 percentage point
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 302.31 +.54:  Growth Rate +15.5% +.2 percentage point, P/E 22.3 -.2
• S&P 500 Current Year Estimated Profit Margin 13.51% +2.0 basis points
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(7 of 10 reporting) +10.0% unch.
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 498.69 +1.39: Growth Rate +22.7% +.3 percentage point, P/E 32.9 -.1
• Bloomberg US Financial Conditions Index .51 -9.0 basis points
• Bloomberg Euro-Zone Financial Conditions Index 1.24 -12.0 basis points
• Bloomberg Global Trade Policy Uncertainty Index 1.6 -.3
• US Yield Curve 52.0 basis points (2s/10s) unch.
• US Atlanta Fed GDPNow Q2 Forecast +4.1% +.1 percentage point
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 35.2% -.6 percentage point

• Cleveland Fed Inflation Nowcast Core PCE YoY +2.85% unch.: CPI YoY +2.96% unch.
• 1-Year TIPS Spread 2.63 -3.0 basis points
• 10-Year TIPS Spread 2.29 unch.
• Highest target rate probability for Jan. 28th FOMC meeting: 48.7% (+.1 percentage point) chance of 3.5%-3.75%. Highest target rate probability for March 18th meeting: 42.8%(-.1 percentage point) chance of 3.5%-3.75%. (current target rate is 3.75-4.0%)
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -640 open in Japan 
• China A50 Futures: Indicating -109 open in China

• DAX Futures: Indicating -109 open in Germany

Portfolio:

• Slightly Higher: On gains in my utility/biotech sector longs, index hedges and emerging market shorts 
• Disclosed Trades: Added to my (IWM)/(QQQ) hedges and my emerging market shorts 
• Market Exposure: Moved to 25% Net Long