Stocks Lower into Final Hour on Mideast War Resumption Fears, Higher Long-Term Rates, Profit-Taking, Tech/Alt Energy Sector Weakness

Economic/Market Gauges:

• North American Investment Grade CDS Index 51.0 +1.0%
• BofA Private Credit Proxy Index 70.6 -3.3% 
• Bloomberg US Securitized MBS/ABS/CMBS Avg. OAS .25 +1.0 basis point
• BofA Global Financial Stress Indicator -.34 +1.0 basis point
• European Financial Sector CDS Index 56.5 +1.9%
• Emerging Market CDS Index 150.4 +1.3%
• Israel Sovereign CDS 54.3 +1.0% 
• Bloomberg Global Trade Policy Uncertainty Index .7 +.1
• US Morning Consult Daily Consume Sentiment Index 89.8 +3.2

• Citi US Economic Surprise Index 62.1 +5.1

• Citi Eurozone Economic Surprise Index -45.20 +14.3

• Citi Emerging Markets Economic Surprise Index 37.0 +1.5
• S&P 500 Current Quarter EPS Growth Rate YoY(488 of 500 reporting) +27.6% -.1 percentage point
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 361.72 +.37:  Growth Rate +23.2% +.1 percentage point, P/E 21.0 -.1
• S&P 500 Current Year Estimated Profit Margin 15.48% unch.
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(9 of 10 reporting) +67.2% unch.
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 890.79 +.84: Growth Rate +125.0% +.2 percentage point, P/E 20.6 -.3 
• Bloomberg US Financial Conditions Index 1.19 +2.0 basis points
• US Yield Curve 40.5 basis points (2s/10s) unch.
• Bloomberg Industrial Metal Index 187.7 -1.9%
• Dutch TTF Nat Gas(European benchmark) 49.3 euros/megawatt-hour +3.5%
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 14.3% -1.2 percentage points
• US Atlanta Fed GDPNow Q2 Forecast +3.0% unch.
• US 10-Year T-Note Yield 4.49% +5.0 basis points
• 1-Year TIPS Spread 2.80 +8.0 basis points

• Highest target rate probability for July 29th FOMC meeting: 90.2% (-1.3 percentage points) chance of 3.5%-3.75%. Highest target rate probability for Sept. 16th meeting: 72.2%(-2.8 percentage points) chance of 3.5%-3.75%. (current target rate is 3.5-3.75%)
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -115 open in Japan 
• China A50 Futures: Indicating -150 open in China

• DAX Futures: Indicating +16 open in Germany

Portfolio:

• Higher: On gains in my energy/biotech sector longs, index hedges and emerging market shorts
• Disclosed Trades: Added to my (IWM)/(QQQ) hedges and emerging market shorts
• Market Exposure: Moved to 50% Net Long