Stocks Modestly Higher into Final Hour on Falling Fed Rate-Hike Odds, Lower Long-Term Rates, Earnings Outlook Optimism, Financial/Consumer Discretionary Sector Strength

Economic/Market Gauges:

• North American Investment Grade CDS Index 51.0 -1.1%
• BofA Private Credit Proxy Index 70.90 +1.1% 
• Bloomberg US Securitized MBS/ABS/CMBS Avg. OAS .27 -3.0 basis points
• BofA Global Financial Stress Indicator -.15 +1.0 basis point
• European Financial Sector CDS Index 54.83 -.6%
• Emerging Market CDS Index 141.1 -.5%
• Israel Sovereign CDS 62.6 +1.9% 
• Bloomberg Global Trade Policy Uncertainty Index .6 +.1
• US Morning Consult Daily Consume Sentiment Index 91.3 +2.3

• Citi US Economic Surprise Index 47.4 +.7

• Citi Eurozone Economic Surprise Index 6.3 unch.

• Citi Emerging Markets Economic Surprise Index 31.5 -4.6
• S&P 500 Current Quarter EPS Growth Rate YoY(32 of 500 reporting) +60.6% -76.2 percentage points
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 373.54 -.01:  Growth Rate +26.4% -.4 percentage point, P/E 20.2 unch.
• S&P 500 Current Year Estimated Profit Margin 15.63% unch.
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(1 of 10 reporting) +1,226.6% unch.
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 905.06 +1.91: Growth Rate +74.5% +.3 percentage point, P/E 19.6 +.2 
• Bloomberg US Financial Conditions Index 1.16 unch.
• US Yield Curve 41.75 basis points (2s/10s) +2.75 basis points
• Bloomberg Industrial Metal Index 173.3 -.7%
• Dutch TTF Nat Gas(European benchmark) 54.61 euros/megawatt-hour +3.1%
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 14.6% +.9 percentage point
• US Atlanta Fed GDPNow Q2 Forecast +1.3% unch.
• US 10-Year T-Note Yield 4.54% -5.0 basis points
• 1-Year TIPS Spread 1.10 -1.0 basis point

• Highest target rate probability for September 29th FOMC meeting: 51.9% (+10.0 percentage points) chance of 3.5%-3.75%. Highest target rate probability for Oct. 28th meeting: 45.3%(-3.1 percentage points) chance of 3.75%-4.0%. (current target rate is 3.5-3.75%)
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -971 open in Japan 
• China A50 Futures: Indicating -140 open in China
• KOSPI 200 Futures: Indicating -56 open in South Korea 

• DAX Futures: Indicating +115 open in Germany

Portfolio:

• Slightly Higher: On gains in my financial/biotech/consumer discretionary sector longs
• Disclosed Trades: Added to my (IWM)/(QQQ) hedges
• Market Exposure: Moved to 75% net long