Stocks Modestly Lower into Afternoon on Mideast War Resumption Worries, Higher Long-Term Rates, Sector Rotation, Tech/Alt Energy Sector Weakness

Economic/Market Gauges:

• North American Investment Grade CDS Index 50.3 +1.0%
• BofA Private Credit Proxy Index 69.82 -.2% 
• Bloomberg US Securitized MBS/ABS/CMBS Avg. OAS .26 unch.
• BofA Global Financial Stress Indicator -.27 -3.0 basis points
• European Financial Sector CDS Index 53.5 +.8%
• Emerging Market CDS Index 140.2 +.7%
• Israel Sovereign CDS 56.3 +1.2% 
• Bloomberg Global Trade Policy Uncertainty Index .5 unch.
• US Morning Consult Daily Consume Sentiment Index 91.4 +3.2

• Citi US Economic Surprise Index 58.7 +1.0

• Citi Eurozone Economic Surprise Index 2.60 +.2

• Citi Emerging Markets Economic Surprise Index 36.7 -.9
• S&P 500 Current Quarter EPS Growth Rate YoY(15 of 500 reporting) +174.4% unch.
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 372.53 +n/a:  Growth Rate +26.7% +n/a, P/E 20.2 -n/a
• S&P 500 Current Year Estimated Profit Margin 15.63% +1.0 basis point
• 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 898.96 +n/a: Growth Rate +73.4% +n/a, P/E 19.2 -n/a 
• Bloomberg US Financial Conditions Index 1.17 +3.0 basis points
• US Yield Curve 36.75 basis points (2s/10s) +1.25 basis points
• Bloomberg Industrial Metal Index 171.63 -.01%
• Dutch TTF Nat Gas(European benchmark) 47.35 euros/megawatt-hour +7.4%
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 15.5% unch.
• US Atlanta Fed GDPNow Q2 Forecast +1.4% +.2 percentage point
• US 10-Year T-Note Yield 4.52% +5.0 basis points
• 1-Year TIPS Spread 1.39 +3.0 basis points

• Highest target rate probability for September 29th FOMC meeting: 47.9% (+1.7 percentage points) chance of 3.75%-4.0%. Highest target rate probability for Oct. 28th meeting: 46.3%(+.6 percentage point) chance of 3.75%-4.0%. (current target rate is 3.5-3.75%)
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -66 open in Japan 
• China A50 Futures: Indicating -220 open in China
• KOSPI 200 Futures: Indicating +2 open in South Korea 

• DAX Futures: Indicating +230 open in Germany

Portfolio:

• Higher: On gains in my financial//biotech sector longs, index hedges and emerging market shorts
• Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges
• Market Exposure: Moved to 75% Net Long