Stocks Slightly Lower into Final Hour on Iran-related Global Sanction Threats, AI Infrastructure Build-Out Concerns, Technical Selling, Tech/Alt Energy Sector Strength

Economic/Market Gauges:

• North American Investment Grade CDS Index 50.8 -.1%
• BofA Private Credit Proxy Index 73.8 +.4% 
• Bloomberg US Securitized MBS/ABS/CMBS Avg. OAS .29 unch.
• BofA Global Financial Stress Indicator -.15 -3.0 basis points
• European Financial Sector CDS Index 53.8 -.5%
• Emerging Market CDS Index 138.8 -.6%
• Israel Sovereign CDS 53.4 -1.4%
• Bloomberg Global Trade Policy Uncertainty Index 1.0 unch.
• US Morning Consult Daily Consume Sentiment Index 89.8 -1.3

• Citi US Economic Surprise Index 24.0 +3.1

• Citi Eurozone Economic Surprise Index 84.6 +6.6

• Citi Emerging Markets Economic Surprise Index 21.7 -3.5
• S&P 500 Current Quarter EPS Growth Rate YoY(467 of 500 reporting) +49.6% unch.
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 391.72 +1.15:  Growth Rate +33.1% +.5 percentage point, P/E 19.6 -.1
• S&P 500 Current Year Estimated Profit Margin 16.32% +4.0 basis points
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(8 of 10 reporting) +138.4% unch.
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 952.75 +2.74: Growth Rate +83.7% +.5 percentage point, P/E 19.2 -.1
• Bloomberg US Financial Conditions Index 1.31 +1.0 basis point
• US Yield Curve 46.75 basis points (2s/10s) -2.75 basis points
• Bloomberg Industrial Metal Index 180.1 +.1%
• Dutch TTF Nat Gas(European benchmark) 68.5 euros/megawatt-hour +4.0%
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 13.3% -.8 percentage point
• US Atlanta Fed GDPNow Q3 Forecast +4.0% unch.
• US 10-Year T-Note Yield 4.70% -4.0 basis points
• 1-Year TIPS Spread 2.01 -3.0 basis points

• Highest target rate probability for Oct. 28th FOMC meeting: 46.0% (+2.7 percentage points) chance of 3.75%-4.0%. Highest target rate probability for Dec. 9th meeting: 45.1%(-.2 percentage point) chance of 3.75%-4.0%. (current target rate is 3.5-3.75%)
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +30 open in Japan 
• China A50 Futures: Indicating -70 open in China
• KOSPI 200 Futures: Indicating -16 open in South Korea 

• DAX Futures: Indicating +80 open in Germany

Portfolio:

• Slightly Higher: On gains in my consumer discretionary/financial sector longs, index hedges and emerging market shorts
• Disclosed Trades: None
• Market Exposure: 75% net long