Stocks Falling Substantially into Final Hour on Mideast War-Induced Inflation Fears, Rising Fed Rate-Hike Odds, AI Infrastructure Build-Out Concerns, Tech/Alt Energy Sector Weakness

Economic/Market Gauges:

• North American Investment Grade CDS Index 59.9 +2.2%
• BofA Private Credit Proxy Index 67.0 -.5% 
• Bloomberg US Securitized MBS/ABS/CMBS Avg. OAS .40 -1.0 basis point
• BofA Global Financial Stress Indicator .02 +2.0 basis points
• European Financial Sector CDS Index 71.3 -.2% 
• Emerging Market CDS Index 160.0 +1.2% 
• Israel Sovereign CDS 58.9 -1.4% 
• Bloomberg Global Trade Policy Uncertainty Index .6 -.1
• US Morning Consult Daily Consume Sentiment Index 87.7 +.6

• Citi US Economic Surprise Index 36.2 +3.1

• Citi Eurozone Economic Surprise Index 47.4 -1.3

• Citi Emerging Markets Economic Surprise Index 27.5 +5.7
• S&P 500 Current Quarter EPS Growth Rate YoY(32 of 500 reporting) +54.1% -13.5 percentage points
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 409.46 +.37:  Growth Rate +24.8% +.2 percentage point, P/E 18.9 -.2
• S&P 500 Current Year Estimated Profit Margin 16.34% -1.0 basis point
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(1 of 10 reporting) +1,013.1% unch.
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 1,088.95 +.46: Growth Rate +62.2% +.1 percentage point, P/E 17.7 -.3
• Bloomberg US Financial Conditions Index 1.21 +2.0 basis points
• US Yield Curve 38.25 basis points (2s/10s) -3.25 basis points
• Bloomberg Industrial Metal Index 173.2 -1.0%
• Dutch TTF Nat Gas(European benchmark) 87.6 euros/megawatt-hour +.4%
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 10.3% +.7%
• US Atlanta Fed GDPNow Q3 Forecast +3.6% unch.
• US 10-Year T-Note Yield 5.19% -1.0 basis point
• 1-Year TIPS Spread 2.92 +15.0 basis points

• Highest target rate probability for Dec. 9th FOMC meeting: 59.9% (-9.4 percentage point) chance of 4.0%-4.25%. Highest target rate probability for Jan. 27th meeting: 44.6%(+5.0 percentage points) chance of 4.25%-4.5%. (current target rate is 3.75-4.0%)
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -910 open in Japan 
• China A50 Futures: Indicating -207 open in China
• KOSPI 200 Futures: Indicating -13 open in South Korea 

• DAX Futures: Indicating +90 open in Germany

Portfolio:

• Modestly Lower: On losses in my tech/industrial sector longs
• Disclosed Trades: Added to my (IWM)/(QQQ) hedges and emerging market shorts
• Market Exposure: Moved to 25% net long