Stocks Close Modestly Lower on Mideast War Resumption Fears, Surging Long-Term Rates, Rising Fed Rate-Hike Odds, Alt Energy/Tech Sector Weakness

Economic/Market Gauges:

• North American Investment Grade CDS Index 58.8 -.7%
• BofA Private Credit Proxy Index 68.2 -1.5% 
• Bloomberg US Securitized MBS/ABS/CMBS Avg. OAS .35 unch.
• BofA Global Financial Stress Indicator .03 -5.0 basis points
• European Financial Sector CDS Index 66.4 +.1% 
• Emerging Market CDS Index 161.2 +.5% 
• Israel Sovereign CDS 57.7 +.9% 
• Bloomberg Global Trade Policy Uncertainty Index .6 -.1
• US Morning Consult Daily Consume Sentiment Index 87.2 +.3

• Citi US Economic Surprise Index 71.1 -2.9

• Citi Eurozone Economic Surprise Index -3.1 -.5

• Citi Emerging Markets Economic Surprise Index 36.2 unch.
• S&P 500 Current Quarter EPS Growth Rate YoY(451 of 500 reporting) +27.1% unch.
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 416.54 +.07:  Growth Rate +27.1% +.1 percentage point, P/E 18.3 unch.
• S&P 500 Current Year Estimated Profit Margin 16.31% -1.0 basis point
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(8 of 10 reporting) +34.9% unch.
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 1,107.80 +.54: Growth Rate +65.0% +.1 percentage point, P/E 15.9 -.1
• Bloomberg US Financial Conditions Index 1.01 +11.0 basis points
• US Yield Curve 24.25 basis points (2s/10s) -.75 basis point
• Bloomberg Industrial Metal Index 169.5 -1.1%
• Dutch TTF Nat Gas(European benchmark) 96.3 euros/megawatt-hour +11.1%
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 11.8% -2.3 percentage points
• US Atlanta Fed GDPNow Q4 Forecast +3.5% unch.
• US 10-Year T-Note Yield 5.12% +13.0 basis points
• 1-Year TIPS Spread 2.09 +10.0 basis points

• Highest target rate probability for Jan. 27th FOMC meeting: 64.7% (+4.0 percentage points) chance of 4.25%-4.5%. Highest target rate probability for March 17th meeting: 50.5%(+6.6 percentage points) chance of 4.5%-4.75%. (current target rate is 3.75-4.0%)
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +411 open in Japan 
• China A50 Futures: Indicating -54 open in China
• KOSPI 200 Futures: Indicating +1 open in South Korea 

• DAX Futures: Indicating -3 open in Germany

Portfolio:

• Slightly Lower: On losses in my tech/industrial/biotech/consumer discretionary sector longs
• Disclosed Trades: None
• Market Exposure: 50% Net Long