Stocks Higher into Final Hour on China Stimulus Hopes, Earnings Outlook Optimism, Loosening US Financial Conditions, Tech/Financial Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Higher
  

• Sector Performance: Almost Every Sector Rising
  

• Volume: Below Average

• Market Leading Stocks: Outperforming
  

Equity Investor Angst:

• Volatility(VIX) 15.5 -1.2%
• DJIA Intraday % Swing .62%
  
• Bloomberg Global Risk On/Risk Off Index 69.4 +.92%

• Euro/Yen Carry Return Index 167.68 +.13%

• Emerging Markets Currency Volatility(VXY) 8.79 -.68%

• CBOE S&P 500 Implied Correlation Index 22.0 -4.5% 

• ISE Sentiment Index 100.0 +23.0 points
  

• Total Put/Call .97 -11.8%

• NYSE Arms 1.07 +18.9%

Credit Investor Angst:

• North American Investment Grade CDS Index 64.46 -2.25%
  

• US Energy High-Yield OAS 318.68 -1.22%
• Bloomberg TRACE # Distressed Bonds Traded 337.0 -9.0
  

• European Financial Sector CDS Index 84.35 -.07% 
• Deutsche Bank Subordinated 5Y Credit Default Swap 263.4 -.83%
  

• Italian/German 10Y Yld Spread 166.0 basis points -2.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 132.7 -.35%
  

• Emerging Market CDS Index 199.94 -1.6%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 24.89 +.36%

• 2-Year SOFR Swap Spread -12.75 basis points unch.
  

• TED Spread 21.0 basis points +1.5 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -12.75 -.25 basis point
  
• MBS  5/10 Treasury Spread 171.0 -7.0 basis points
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 772.0 unch.
  
• Avg. Auto ABS OAS 71.0 unch.
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 42.8 -.06%
• 3-Month T-Bill Yield 5.49% +3.0 basis points
  

• China Iron Ore Spot 112.9 USD/Metric Tonne +.56%
• Dutch TTF Nat Gas(European benchmark) 38.41 euros/megawatt-hour +10.5%

• Citi US Economic Surprise Index 56.0 -3.6 points

• Citi Eurozone Economic Surprise Index -58.4 +8.5 points

• Citi Emerging Markets Economic Surprise Index -.3 -1.9 points
• S&P 500 Current Quarter EPS Growth Rate YoY(484 of 500 reporting) -6.1%  +1.1 percentage point
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 237.51 +.51:  Growth Rate +8.1% +.2 percentage point, P/E 18.6 +.1
  
• S&P 500 Current Year Estimated Profit Margin 12.21% unch.
  
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(10 of 10 reporting) +24.3% unch.
  
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 242.96 +1.20: Growth Rate +46.5% +.7 percentage point, P/E 30.8 +.1
  
• Bloomberg US Financial Conditions Index .45 +5.0 basis points
  
• Bloomberg Euro-Zone Financial Conditions Index .02 +8.0 basis points
  
• US Yield Curve -84.25 basis points (2s/10s) -2.5 basis points
  
• US Atlanta Fed 2Q GDPNow Forecast +5.91% unch.
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +4.23% unch.: CPI YoY +3.83% +1.0 basis point
  
• 10-Year TIPS Spread 2.30 -2.0 basis points
  
• Highest target rate probability for Nov. 1st FOMC meeting: 48.0%(+1.3 percentage points) chance of 5.5%-5.75%. Highest target rate probability for Dec. 13th meeting: 46.5%(+1.3 percentage points) chance of 5.5%-5.75%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +71 open in Japan 
• China A50 Futures: Indicating +32 open in China

• DAX Futures: Indicating +35 open in Germany

Portfolio:

• Higher:  On gains in my tech/industrial/medical/transport sector longs
  

• Disclosed Trades: None
  

• Market Exposure: 75% Net Long