Stocks Modestly Lower into Final Hour on China Economy Worries, Rising Long-Term Rates, Technical Selling, Alt Energy/Tech Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Lower
  

• Sector Performance: Most Sectors Declining
  

• Volume: Around Average

• Market Leading Stocks: Underperforming
  

Equity Investor Angst:

• Volatility(VIX) 16.2 -1.5%
• DJIA Intraday % Swing .71%
  
• Bloomberg Global Risk On/Risk Off Index 71.0 -.04%

• Euro/Yen Carry Return Index 168.29 +.23%

• Emerging Markets Currency Volatility(VXY) 9.4 -.64%

• CBOE S&P 500 Implied Correlation Index 23.3 +.69% 

• ISE Sentiment Index 157.0 +48.0 points
  

• Total Put/Call .95 -9.5%

• NYSE Arms .84 -31.7%

Credit Investor Angst:

• North American Investment Grade CDS Index 68.1 +1.47%
  

• US Energy High-Yield OAS 329.09 -1.09%
• Bloomberg TRACE # Distressed Bonds Traded 351.0 +7.0
  

• European Financial Sector CDS Index 84.2 +1.1% 
• Deutsche Bank Subordinated 5Y Credit Default Swap 245.57 +.5%
  

• Italian/German 10Y Yld Spread 170.0 basis points +2.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 120.4 +5.1%
  

• Emerging Market CDS Index 214.7 -.69%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 24.9 -.75%

• 2-Year SOFR Swap Spread -11.5 basis points -.25 basis point
  

• TED Spread 19.75 basis points -1.75 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -10.75 -1.0 basis point
  
• MBS  5/10 Treasury Spread 179.0 unch.
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 745.0 -3.0 basis points
  
• Avg. Auto ABS OAS 68.0 unch.
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 42.3 +.13%
• 3-Month T-Bill Yield 5.44% +2.0 basis points
  

• China Iron Ore Spot 101.1 USD/Metric Tonne +.29%
• Dutch TTF Nat Gas(European benchmark) 37.8 euros/megawatt-hour -2.7%

• Citi US Economic Surprise Index 71.6 +3.0 points

• Citi Eurozone Economic Surprise Index -66.7 +8.9 points

• Citi Emerging Markets Economic Surprise Index 3.3 -.9 point
• S&P 500 Current Quarter EPS Growth Rate YoY(461 of 500 reporting) -8.0%  +.2 percentage point
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 234.56 +.12:  Growth Rate +7.1% +.1 percentage point, P/E 18.9 -.1
  
• S&P 500 Current Year Estimated Profit Margin 12.11% unch.
  
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(8 of 10 reporting) +17.0% unch.
  
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 232.88 +.59: Growth Rate +41.9% +.3 percentage point, P/E 32.2 -.7
  
• Bloomberg US Financial Conditions Index .35 +6.0 basis points
  
• Bloomberg Euro-Zone Financial Conditions Index -.03 -1.0 basis point
  
• US Yield Curve -73.0 basis points (2s/10s) +.75 basis point
  
• US Atlanta Fed 2Q GDPNow Forecast +5.76% +73.0 basis points
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +4.23% unch.: CPI YoY +3.82% unch.
  
• 10-Year TIPS Spread 2.34 +1.0 basis point
  
• Highest target rate probability for Nov. 1st FOMC meeting: 61.0%(unch.) chance of 5.25%-5.5%. Highest target rate probability for  Dec. 13th meeting: 58.9%(+1.3 percentage points) chance of 5.25%-5.5%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +48 open in Japan 
• China A50 Futures: Indicating -95 open in China

• DAX Futures: Indicating +23 open in Germany

Portfolio:

• Slightly Lower:  On loses in my medical/tech sector longs
  

• Disclosed Trades: None
  

• Market Exposure: 50% Net Long