Stocks Lower into Afternoon on Rising Fed Rate-Hike Odds, Escalating China Tensions, Technical Selling, Transport/Financial Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Lower
  

• Sector Performance: Almost Sector Declining
  

• Volume: Below Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 14.9 +6.2%
• DJIA Intraday % Swing .93%
  
• Bloomberg Global Risk On/Risk Off Index 71.4 +.3%

• Euro/Yen Carry Return Index 167.94 -.01%

• Emerging Markets Currency Volatility(VXY) 8.76 +.57%

• CBOE S&P 500 Implied Correlation Index 21.1 +8.9% 

• ISE Sentiment Index 86.0 -32.0 points
  

• Total Put/Call 1.03 -1.9%

• NYSE Arms 1.17 +18.2%

Credit Investor Angst:

• North American Investment Grade CDS Index 64.8 +.91%
  

• US Energy High-Yield OAS 312.95 +.51%
• Bloomberg TRACE # Distressed Bonds Traded 354.0 -10
  

• European Financial Sector CDS Index 83.0 +3.4% 
• Deutsche Bank Subordinated 5Y Credit Default Swap 269.36 +2.4%
  

• Italian/German 10Y Yld Spread 175.0 basis points +2.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 121.3 +.66%
  

• Emerging Market CDS Index 205.97 +1.59%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 24.90 unch.

• 2-Year SOFR Swap Spread -10.5 basis points -.25 basis point
  

• TED Spread 18.5 basis points -7.5 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -11.75 unch.
  
• MBS  5/10 Treasury Spread 172.0 +8.0 basis points
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 806.0 +2.0 basis points
  
• Avg. Auto ABS OAS 73.0 unch.
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 42.2 -.21%
• 3-Month T-Bill Yield 5.46% +4.0 basis points
  

• China Iron Ore Spot 114.9 USD/Metric Tonne -1.12%
• Dutch TTF Nat Gas(European benchmark) 31.1 euros/megawatt-hour -9.8%

• Citi US Economic Surprise Index 59.5 +3.0 points

• Citi Eurozone Economic Surprise Index -72.8 -10.7 points

• Citi Emerging Markets Economic Surprise Index 7.0 +.9 point
• S&P 500 Current Quarter EPS Growth Rate YoY(496 of 500 reporting) -5.8%  -.2 percentage point
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 238.35 -.03:  Growth Rate +8.4% unch., P/E 18.7 -.2
  
• S&P 500 Current Year Estimated Profit Margin 12.14% unch.
  
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(10 of 10 reporting) +25.4% +1.1 percentage points
  
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 245.67 +.26: Growth Rate +48.2% +.2 percentage point, P/E 31.7 -.2
  
• Bloomberg US Financial Conditions Index .46 +6.0 basis points
  
• Bloomberg Euro-Zone Financial Conditions Index .13 +75.0 basis points
  
• US Yield Curve -73.5 basis points (2s/10s) -3.5 basis point
  
• US Atlanta Fed 2Q GDPNow Forecast +5.58% -6.0 basis points
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +4.03% unch.: CPI YoY +3.82% unch.
  
• 10-Year TIPS Spread 2.30 +1.0 basis point
  
• Highest target rate probability for Nov. 1st FOMC meeting: 50.5%(-4.3 percentage points) chance of 5.25%-5.5%. Highest target rate probability for Dec. 13th meeting: 50.3%(-4.0 percentage points) chance of 5.25%-5.5%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -298 open in Japan 
• China A50 Futures: Indicating -2 open in China

• DAX Futures: Indicating +8 open in Germany

Portfolio:

• Slightly Lower:  On losses in my tech/transport sector longs
  

• Disclosed Trades: None
  

• Market Exposure: 75% Net Long