Stocks Slightly Lower into Final Hour on China Economy Worries, Dollar Strength, Technical Selling, Tech/Alt Energy 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) 14.7 +1.6%
• DJIA Intraday % Swing .61%
  
• Bloomberg Global Risk On/Risk Off Index 70.9 -1.3%

• Euro/Yen Carry Return Index 167.07 -.54%

• Emerging Markets Currency Volatility(VXY) 8.9 +1.0%

• CBOE S&P 500 Implied Correlation Index 20.7 +.5% 

• ISE Sentiment Index 104.0 +17.0 points
  

• Total Put/Call 1.03 -16.3%

• NYSE Arms 1.25 +33.7%

Credit Investor Angst:

• North American Investment Grade CDS Index 64.5 +.11%
  

• US Energy High-Yield OAS 313.98 +.47%
• Bloomberg TRACE # Distressed Bonds Traded 344.0 -10
  

• European Financial Sector CDS Index 82.95 -.2% 
• Deutsche Bank Subordinated 5Y Credit Default Swap 270.45 +.41%
  

• Italian/German 10Y Yld Spread 173.0 basis points -2.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 123.3 +1.59%
  

• Emerging Market CDS Index 201.39 -2.1%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 24.88 unch.

• 2-Year SOFR Swap Spread -10.75 basis points -.25 basis point
  

• TED Spread 21.25 basis points -2.75 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -11.75 unch.
  
• MBS  5/10 Treasury Spread 170.0 -2.0 basis points
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 807.0 +1.0 basis point
  
• Avg. Auto ABS OAS 73.0 unch.
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 42.2 -.12%
• 3-Month T-Bill Yield 5.45% -1.0 basis point
  

• China Iron Ore Spot 113.2 USD/Metric Tonne -.9%
• Dutch TTF Nat Gas(European benchmark) 32.76 euros/megawatt-hour +5.4%

• Citi US Economic Surprise Index 62.2 +2.7 points

• Citi Eurozone Economic Surprise Index -78.0 -5.2 points

• Citi Emerging Markets Economic Surprise Index 6.5 -.5 point
• S&P 500 Current Quarter EPS Growth Rate YoY(496 of 500 reporting) -5.8%  unch.
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 238.41 +.06:  Growth Rate +8.4% unch., P/E 18.7 unch.
  
• 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% unch.
  
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 245.64 -.03: Growth Rate +48.1% -.1 percentage point, P/E 31.4 -.3
  
• Bloomberg US Financial Conditions Index .42 -5.0 basis points
  
• Bloomberg Euro-Zone Financial Conditions Index .21 +8.0 basis points
  
• US Yield Curve -69.5 basis points (2s/10s) +4.0 basis point
  
• US Atlanta Fed 2Q GDPNow Forecast +5.58% unch.
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +4.03% unch.: CPI YoY +3.82% unch.
  
• 10-Year TIPS Spread 2.31 +1.0 basis point
  
• Highest target rate probability for Nov. 1st FOMC meeting: 53.6%(+.7 percentage point) chance of 5.25%-5.5%. Highest target rate probability for Dec. 13th meeting: 53.3%(+.8 percentage point) chance of 5.25%-5.5%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -291 open in Japan 
• China A50 Futures: Indicating -114 open in China

• DAX Futures: Indicating +11 open in Germany

Portfolio:

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

• Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges
  

• Market Exposure: Moved to 75% Net Long