Stocks Modestly Lower into Afternoon on China Economy Worries, Higher Long-Term Rates, Dollar Strength, Homebuilding/Gambling Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Lower
  

• Sector Performance: Most Sectors Declining
  

• Volume: Around Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 13.9 +.7%
• DJIA Intraday % Swing .74%
  
• Bloomberg Global Risk On/Risk Off Index 71.7 +1.4%

• Euro/Yen Carry Return Index 167.9 +.15%

• Emerging Markets Currency Volatility(VXY) 8.6 unch.

• CBOE S&P 500 Implied Correlation Index 18.8 -.84% 

• ISE Sentiment Index 128.0 +38.0 points
  

• Total Put/Call .91 -6.2%

• NYSE Arms .69 -1.4%

Credit Investor Angst:

• North American Investment Grade CDS Index 63.6 +.44%
  

• US Energy High-Yield OAS 308.5 -1.5%
• Bloomberg TRACE # Distressed Bonds Traded 364.0 unch.
  

• European Financial Sector CDS Index 80.1 +1.2% 
• Deutsche Bank Subordinated 5Y Credit Default Swap 263.9 +1.6%
  

• Italian/German 10Y Yld Spread 173.0 basis points +4.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 120.6 -.72%
  

• Emerging Market CDS Index 200.24 +.79%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 24.91 -.02%

• 2-Year SOFR Swap Spread -10.25 basis points unch.
  

• TED Spread 25.25 basis points +1.0 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -11.75 -.25 basis point
  
• MBS  5/10 Treasury Spread 164.0 +1.0 basis point
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 804.0 unch.
  
• Avg. Auto ABS OAS 73.0 unch.
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 42.3 -.52%
• 3-Month T-Bill Yield 5.42% unch.
  

• China Iron Ore Spot 116.6 USD/Metric Tonne +1.4%
• Dutch TTF Nat Gas(European benchmark) 34.4 euros/megawatt-hour +2.6%

• Citi US Economic Surprise Index 56.5 +3.8 points

• Citi Eurozone Economic Surprise Index -62.1 unch.

• 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 238.38 +.59:  Growth Rate +8.4% +.2 percentage point, P/E 18.9 unch.
  
• S&P 500 Current Year Estimated Profit Margin 12.14% -7.0 basis points
  
• 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 245.41 +1.52: Growth Rate +48.0% +.9 percentage point, P/E 31.9 -.1
  
• Bloomberg US Financial Conditions Index .40 +6.0 basis points
  
• Bloomberg Euro-Zone Financial Conditions Index .163 -73.0 basis points
  
• US Yield Curve -70.0 basis points (2s/10s) -1.0 basis point
  
• US Atlanta Fed 2Q GDPNow Forecast +5.64% +1.0 basis point
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +4.03% unch.: CPI YoY +3.82% unch.
  
• 10-Year TIPS Spread 2.29 +2.0 basis points
  
• Highest target rate probability for Nov. 1st FOMC meeting: 57.5%(-7.1 percentage points) chance of 5.25%-5.5%. Highest target rate probability for Dec. 13th meeting: 56.8%(-5.1 percentage points) chance of 5.25%-5.5%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +113 open in Japan 
• China A50 Futures: Indicating -11 open in China

• DAX Futures: Indicating +25 open in Germany

Portfolio:

• Slightly Higher:  On gains in my tech sector longs, index hedges and emerging market shorts
  

• Disclosed Trades: None
  

• Market Exposure: 75% Net Long