Stocks Closing at Session Lows on Mid-East Regional War Fears, Rising Long-Term Rates, Earnings Outlook Jitters, Alt Energy/Consumer Discretionary 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) 19.7 +2.5%
• DJIA Intraday % Swing .98% -15.3%
  
• Bloomberg Global Risk On/Risk Off Index 69.9 -1.6%

• Euro/Yen Carry Return Index 169.0 +.44%

• Emerging Markets Currency Volatility(VXY) 8.5 +1.2%

• CBOE S&P 500 Implied Correlation Index 28.7 +5.2% 

• ISE Sentiment Index 103.0 +22.0 points
  

• Total Put/Call 1.04 +5.1%

• NYSE Arms .77 -28.7%

Credit Investor Angst:

• North American Investment Grade CDS Index 79.57 +2.6%
  

• US Energy High-Yield OAS 370.5 +2.1%
• Bloomberg TRACE # Distressed Bonds Traded 354 -18
  

• European Financial Sector CDS Index 98.71 +2.2% 
• Deutsche Bank Subordinated 5Y Credit Default Swap 306.9 +1.5%
  

• Italian/German 10Y Yld Spread 201.0 basis points -5.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 134.3 +3.2%
  

• Emerging Market CDS Index 242.8 +.8%
• Israel Sovereign CDS 128.8 +.1%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 24.7 +.13%

• 2-Year SOFR Swap Spread -11.75 basis points unch.
  

• TED Spread 16.0 basis points -1.75 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -25.75 +.25 basis point
  
• MBS  5/10 Treasury Spread 185.0 -3.0 basis points
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 909.0 +2.0 basis points
  
• Avg. Auto ABS OAS 85.0 -1.0 basis point
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 41.2 +.16%
• 3-Month T-Bill Yield 5.47% -3.0 basis point
  

• China Iron Ore Spot 115.6 USD/Metric Tonne -1.2%
• Dutch TTF Nat Gas(European benchmark) 50.17 euros/megawatt-hour -1.3%

• Citi US Economic Surprise Index 54.3 -.1 point

• Citi Eurozone Economic Surprise Index -34.7 +1.5 points

• Citi Emerging Markets Economic Surprise Index 23.9 unch.
• S&P 500 Current Quarter EPS Growth Rate YoY(78 of 500 reporting) +1.9% -4.6 percentage points
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 240.35 -.30:  Growth Rate +9.3% -.1 percentage point, P/E 18.0 -.2
  
• S&P 500 Current Year Estimated Profit Margin 12.12% -3.0 basis points
  
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(2 of 10 reporting) -20.9%
  
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 267.66 +.14: Growth Rate +57.9% +.1 percentage point, P/E 28.3 +.1
  
• Bloomberg US Financial Conditions Index -.11 -11.0 basis points
  
• Bloomberg Euro-Zone Financial Conditions Index -.92 -79.0 basis points
  
• US Yield Curve -18.25 basis points (2s/10s) +13.75 basis points
  
• US Atlanta Fed 2Q GDPNow Forecast +5.41% unch.
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +3.70% unch.: CPI YoY +3.36% unch.
  
• 10-Year TIPS Spread 2.50 +7.0 basis points
  
• Highest target rate probability for Dec. 13th FOMC meeting: 75.2%(+14.4 percentage points) chance of 5.25%-5.5%. Highest target rate probability for Jan. 31st meeting: 62.7%(+10.7 percentage points) chance of 5.25%-5.5%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -140 open in Japan 
• China A50 Futures: Indicating -25 open in China

• DAX Futures: Indicating +14 open in Germany

Portfolio:

• Slightly Higher:  On gains in my index hedges and emerging market shorts
  

• Disclosed Trades: Added to my (IWM)/(QQQ) hedges
  

• Market Exposure: Moved to Market Neutral