Stocks Modestly Higher into Final Hour on Falling Fed Rate-Hike Odds, Diminished Mid-East Regional War Fears, Earnings Outlook Optimism, Tech/Homebuilding Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Lower
  

• Sector Performance: Mixed
  

• Volume: Around Average

• Market Leading Stocks: Underperforming
  

Equity Investor Angst:

• Volatility(VIX) 17.4 -4.0%
• DJIA Intraday % Swing .82% +10.9%
  
• Bloomberg Global Risk On/Risk Off Index 63.4 +1.0%

• Euro/Yen Carry Return Index 169.8 -.8%

• Emerging Markets Currency Volatility(VXY) 8.07 -1.5%

• CBOE S&P 500 Implied Correlation Index 29.3 -2.4% 

• ISE Sentiment Index 123.0 +33.0
  

• Total Put/Call .94 -13.8%

• NYSE Arms 1.54 +60.4%

Credit Investor Angst:

• North American Investment Grade CDS Index 77.45 -2.3%
  

• US Energy High-Yield OAS 355.9 -.20%
• Bloomberg TRACE # Distressed Bonds Traded 388 +21
  

• European Financial Sector CDS Index 96.46 -2.4% 
• Deutsche Bank Subordinated 5Y Credit Default Swap 279.47 -2.81%
  

• Italian/German 10Y Yld Spread 196.0 basis points +4.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 135.5 -1.7%
  

• Emerging Market CDS Index 223.3 -2.2%
• Israel Sovereign CDS 136.47 -.93%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 24.61 +.08%

• 2-Year SOFR Swap Spread -12.0 basis points -.5 basis point
  

• TED Spread 18.5 basis points +1.0 basis point
  

• 3-Month EUR/USD Cross-Currency Basis Swap -23.75 +1.25 basis points
  
• MBS  5/10 Treasury Spread 178.0 -5.0 basis points
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 923.0 +2.0 basis points
  
• Avg. Auto ABS OAS 97.0 +1.0 basis point
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 41.31 +.08%
• 3-Month T-Bill Yield 5.46% unch.
  

• China Iron Ore Spot 120.8 USD/Metric Tonne -.6%
• Dutch TTF Nat Gas(European benchmark) 47.8 euros/megawatt-hour -.5%

• Citi US Economic Surprise Index 54.4 -9.0 points

• Citi Eurozone Economic Surprise Index -46.5 -1.0 point

• Citi Emerging Markets Economic Surprise Index 23.2 -3.1 points
• S&P 500 Current Quarter EPS Growth Rate YoY(310 of 500 reporting) +2.9% +.4 percentage point
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 240.31 -.23:  Growth Rate +9.4% unch., P/E 17.5 +.2
  
• S&P 500 Current Year Estimated Profit Margin 12.18% +4.0 basis points
  
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(6 of 10 reporting) +51.9% unch.
  
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 272.94 +.29: Growth Rate +61.0% +.1 percentage point, P/E 26.9 +.5
  
• Bloomberg US Financial Conditions Index -.13 -2.0 basis points
  
• Bloomberg Euro-Zone Financial Conditions Index .55 +6.0 basis points
  
• US Yield Curve -19.25 basis points (2s/10s) +.5 basis point
  
• US Atlanta Fed 3Q GDPNow Forecast +2.26% unch.
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +3.63% unch.: CPI YoY +3.28% unch.
  
• 10-Year TIPS Spread 2.40 -2.0 basis points
  
• Highest target rate probability for Jan. 31st FOMC meeting: 68.5%(+9.5 percentage points) chance of 5.25%-5.5%. Highest target rate probability for March 20th meeting: 65.0%(+8.2 percentage points) chance of 5.25%-5.5%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +85 open in Japan 
• China A50 Futures: Indicating +25 open in China

• DAX Futures: Indicating +82 open in Germany

Portfolio:

• Slightly Lower:  On losses in my index hedges and emerging market shorts
  

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

• Market Exposure: Moved to 50% Net Long