Stocks Reversing Slightly Higher into Afternoon on Rising Fed Rate-Cut Odds, China Stimulus Hopes, Earnings Outlook Optimism, Energy/Defense Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Around Even
  

• Sector Performance: Mixed
  

• Volume: Around Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 12.6 +1.2%
• DJIA Intraday % Swing .94% -6.0%
  
• Bloomberg Global Risk On/Risk Off Index 58.4 -2.3%

• Euro/Yen Carry Return Index 170.9 -.40%

• Emerging Markets Currency Volatility(VXY) 7.45 -1.8%

• CBOE S&P 500 Implied Correlation Index 18.3 +5.1% 

• ISE Sentiment Index 105.0 -29.0
  

• Total Put/Call .84 -19.2%

• NYSE Arms 1.36 -14.5% 
• NYSE Non-Block Money Flow +$145.7M 
  

Credit Investor Angst:

• North American Investment Grade CDS Index 54.63 -.05%
  

• US Energy High-Yield OAS 334.92 +.5%
• Bloomberg TRACE # Distressed Bonds Traded 349 +5
  

• European Financial Sector CDS Index 70.0 +1.8% 
• Deutsche Bank Subordinated 5Y Credit Default Swap 210.97 -.44%
  

• Italian/German 10Y Yld Spread 155.0 basis points -2.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 96.98 -.36%
  

• Emerging Market CDS Index 173.95 -.08%
• Israel Sovereign CDS 120.0 +.8%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 24.46 +.35%

• 2-Year SOFR Swap Spread -16.5 basis points +.75 basis point
  

• TED Spread 21.75 basis points n/a
  

• 3-Month EUR/USD Cross-Currency Basis Swap -4.25 unch.
  
• MBS  5/10 Treasury Spread 139.0 -4.0 basis points
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 958.0 -2.0 basis points
  
• Avg. Auto ABS OAS 75.0 unch.
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 41.24 -.03%
• 3-Month T-Bill Yield 5.35% -2.0 basis points
  

• China Iron Ore Spot 129.1 USD/Metric Tonne -.5%
• Dutch TTF Nat Gas(European benchmark) 31.99 euros/megawatt-hour +3.8%

• Citi US Economic Surprise Index 7.5 -.6 points

• Citi Eurozone Economic Surprise Index -14.80 +1.1 points

• Citi Emerging Markets Economic Surprise Index 9.9 -3.7 points
• S&P 500 Current Quarter EPS Growth Rate YoY(29 of 500 reporting) -7.2% -16.3 percentage points
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 243.52 +.06:  Growth Rate +11.9% unch., P/E 19.6 +.1
  
• S&P 500 Current Year Estimated Profit Margin 12.04% unch.
  
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(0 of 10 reporting) +0.0% -0.0 percentage points
  
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 290.84 +.11: Growth Rate +36.3% unch., P/E 30.1 +.1
  
• Bloomberg US Financial Conditions Index .96 unch.
  
• Bloomberg Euro-Zone Financial Conditions Index .56 +7.0 basis points
  
• US Yield Curve -20.0 basis points (2s/10s) +14.0 basis points
  
• US Atlanta Fed 4Q GDPNow Forecast +2.21% unch.
  
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 67.1% +1.2 percentage points
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +3.02% unch.: CPI YoY +2.97% unch.
  
• 10-Year TIPS Spread 2.27 +4.0 basis points
  
• Highest target rate probability for March 20th FOMC meeting: 74.2%(+4.0 percentage points) chance of 5.0%-5.25%. Highest target rate probability for May 1st meeting: 69.2%(+4.7 percentage points) chance of 4.75%-5.0%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +108 open in Japan 
• China A50 Futures: Indicating -5 open in China

• DAX Futures: Indicating +150 open in Germany

Portfolio:

• Slightly Higher:  On gains in my utility/biotech/tech sector longs
  

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

• Market Exposure: Moved to 100% Net Long