Stocks Rising into Close on Lower Long-Term Rates, Less China Economic Pessimism, Short-Covering, Tech/Commodity Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Higher
  

• Sector Performance: Almost Every Sector Rising
  

• Volume: Above Average

• Market Leading Stocks: Outperforming
  

Equity Investor Angst:

• Volatility(VIX) 14.8 -3.8%
• DJIA Intraday % Swing .67 +38.5%
  
• Bloomberg Global Risk On/Risk Off Index 65.4 -.95%

• Euro/Yen Carry Return Index 178.9 -.9%

• Emerging Markets Currency Volatility(VXY) 7.07 +.43%

• CBOE S&P 500 Implied Correlation Index 18.8 -4.5% 

• ISE Sentiment Index 140.0 +17.0
  

• Total Put/Call .98 -7.6%

• NYSE Arms .98 -15.5%
  
• NYSE Non-Block Money Flow +$284.2M 
  

Credit Investor Angst:

• North American Investment Grade CDS Index 51.8 -2.4%
  

• US Energy High-Yield OAS 262.3 -.9%
• Bloomberg TRACE # Distressed Bonds Traded 283 -8
  

• European Financial Sector CDS Index 63.1 -2.5%
  
• Deutsche Bank Subordinated 5Y Credit Default Swap 189.4 -1.4%
  

• Italian/German 10Y Yld Spread 132.0 basis points -1.0 basis point
  

• Asia Ex-Japan Investment Grade CDS Index 107.8 -5.2%
  

• Emerging Market CDS Index 170.1 -2.6%
  
• Israel Sovereign CDS 131.7 -.2%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 24.4 unch.

• 2-Year SOFR Swap Spread -6.25 basis points unch.
  

• Treasury Repo 3M T-Bill Spread 8.5 basis points -1.25 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -3.5 +.25 basis point
  
• MBS  5/10 Treasury Spread 145.0 -4.0 basis points
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 769.0 -2.0 basis points
  
• Avg. Auto ABS OAS 57.0 -1.0 basis point
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 39.5 +.5%
• 3-Month T-Bill Yield 5.40% -1.0 basis point
  

• China Iron Ore Spot 116.4 USD/Metric Tonne -1.11%
• Dutch TTF Nat Gas(European benchmark) 30.9 euros/megawatt-hour +7.6%

• Citi US Economic Surprise Index 2.6 +.6 point

• Citi Eurozone Economic Surprise Index 29.3 +.5 point

• Citi Emerging Markets Economic Surprise Index 34.0 +1.3 points
• S&P 500 Current Quarter EPS Growth Rate YoY(373 of 500 reporting) +4.7% -.5 percentage point
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 254.58 +.38:  Growth Rate +14.1% +.2 percentage point, P/E 19.8 +.1
  
• S&P 500 Current Year Estimated Profit Margin 12.89% +1.0 basis point
  
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(6 of 10 reporting) +57.2% unch.
  
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 321.85 +1.96: Growth Rate +34.0% +.9 percentage point, P/E 30.3 +.1
  
• Bloomberg US Financial Conditions Index 1.02 unch.
  
• Bloomberg Euro-Zone Financial Conditions Index 1.12 +16.0 basis point
  
• US Yield Curve -30.75 basis points (2s/10s) +3.0 basis points
  
• US Atlanta Fed 2Q GDPNow Forecast +3.3% -60.0 basis points
  
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 44.1% +4.6 percentage points
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +2.74% unch.: CPI YoY +3.50% unch.
  
• 10-Year TIPS Spread 2.36 -1.0 basis point
  
• Highest target rate probability for July 31st FOMC meeting: 64.5%(-7.4 percentage points) chance of 5.25%-5.5%. Highest target rate probability for Sept. 18th meeting: 45.0%(+2.4 percentage points) chance of 5.0%-5.25%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -331 open in Japan 
• China A50 Futures: Indicating +275 open in China

• DAX Futures: Indicating +215 open in Germany

Portfolio:

• Higher:  On gains in my tech/industrial/financial/consumer discretionary sector longs
  

• Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges and some of my emerging market shorts
  

• Market Exposure: Moved to 100% Net Long