Stocks Lower into Final Hour on Rising Long-Term Rates, Fed Policy Mistake Worries, US Election Integrity Concerns, Regional Bank/Homebuilding Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Lower
  

• Sector Performance: Most Sectors Declining
  

• Volume: Around Average
  

• Market Leading Stocks: Underperforming
  

Equity Investor Angst:

• Volatility(VIX) 18.6 +3.1%
• DJIA Intraday % Swing 1.0 +56.0%
  
• Bloomberg Global Risk On/Risk Off Index 61.8 +1.1%

• Euro/Yen Carry Return Index 180.7 +.39%

• Emerging Markets Currency Volatility(VXY) 9.6 +.1%

• CBOE S&P 500 Implied Correlation Index 15.6 +1.1% 

• ISE Sentiment Index 124.0 -28.0 points
  

• Total Put/Call .86 +3.6%

• NYSE Arms .68 -39.3%
  
• NYSE Non-Block Money Flow -$277.3M 
  

Credit Investor Angst:

• North American Investment Grade CDS Index 52.1 +1.8%
  

• US Energy High-Yield OAS 324.2 +.25%
• Bloomberg TRACE # Distressed Bonds Traded 196 -3
  

• European Financial Sector CDS Index 63.1 +2.0%
  
• Deutsche Bank Subordinated 5Y Credit Default Swap 159.9 +1.3%
  

• Italian/German 10Y Yld Spread 123.0 basis points +5.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 71.3 -.1%
  

• Emerging Market CDS Index 165.3 +2.0%
• Israel Sovereign CDS 149.5 +.4%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 25.2 -.04%

• 2-Year SOFR Swap Spread -19.25 basis points +.25 basis point
  

• 3M T-Bill Treasury Repo Spread -19.0 basis points +2.0 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -3.0 -.25 basis point
  
• MBS  5/10 Treasury Spread 148.0 +5.0 basis points
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 700.0 -1.0 basis point
  
• Avg. Auto ABS OAS 59.0 -2.0 basis points
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 38.3 -.29%
• 3-Month T-Bill Yield 4.63% unch.
  

• China Iron Ore Spot 100.7 USD/Metric Tonne -1.1%
• Dutch TTF Nat Gas(European benchmark) 40.02 euros/megawatt-hour +2.1%

• Citi US Economic Surprise Index 16.4 +1.6 points
  

• Citi Eurozone Economic Surprise Index -11.0 +6.9 points

• Citi Emerging Markets Economic Surprise Index -.8 +2.0 points
• S&P 500 Current Quarter EPS Growth Rate YoY(72 of 500 reporting) +6.7% unch.
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 267.80 +.24:  Growth Rate +14.8% +.1 percentage point, P/E 21.8 -.1
  
• S&P 500 Current Year Estimated Profit Margin 12.64% -1.0 basis point
  
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(1 of 10 reporting) +40.2% n/a
  
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 369.37 +1.32: Growth Rate +29.7% +.4 percentage point, P/E 32.1 -.1
  
• Bloomberg US Financial Conditions Index .91 +3.0 basis points
  
• Bloomberg Euro-Zone Financial Conditions Index .79 -3.0 basis points
  
• US Yield Curve 15.5 basis point (2s/10s) +3.75 basis points
  
• US Atlanta Fed 3Q GDPNow Forecast +3.43% unch.
  
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 49.5 -.6 percentage point
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +2.62% unch.: CPI YoY +2.57% unch.
  
• 10-Year TIPS Spread 2.32 +1.0 basis point
  
• Highest target rate probability for Dec. 18th FOMC meeting: 65.3%(-11.5 percentage points) chance of 4.25%-4.5%. Highest target rate probability for Jan. 29th meeting: 44.7%(-11.1 percentage points) chance of 4.0%-4.25%. (current target rate is 4.75-5.0%)
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +135 open in Japan 
• China A50 Futures: Indicating -42 open in China

• DAX Futures: Indicating +151 open in Germany

Portfolio:

• Lower:  On losses in my tech/industrial/biotech/consumer discretionary/utility sector longs
  

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

• Market Exposure: Moved to 75% Net Long