Stocks Reversing Modestly Lower into Final Hour on Mideast War Escalation, Global Supply Chain Disruption Fears, Rising Long-Term Rates, Pharma/Homebuilding Sector Weakness

Economic/Market Gauges:

• North American Investment Grade CDS Index 52.3 -.1%
• BofA Private Credit Proxy Index 68.8 -2.1% 
• Bloomberg US Securitized MBS/ABS/CMBS Avg. OAS .29 +2.0 basis point
• BofA Global Financial Stress Indicator -.11 +4.0 basis points
• European Financial Sector CDS Index 55.5 -.6%
• Emerging Market CDS Index 145.0 -.1%
• Israel Sovereign CDS 63.4 +2.8% 
• Bloomberg Global Trade Policy Uncertainty Index .7 +.1
• US Morning Consult Daily Consume Sentiment Index 89.8 +.7

• Citi US Economic Surprise Index 50.3 -3.4

• Citi Eurozone Economic Surprise Index 13.9 +6.6

• Citi Emerging Markets Economic Surprise Index 23.5 -5.8
• S&P 500 Current Quarter EPS Growth Rate YoY(48 of 500 reporting) +52.3% -2.5 percentage points
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 375.84 +1.43:  Growth Rate +27.3% +.5 percentage point, P/E 19.9 -.3
• S&P 500 Current Year Estimated Profit Margin 15.66% +2.0 basis points
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(2 of 10 reporting) +510.0% unch.
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 908.65 +2.38: Growth Rate +75.2% +.4 percentage point, P/E 19.1 -.4 
• Bloomberg US Financial Conditions Index 1.06 -10.0 basis points
• US Yield Curve 38.0 basis points (2s/10s) +1.75 basis points
• Bloomberg Industrial Metal Index 173.24 +.33%
• Dutch TTF Nat Gas(European benchmark) 58.7 euros/megawatt-hour +2.2%
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 14.0% -.4 percentage point
• US Atlanta Fed GDPNow Q2 Forecast +1.7% unch.
• US 10-Year T-Note Yield 4.60% +5.0 basis points
• 1-Year TIPS Spread 1.15 -1.0 basis point

• Highest target rate probability for September 29th FOMC meeting: 53.6% (+2.4 percentage points) chance of 3.75%-4.0%. Highest target rate probability for Oct. 28th meeting: 49.3%(+.3 percentage point) chance of 3.75%-4.0%. (current target rate is 3.5-3.75%)
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +1,080 open in Japan 
• China A50 Futures: Indicating -140 open in China
• KOSPI 200 Futures: Indicating +22 open in South Korea 

• DAX Futures: Indicating -12 open in Germany

Portfolio:

• Slightly Higher: On gains in my tech sector longs and index hedges
• Disclosed Trades: Added to my (IWM)/(QQQ) hedges 
• Market Exposure: Moved to 25% net long