Stocks Lower into Final Hour on Rising Fed Rate-Hike Odds, Mideast War-Induced Inflation Fears, Technical Selling, Consumer Discretionary/Transport Sector Weakness

Economic/Market Gauges:

• North American Investment Grade CDS Index 50.4 +.4%
• BofA Private Credit Proxy Index 74.9 +1.5% 
• Bloomberg US Securitized MBS/ABS/CMBS Avg. OAS .30 +2.0 basis points
• BofA Global Financial Stress Indicator -.21 -1.0 basis point
• European Financial Sector CDS Index 53.9 unch.
• Emerging Market CDS Index 138.3 +.3%
• Israel Sovereign CDS 53.4 -.5%
• Bloomberg Global Trade Policy Uncertainty Index 1.1 unch.
• US Morning Consult Daily Consume Sentiment Index 86.3 -1.2

• Citi US Economic Surprise Index 17.1 -4.1

• Citi Eurozone Economic Surprise Index 82.2 -5.4

• Citi Emerging Markets Economic Surprise Index 20.2 -3.8
• S&P 500 Current Quarter EPS Growth Rate YoY(485 of 500 reporting) +52.1% -.1 percentage point
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 396.37 +4.03:  Growth Rate +20.8% +1.3 percentage points, P/E 19.5 -.2
• S&P 500 Current Year Estimated Profit Margin 16.29% +1.0 basis point
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(9 of 10 reporting) +133.3% unch.
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 966.61 +12.10: Growth Rate +86.4% +2.3 percentage points, P/E 19.3 -.2
• Bloomberg US Financial Conditions Index 1.33 +6.0 basis points
• US Yield Curve 40.75 basis points (2s/10s) -3.25 basis points
• Bloomberg Industrial Metal Index 180.2 +.2%
• Dutch TTF Nat Gas(European benchmark) 70.5 euros/megawatt-hour +5.2%
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 12.3 -.3 percentage point
• US Atlanta Fed GDPNow Q3 Forecast +4.6% unch.
• US 10-Year T-Note Yield 4.75% +4.0 basis points
• 1-Year TIPS Spread 2.15 +7.0 basis points

• Highest target rate probability for Oct. 28th FOMC meeting: 57.5% (+4.8 percentage points) chance of 3.75%-4.0%. Highest target rate probability for Dec. 9th meeting: 40.2%(+.7 percentage point) chance of 4.0%-4.25%. (current target rate is 3.5-3.75%)
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -587 open in Japan 
• China A50 Futures: Indicating -156 open in China
• KOSPI 200 Futures: Indicating -16 open in South Korea 

• DAX Futures: Indicating -40 open in Germany

Portfolio:

• Higher: On gains in my energy/tech sector longs, index hedges and emerging market shorts
• Disclosed Trades: None
• Market Exposure: 50% net long