Stocks Falling into Final Hour on Mideast War Escalation, Mideast War-Induced Inflation Fears, Rising Fed Rate-Hike Odds, Tech/Transport Sector Weakness

Economic/Market Gauges:

• North American Investment Grade CDS Index 50.8 +1.1%
• BofA Private Credit Proxy Index 74.0 -.7% 
• Bloomberg US Securitized MBS/ABS/CMBS Avg. OAS .32 +2.0 basis points
• BofA Global Financial Stress Indicator -.17 +4.0 basis points
• European Financial Sector CDS Index 54.5 +1.2%
• Emerging Market CDS Index 139.5 +1.1%
• Israel Sovereign CDS 52.5 -1.8%
• Bloomberg Global Trade Policy Uncertainty Index 1.0 -.1
• US Morning Consult Daily Consume Sentiment Index 87.5 +1.2

• Citi US Economic Surprise Index 16.3 -.8

• Citi Eurozone Economic Surprise Index 72.3 -9.9

• Citi Emerging Markets Economic Surprise Index 24.2 +4.0
• S&P 500 Current Quarter EPS Growth Rate YoY(486 of 500 reporting) +52.0% -.1 percentage point
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 396.93 +.56:  Growth Rate +21.0% +.2 percentage point, P/E 19.3 -.2
• S&P 500 Current Year Estimated Profit Margin 16.29% unch.
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(9 of 10 reporting) +133.3% unch.
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 968.31 +1.70: Growth Rate +86.7% +.3 percentage point, P/E 19.3 unch.
• Bloomberg US Financial Conditions Index 1.33 unch.
• US Yield Curve 40.25 basis points (2s/10s) -.5 basis point
• Bloomberg Industrial Metal Index 179.8 -.2%
• Dutch TTF Nat Gas(European benchmark) 74.1 euros/megawatt-hour +6.1%
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 12.3 unch.
• US Atlanta Fed GDPNow Q3 Forecast +4.8% +20.0 basis points
• US 10-Year T-Note Yield 4.80% +5.0 basis points
• 1-Year TIPS Spread 2.26 +10.0 basis points

• Highest target rate probability for Oct. 28th FOMC meeting: 57.7% (+.5 percentage point) chance of 3.75%-4.0%. Highest target rate probability for Dec. 9th meeting: 42.8%(+2.0 percentage points) chance of 4.0%-4.25%. (current target rate is 3.5-3.75%)
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -1,570 open in Japan 
• China A50 Futures: Indicating -129 open in China
• KOSPI 200 Futures: Indicating -40 open in South Korea 

• DAX Futures: Indicating -120 open in Germany

Portfolio:

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