Stocks Falling into Final Hour on Surging Long-Term Rates, Mideast War-Induced Inflation Fears, Rising Fed Rate-Hike Odds, Consumer Discretionary/Biotech Sector Weakness

Economic/Market Gauges:

• North American Investment Grade CDS Index 57.2 +2.3% 
• BofA Private Credit Proxy Index 70.1 -.9% 
• Bloomberg US Securitized MBS/ABS/CMBS Avg. OAS .36 +1.0 basis point
• BofA Global Financial Stress Indicator -.14 unch.
• European Financial Sector CDS Index 63.4 +2.3% 
• Emerging Market CDS Index 147.1 +3.0% 
• Israel Sovereign CDS 57.7 +2.6% 
• Bloomberg Global Trade Policy Uncertainty Index .9 +.1
• US Morning Consult Daily Consume Sentiment Index 87.6 +2.6

• Citi US Economic Surprise Index 40.3 +16.1

• Citi Eurozone Economic Surprise Index 82.1 +19.5

• Citi Emerging Markets Economic Surprise Index 17.7 -1.1
• S&P 500 Current Quarter EPS Growth Rate YoY(7 of 500 reporting) +16.5% -2.5 percentage points
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 402.90 +.29:  Growth Rate +22.8% +.1 percentage point, P/E 19.3 unch.
• S&P 500 Current Year Estimated Profit Margin 16.29% unch.
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(0 of 10 reporting) n/a
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 1,047.25 +.52: Growth Rate +56.0% +.1 percentage point, P/E 18.4 -.1
• Bloomberg US Financial Conditions Index 1.30 +4.0 basis points
• US Yield Curve 21.75 basis points (2s/10s) +1.25 basis points
• Bloomberg Industrial Metal Index 180.9 -.7%
• Dutch TTF Nat Gas(European benchmark) 74.1 euros/megawatt-hour +1.1%
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 8.5% -.9 percentage point
• US Atlanta Fed GDPNow Q3 Forecast +5.1% unch.
• US 10-Year T-Note Yield 5.11% +14.0 basis points
• 1-Year TIPS Spread 2.42 +10.0 basis points

• Highest target rate probability for Dec. 9th FOMC meeting: 53.2% (+10.9 percentage points) chance of 4.25%-4.5%. Highest target rate probability for Jan. 27th meeting: 46.4%(+2.0 percentage points) chance of 4.25%-4.5%. (current target rate is 3.75-4.0%)
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +915 open in Japan 
• China A50 Futures: Indicating -67 open in China
• KOSPI 200 Futures: Indicating +1 open in South Korea 

• DAX Futures: Indicating +140 open in Germany

Portfolio:

• Modestly Lower: On losses in my consumer discretionary/biotech sector longs
• Disclosed Trades: Added to my (IWM)/(QQQ) hedges and to my emerging market shorts
• Market Exposure: Moved to 50% net long