Stocks Modestly Higher into Final Hour on Stable Long-Term Rates, Dollar Weakness, Month-End Positioning, Commodity/Transport Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Higher
  

• Sector Performance: Most Sectors Rising
  

• Volume:  Below Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 20.9 -3.6%
• DJIA Intraday % Swing 1.02%
  
• Bloomberg Global Risk On/Risk Off Index 62.5 +3.1%

• Euro/Yen Carry Return Index 150.3 +.3%

• Emerging Markets Currency Volatility(VXY) 10.9 -.1%

• CBOE S&P 500 Implied Correlation Index 36.2 -4.7% 

• ISE Sentiment Index 112.0 +26.0 points
  

• Total Put/Call 1.02 -7.3%

• NYSE Arms 1.13 +34.5%

Credit Investor Angst:

• North American Investment Grade CDS Index 75.4 -1.5%
  

• US Energy High-Yield OAS 364.3 -2.2%
• Bloomberg TRACE # Distressed Bonds Traded 291.0 -10
  

• European Financial Sector CDS Index 88.1 -2.3% 
• Credit Suisse Subordinated 5Y Credit Default Swap 404.91 -.5%
  

• Italian/German 10Y Yld Spread 184.0 basis basis points -6.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 117.2 -.5%
  

• Emerging Market CDS Index 238.8 -2.2%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 27.2 +.44%

• 2-Year Swap Spread 35.0 basis points +1.0 basis point
  

• TED Spread 17.25 basis points +2.25 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -8.75 -.75 basis point
  
• MBS  5/10 Treasury Spread  147.0 -6.0 basis points
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 516.0 +3.0 basis points
  
• Avg. Auto ABS OAS 58.0 -3.0 basis points
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 47.5 +.12%
• 3-Month T-Bill Yield 4.77% -4.0 basis points
  

• China Iron Ore Spot 123.6 USD/Metric Tonne +.7%
• Dutch TTF Nat Gas(European benchmark) 47.3 euros/megawatt-hour -7.3%

• Citi US Economic Surprise Index 40.4 +2.9 points

• Citi Eurozone Economic Surprise Index 60.5 -8.2 points
  

• Citi Emerging Markets Economic Surprise Index 2.2 -.3 point
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 224.07 +.10:  Growth Rate +.7% +.4 percentage point, P/E 17.8+.1
• S&P 500 Current Year Estimated Profit Margin 12.38% -1.0 basis point
  
• Bloomberg US Financial Conditions Index .21 -5.0 basis points
  
• Yield Curve -86.75 basis points (2s/10s) -.75 basis point
• US Atlanta Fed 1Q GDPNow Forecast +2.80% +5.0 basis points
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +4.72% unch.: CPI YoY +6.23% unch.
  
• 10-Year TIPS Spread 2.37 -1.0 basis point
  
• Highest target rate probability for May 3rd FOMC meeting: 71.0%(+1.7 percentage points) chance of 5.0%-5.25%. Highest target rate probability for June 14th meeting: 56.9%(+.1 percentage point) chance of 5.25%-5.5%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +92 open in Japan 
• China A50 Futures: Indicating +37 open in China

• DAX Futures: Indicating +33 open in Germany

Portfolio:

• Slightly Higher:  On gains in my industrial/tech/commodity sector longs
  

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

• Market Exposure: Moved to 25% Net Long