Stocks Modestly Lower into Final Hour on US Policy-Induced Stagflation Fears, Less Dovish Fed Speak, Earnings Outlook Worries, Transport/Alt Energy Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Lower
  

• Sector Performance: Mixed
  

• Volume:  Around Average

• Market Leading Stocks: Outperforming
  

Equity Investor Angst:

• Volatility(VIX) 18.7 +2.4%
• DJIA Intraday % Swing .90%
  
• Bloomberg Global Risk On/Risk Off Index 63.4 -.03%

• Euro/Yen Carry Return Index 148.6 -.23%

• Emerging Markets Currency Volatility(VXY) 10.7 unch.

• CBOE S&P 500 Implied Correlation Index 32.1 +2.5% 

• ISE Sentiment Index 113.0 -5.0 points
  

• Total Put/Call .86 -5.5%

• NYSE Arms .79 +6.8%

Credit Investor Angst:

• North American Investment Grade CDS Index 71.7 +.97%
  

• US Energy High-Yield OAS 367.7 +3.6%
• Bloomberg TRACE # Distressed Bonds Traded 326.0 unch.
  

• European Financial Sector CDS Index 83.8 -1.0% 
• Credit Suisse Subordinated 5Y Credit Default Swap 382.99 +.28%
  

• Italian/German 10Y Yld Spread 186.0 basis points unch.
  

• Asia Ex-Japan Investment Grade CDS Index 108.5 -1.0%
  

• Emerging Market CDS Index 230.25 +1.2%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 27.6 +.09%

• 2-Year Swap Spread 31.75 basis points -3.25 basis points
  

• TED Spread 10.25 basis points -1.25 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -8.0 +.25 basis point
  
• MBS  5/10 Treasury Spread  142.0 -5.0 basis points
  
• Bloomberg US Agg CMBS Avg OAS 100.0 -2.0 basis points
  
• Avg. Auto ABS OAS .62 -4.0 basis points
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 47.7 -.07%
• 3-Month T-Bill Yield 4.77% +2.0 basis points
  

• China Iron Ore Spot 125.7 USD/Metric Tonne +.90%
• Dutch TTF Nat Gas(European benchmark) 52.0 euros/megawatt-hour -4.9%

• Citi US Economic Surprise Index 29.0 -7.0 points

• Citi Eurozone Economic Surprise Index 81.2 -1.5 points
  

• Citi Emerging Markets Economic Surprise Index 6.5 -.5 point
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 223.96 -.10:  Growth Rate +.2% unch., P/E 18.4 unch.
• S&P 500 Current Year Estimated Profit Margin 12.42% -2.0 basis points
  
• Bloomberg US Financial Conditions Index .49 -3.0 basis points
  
• Yield Curve -78.0 basis points (2s/10s) +4.0 basis points
• US Atlanta Fed 1Q GDPNow Forecast +2.50% +8.0 basis points
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +4.30% unch.: CPI YoY +6.24% unch.
  
• 10-Year TIPS Spread 2.38 +3.0 basis points
  
• Highest target rate probability for May 3rd FOMC meeting: 72.0%(+1.0 percentage points) chance of 5.0%-5.25%. Highest target rate probability for June 14th meeting: 45.8%(-.8 percentage point) chance of 5.25%-5.5%.

Overseas Futures:

• Nikkei 225 Futures: Indicating -46 open in Japan 
• China A50 Futures: Indicating -6 open in China

• DAX Futures: Indicating +70 open in Germany

Portfolio:

• Lower:  On losses in my industrial/tech sector longs and emerging market shorts
  

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

• Market Exposure: Moved to 50% Net Long