Stocks Reversing Lower into Afternoon on Regional Bank Contagion Worries, US Policy-Induced Stagflation Fears, Fed Higher-for-Longer Concerns, Tech/Healthcare Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Lower
  

• Sector Performance: Most Sectors Declining
  

• Volume:  Around Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 20.7 +.5%
• DJIA Intraday % Swing .67%
  
• Bloomberg Global Risk On/Risk Off Index 50.5 +2.2%

• Euro/Yen Carry Return Index 147.7 -.3%

• Emerging Markets Currency Volatility(VXY) 12.0 unch.

• CBOE S&P 500 Implied Correlation Index 37.2 +5.2% 

• ISE Sentiment Index 130.0 +46.0 points
  

• Total Put/Call 1.02 +12.1%

• NYSE Arms .83 +7.8%

Credit Investor Angst:

• North American Investment Grade CDS Index 84.56 +1.4%
  

• US Energy High-Yield OAS 434.02 -.82%
• Bloomberg TRACE # Distressed Bonds Traded 471.0 +12
  

• European Financial Sector CDS Index 114.83 -1.1% 
• Deutsche Bank Subordinated 5Y Credit Default Swap 489.6 +15.9%
  

• Italian/German 10Y Yld Spread 185.0 basis basis points +1.0 basis point
  

• Asia Ex-Japan Investment Grade CDS Index 145.2 -1.2%
  

• Emerging Market CDS Index 251.2 +1.1%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 26.6 +.36%

• 2-Year Swap Spread 33.0 basis points +4.0 basis points
  

• TED Spread 49.0 basis points unch.
  

• 3-Month EUR/USD Cross-Currency Basis Swap -21.75 +.25 basis point
  
• MBS  5/10 Treasury Spread  161.0 +7.0 basis points
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 663.0 +2.0 basis points
  
• Avg. Auto ABS OAS 90.0 -1.0 basis point
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 47.8 +.28%
• 3-Month T-Bill Yield 4.64% -4.0 basis points
  

• China Iron Ore Spot 121.9 USD/Metric Tonne +.5%
• Dutch TTF Nat Gas(European benchmark) 42.7 euros/megawatt-hour +.5%

• Citi US Economic Surprise Index 61.3 +1.8 points

• Citi Eurozone Economic Surprise Index 60.9 +1.4 points
  

• Citi Emerging Markets Economic Surprise Index 23.5 -.1 point
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 226.26 -.05:  Growth Rate +1.7% -.1 percentage point, P/E 17.6 unch.
  
• S&P 500 Current Year Estimated Profit Margin 12.33% unch.
  
• Bloomberg US Financial Conditions Index -.61 -10.0 basis points
• Bloomberg Euro-Zone Financial Conditions Index -4.19 +19.0 basis points
  
• US Yield Curve -49.25 basis points (2s/10s) -.25 basis point
• US Atlanta Fed 1Q GDPNow Forecast +3.19% unch.
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +4.73% unch.: CPI YoY +5.22% unch.
  
• 10-Year TIPS Spread 2.31 +6.0 basis points
  
• Highest target rate probability for June 14th FOMC meeting: 55.5%(-3.5 percentage points) chance of 4.75%-5.0%. Highest target rate probability for July 26th meeting: 42.0%(+.2 percentage point) chance of 4.75%-5.0%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -293 open in Japan 
• China A50 Futures: Indicating +61 open in China

• DAX Futures: Indicating +89 open in Germany

Portfolio:

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

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

• Market Exposure: Moved to 25% Net Long