Stocks Modestly Higher into Afternoon on US Soft-Landing Hopes, Dollar Weakness, Less European/Emerging Markets/US High-Yield Debt Angst, Pharma/Energy Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Around Even
  

• Sector Performance: Most Sectors Rising
  

• Volume: Below Average

• Market Leading Stocks: Underperforming
  

Equity Investor Angst:

• Volatility(VIX) 18.6 -2.5%
• DJIA Intraday % Swing .80%
  
• Bloomberg Global Risk On/Risk Off Index 54.7 -1.0%

• Euro/Yen Carry Return Index 153.2 +.53%

• Emerging Markets Currency Volatility(VXY) 11.4 -.7%

• CBOE S&P 500 Implied Correlation Index 33.1 +.24% 

• ISE Sentiment Index 116.0 +5.0 points
  

• Total Put/Call .91 -9.0%

• NYSE Arms 1.72 +109.7%

Credit Investor Angst:

• North American Investment Grade CDS Index 75.8 -1.7%
  

• US Energy High-Yield OAS 370.92 -.19%
• Bloomberg TRACE # Distressed Bonds Traded 365.0 -15
  

• European Financial Sector CDS Index 97.5 -2.3% 
• Deutsche Bank Subordinated 5Y Credit Default Swap 386.3 -2.6%
  

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

• Asia Ex-Japan Investment Grade CDS Index 126.8 -1.9%
  

• Emerging Market CDS Index 233.4 -1.8%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 26.91 +.07%

• 2-Year Swap Spread 31.0 basis points -1.0 basis point
  

• TED Spread 23.25 basis points +1.5 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -16.5 -1.0 basis point
  
• MBS  5/10 Treasury Spread 158.0 -7.0 basis points
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 691.0 unch.
  
• Avg. Auto ABS OAS 96.0 +1.0 basis point
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 47.8 +.24%
• 3-Month T-Bill Yield 4.97% +2.0 basis points
  

• China Iron Ore Spot 117.4 USD/Metric Tonne -.7%
• Dutch TTF Nat Gas(European benchmark) 42.9 euros/megawatt-hour -1.9%

• Citi US Economic Surprise Index 29.2 -.5 point

• Citi Eurozone Economic Surprise Index 50.70 -1.3 points
  

• Citi Emerging Markets Economic Surprise Index 22.2 +.6 point
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 226.06 -.04:  Growth Rate +1.6% -.1 percentage point, P/E 18.2 unch.
  
• S&P 500 Current Year Estimated Profit Margin 12.28% -1.0 basis point
  
• Bloomberg US Financial Conditions Index .00 +10.0 basis points
• Bloomberg Euro-Zone Financial Conditions Index -4.04 -3.0 basis points
  
• US Yield Curve -57.5 basis points (2s/10s) +5.0 basis points
• US Atlanta Fed 1Q GDPNow Forecast +2.17% unch.
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +4.58% -2.0 basis points: CPI YoY +5.12% -10.0 basis points
  
• 10-Year TIPS Spread 2.31 +2.0 basis points
  
• Highest target rate probability for June 14th FOMC meeting: 67.2%(-2.4 percentage points) chance of 5.0%-5.25%. Highest target rate probability for July 26th meeting: 47.5%(+1.4 percentage points) chance of 4.75%-5.0%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +37 open in Japan 
• China A50 Futures: Indicating -10 open in China

• DAX Futures: Indicating +169 open in Germany

Portfolio:

• Higher:  On gains in my industrial/medical/utility/tech sector longs and emerging market shorts
  

• Disclosed Trades:  Covered some of my (IWM)/(QQQ) hedges
  

• Market Exposure: Moved to 75% Net Long