Stocks Reversing Higher into Afternoon on US Economic "Soft-Landing" Hopes, Less European/Emerging Markets/US High-Yield Debt Angst, Month-End Positioning, Transport/Energy Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Higher
  

• Sector Performance: Most Sectors Rising
  

• Volume: Around Average

• Market Leading Stocks: Outperforming
  

Equity Investor Angst:

• Volatility(VIX) 16.1 -5.3%
• DJIA Intraday % Swing 1.05%
  
• Bloomberg Global Risk On/Risk Off Index 55.3 -3.1%

• Euro/Yen Carry Return Index 157.0 +1.6%

• Emerging Markets Currency Volatility(VXY) 9.9 -.9%

• CBOE S&P 500 Implied Correlation Index 33.5 +.3% 

• ISE Sentiment Index 109.0 +3.0 points
  

• Total Put/Call .94 -4.1%

• NYSE Arms 1.15 +105.3%

Credit Investor Angst:

• North American Investment Grade CDS Index 75.4 -1.8%
  

• US Energy High-Yield OAS 381.05 -.50%
• Bloomberg TRACE # Distressed Bonds Traded 400.0 -13.0
  

• European Financial Sector CDS Index 97.9 -1.1% 
• Deutsche Bank Subordinated 5Y Credit Default Swap 357.15 -1.8%
  

• Italian/German 10Y Yld Spread 186.0 basis points -3.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 129.17 -1.6%
  

• Emerging Market CDS Index 238.2 -2.3%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 26.7 -.3%

• 2-Year Swap Spread 29.25 basis points unch.
  

• TED Spread 22.5 basis points +12.0 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -18.75 +.5 basis point
  
• MBS  5/10 Treasury Spread 170.0 +1.0 basis point
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 696.0 -1.0 basis point
  
• Avg. Auto ABS OAS 94.0 unch.
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 47.7 +.02%
• 3-Month T-Bill Yield 5.07% -7.0 basis points
  

• China Iron Ore Spot 104.5 USD/Metric Tonne -.3%
• Dutch TTF Nat Gas(European benchmark) 38.5 euros/megawatt-hour -1.7%

• Citi US Economic Surprise Index 22.0 +1.0 point

• Citi Eurozone Economic Surprise Index 15.2 -6.3 points
  

• Citi Emerging Markets Economic Surprise Index 35.6 +3.1 points
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 226.73 +.39:  Growth Rate +1.9% +.2 percentage point, P/E 18.3 +.2
  
• S&P 500 Current Year Estimated Profit Margin 12.29% +1.0 basis point
  
• Bloomberg US Financial Conditions Index .06 -10.0 basis points
• Bloomberg Euro-Zone Financial Conditions Index -4.49 -13.0 basis points
  
• US Yield Curve -60.0 basis points (2s/10s) -5.0 basis points
• US Atlanta Fed 2Q GDPNow Forecast +1.66% n/a
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +4.66% +8.0 basis points: CPI YoY +5.19% unch.
  
• 10-Year TIPS Spread 2.22 -6.0 basis points
  
• Highest target rate probability for June 14th FOMC meeting: 66.0%(+3.8 percentage points) chance of 5.0%-5.25%. Highest target rate probability for July 26th meeting: 55.4%(+.2 percentage point) chance of 5.0%-5.25%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +183 open in Japan 
• China A50 Futures: Indicating +45 open in China

• DAX Futures: Indicating +129 open in Germany

Portfolio:

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

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

• Market Exposure: Moved to 50% Net Long