Stocks Reversing Lower into Afternoon on US Policy-Induced Stagflation Fears, Declining Confidence in US Political/Judicial System, Regional Bank Contagion Worries, Industrial/Financial Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Lower
  

• Sector Performance: Almost Every Sector Declining
  

• Volume:  Around Average

• Market Leading Stocks: Underperforming
  

Equity Investor Angst:

• Volatility(VIX) 19.2 +3.7%
• DJIA Intraday % Swing 1.08%
  
• Bloomberg Global Risk On/Risk Off Index 53.7 -1.4%

• Euro/Yen Carry Return Index 150.4 -.16%

• Emerging Markets Currency Volatility(VXY) 11.7 -1.7%

• CBOE S&P 500 Implied Correlation Index 33.8 +2.4% 

• ISE Sentiment Index 94.0 -17.0 points
  

• Total Put/Call 1.01 +9.8%

• NYSE Arms .96 -18.0%

Credit Investor Angst:

• North American Investment Grade CDS Index 78.97 +3.5%
  

• US Energy High-Yield OAS 386.37 +2.8%
• Bloomberg TRACE # Distressed Bonds Traded 442.0 -2
  

• European Financial Sector CDS Index 102.52 +3.7% 
• Deutsche Bank Subordinated 5Y Credit Default Swap 373.71 -2.3%
  

• Italian/German 10Y Yld Spread 187.0 basis basis points +2.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 129.04 -.28%
  

• Emerging Market CDS Index 234.94 +2.5%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 26.82 -.33%

• 2-Year Swap Spread 33.75 basis points +.5 basis point
  

• TED Spread 61.5 basis points +11.5 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -14.75 +1.0 basis point
  
• MBS  5/10 Treasury Spread  153.0 +1.0 basis point
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 686.0 +7.0 basis points
  
• Avg. Auto ABS OAS 94.0 +2.0 basis points
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 47.8 -.04%
• 3-Month T-Bill Yield 4.72% +7.0 basis points
  

• China Iron Ore Spot 118.4 USD/Metric Tonne -.29%
• Dutch TTF Nat Gas(European benchmark) 46.6 euros/megawatt-hour -9.3%

• Citi US Economic Surprise Index 48.1 -3.9 points

• Citi Eurozone Economic Surprise Index 46.8 +.3 point
  

• Citi Emerging Markets Economic Surprise Index 25.4 +.2 point
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 226.11 unch.:  Growth Rate +1.7% unch., P/E 18.1 -.1
  
• S&P 500 Current Year Estimated Profit Margin 12.29% unch.
  
• Bloomberg US Financial Conditions Index -.47 -13.0 basis points
• Bloomberg Euro-Zone Financial Conditions Index -3.95 +7.0 basis points
  
• US Yield Curve -51.25 basis points (2s/10s) +5.75 basis points
• US Atlanta Fed 1Q GDPNow Forecast +1.71% unch.
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +4.60% -13.0 basis points: CPI YoY +5.22% unch.
  
• 10-Year TIPS Spread 2.27 -4.0 basis points
  
• Highest target rate probability for June 14th FOMC meeting: 53.5%(+12.2 percentage points) chance of 4.75%-5.0%. Highest target rate probability for July 26th meeting: 44.6%(-2.7 percentage points) chance of 4.75%-5.0%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -127 open in Japan 
• China A50 Futures: Indicating +81 open in China

• DAX Futures: Indicating +154 open in Germany

Portfolio:

• Slightly Higher:  On gains in my utility/medical sector longs and index hedges
  

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

• Market Exposure: Moved to 25% Net Long