Stocks Reversing Slightly Higher into Afternoon on Loosening US Financial Conditions, Diminishing Regional Bank Contagion Fears, Earnings Outlook Optimism, Financial/Medical Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Lower
  

• Sector Performance: Mixed
  

• Volume: Below Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 16.4 -2.6%
• DJIA Intraday % Swing .42%
  
• Bloomberg Global Risk On/Risk Off Index 58.7 +1.0%

• Euro/Yen Carry Return Index 154.3 +.4%

• Emerging Markets Currency Volatility(VXY) 10.1 +.7%

• CBOE S&P 500 Implied Correlation Index 31.3 +.2% 

• ISE Sentiment Index 198.0 -10.0 points
  

• Total Put/Call .94 +4.4%

• NYSE Arms 1.08 +13.7%

Credit Investor Angst:

• North American Investment Grade CDS Index 73.95 +.42%
  

• US Energy High-Yield OAS 364.26 +.77%
• Bloomberg TRACE # Distressed Bonds Traded 393.0 +7
  

• European Financial Sector CDS Index 92.7 +.19% 
• Deutsche Bank Subordinated 5Y Credit Default Swap 347.96 +2.2%
  

• Italian/German 10Y Yld Spread 185.0 basis basis points +3.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 124.0 +2.1%
  

• Emerging Market CDS Index 237.5 +1.9%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 26.95 -.01%

• 2-Year Swap Spread 29.25 basis points -1.25 basis points
  

• TED Spread 11.75 basis points -6.25 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -15.5 +.75 basis point
  
• MBS  5/10 Treasury Spread 169.0 +2.0 basis points
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 694.0 +1.0 basis point
  
• Avg. Auto ABS OAS 95.0 unch.
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 47.6 -.31%
• 3-Month T-Bill Yield 5.12% unch.
  

• China Iron Ore Spot 116.9 USD/Metric Tonne -.4%
• Dutch TTF Nat Gas(European benchmark) 40.3 euros/megawatt-hour -5.7%

• Citi US Economic Surprise Index 35.9 -1.0 point

• Citi Eurozone Economic Surprise Index 37.5 -.6 point
  

• Citi Emerging Markets Economic Surprise Index 32.7 unch.
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 226.08 unch.:  Growth Rate +1.6% unch., P/E 18.4 unch.
  
• S&P 500 Current Year Estimated Profit Margin 12.26% unch.
  
• Bloomberg US Financial Conditions Index .29 +9.0 basis points
• Bloomberg Euro-Zone Financial Conditions Index -4.04 +2.0 basis points
  
• US Yield Curve -65.75 basis points (2s/10s) -2.0 basis points
• US Atlanta Fed 1Q GDPNow Forecast +2.48% unch.
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +4.58% unch.: CPI YoY +5.17% unch.
  
• 10-Year TIPS Spread 2.29 +1.0 basis point
  
• Highest target rate probability for June 14th FOMC meeting: 64.6%(+.8 percentage point) chance of 5.0%-5.25%. Highest target rate probability for July 26th meeting: 58.1%(+3.4 percentage points) chance of 5.0%-5.25%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -1 open in Japan 
• China A50 Futures: Indicating +7 open in China

• DAX Futures: Indicating +145 open in Germany

Portfolio:

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

• Disclosed Trades:  None
  

• Market Exposure: 50% Net Long