Stocks Rising into Afternoon on Earnings Outlook Optimism, US Economic "Soft-Landing" Hopes, Short-Covering, Tech/Gambling Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Higher
  

• Sector Performance: Most Sectors Rising
  

• Volume: Around Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 17.1 -9.5%
• DJIA Intraday % Swing .80%
  
• Bloomberg Global Risk On/Risk Off Index 57.0 +4.8%

• Euro/Yen Carry Return Index 154.2 -.08%

• Emerging Markets Currency Volatility(VXY) 10.0 unch.

• CBOE S&P 500 Implied Correlation Index 33.5 -7.1% 

• ISE Sentiment Index 94.0 +13.0 points
  

• Total Put/Call .97 -4.9%

• NYSE Arms .89 -43.7%

Credit Investor Angst:

• North American Investment Grade CDS Index 77.2 -2.0%
  

• US Energy High-Yield OAS 385.6 -2.7%
• Bloomberg TRACE # Distressed Bonds Traded 413.0 unch.
  

• European Financial Sector CDS Index 99.3 -2.1% 
• Deutsche Bank Subordinated 5Y Credit Default Swap 364.4 -1.0%
  

• Italian/German 10Y Yld Spread 189.0 basis points +1.0 basis point
  

• Asia Ex-Japan Investment Grade CDS Index 131.0 -.5%
  

• Emerging Market CDS Index 244.9 -1.9%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 26.7 -.1%

• 2-Year Swap Spread 29.25 basis points -2.5 basis points
  

• TED Spread 10.5 basis points -9.25 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -19.25 -3.5 basis points
  
• MBS  5/10 Treasury Spread 169.0 -1.0 basis point
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 697.0 +4.0 basis points
  
• Avg. Auto ABS OAS 94.0 unch.
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 47.62 +.04%
• 3-Month T-Bill Yield 5.14% +1.0 basis point
  

• China Iron Ore Spot 104.5 USD/Metric Tonne +.5%
• Dutch TTF Nat Gas(European benchmark) 39.0 euros/megawatt-hour +1.3%

• Citi US Economic Surprise Index 21.0 -5.2 points

• Citi Eurozone Economic Surprise Index 21.5 -7.6 points
  

• Citi Emerging Markets Economic Surprise Index 32.5 +1.3 points
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 226.34 +.40:  Growth Rate +1.7% +.2 percentage point, P/E 18.1 unch.
  
• S&P 500 Current Year Estimated Profit Margin 12.28% +2.0 basis points
  
• Bloomberg US Financial Conditions Index .14 +17.0 basis point
• Bloomberg Euro-Zone Financial Conditions Index -4.36 +7.0 basis points
  
• US Yield Curve -55.0 basis points (2s/10s) -3.25 basis points
• US Atlanta Fed 2Q GDPNow Forecast +1.13% n/a
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +4.58% unch.: CPI YoY +5.19% unch.
  
• 10-Year TIPS Spread 2.28 +3.0 basis points
  
• Highest target rate probability for June 14th FOMC meeting: 71.0%(+7.2 percentage points) chance of 5.0%-5.25%. Highest target rate probability for July 26th meeting: 59.9%(+12.3 percentage points) chance of 5.0%-5.25%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +208 open in Japan 
• China A50 Futures: Indicating +59 open in China

• DAX Futures: Indicating +145 open in Germany

Portfolio:

• Slightly Lower:  On losses in my index hedges and emerging market shorts
  

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

• Market Exposure: Moved to 50% Net Long