Stocks Slightly Lower into Afternoon on US Policy-Induced Stagflation Fears, Fed "Higher for Longer" Worries, Earnings Outlook Concerns, Financial/Alt Energy Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Lower
  

• Sector Performance: Most Sectors Declining
  

• Volume: Around Average

• Market Leading Stocks: Underperforming
  

Equity Investor Angst:

• Volatility(VIX) 16.8 +1.9%
• DJIA Intraday % Swing .53%
  
• Bloomberg Global Risk On/Risk Off Index 57.1 -2.3%

• Euro/Yen Carry Return Index 153.7 -.33%

• Emerging Markets Currency Volatility(VXY) 9.9 -1.9%

• CBOE S&P 500 Implied Correlation Index 32.3 +2.6% 

• ISE Sentiment Index 72.0 -29.0 points
  

• Total Put/Call .85 -14.1%

• NYSE Arms 1.69 +77.9%

Credit Investor Angst:

• North American Investment Grade CDS Index 76.4 +2.23%
  

• US Energy High-Yield OAS 380.2 +3.7%
• Bloomberg TRACE # Distressed Bonds Traded 412.0 +19
  

• European Financial Sector CDS Index 95.75 +3.30% 
• Deutsche Bank Subordinated 5Y Credit Default Swap 349.08 +.32%
  

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

• Asia Ex-Japan Investment Grade CDS Index 126.4 +1.8%
  

• Emerging Market CDS Index 241.81 +1.5%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 26.9 -.04%

• 2-Year Swap Spread 28.5 basis points -.75 basis point
  

• TED Spread 20.0 basis points +8.25 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -14.75 +.75 basis point
  
• MBS  5/10 Treasury Spread 165.0 -4.0 basis points
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 694.0 unch.
  
• Avg. Auto ABS OAS 95.0 unch.
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 47.7 +.21%
• 3-Month T-Bill Yield 5.07% -5.0 basis points
  

• China Iron Ore Spot 112.8 USD/Metric Tonne -2.3%
• Dutch TTF Nat Gas(European benchmark) 40.6 euros/megawatt-hour +.7%

• Citi US Economic Surprise Index 26.4 -8.5 points

• Citi Eurozone Economic Surprise Index 37.0 -.5 point
  

• Citi Emerging Markets Economic Surprise Index 31.8 -.9 point
  
• 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 .11 -9.0 basis points
• Bloomberg Euro-Zone Financial Conditions Index -4.18 -14.0 basis points
  
• US Yield Curve -63.75 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 unch.
  
• Highest target rate probability for June 14th FOMC meeting: 66.1%(+7.1 percentage points) chance of 5.0%-5.25%. Highest target rate probability for July 26th meeting: 55.2%(+1.9 percentage points) chance of 5.0%-5.25%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -1 open in Japan 
• China A50 Futures: Indicating -13 open in China

• DAX Futures: Indicating +152 open in Germany

Portfolio:

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

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

• Market Exposure: Moved to 75% Net Long