Stocks Lower into Final Hour on US Policy-Induced Stagflation Fears, Cooling AI Stock Frenzy, Global Growth Worries, Energy/Regional Bank Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Lower
  

• Sector Performance: Most Sectors Declining
  

• Volume: Around Average

• Market Leading Stocks: Underperforming
  

Equity Investor Angst:

• Volatility(VIX) 17.3 -.8%
• DJIA Intraday % Swing .65%
  
• Bloomberg Global Risk On/Risk Off Index 54.0 -5.2%

• Euro/Yen Carry Return Index 156.0 -.91%

• Emerging Markets Currency Volatility(VXY) 9.2 +9.9%

• CBOE S&P 500 Implied Correlation Index 24.6 +2.3% 

• ISE Sentiment Index 99.0 -37.0 points
  

• Total Put/Call .95 +8.0%

• NYSE Arms 1.58 +28.5%

Credit Investor Angst:

• North American Investment Grade CDS Index 74.9 +.63%
  

• US Energy High-Yield OAS 400.24 +2.9%
• Bloomberg TRACE # Distressed Bonds Traded 376.0 -23.0
  

• European Financial Sector CDS Index 93.0 +2.1% 
• Deutsche Bank Subordinated 5Y Credit Default Swap 316.7 +1.4%
  

• Italian/German 10Y Yld Spread 180.0 basis points -1.0 basis point
  

• Asia Ex-Japan Investment Grade CDS Index 123.1 +2.1%
  

• Emerging Market CDS Index 245.36 -.09%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 25.7 +.24%

• 2-Year Swap Spread 21.25 basis points +1.25 basis points
  

• TED Spread 7.25 basis points -13.25 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -21.75 +1.75 basis points
  
• MBS  5/10 Treasury Spread 178.0 -6.0 basis points
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 721.0 +2.0 basis points
  
• Avg. Auto ABS OAS 90.0 -2.0 basis points
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 46.3 -.64%
• 3-Month T-Bill Yield 5.40% +12.0 basis points
  

• China Iron Ore Spot 99.1 USD/Metric Tonne +.8%
• Dutch TTF Nat Gas(European benchmark) 26.9 euros/megawatt-hour  +6.4%

• Citi US Economic Surprise Index 23.7 -1.6 points

• Citi Eurozone Economic Surprise Index -62.9 +.6 point

• Citi Emerging Markets Economic Surprise Index 10.6 +2.2 points
• S&P 500 Current Quarter EPS Growth Rate YoY(489 of 500 reporting) -3.6% -.6 percentage point
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 229.74 +.07:  Growth Rate +2.8% unch., P/E 18.2 -.1
  
• S&P 500 Current Year Estimated Profit Margin 12.26% unch.
  
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(10 of 10 reporting) -2.9% unch.
  
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 205.35 +.02: Growth Rate +34.9% unch., P/E 34.9 -.5
  
• Bloomberg US Financial Conditions Index -.02 +8.0 basis points
• Bloomberg Euro-Zone Financial Conditions Index -4.85 -14.0 basis points
  
• US Yield Curve -76.0 basis points (2s/10s) +3.25 basis points
• US Atlanta Fed 2Q GDPNow Forecast +1.90% unch.
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +4.71% unch.: CPI YoY +4.13% +1.0 basis point
  
• 10-Year TIPS Spread 2.19 -4.0 basis points
  
• Highest target rate probability for July 26th FOMC meeting: 49.8%(-2.8 percentage points) chance of 5.25%-5.5%. Highest target rate probability for Sept. 20th meeting: 40.1%(+11.4 percentage points) chance of 5.0%-5.25%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -170 open in Japan 
• China A50 Futures: Indicating -65 open in China

• DAX Futures: Indicating +62 open in Germany

Portfolio:

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

• Disclosed Trades:  None
  

• Market Exposure: 50% Net Long