Stocks Lower into Final Hour on Regional Bank Contagion Fears, US Policy-Induced Stagflation Concerns, Earnings Outlook Worries, Financial/Airlines Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Lower
  

• Sector Performance: Most Sectors Declining
  

• Volume: Above Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 20.2 +9.9%
• DJIA Intraday % Swing 1.26%
  
• Bloomberg Global Risk On/Risk Off Index 49.9 -4.0%

• Euro/Yen Carry Return Index 154.5 -.90%

• Emerging Markets Currency Volatility(VXY) 9.9 -.1%

• CBOE S&P 500 Implied Correlation Index 38.3 +8.1% 

• ISE Sentiment Index 81.0 -18.0 points
  

• Total Put/Call .82 -24.8%

• NYSE Arms .85 -34.6%

Credit Investor Angst:

• North American Investment Grade CDS Index 83.6 +2.5%
  

• US Energy High-Yield OAS 433.73 +3.4%
• Bloomberg TRACE # Distressed Bonds Traded 413.0 unch.
  

• European Financial Sector CDS Index 106.8 +3.6% 
• Deutsche Bank Subordinated 5Y Credit Default Swap 385.25 +2.8%
  

• Italian/German 10Y Yld Spread 193.0 basis points +6.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 135.5 +1.9%
  

• Emerging Market CDS Index 250.92 +2.9%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 26.62 -.01%

• 2-Year Swap Spread 26.25 basis points -3.25 basis points
  

• TED Spread 6.5 basis points -8.0 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -25.5 -2.5 basis points
  
• MBS  5/10 Treasury Spread 164.0 +1.0 basis point
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 708.0 +6.0 basis points
  
• Avg. Auto ABS OAS 94.0 +1.0 basis point
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 47.8 +.05%
• 3-Month T-Bill Yield 5.21% +1.0 basis point
  

• China Iron Ore Spot 96.4 USD/Metric Tonne -3.1%
• Dutch TTF Nat Gas(European benchmark) 35.6 euros/megawatt-hour -3.1%

• Citi US Economic Surprise Index 15.9 -.7 point

• Citi Eurozone Economic Surprise Index 5.30 -7.3 points
  

• Citi Emerging Markets Economic Surprise Index 36.6 +1.5 points
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 227.5 +.00:  Growth Rate +2.0% -.1 percentage point, P/E 17.8 -.3
  
• S&P 500 Current Year Estimated Profit Margin 12.26% unch.
  
• Bloomberg US Financial Conditions Index -.23 -11.0 basis points
• Bloomberg Euro-Zone Financial Conditions Index -4.70 -11.0 basis points
  
• US Yield Curve -37.5 basis points (2s/10s) +17.75 basis points
• US Atlanta Fed 2Q GDPNow Forecast +2.66% +82.0 basis points
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +4.66% unch.: CPI YoY +5.19% unch.
  
• 10-Year TIPS Spread 2.19 -3.0 basis points
  
• Highest target rate probability for July 26th FOMC meeting: 59.8%(+25.2 percentage points) chance of 4.75%-5.0%. Highest target rate probability for Sept. 20th meeting: 53.3%(+30.2 percentage points) chance of 4.5%-4.75%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -523 open in Japan 
• China A50 Futures: Indicating -1 open in China

• DAX Futures: Indicating +108 open in Germany

Portfolio:

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

• Disclosed Trades:  None
  

• Market Exposure: 25% Net Long