Stocks Reversing Lower into Afternoon on US Policy-Induced Stagflation Fears, Regional Bank Contagion Concerns, Global Growth Worries, Financial/Commodity Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Modestly Higher
  

• Sector Performance: Mixed
  

• Volume: Around Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 17.1 -3.3%
• DJIA Intraday % Swing 1.24%
  
• Bloomberg Global Risk On/Risk Off Index 54.3 -1.2%

• Euro/Yen Carry Return Index 154.3 -.6%

• Emerging Markets Currency Volatility(VXY) 9.59 -.72%

• CBOE S&P 500 Implied Correlation Index 33.8 -2.5% 

• ISE Sentiment Index 120.0 +6.0 points
  

• Total Put/Call .88 -3.3%

• NYSE Arms 1.54 +73.0%

Credit Investor Angst:

• North American Investment Grade CDS Index 82.08 -.01%
  

• US Energy High-Yield OAS 415.15 +.70%
• Bloomberg TRACE # Distressed Bonds Traded 425.0 -1.0
  

• European Financial Sector CDS Index 103.15 -1.3% 
• Deutsche Bank Subordinated 5Y Credit Default Swap 392.62 +1.4%
  

• Italian/German 10Y Yld Spread 191.0 basis points -2.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 134.5 unch.
  

• Emerging Market CDS Index 251.66 -.92%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 26.4 -.13%

• 2-Year Swap Spread 25.25 basis points +2.0 basis points
  

• TED Spread 11.75 basis points -3.75 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -19.25 -.5 basis point
  
• MBS  5/10 Treasury Spread 171.0 -1.0 basis point
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 715.0 +1.0 basis point
  
• Avg. Auto ABS OAS 94.0 unch.
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 47.9 +.15%
• 3-Month T-Bill Yield 5.22% unch.
  

• China Iron Ore Spot 100.75 USD/Metric Tonne -2.5%
• Dutch TTF Nat Gas(European benchmark) 35.0 euros/megawatt-hour -2.7%

• Citi US Economic Surprise Index 17.1 -.7 point

• Citi Eurozone Economic Surprise Index -21.2 -.9 point
  

• Citi Emerging Markets Economic Surprise Index 39.6 -.2 point
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 227.84 -.09:  Growth Rate +2.2% -.1 percentage point, P/E 18.1 unch.
  
• S&P 500 Current Year Estimated Profit Margin 12.24% -1.0 basis point
  
• Bloomberg US Financial Conditions Index -.04 -3.0 basis points
• Bloomberg Euro-Zone Financial Conditions Index -4.40 -5.0 basis points
  
• US Yield Curve -45.75 basis points (2s/10s) +4.75 basis points
• US Atlanta Fed 2Q GDPNow Forecast +2.75% unch.
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +4.65% -1.0 basis point: CPI YoY +4.14% -105.0 basis points
  
• 10-Year TIPS Spread 2.20 -3.0 basis points
  
• Highest target rate probability for July 26th FOMC meeting: 54.7%(-2.7 percentage points) chance of 5.0%-5.25%. Highest target rate probability for Sept. 20th meeting: 51.1%(+5.0 percentage points) chance of 4.75%-5.0%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -162 open in Japan 
• China A50 Futures: Indicating -19 open in China

• DAX Futures: Indicating +13 open in Germany

Portfolio:

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

• Disclosed Trades:  Added to my (IWM)/(QQQ) hedges
  

• Market Exposure: Moved to 25% Net Long