Stocks Reversing Slightly Lower into Final Hour on US Policy-Induced Stagflation Fears, Regional Bank Contagion Worries, European/Emerging Markets/US High-Yield Debt Angst, Financial/Alt Energy Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Around Even
  

• Sector Performance: Mixed
  

• Volume: Below Average

• Market Leading Stocks: Underperforming
  

Equity Investor Angst:

• Volatility(VIX) 15.7 -.3%
• DJIA Intraday % Swing .41%
  
• Bloomberg Global Risk On/Risk Off Index 56.7 +2.0%

• Euro/Yen Carry Return Index 157.7 +.4%

• Emerging Markets Currency Volatility(VXY) 9.9 +.9%

• CBOE S&P 500 Implied Correlation Index 30.9 -3.9% 

• ISE Sentiment Index 75.0 -17.0 points
  

• Total Put/Call .94 -4.1%

• NYSE Arms 1.10 +14.6%

Credit Investor Angst:

• North American Investment Grade CDS Index 76.6 +1.0%
  

• US Energy High-Yield OAS 379.51 -1.4%
• Bloomberg TRACE # Distressed Bonds Traded 399.0 -1.0
  

• European Financial Sector CDS Index 98.6 +.6% 
• Deutsche Bank Subordinated 5Y Credit Default Swap 360.10 +.8%
  

• Italian/German 10Y Yld Spread 186.0 basis points unch.
  

• Asia Ex-Japan Investment Grade CDS Index 127.4 -1.4%
  

• Emerging Market CDS Index 234.8 -1.2%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 26.7 -.06%

• 2-Year Swap Spread 29.0 basis points -.25 basis point
  

• TED Spread 27.25 basis points +4.75 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -18.75 unch.
  
• MBS  5/10 Treasury Spread 169.0 -1.0 basis point
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 698.0 +2.0 basis points
  
• Avg. Auto ABS OAS 94.0 unch.
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 47.6 -.08%
• 3-Month T-Bill Yield 5.01% -6.0 basis points
  

• China Iron Ore Spot 101.9 USD/Metric Tonne -.11%
• Dutch TTF Nat Gas(European benchmark) 38.8 euros/megawatt-hour +.77%

• Citi US Economic Surprise Index 19.0 -3.0 points

• Citi Eurozone Economic Surprise Index 10.2 -5.0 points
  

• Citi Emerging Markets Economic Surprise Index 32.3 -3.3 points
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 227.56 +.83:  Growth Rate +2.2% +.3 percentage point, P/E 18.4 +.1
  
• S&P 500 Current Year Estimated Profit Margin 12.27% -2.0 basis points
  
• Bloomberg US Financial Conditions Index .10 +8.0 basis points
• Bloomberg Euro-Zone Financial Conditions Index -4.50 -1.0 basis point
  
• US Yield Curve -56.75 basis points (2s/10s) +3.25 basis points
• US Atlanta Fed 2Q GDPNow Forecast +1.84% +18.0 basis points
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +4.66% unch.: CPI YoY +5.19% unch.
  
• 10-Year TIPS Spread 2.23 +1.0 basis point
  
• Highest target rate probability for June 14th FOMC meeting: 67.1%(+2.5 percentage points) chance of 5.0%-5.25%. Highest target rate probability for July 26th meeting: 61.2%(+5.7 percentage points) chance of 5.0%-5.25%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +162 open in Japan 
• China A50 Futures: Indicating +14 open in China

• DAX Futures: Indicating +91 open in Germany

Portfolio:

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

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

• Market Exposure: Moved to 25% Net Long