Stocks Slightly Higher into Afternoon on Lower Long-Term Rates, AI Stock Frenzy, Short-Covering, Tech/Alt Energy Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Lower
  

• Sector Performance: Most Sectors Declining
  

• Volume: Above Average

• Market Leading Stocks: Underperforming
  

Equity Investor Angst:

• Volatility(VIX) 17.9 +2.4%
• DJIA Intraday % Swing .72%
  
• Bloomberg Global Risk On/Risk Off Index 56.5 -5.4%

• Euro/Yen Carry Return Index 157.2 -.39%

• Emerging Markets Currency Volatility(VXY) 9.8 +3.7%

• CBOE S&P 500 Implied Correlation Index 24.2 -4.3% 

• ISE Sentiment Index 137.0 +11.0 points
  

• Total Put/Call .82 -46.8%

• NYSE Arms 1.38 +39.4%

Credit Investor Angst:

• North American Investment Grade CDS Index 75.9 -.39%
  

• US Energy High-Yield OAS 389.1 +1.8%
• Bloomberg TRACE # Distressed Bonds Traded 399.0 -21.0
  

• European Financial Sector CDS Index 91.0 +.26% 
• Deutsche Bank Subordinated 5Y Credit Default Swap 312.5 +.37%
  

• Italian/German 10Y Yld Spread 181.0 basis points -5.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 121.2 -4.3%
  

• Emerging Market CDS Index 245.33 -1.9%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 25.7 +.23%

• 2-Year Swap Spread 20.0 basis points +.75 basis point
  

• TED Spread 20.5 basis points +1.0 basis point
  

• 3-Month EUR/USD Cross-Currency Basis Swap -23.5 -.5 basis point
  
• MBS  5/10 Treasury Spread 184.0 -7.0 basis points
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 719.0 +1.0 basis point
  
• Avg. Auto ABS OAS 92.0 +1.0 basis point
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 46.6 -.45%
• 3-Month T-Bill Yield 5.28% +4.0 basis points
  

• China Iron Ore Spot 96.3 USD/Metric Tonne -2.2%
• Dutch TTF Nat Gas(European benchmark) 24.7 euros/megawatt-hour  +.48%

• Citi US Economic Surprise Index 25.3 +3.3 points

• Citi Eurozone Economic Surprise Index -63.5 -16.8 points

• Citi Emerging Markets Economic Surprise Index 8.4 -4.2 points
• S&P 500 Current Quarter EPS Growth Rate YoY(485 of 500 reporting) -3.0% unch.
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 229.67 +.69:  Growth Rate +2.8% +.4 percentage point, P/E 18.3 unch.
  
• S&P 500 Current Year Estimated Profit Margin 12.26% +2.0 basis points
  
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(10 of 10 reporting) -2.7% unch.
  
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 205.33 +5.02: Growth Rate +34.9% +3.3 percentage points, P/E 35.4 +.9
  
• Bloomberg US Financial Conditions Index -.10 -4.0 basis points
• Bloomberg Euro-Zone Financial Conditions Index -4.71 -8.0 basis points
  
• US Yield Curve -79.25 basis points (2s/10s) -2.75 basis points
• US Atlanta Fed 2Q GDPNow Forecast +1.90% unch.
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +4.71% +6.0 basis points: CPI YoY +4.12% unch.
  
• 10-Year TIPS Spread 2.23 -3.0 basis points
  
• Highest target rate probability for July 26th FOMC meeting: 53.9%(+1.7 percentage points) chance of 5.25%-5.5%. Highest target rate probability for Sept. 20th meeting: 46.4%(-.3 percentage point) chance of 5.25%-5.5%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -218 open in Japan 
• China A50 Futures: Indicating -166 open in China

• DAX Futures: Indicating +9 open in Germany

Portfolio:

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

• Disclosed Trades:  Added to my emerging market shorts
  

• Market Exposure: Moved to 50% Net Long