Stocks Slightly Higher into Final Hour on Fed Rate-Hike Pause Hopes, Dollar Weakness, Short-Covering, Tech/Transport Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Higher
  

• Sector Performance: Most Sectors Rising
  

• Volume: Around Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 17.8 +.2%
• DJIA Intraday % Swing .63%
  
• Bloomberg Global Risk On/Risk Off Index 52.9 +.9%

• Euro/Yen Carry Return Index 156.6 -.31%

• Emerging Markets Currency Volatility(VXY) 9.91 +.2%

• CBOE S&P 500 Implied Correlation Index 34.2 -.47% 

• ISE Sentiment Index 109.0 +22.0 points
  

• Total Put/Call .95 -6.9%

• NYSE Arms .99 -34.4%

Credit Investor Angst:

• North American Investment Grade CDS Index 79.8 +.77%
  

• US Energy High-Yield OAS 405.9 +1.3%
• Bloomberg TRACE # Distressed Bonds Traded 413.0 +22.0
  

• European Financial Sector CDS Index 103.0 +.29% 
• Deutsche Bank Subordinated 5Y Credit Default Swap 374.6 +1.6%
  

• Italian/German 10Y Yld Spread 187.0 basis points -5.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 133.0 +2.4%
  

• Emerging Market CDS Index 241.19 -.67%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 26.7 -.17%

• 2-Year Swap Spread 29.5 basis points -2.0 basis points
  

• TED Spread 14.5 basis points -3.5 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -23.0 +.5 basis point
  
• MBS  5/10 Treasury Spread 163.0 -5.0 basis points
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 702.0 +3.0 basis points
  
• Avg. Auto ABS OAS 93.0 unch.
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 47.7 +.44%
• 3-Month T-Bill Yield 5.20% +6.0 basis points
  

• China Iron Ore Spot 100.5 USD/Metric Tonne -.77%
• Dutch TTF Nat Gas(European benchmark) 36.8 euros/megawatt-hour -2.0%

• Citi US Economic Surprise Index 16.6 +4.1 points

• Citi Eurozone Economic Surprise Index 12.6 +.1 point
  

• Citi Emerging Markets Economic Surprise Index 35.1 +.4 point
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 227.5 +.12:  Growth Rate +2.1% -.1 percentage point, P/E 18.1 +.1
  
• S&P 500 Current Year Estimated Profit Margin 12.26% unch.
  
• Bloomberg US Financial Conditions Index .05 +14.0 basis points
• Bloomberg Euro-Zone Financial Conditions Index -4.59 +1.0 basis point
  
• US Yield Curve -54.75 basis points (2s/10s) -.5 basis point
• US Atlanta Fed 2Q GDPNow Forecast +1.84% unch.
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +4.66% unch.: CPI YoY +5.19% unch.
  
• 10-Year TIPS Spread 2.22 +2.0 basis points
  
• Highest target rate probability for June 14th FOMC meeting: 77.1%(-5.7 percentage points) chance of 5.0%-5.25%. Highest target rate probability for July 26th meeting: 52.5%(-3.6 percentage points) chance of 5.0%-5.25%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -308 open in Japan 
• China A50 Futures: Indicating -101 open in China

• DAX Futures: Indicating +139 open in Germany

Portfolio:

• Slightly Higher:  On gains in my tech/industrial/utility/medical sector longs
  

• Disclosed Trades:  None
  

• Market Exposure: 25% Net Long