Stocks Higher into Final Hour on Fed Pause Expectations, China Stimulus Hopes, Meme Stock Frenzy, Commodity/Retail Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Higher
  

• Sector Performance: Almost Every Sector Rising
  

• Volume: Around Average

• Market Leading Stocks: Outperforming
  

Equity Investor Angst:

• Volatility(VIX) 14.6 -2.6%
• DJIA Intraday % Swing .59%
  
• Bloomberg Global Risk On/Risk Off Index 62.1 +3.0%

• Euro/Yen Carry Return Index 158.9 +.7%

• Emerging Markets Currency Volatility(VXY) 9.3 -1.9%

• CBOE S&P 500 Implied Correlation Index 20.4 -.9% 

• ISE Sentiment Index 147.0 +14.0 points
  

• Total Put/Call .71 -18.4%

• NYSE Arms .68 -20.9%

Credit Investor Angst:

• North American Investment Grade CDS Index 70.2 -.6%
  

• US Energy High-Yield OAS 372.41 -2.95%
• Bloomberg TRACE # Distressed Bonds Traded 419.0 +8.0
  

• European Financial Sector CDS Index 88.65 +.12% 
• Deutsche Bank Subordinated 5Y Credit Default Swap 287.7 +.06%
  

• Italian/German 10Y Yld Spread 163.0 basis points -4.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 113.9 +.05%
  

• Emerging Market CDS Index 214.1 -.19%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 26.4 +.1%

• 2-Year Swap Spread 20.25 basis points +1.0 basis point
  

• TED Spread 34.25 basis points +3.25 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -23.5 unch.
  
• MBS  5/10 Treasury Spread 158.0 -4.0 basis points
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 731.0 -1.0 basis point
  
• Avg. Auto ABS OAS 85.0 unch.
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 45.1 -.06%
• 3-Month T-Bill Yield 5.21% -2.0 basis points
  

• China Iron Ore Spot 111.2 USD/Metric Tonne -.4%
• Dutch TTF Nat Gas(European benchmark) 36.1 euros/megawatt-hour  +16.2%

• Citi US Economic Surprise Index 18.7 -.4 point

• Citi Eurozone Economic Surprise Index -89.8 +2.3 points

• Citi Emerging Markets Economic Surprise Index 10.10 -2.9 points
• S&P 500 Current Quarter EPS Growth Rate YoY(499 of 500 reporting) -2.7% unch.
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 230.59 +.05:  Growth Rate +3.1% unch., P/E 18.9 +.2
  
• S&P 500 Current Year Estimated Profit Margin 12.24% -1.0 basis point
  
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(10 of 10 reporting) -2.7% unch.
  
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 207.74 +.10: Growth Rate +36.5% +.1 percentage point, P/E 36.9 +.8
  
• Bloomberg US Financial Conditions Index .08 -1.0 basis point
• Bloomberg Euro-Zone Financial Conditions Index -4.17 -7.0 basis points
  
• US Yield Curve -86.5 basis points (2s/10s) -4.0 basis points
• US Atlanta Fed 2Q GDPNow Forecast +2.20% unch.
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +4.70% -1.0 basis point: CPI YoY +3.22% -91.0 basis points
  
• 10-Year TIPS Spread 2.21 +2.0 basis points
  
• Highest target rate probability for July 26th FOMC meeting: 60.1%(+.2 percentage point) chance of 5.25%-5.5%. Highest target rate probability for Sept. 20th meeting: 61.4%(+4.3 percentage points) chance of 5.25%-5.5%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +471 open in Japan 
• China A50 Futures: Indicating -42 open in China

• DAX Futures: Indicating -2 open in Germany

Portfolio:

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

• Disclosed Trades:  Covered some of my (IWM)/(QQQ) hedges
  

• Market Exposure: Moved to 75% Net Long