Stocks Modestly Lower into Final Hour on Falling Fed Rate-Cut Odds, Rising Long-Term Rates, Dollar Strength, Alt Energy/Airline Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Lower
  

• Sector Performance: Most Sectors Declining
  

• Volume: Around Average

• Market Leading Stocks: Underperforming
  

Equity Investor Angst:

• Volatility(VIX) 13.7 -.9%
• DJIA Intraday % Swing 1.07 -7.8%
  
• Bloomberg Global Risk On/Risk Off Index 61.0 +5.2%

• Euro/Yen Carry Return Index 172.4 -.24%

• Emerging Markets Currency Volatility(VXY) 7.3 +.69%

• CBOE S&P 500 Implied Correlation Index 17.6 -10.0% 

• ISE Sentiment Index 149.0 unch.
  

• Total Put/Call .94 -10.5%

• NYSE Arms 1.04 +7.2% 
• NYSE Non-Block Money Flow -$269.0M 
  

Credit Investor Angst:

• North American Investment Grade CDS Index 54.9 +.4%
  

• US Energy High-Yield OAS 326.2 +.8%
• Bloomberg TRACE # Distressed Bonds Traded 324 -2
  

• European Financial Sector CDS Index 69.7 +1.1% 
• Deutsche Bank Subordinated 5Y Credit Default Swap 208.5 +1.2%
  

• Italian/German 10Y Yld Spread 157.0 basis points -1.0 basis point
  

• Asia Ex-Japan Investment Grade CDS Index 100.67 -.15%
  

• Emerging Market CDS Index 180.43 -.52%
• Israel Sovereign CDS 125.0 -5.4%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 24.49 unch.

• 2-Year SOFR Swap Spread -13.5 basis points -.5 basis point
  

• Treasury Repo 3M T-Bill Spread 7.5 basis points +1.5 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -5.5 +3.0 basis points
  
• MBS  5/10 Treasury Spread 153.0 +3.0 basis points
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 864.0 -9.0 basis points
  
• Avg. Auto ABS OAS 69.0 -2.0 basis points
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 40.5 -.4%
• 3-Month T-Bill Yield 5.38% +1.0 basis point
  

• China Iron Ore Spot 124.7 USD/Metric Tonne -1.2%
• Dutch TTF Nat Gas(European benchmark) 28.3 euros/megawatt-hour -3.3%

• Citi US Economic Surprise Index 42.6 +3.1 points

• Citi Eurozone Economic Surprise Index 9.0 +2.0 points

• Citi Emerging Markets Economic Surprise Index -2.4 unch.
• S&P 500 Current Quarter EPS Growth Rate YoY(238 of 500 reporting) +4.2% -.2 percentage point
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 244.99 +.85:  Growth Rate +10.7% +.4 percentage point, P/E 20.2 -.1
  
• S&P 500 Current Year Estimated Profit Margin 11.39% -5.0 basis points
  
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(7 of 10 reporting) +44.2% unch.
  
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 301.81 +5.99: Growth Rate +41.5% +2.8 percentage points, P/E 31.7 -.6
  
• Bloomberg US Financial Conditions Index .99 +9.0 basis points
  
• Bloomberg Euro-Zone Financial Conditions Index .73 +8.0 basis points
  
• US Yield Curve -31.75 basis points (2s/10s) +2.5 basis points
  
• US Atlanta Fed 1Q GDPNow Forecast +4.2% unch.
  
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 61.2% -3.0 percentage points
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +2.66% unch.: CPI YoY +2.96% unch.
  
• 10-Year TIPS Spread 2.26 +5.0 basis points
  
• Highest target rate probability for May 1st FOMC meeting: 54.5%(-5.4 percentage points) chance of 5.0%-5.25%. Highest target rate probability for June 12th meeting: 46.2%(-9.4 percentage points) chance of 4.75%-5.0%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -4 open in Japan 
• China A50 Futures: Indicating -59 open in China

• DAX Futures: Indicating +111 open in Germany

Portfolio:

• Higher:  On gains in my biotech/tech sector longs and index hedges

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

• Market Exposure: Moved to 100% Net Long