Stocks Falling into Final Hour on Rising Fed "Policy Mistake" Fears, Escalating Mid-East War Worries, Surging Long-Term Rates, Consumer Discretionary/Regional Bank Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Lower
  

• Sector Performance: Almost Every Sector Declining
  

• Volume: Around Average

• Market Leading Stocks: Underperforming
  

Equity Investor Angst:

• Volatility(VIX) 16.0 +7.0%
• DJIA Intraday % Swing .81 -26.0%
  
• Bloomberg Global Risk On/Risk Off Index 67.8 +.2%

• Euro/Yen Carry Return Index 178.6 -.3%

• Emerging Markets Currency Volatility(VXY) 6.60 +1.5%

• CBOE S&P 500 Implied Correlation Index 18.1 +8.8% 

• ISE Sentiment Index 105.0 -30.0
  

• Total Put/Call 1.0 -2.9%

• NYSE Arms .65 -13.3%
  
• NYSE Non-Block Money Flow -$484.9M 
  

Credit Investor Angst:

• North American Investment Grade CDS Index 53.3 +4.8%
  

• US Energy High-Yield OAS 261.7 -.83%
• Bloomberg TRACE # Distressed Bonds Traded 284 +11
  

• European Financial Sector CDS Index 62.5 -.2%
  
• Deutsche Bank Subordinated 5Y Credit Default Swap 183.19 -.38%
  

• Italian/German 10Y Yld Spread 137.0 basis points -1.0 basis point
  

• Asia Ex-Japan Investment Grade CDS Index 103.2 +.38%
  

• Emerging Market CDS Index 170.5 +4.2%
  
• Israel Sovereign CDS 127.7 unch.
  

• China Corp. High-Yield Bond USD ETF(KHYB) 24.59 -.33%

• 2-Year SOFR Swap Spread -8.25 basis points +1.75 basis points
  

• Treasury Repo 3M T-Bill Spread 8.75 basis points +3.75 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -3.5 unch.
  
• MBS  5/10 Treasury Spread 148.0 +7.0 basis points
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 778.0 unch.
  
• Avg. Auto ABS OAS 59.0 +1.0 basis point
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 39.6 -.5%
• 3-Month T-Bill Yield 5.40% +4.0 basis points
  

• China Iron Ore Spot 106.5 USD/Metric Tonne -.23%
• Dutch TTF Nat Gas(European benchmark) 27.1 euros/megawatt-hour -.92%

• Citi US Economic Surprise Index 40.9 +3.3 points

• Citi Eurozone Economic Surprise Index 35.5 -.5 point

• Citi Emerging Markets Economic Surprise Index 30.5 +2.0 points
• S&P 500 Current Quarter EPS Growth Rate YoY(20 of 500 reporting) +40.1% +.6 percentage point
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 251.50 +.07:  Growth Rate +12.7% unch., P/E 20.5 -.1
  
• S&P 500 Current Year Estimated Profit Margin 12.86% -1.0 basis point
  
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(0 of 10 reporting) +n/a
  
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 312.69 +.16: Growth Rate +30.1% unch., P/E 32.0 -.2
  
• Bloomberg US Financial Conditions Index 1.02 -5.0 basis points
  
• Bloomberg Euro-Zone Financial Conditions Index .87 -7.0 basis points
  
• US Yield Curve -41.5 basis points (2s/10s) -3.0 basis points
  
• US Atlanta Fed 1Q GDPNow Forecast +2.5% unch.
  
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 41.7% -6.1 percentage points
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +2.74% +7.0 basis points: CPI YoY +3.43% +2.0 basis points
  
• 10-Year TIPS Spread 2.41 +4.0 basis points
  
• Highest target rate probability for June 12th FOMC meeting: 83.0%(+40.4 percentage points) chance of 5.25%-5.5%. Highest target rate probability for July 31st meeting: 59.0%(+34.0 percentage points) chance of 5.25%-5.5%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -381 open in Japan 
• China A50 Futures: Indicating -60 open in China

• DAX Futures: Indicating +204 open in Germany

Portfolio:

• Slightly Lower:  On losses in my consumer discretionary/tech/financial/transport/industrial sector longs
  

• Disclosed Trades: Added to my (IWM)/(QQQ) hedges and to my emerging market shorts
  

• Market Exposure: Moved to Market Neutral