Stocks Falling into Final Hour on Stagflationary US Economic Data, Higher Long-Term Rates, Earnings Outlook Worries, Transport/Commodity 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) 15.2 +3.4%
• DJIA Intraday % Swing 1.01 +245.9%
  
• Bloomberg Global Risk On/Risk Off Index 67.7 -.6%

• Euro/Yen Carry Return Index 183.4 +.5%

• Emerging Markets Currency Volatility(VXY) 7.0 +.6%

• CBOE S&P 500 Implied Correlation Index 17.6 +4.8% 

• ISE Sentiment Index 125.0 -3.0
  

• Total Put/Call .92 -1.1%

• NYSE Arms 1.12 unch.
  
• NYSE Non-Block Money Flow -$410.3M 
  

Credit Investor Angst:

• North American Investment Grade CDS Index 53.1 +2.6%
  

• US Energy High-Yield OAS 259.9 +1.2%
• Bloomberg TRACE # Distressed Bonds Traded 285 +3
  

• European Financial Sector CDS Index 63.5 +1.4%
  
• Deutsche Bank Subordinated 5Y Credit Default Swap 189.0 +.6%
  

• Italian/German 10Y Yld Spread 133.0 basis points +1.0 basis point
  

• Asia Ex-Japan Investment Grade CDS Index 111.2 -2.2%
  

• Emerging Market CDS Index 175.7 +2.6%
  
• Israel Sovereign CDS 133.2 -1.7%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 24.4 unch.

• 2-Year SOFR Swap Spread -7.25 basis points +.5 basis point
  

• Treasury Repo 3M T-Bill Spread 8.5 basis points unch.
  

• 3-Month EUR/USD Cross-Currency Basis Swap -3.75 +.5 basis point
  
• MBS  5/10 Treasury Spread 151.0 +3.0 basis points
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 773.0 +3.0 basis points
  
• Avg. Auto ABS OAS 58.0 unch.
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 39.3 -.2%
• 3-Month T-Bill Yield 5.40% +1.0 basis point
  

• China Iron Ore Spot 116.1 USD/Metric Tonne -.29%
• Dutch TTF Nat Gas(European benchmark) 29.1 euros/megawatt-hour +3.8%

• Citi US Economic Surprise Index 7.6 -6.4 points

• Citi Eurozone Economic Surprise Index 29.9 +14.4 points

• Citi Emerging Markets Economic Surprise Index 34.1 -7.5 points
• S&P 500 Current Quarter EPS Growth Rate YoY(266 of 500 reporting) +3.6% +.2 percentage point
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 253.68 -.02:  Growth Rate +13.7% unch., P/E 20.0 -.2
  
• S&P 500 Current Year Estimated Profit Margin 12.85% -2.0 basis points
  
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(5 of 10 reporting) +42.4% unch.
  
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 319.16 +.25: Growth Rate +32.8% +.1 percentage point, P/E 30.9 -.3
  
• Bloomberg US Financial Conditions Index .96 -8.0 basis points
  
• Bloomberg Euro-Zone Financial Conditions Index .95 +10.0 basis points
  
• US Yield Curve -35.75 basis points (2s/10s) -.5 basis point
  
• US Atlanta Fed 2Q GDPNow Forecast +3.9% unch.
  
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 40.6% unch.
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +2.74% unch.: CPI YoY +3.50% +1.0 basis point
  
• 10-Year TIPS Spread 2.40 -1.0 basis point
  
• Highest target rate probability for June 12th FOMC meeting: 90.1%(+3.1 percentage points) chance of 5.25%-5.5%. Highest target rate probability for July 31st meeting: 75.2%(+4.4 percentage points) chance of 5.25%-5.5%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -155 open in Japan 
• China A50 Futures: Indicating -9 open in China

• DAX Futures: Indicating +154 open in Germany

Portfolio:

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

• Disclosed Trades: Added to my (IWM)/(QQQ) hedges
  

• Market Exposure: Moved to 50% Net Long