Stocks Finish Slightly Higher on Lower Long-Term Rates, More Dovish Fed Commentary, Short-Covering, Alt Energy/Healthcare Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Slightly Higher
  

• Sector Performance: Mixed
  

• Volume: Below Average

• Market Leading Stocks: Outperforming
  

Equity Investor Angst:

• Volatility(VIX) 15.7 +3.6%
• DJIA Intraday % Swing 1.09 +172.5%
  
• Bloomberg Global Risk On/Risk Off Index 67.0 -2.4%

• Euro/Yen Carry Return Index 179.0 -.1%

• Emerging Markets Currency Volatility(VXY) 6.52 -.91%

• CBOE S&P 500 Implied Correlation Index 17.6 +7.1% 

• ISE Sentiment Index 133.0 -16.0
  

• Total Put/Call .99 -3.9%

• NYSE Arms .74 -33.0%
  
• NYSE Non-Block Money Flow +$10.4M 
  

Credit Investor Angst:

• North American Investment Grade CDS Index 51.1 -.2%
  

• US Energy High-Yield OAS 264.2 +.56%
• Bloomberg TRACE # Distressed Bonds Traded 273 +22
  

• European Financial Sector CDS Index 62.6 +.3%
  
• Deutsche Bank Subordinated 5Y Credit Default Swap 184.7 +.31%
  

• Italian/German 10Y Yld Spread 138.0 basis points -1.0 basis point
  

• Asia Ex-Japan Investment Grade CDS Index 103.0 -1.7%
  

• Emerging Market CDS Index 163.9 -2.4%
  
• Israel Sovereign CDS 127.7 +3.4%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 24.7 +.2%

• 2-Year SOFR Swap Spread -10.0 basis points -.25 basis point
  

• Treasury Repo 3M T-Bill Spread 5.0 basis points -1.25 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -3.5 unch.
  
• MBS  5/10 Treasury Spread 141.0 -1.0 basis point
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 778.0 +2.0 basis points
  
• Avg. Auto ABS OAS 58.0 unch.
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 39.8 -.2%
• 3-Month T-Bill Yield 5.36% -1.0 basis point
  

• China Iron Ore Spot 108.0 USD/Metric Tonne +.5%
• Dutch TTF Nat Gas(European benchmark) 27.4 euros/megawatt-hour -2.0%

• Citi US Economic Surprise Index 37.6 -1.6 points

• Citi Eurozone Economic Surprise Index 36.0 -.4 point

• Citi Emerging Markets Economic Surprise Index 28.5 +.7 point
• S&P 500 Current Quarter EPS Growth Rate YoY(19 of 500 reporting) +39.5% unch.
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 251.43 +.13:  Growth Rate +12.7% +.1 percentage point, P/E 20.6 -.1
  
• S&P 500 Current Year Estimated Profit Margin 12.87% +3.0 basis points
  
• 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 1.07 +6.0 basis points
  
• Bloomberg Euro-Zone Financial Conditions Index .95 unch.
  
• US Yield Curve -38.5 basis points (2s/10s) -1.5 basis points
  
• US Atlanta Fed 1Q GDPNow Forecast +2.5% unch.
  
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 47.8% -.6 percentage point
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +2.67% unch.: CPI YoY +3.41% unch.
  
• 10-Year TIPS Spread 2.37 -2.0 basis points
  
• Highest target rate probability for June 12th FOMC meeting: 56.2%(+4.9 percentage points) chance of 5.0%-5.25%. Highest target rate probability for July 31st meeting: 50.7%(+.5 percentage point) chance of 5.0%-5.25%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -53 open in Japan 
• China A50 Futures: Indicating +34 open in China

• DAX Futures: Indicating +239 open in Germany

Portfolio:

• Slightly Higher:  On gains in my consumer discretionary/tech/financial sector longs
  

• Disclosed Trades: None
  

• Market Exposure: 50% Net Long