Stocks Reversing Lower into Afternoon on Escalating Mid-East Regional War Fears, Surging Long-Term Rates, Diminishing Fed Rate-Cut Odds, Tech/Alt Energy Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Lower
  

• Sector Performance: Most Sectors Declining
  

• Volume: Below Average

• Market Leading Stocks: Underperforming
  

Equity Investor Angst:

• Volatility(VIX) 17.6 +1.4%
• DJIA Intraday % Swing 1.16 unch.
  
• Bloomberg Global Risk On/Risk Off Index 67.6 +1.5%

• Euro/Yen Carry Return Index 178.3 +.5%

• Emerging Markets Currency Volatility(VXY) 7.19 -.14%

• CBOE S&P 500 Implied Correlation Index 20.0 +3.3% 

• ISE Sentiment Index 128.0 +24.0
  

• Total Put/Call .87 +1.2%

• NYSE Arms .75 -66.7%
  
• NYSE Non-Block Money Flow -$64.7M 
  

Credit Investor Angst:

• North American Investment Grade CDS Index 56.60 +3.6%
  

• US Energy High-Yield OAS 277.3 +1.5%
• Bloomberg TRACE # Distressed Bonds Traded 274 +1
  

• European Financial Sector CDS Index 67.1 +.1%
  
• Deutsche Bank Subordinated 5Y Credit Default Swap 197.1 +1.3%
  

• Italian/German 10Y Yld Spread 144.0 basis points +3.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 108.75 -.05%
  

• Emerging Market CDS Index 184.6 +3.0%
  
• Israel Sovereign CDS 139.5 +4.1%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 24.5 -.08%

• 2-Year SOFR Swap Spread -7.75 basis points +.75 basis point
  

• Treasury Repo 3M T-Bill Spread 9.0 basis points -.5 basis point
  

• 3-Month EUR/USD Cross-Currency Basis Swap -4.25 -.75 basis point
  
• MBS  5/10 Treasury Spread 152.0 +4.0 basis points
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 771.0 -4.0 basis points
  
• Avg. Auto ABS OAS 56.0 -1.0 basis point
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 39.2 -.4%
• 3-Month T-Bill Yield 5.39% -1.0 basis point
  

• China Iron Ore Spot 111.8 USD/Metric Tonne -.4%
• Dutch TTF Nat Gas(European benchmark) 31.1 euros/megawatt-hour +1.3%

• Citi US Economic Surprise Index 40.0 -1.1 points

• Citi Eurozone Economic Surprise Index 31.3 -3.6 points

• Citi Emerging Markets Economic Surprise Index 29.6 -4.2 points
• S&P 500 Current Quarter EPS Growth Rate YoY(32 of 500 reporting) +19.7% -2.2 percentage points
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 251.75 +.18:  Growth Rate +12.8% +.1 percentage point, P/E 20.4 -.3
  
• S&P 500 Current Year Estimated Profit Margin 12.85% -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 313.35 +.33: Growth Rate +30.4% +.1 percentage point, P/E 32.2 -.6
  
• Bloomberg US Financial Conditions Index .98 -17.0 basis points
  
• Bloomberg Euro-Zone Financial Conditions Index .87 -13.0 basis points
  
• US Yield Curve -31.0 basis points (2s/10s) +7.25 basis points
  
• US Atlanta Fed 1Q GDPNow Forecast +2.4% unch.
  
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 43.5% unch.
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +2.74% unch.: CPI YoY +3.43% unch.
  
• 10-Year TIPS Spread 2.43 +3.0 basis points
  
• Highest target rate probability for June 12th FOMC meeting: 79.0%(+7.3 percentage points) chance of 5.25%-5.5%. Highest target rate probability for July 31st meeting: 51.3%(+7.8 percentage points) chance of 5.25%-5.5%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -463 open in Japan 
• China A50 Futures: Indicating -37 open in China

• DAX Futures: Indicating +120 open in Germany

Portfolio:

• Slightly Higher:  On gains in index hedges and emerging market shorts
  

• Disclosed Trades: None
  

• Market Exposure: Market Neutral