Stocks Slightly Lower into Close on Surging Long-Term Rates, Less Dovish Fed Commentary, Mid-East Regional War Fears, Financial/Homebuilding Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Lower
  

• Sector Performance: Mixed
  

• Volume: Below Average

• Market Leading Stocks: Underperforming
  

Equity Investor Angst:

• Volatility(VIX) 17.9 -6.9%
• DJIA Intraday % Swing .74 -38.7%
  
• Bloomberg Global Risk On/Risk Off Index 67.1 +.7%

• Euro/Yen Carry Return Index 178.7 +.3%

• Emerging Markets Currency Volatility(VXY) 7.66 +6.5%

• CBOE S&P 500 Implied Correlation Index 21.0 -7.1% 

• ISE Sentiment Index 120.0 +22.0
  

• Total Put/Call .83 -9.8%

• NYSE Arms 1.25 +68.9%
  
• NYSE Non-Block Money Flow -$86.9M 
  

Credit Investor Angst:

• North American Investment Grade CDS Index 57.6 +.4%
  

• US Energy High-Yield OAS 283.8 +.9%
• Bloomberg TRACE # Distressed Bonds Traded 267 -7
  

• European Financial Sector CDS Index 70.3 +4.7%
  
• Deutsche Bank Subordinated 5Y Credit Default Swap 203.4 +3.2%
  

• Italian/German 10Y Yld Spread 146.0 basis points +2.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 115.0 +5.9%
  

• Emerging Market CDS Index 186.6 +.84%
  
• Israel Sovereign CDS 141.8 +1.6%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 24.5 +.07%

• 2-Year SOFR Swap Spread -8.5 basis points -.75 basis point
  

• Treasury Repo 3M T-Bill Spread 5.25 basis points -4.75 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -5.25 -1.0 basis point
  
• MBS  5/10 Treasury Spread 152.0 unch.
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 770.0 -1.0 basis point
  
• Avg. Auto ABS OAS 56.0 unch.
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 39.1 -.44%
• 3-Month T-Bill Yield 5.36% -3.0 basis points
  

• China Iron Ore Spot 111.0 USD/Metric Tonne +1.5%
• Dutch TTF Nat Gas(European benchmark) 33.1 euros/megawatt-hour +6.4%

• Citi US Economic Surprise Index 33.8 -6.2 points

• Citi Eurozone Economic Surprise Index 34.1 +2.8 points

• Citi Emerging Markets Economic Surprise Index 31.4 +.8 point
• S&P 500 Current Quarter EPS Growth Rate YoY(39 of 500 reporting) +11.1% -8.6 percentage points
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 252.07 +.32:  Growth Rate +12.9% +.1 percentage point, P/E 20.1 -.3
  
• 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 313.62 +.27: Growth Rate +30.5% +.1 percentage point, P/E 31.4 -.8
  
• Bloomberg US Financial Conditions Index .89 -9.0 basis points
  
• Bloomberg Euro-Zone Financial Conditions Index .81 -6.0 basis points
  
• US Yield Curve -30.25 basis points (2s/10s) +.75 basis point
  
• US Atlanta Fed 1Q GDPNow Forecast +2.9% +50.0 basis points
  
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 40.7% -2.8 percentage points
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +2.74% unch.: CPI YoY +3.46% +3.0 basis points
  
• 10-Year TIPS Spread 2.42 -1.0 basis point
  
• Highest target rate probability for June 12th FOMC meeting: 83.1%(+4.4 percentage points) chance of 5.25%-5.5%. Highest target rate probability for July 31st meeting: 55.6%(+4.5 percentage points) chance of 5.25%-5.5%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +109 open in Japan 
• China A50 Futures: Indicating +17 open in China

• DAX Futures: Indicating +196 open in Germany

Portfolio:

• Higher:  On gains in my tech/consumer discretionary sector longs, index hedges and emerging market shorts
  

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

• Market Exposure: Moved to 25% Net Long