Stocks Sharply Lower into Final Hour on New China AI Model Ramification Speculation, Tariff Uncertainty, Profit-Taking, Tech/Construction Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Slightly Higher
  

• Sector Performance: Mixed
  

• Volume: Heavy
  

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 18.1 +21.6%
• S&P 500 Intraday % Swing .91 +40.4%.
  
• Bloomberg Global Risk On/Risk Off Index 71.8 -4.2%

• Euro/Yen Carry Return Index 181.2 -.9%

• Emerging Markets Currency Volatility(VXY) 8.3 +2.2%

• CBOE S&P 500 Implied Correlation Index 13.5 +13.4% 

• ISE Sentiment Index 163.0 -7.0 points
  

• Total Put/Call .92 +19.5%

• NYSE Arms 1.14 +11.7%
  
• NYSE Non-Block Money Flow +$12.7M 
  

Credit Investor Angst:

• North American Investment Grade CDS Index 49.1 +2.2%
  

• US Energy High-Yield OAS 280.9 +2.2%
• Bloomberg TRACE # Distressed Bonds Traded 166 -18
  

• European Financial Sector CDS Index 60.7 +2.1%
  
• Deutsche Bank Subordinated 5Y Credit Default Swap 144.9 +1.4%
  

• Italian/German 10Y Yld Spread 110.0 basis points unch.
  

• Asia Ex-Japan Investment Grade CDS Index 76.5 +3.5%
  

• Emerging Market CDS Index 159.9 +2.3%
• Israel Sovereign CDS 87.9 +1.4%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 24.01 +.02%

• 2-Year SOFR Swap Spread -16.5 basis points -.5 basis point
  

• 3M T-Bill Treasury Repo Spread 4.0 basis points -.25 basis point
  

• 3-Month EUR/USD Cross-Currency Basis Swap -2.5 -1.0 basis point
  
• MBS  5/10 Treasury Spread 136.0 -1.0 basis point
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 605.0 -4.0 basis points
  
• Avg. Auto ABS OAS 44.0 +1.0 basis point
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 37.18 -.27%
• 3-Month T-Bill Yield 4.29% -3.0 basis points
  

• China Iron Ore Spot 103.2 USD/Metric Tonne -.4%
• Dutch TTF Nat Gas(European benchmark) 47.8 euros/megawatt-hour -3.7%

• Citi US Economic Surprise Index 9.6 -9.1 points
  

• Citi Eurozone Economic Surprise Index -4.0 +20.9 points

• Citi Emerging Markets Economic Surprise Index 7.2 -.7 point
• S&P 500 Current Quarter EPS Growth Rate YoY(79 of 500 reporting) +16.0% -2.9 percentage points
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 274.84 +.56:  Growth Rate +15.4% +.3 percentage point, P/E 21.8 -.4
  
• S&P 500 Current Year Estimated Profit Margin 12.26% +1.0 basis point
  
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(1 of 10 reporting) +97.6% unch.
  
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 399.65 +1.02: Growth Rate +27.8% +.7 percentage point, P/E 33.4 -1.1
  
• Bloomberg US Financial Conditions Index .88 +1.0 basis point
  
• Bloomberg Euro-Zone Financial Conditions Index 1.83 +7.0 basis points
  
• US Yield Curve 33.25 basis points (2s/10s) -1.75 basis points
  
• US Atlanta Fed Q4 GDPNow Forecast +2.99% unch.
  
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 27.0% +3.6 percentage points
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +2.83% unch.: CPI YoY +2.84% unch.
  
• 10-Year TIPS Spread 2.40 -5.0 basis points
  
• Highest target rate probability for March 19th FOMC meeting: 68.1% (-4.3 percentage points) chance of 4.25%-4.5%. Highest target rate probability for May 7th meeting: 47.4%(-5.4 percentage points) chance of 4.25%-4.5%. (current target rate is 4.25-4.5%)
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -475 open in Japan 
• China A50 Futures: Indicating +33 open in China

• DAX Futures: Indicating +170 open in Germany

Portfolio:

• Lower: On losses in my utility/tech/industrial sector longs
• Disclosed Trades: Added to my (IWM)/(QQQ) hedges
  
• Market Exposure: Moved to 50% Net Long