Stocks Slightly Lower into Final Hour on US Economic Data, Technical Selling, Profit-Taking, Pharma/Gambling Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Modestly Lower
  

• Sector Performance: Mixed

• Volume: Around Average

• Market Leading Stocks: Performing In Line

Equity Investor Angst:

• Volatility(VIX) 17.3 -.9%
• S&P 500 Intraday % Swing .41 -58.4%.
  
• Bloomberg Global Risk On/Risk Off Index 77.7 +1.2%

• Euro/Yen Carry Return Index 181.2 -.6%

• Emerging Markets Currency Volatility(VXY) 8.3 -1.7%

• CBOE S&P 500 Implied Correlation Index 20.5 +2.5% 

• ISE Sentiment Index 140.0 +8.0 points
  

• Total Put/Call .78 unch.

• NYSE Arms 1.0 +40.9%
• NYSE Non-Block Money Flow -$71.2M 
  

Credit Investor Angst:

• North American Investment Grade CDS Index 56.9 -.31%
  

• US Energy High-Yield OAS 344.5 +1.0%
• Bloomberg TRACE # Distressed Bonds Traded 213.0 -11.0

• European Financial Sector CDS Index 62.0 -2.0%
  
• Deutsche Bank Subordinated 5Y Credit Default Swap 142.3 -1.3%
  

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

• Asia Ex-Japan Investment Grade CDS Index 76.4 -.4%
  

• Emerging Market CDS Index 178.4 -.9%
• Israel Sovereign CDS 86.5 -1.3%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 24.3 unch.

• 2-Year SOFR Swap Spread -17.75 basis points -.25 basis point

• 3M T-Bill Treasury Repo Spread -2.25 basis points -2.25 basis points

• 3-Month EUR/USD Cross-Currency Basis Swap .25 +.25 basis point
• MBS  5/10 Treasury Spread 139.0 +1.0 basis point
• Bloomberg CMBS Investment Grade Bbb Average OAS 601.0 unch.
• Avg. Auto ABS OAS 58.0 unch.

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 36.9 +.12%
• 3-Month T-Bill Yield 4.28% -1.0 basis point

• China Iron Ore Spot 102.0 USD/Metric Tonne +.5%
• Dutch TTF Nat Gas(European benchmark) 42.8 euros/megawatt-hour +.3%

• Citi US Economic Surprise Index -4.6 -2.1 points

• Citi Eurozone Economic Surprise Index 32.0 +.2 point

• Citi Emerging Markets Economic Surprise Index 8.7 +4.0 points
• S&P 500 Current Quarter EPS Growth Rate YoY(14 of 500 reporting) +8.2% -.2 percentage point
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 277.98 +.15:  Growth Rate +12.9% +.1 percentage point, P/E 20.8 +.1
• S&P 500 Current Year Estimated Profit Margin 13.57% +2.0 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 417.18 +4.32: Growth Rate +20.6% +1.2 percentage points, P/E 29.8 +.1
• Bloomberg US Financial Conditions Index .45 +15.0 basis points
• Bloomberg Euro-Zone Financial Conditions Index 1.56 +18.0 basis points
• US Yield Curve 30.25 basis points (2s/10s) +1.25 basis points
• US Atlanta Fed GDPNow Q1 Forecast -1.76% unch.
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 32.5% -2.6 percentage points

• Cleveland Fed Inflation Nowcast Core PCE YoY +2.60% unch.: CPI YoY +2.47% +1.0 basis point
• 10-Year TIPS Spread 2.35 -1.0 basis point
• Highest target rate probability for June 18th FOMC meeting: 61.5% (+3.0 percentage points) chance of 4.5%-4.25%. Highest target rate probability for July 30th meeting: 49.3%(+.7 percentage point) chance of 4.0%-4.25%. (current target rate is 4.25-4.5%)
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +35 open in Japan 
• China A50 Futures: Indicating +3 open in China

• DAX Futures: Indicating +251 open in Germany

Portfolio:

• Slightly Higher: On gains in my tech/financial/industrial sector longs
• Disclosed Trades: None
• Market Exposure: 100% Net Long