Stocks Surging into Final Hour on Optimistic FOMC Commentary, Lower Long-Term Rates, Short-Covering, Tech/Financial Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Modestly Higher
  

• Sector Performance: Most Sectors Rising

• Volume: Below Average

• Market Leading Stocks: Outperforming

Equity Investor Angst:

• Volatility(VIX) 21.0 -3.8%
• S&P 500 Intraday % Swing 1.0 -18.0%.
  
• Bloomberg Global Risk On/Risk Off Index 73.6 -1.0%

• Euro/Yen Carry Return Index 182.2 -.41%

• Emerging Markets Currency Volatility(VXY) 8.2 +5.0%

• CBOE S&P 500 Implied Correlation Index 23.5 -4.2% 

• ISE Sentiment Index 152.0 +17.0 points
  

• Total Put/Call .84 +7.7%

• NYSE Arms .82 -1.2%
• NYSE Non-Block Money Flow -$52.6M 
  

Credit Investor Angst:

• North American Investment Grade CDS Index 53.3 -1.7%
  

• US Energy High-Yield OAS 353.4 -1.5%
• Bloomberg TRACE # Distressed Bonds Traded 222.0 -14.0

• European Financial Sector CDS Index 58.3 -1.6%
  
• Deutsche Bank Subordinated 5Y Credit Default Swap 134.5 -.3%
  

• Italian/German 10Y Yld Spread 111.0 basis points unch.

• Asia Ex-Japan Investment Grade CDS Index 72.4 -1.2%
  

• Emerging Market CDS Index 160.7 -.6%
• Israel Sovereign CDS 83.8 +.3%
  

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

• 2-Year SOFR Swap Spread -16.5 basis points unch.

• 3M T-Bill Treasury Repo Spread -.5 basis point +2.25 basis points

• 3-Month EUR/USD Cross-Currency Basis Swap .25 -.5 basis point
• MBS  5/10 Treasury Spread 136.0 -1.0 basis point
• Bloomberg CMBS Investment Grade Bbb Average OAS 602.0 +3.0 basis points
• Avg. Auto ABS OAS 56.0 +1.0 basis point

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 37.0 -1.6%
• 3-Month T-Bill Yield 4.30% +2.0 basis points

• China Iron Ore Spot 99.9 USD/Metric Tonne -.4%
• Dutch TTF Nat Gas(European benchmark) 43.4 euros/megawatt-hour +6.4%

• Citi US Economic Surprise Index -6.9 +.4 point

• Citi Eurozone Economic Surprise Index 23.3 +.1 point

• Citi Emerging Markets Economic Surprise Index 4.5 +.5 point
• S&P 500 Current Quarter EPS Growth Rate YoY(4 of 500 reporting) +4.3% -1.8 percentage points
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 277.50 -.02:  Growth Rate +12.7% unch., P/E 20.4 +.2
• S&P 500 Current Year Estimated Profit Margin 13.55% -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 412.05 +.20: Growth Rate +19.2% +.1 percentage point, P/E 29.3 +.5
• Bloomberg US Financial Conditions Index .20 -7.0 basis points
• Bloomberg Euro-Zone Financial Conditions Index 1.43 +5.0 basis points
• US Yield Curve 26.75 basis points (2s/10s) +2.75 basis points
• US Atlanta Fed GDPNow Q1 Forecast -1.76% unch.
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 33.7% +.6 percentage point

• Cleveland Fed Inflation Nowcast Core PCE YoY +2.60% unch.: CPI YoY +2.46% unch.
• 10-Year TIPS Spread 2.32 +2.0 basis points
• Highest target rate probability for May 7th FOMC meeting: 80.5% (-2.8 percentage points) chance of 4.25%-4.5%. Highest target rate probability for June 18th meeting: 54.9%(-.7 percentage points) chance of 4.0%-4.25%. (current target rate is 4.25-4.5%)
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +120 open in Japan 
• China A50 Futures: Indicating +3 open in China

• DAX Futures: Indicating +40 open in Germany

Portfolio:

• Higher: On gains in my consumer discretionary/tech/utility/industrial/financial sector longs
• Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges 
• Market Exposure: Moved to 100% Net Long