Stocks Falling Sharply into Afternoon on Escalating Global Trade War Tensions, Global Growth Fears, Earnings Outlook Jitters, Tech/Energy Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Lower
  

• Sector Performance: Almost Every Sector Declining

• Volume: Heavy

• Market Leading Stocks: Underperforming

Equity Investor Angst:

• Volatility(VIX) 27.8 +29.5%
• S&P 500 Intraday % Swing 1.5 -19.4%
• Bloomberg Global Risk On/Risk Off Index 61.0 -9.0%

• Euro/Yen Carry Return Index 180.9 -.5%

• Emerging Markets Currency Volatility(VXY) 8.7 +3.1%

• CBOE S&P 500 Implied Correlation Index 31.8 +44.8% 

• ISE Sentiment Index 115.0 -7.0 points
  

• Total Put/Call 1.07 +12.6%

• NYSE Arms 1.19 +33.7%
• NYSE Non-Block Money Flow -$40.0M 
  

Credit Investor Angst:

• North American Investment Grade CDS Index 64.9 +5.6%
  

• US Energy High-Yield OAS 437.1 +11.8%
• Bloomberg TRACE # Distressed Bonds Traded 240.0 +1.0

• European Financial Sector CDS Index 73.0 +6.2%
  
• Deutsche Bank Subordinated 5Y Credit Default Swap 165.3 +3.4%
  

• Italian/German 10Y Yld Spread 112.0 basis points +2.0 basis points

• Asia Ex-Japan Investment Grade CDS Index 89.2 +7.5%
  

• Emerging Market CDS Index 194.2 +4.0%
• Israel Sovereign CDS 98.5 +5.1%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 23.9 -.5%

• 2-Year SOFR Swap Spread -19.0 basis points -1.5 basis points

• 3M T-Bill Treasury Repo Spread -4.75 basis points -.75 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap .25 unch.
• MBS  5/10 Treasury Spread 146.0 -2.0 basis points
• Bloomberg CMBS Investment Grade Bbb Average OAS 603.0 +1.0 basis point
• Avg. Auto ABS OAS 60.0 unch.

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 36.9 +.2%
• 3-Month T-Bill Yield 4.29% -1.0 basis point

• China Iron Ore Spot 100.9 USD/Metric Tonne -.9%
• Dutch TTF Nat Gas(European benchmark) 39.2 euros/megawatt-hour -5.0%

• Citi US Economic Surprise Index -7.2 -2.4 points

• Citi Eurozone Economic Surprise Index 17.4 +5.7 points

• Citi Emerging Markets Economic Surprise Index 3.8 -2.3 points
• S&P 500 Current Quarter EPS Growth Rate YoY(18 of 500 reporting) +7.5% -.9 percentage point
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 278.44 -.04:  Growth Rate +13.4% -.1 percentage point, P/E 19.6 -.7
• S&P 500 Current Year Estimated Profit Margin 13.57% unch.
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(0 of 10 reporting) n/a
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 418.68 +.07: Growth Rate +21.1% unch., P/E 26.7 -1.4
• Bloomberg US Financial Conditions Index .09 +1.0 basis point
• Bloomberg Euro-Zone Financial Conditions Index 1.31 -10.0 basis points
• US Yield Curve 33.0 basis points (2s/10s) +4.5 basis points
• US Atlanta Fed GDPNow Q1 Forecast -3.7% unch.
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 38.7% +1.0 percentage point

• Cleveland Fed Inflation Nowcast Core PCE YoY +2.68% unch.: CPI YoY +2.49% unch.
• 10-Year TIPS Spread 2.30 -3.0 basis points
• Highest target rate probability for June 18th FOMC meeting: 64.0% (+3.4 percentage points) chance of 4.5%-4.25%. Highest target rate probability for July 30th meeting: 50.4%(+11.4 percentage points) chance of 3.75%-4.0%. (current target rate is 4.25-4.5%)
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -680 open in Japan 
• China A50 Futures: Indicating -74 open in China

• DAX Futures: Indicating +210 open in Germany

Portfolio:

• Slightly Lower: On losses in my consumer discretionary/industrial/tech/financial sector longs
• Disclosed Trades: Added to my (IWM)/(QQQ) hedges and to my emerging market shorts
• Market Exposure: Moved to Market Neutral