Stocks Falling Substantially into Final Hour on US/China Trade War Escalation, Fed Chairman Powell's Hawkish Commentary, Earnings Outlook Jitters, Tech/Biotech Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Lower
  

• Sector Performance: Most Sectors Declining

• Volume: Below Average

• Market Leading Stocks: Performing In Line

Equity Investor Angst:

• Volatility(VIX) 31.0 +2.8%
• S&P 500 Intraday % Swing .99 +10.0%
• Bloomberg Global Risk On/Risk Off Index 53.2 -5.0% 
• Swiss Franc/Offshore Chinese Renminbi Cross 8.96 +.69%

• Euro/Yen Carry Return Index 181.72 +.3%

• Emerging Markets Currency Volatility(VXY) 9.38 +.54%

• CBOE S&P 500 Implied Correlation Index 40.8 +1.4% 

• ISE Sentiment Index 118.0 unch.

• Total Put/Call .95 -5.9%

• NYSE Arms 1.13 -19.3%
• NYSE Non-Block Money Flow -$314.8M 
  

Credit Investor Angst:

• North American Investment Grade CDS Index 71.2 +1.9%
  

• US Energy High-Yield OAS 516.6 -.1%
• Bloomberg TRACE # Distressed Bonds Traded 304.0 +4.0

• European Financial Sector CDS Index 77.5 +.07%
  
• Deutsche Bank Subordinated 5Y Credit Default Swap 185.0 -.13%
  

• Italian/German 10Y Yld Spread 119.0 basis points +1.0 basis point

• Asia Ex-Japan Investment Grade CDS Index 104.75 +1.1%
  

• Emerging Market CDS Index 210.3 +1.6%
• Israel Sovereign CDS 110.2 -2.0%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 23.46 -.2%

• 2-Year SOFR Swap Spread -24.0 basis points -.5 basis point

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

• 3-Month EUR/USD Cross-Currency Basis Swap -1.0 +2.5 basis points
• MBS  5/10 Treasury Spread 157.0 +1.0 basis point
• Bloomberg CMBS Investment Grade Bbb Average OAS 647.0 unch.
• Avg. Auto ABS OAS 72.0 +1.0 basis point

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 36.83 +.22% 
• US 10-Year T-Note Yield 4.29% -5.0 basis points
• 3-Month T-Bill Yield 4.31% +2.0 basis points
  

• China Iron Ore Spot 98.0 USD/Metric Tonne -.2%
• Dutch TTF Nat Gas(European benchmark) 35.3 euros/megawatt-hour +2.6%

• Citi US Economic Surprise Index -19.5 -.7 point

• Citi Eurozone Economic Surprise Index 1.3 -.6 point

• Citi Emerging Markets Economic Surprise Index 15.2 +6.4 points
• S&P 500 Current Quarter EPS Growth Rate YoY(43 of 500 reporting) +6.5% -.1 percentage point
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 276.60 -.44:  Growth Rate +12.6% -.2 percentage point, P/E 19.3 -.3
• S&P 500 Current Year Estimated Profit Margin 13.47% -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 418.02 -.19: Growth Rate +20.9% unch., P/E 27.2 -.8
• Bloomberg US Financial Conditions Index -.50 +2.0 basis points
• Bloomberg Euro-Zone Financial Conditions Index .75 +2.0 basis points
• US Yield Curve 49.0 basis points (2s/10s) -.25 basis point
• US Atlanta Fed GDPNow Q1 Forecast -2.2% +.2 percentage point
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 41.1% +3.1 percentage points

• Cleveland Fed Inflation Nowcast Core PCE YoY +2.54% unch.: CPI YoY +2.38% -4.0 basis points
• 1-Year TIPS Spread 3.05 -4.0 basis points
  
• 10-Year TIPS Spread 2.18 -2.0 basis points
• Highest target rate probability for June 18th FOMC meeting: 61.2% (-1.1 percentage points) chance of 4.0%-4.25%. Highest target rate probability for July 30th meeting: 51.1%(+4.2 percentage points) chance of 3.75%-4.0%. (current target rate is 4.25-4.5%)
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +70 open in Japan 
• China A50 Futures: Indicating -77 open in China

• DAX Futures: Indicating +9 open in Germany

Portfolio:

• Slightly Higher: On gains in my index hedges and emerging market shorts
• Disclosed Trades: Added to my (IWM)/(QQQ) hedges
• Market Exposure: Moved to Market Neutral