Stocks Reversing Lower into Final Hour on China's Trade War Escalation, Global Growth Fears, Higher Long-Term Rates, Consumer Discretionary/Energy Sector Weakness

  Broad Equity Market Tone:

• Advance/Decline Line: Lower
  

• Sector Performance: Mixed

• Volume: Heavy

• Market Leading Stocks: Underperforming

Equity Investor Angst:

• Volatility(VIX) 49.8 +6.1%
• S&P 500 Intraday % Swing 2.3 -73.4%
• Bloomberg Global Risk On/Risk Off Index 39.5 +.7%

• Euro/Yen Carry Return Index 179.5 -.7%

• Emerging Markets Currency Volatility(VXY) 9.8 -.5%

• CBOE S&P 500 Implied Correlation Index 46.4 +6.4% 

• ISE Sentiment Index 118.0 -7.0 points
  

• Total Put/Call 1.17 -4.1%

• NYSE Arms 1.66 +253.1%
• NYSE Non-Block Money Flow -$165.0M 
  

Credit Investor Angst:

• North American Investment Grade CDS Index 77.1 +.6%
  

• US Energy High-Yield OAS 535.6 +1.9%
• Bloomberg TRACE # Distressed Bonds Traded 343.0 +34.0

• European Financial Sector CDS Index 83.3 -3.9%
  
• Deutsche Bank Subordinated 5Y Credit Default Swap 197.1 -5.3%
  

• Italian/German 10Y Yld Spread 120.0 basis points -6.0 basis points

• Asia Ex-Japan Investment Grade CDS Index 114.2 -4.0%
  

• Emerging Market CDS Index 223.0 -.3%
• Israel Sovereign CDS 112.77 -1.1%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 23.1 -.4%

• 2-Year SOFR Swap Spread -28.75 basis points -6.0 basis points

• 3M T-Bill Treasury Repo Spread -2.5 basis points +7.75 basis points

• 3-Month EUR/USD Cross-Currency Basis Swap -1.25 +3.25 basis points
• MBS  5/10 Treasury Spread 158.0 +4.0 basis points
• Bloomberg CMBS Investment Grade Bbb Average OAS 637.0 +11.0 basis points
• Avg. Auto ABS OAS 64.0 +3.0 basis points

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 37.34 -.21%
• 3-Month T-Bill Yield 4.29% +3.0 basis points

• China Iron Ore Spot 93.9 USD/Metric Tonne -1.0%
• Dutch TTF Nat Gas(European benchmark) 36.2 euros/megawatt-hour -2.1%

• Citi US Economic Surprise Index -6.7 -1.1 points

• Citi Eurozone Economic Surprise Index 12.2 -.6 point

• Citi Emerging Markets Economic Surprise Index 1.8 -.6 point
• S&P 500 Current Quarter EPS Growth Rate YoY(19 of 500 reporting) +4.1% -3.4 percentage points
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 278.0 -.43:  Growth Rate +13.2% -.2 percentage point, P/E 18.6 +.6
• S&P 500 Current Year Estimated Profit Margin 13.54% -3.0 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 418.52 -.54: Growth Rate +21.0% -.2 percentage point, P/E 26.0 +1.3
• Bloomberg US Financial Conditions Index -1.08 +6.0 basis points
• Bloomberg Euro-Zone Financial Conditions Index .14 -57.0 basis points
• US Yield Curve 51.5 basis points (2s/10s) +10.5 basis points
• US Atlanta Fed GDPNow Q1 Forecast -2.8% unch.
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 42.7% -5.1 percentage points

• Cleveland Fed Inflation Nowcast Core PCE YoY +2.68% unch.: CPI YoY +2.49% unch.
• 10-Year TIPS Spread 2.23 +4.0 basis points
• Highest target rate probability for June 18th FOMC meeting: 50.0% (-11.2 percentage points) chance of 4.0%-4.25%. Highest target rate probability for July 30th meeting: 49.8%(-7.9 percentage points) chance of 3.75%-4.0%. (current target rate is 4.25-4.5%)
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -250 open in Japan 
• China A50 Futures: Indicating -385 open in China

• DAX Futures: Indicating -192 open in Germany

Portfolio:

• Higher: On gains in my tech/financial/industrial sector longs, index hedges and emerging market shorts
• Disclosed Trades: Added to my (IWM)/(QQQ) hedges, took profits in my financial sector longs
• Market Exposure: Moved to Market Neutral