Stocks Reversing Slightly Higher into Final Hour on Global Tariff Negotiation Optimism, Short-Covering, Bargain-Hunting, Tech/Medical Equipment Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Lower
  

• Sector Performance: Mixed

• Volume: Very Heavy

• Market Leading Stocks: Performing In Line

Equity Investor Angst:

• Volatility(VIX) 45.8 +1.1%
• S&P 500 Intraday % Swing 8.5 +151.3%
• Bloomberg Global Risk On/Risk Off Index 41.6 -5.7%

• Euro/Yen Carry Return Index 181.6 +.5%

• Emerging Markets Currency Volatility(VXY) 9.94 +3.5%

• CBOE S&P 500 Implied Correlation Index 44.6 +.3% 

• ISE Sentiment Index 118.0 +28.0 points
  

• Total Put/Call 1.15 -6.6%

• NYSE Arms .42 -67.4%
• NYSE Non-Block Money Flow -$113.4M 
  

Credit Investor Angst:

• North American Investment Grade CDS Index 74.5 +3.6%
  

• US Energy High-Yield OAS 524.4 +6.3%
• Bloomberg TRACE # Distressed Bonds Traded 309.0 +50.0

• European Financial Sector CDS Index 86.7 +3.0%
  
• Deutsche Bank Subordinated 5Y Credit Default Swap 208.1 +9.5%
  

• Italian/German 10Y Yld Spread 126.0 basis points +7.0 basis points

• Asia Ex-Japan Investment Grade CDS Index 115.5 +22.5%
  

• Emerging Market CDS Index 221.0 +3.7%
• Israel Sovereign CDS 114.1 +3.9%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 23.2 -1.8%

• 2-Year SOFR Swap Spread -22.75 basis points -1.75 basis points

• 3M T-Bill Treasury Repo Spread -10.25 basis points +.75 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -4.5 -.25 basis point
• MBS  5/10 Treasury Spread 154.0 +4.0 basis points
• Bloomberg CMBS Investment Grade Bbb Average OAS 626.0 +10.0 basis points
• Avg. Auto ABS OAS 61.0 +1.0 basis point

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 36.4 -.6%
• 3-Month T-Bill Yield 4.26% -1.0 basis point

• China Iron Ore Spot 97.3 USD/Metric Tonne -.27%
• Dutch TTF Nat Gas(European benchmark) 37.0 euros/megawatt-hour +1.7%

• Citi US Economic Surprise Index -5.6 -2.3 points

• Citi Eurozone Economic Surprise Index 12.8 -1.8 points

• Citi Emerging Markets Economic Surprise Index 2.4 -.6 point
• S&P 500 Current Quarter EPS Growth Rate YoY(18 of 500 reporting) +7.5% unch.
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 278.43 +.01:  Growth Rate +13.4% unch., P/E 18.0 -.6
• S&P 500 Current Year Estimated Profit Margin 13.57% -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 419.06 +.38: Growth Rate +21.2% +.1 percentage point, P/E 24.7 -.5
• Bloomberg US Financial Conditions Index -1.14 -75.0 basis points
• Bloomberg Euro-Zone Financial Conditions Index .71 -42.0 basis points
• US Yield Curve 41.0 basis points (2s/10s) +7.25 basis points
• US Atlanta Fed GDPNow Q1 Forecast -2.8% unch.
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 47.8% +2.4 percentage points

• Cleveland Fed Inflation Nowcast Core PCE YoY +2.68% unch.: CPI YoY +2.49% unch.
• 10-Year TIPS Spread 2.19 +1.0 basis point
• Highest target rate probability for June 18th FOMC meeting: 65.3% (+1.4 percentage points) chance of 4.0%-4.25%. Highest target rate probability for July 30th meeting: 57.6%(-4.0 percentage points) chance of 3.75%-4.0%. (current target rate is 4.25-4.5%)
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +1,364 open in Japan 
• China A50 Futures: Indicating -420 open in China

• DAX Futures: Indicating +411 open in Germany

Portfolio:

• Higher: On gains in my tech/financial sector longs and emerging market shorts
• Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges
• Market Exposure: Moved to 25% Net Long