Stocks Soaring into Final Hour on Diminishing Global Trade War Fears, Less Tariff Uncertainty, Technical Buying, Tech/Transport Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Higher
  

• Sector Performance: Every Sector Rising

• Volume: Heavy

• Market Leading Stocks: Outperforming

Equity Investor Angst:

• Volatility(VIX) 37.3 -28.7%
• S&P 500 Intraday % Swing 2.1 -7.7%
• Bloomberg Global Risk On/Risk Off Index 49.2 +31.4%

• Euro/Yen Carry Return Index 181.7 +1.2%

• Emerging Markets Currency Volatility(VXY) 10.5 +5.3%

• CBOE S&P 500 Implied Correlation Index 38.9 -16.6% 

• ISE Sentiment Index 122.0 +20.0 points
  

• Total Put/Call 1.02 -16.4%

• NYSE Arms .24 -88.7%
• NYSE Non-Block Money Flow -$99.3M 
  

Credit Investor Angst:

• North American Investment Grade CDS Index 70.5 -13.0%
  

• US Energy High-Yield OAS 518.2 -5.1%
• Bloomberg TRACE # Distressed Bonds Traded 348.0 +5.0

• European Financial Sector CDS Index 91.6 +10.0%
  
• Deutsche Bank Subordinated 5Y Credit Default Swap 211.4 +7.2%
  

• Italian/German 10Y Yld Spread 129.0 basis points +9.0 basis points

• Asia Ex-Japan Investment Grade CDS Index 126.8 +11.0%
  

• Emerging Market CDS Index 208.8 -9.1%
• Israel Sovereign CDS 121.0 +7.3%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 23.3 +1.1%

• 2-Year SOFR Swap Spread -22.0 basis points +6.75 basis points

• 3M T-Bill Treasury Repo Spread -3.5 basis points -1.0 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -4.25 -3.0 basis points
• MBS  5/10 Treasury Spread 155.0 -3.0 basis points
• Bloomberg CMBS Investment Grade Bbb Average OAS 640.0 +3.0 basis points
• Avg. Auto ABS OAS 65.0 +1.0 basis point

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 36.5 +.6%
• 3-Month T-Bill Yield 4.33% +4.0 basis points

• China Iron Ore Spot 95.9 USD/Metric Tonne +1.1%
• Dutch TTF Nat Gas(European benchmark) 33.7 euros/megawatt-hour -7.1%

• Citi US Economic Surprise Index -7.6 -.9 point

• Citi Eurozone Economic Surprise Index 11.7 -.5 point

• Citi Emerging Markets Economic Surprise Index 1.3 -.5 point
• S&P 500 Current Quarter EPS Growth Rate YoY(20 of 500 reporting) +4.1% unch.
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 277.70 -.30:  Growth Rate +13.1% -.1 percentage point, P/E 17.9 -.7
• S&P 500 Current Year Estimated Profit Margin 13.52% -2.0 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 418.43 -.09: Growth Rate +21.0% unch., P/E 25.0 -1.0
• Bloomberg US Financial Conditions Index -1.58 -50.0 basis points
• Bloomberg Euro-Zone Financial Conditions Index .64 +50.0 basis points
• US Yield Curve 45.5 basis points (2s/10s) -6.5 basis points
• US Atlanta Fed GDPNow Q1 Forecast -2.4% +40.0 basis points
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 40.4% -2.3 percentage points

• Cleveland Fed Inflation Nowcast Core PCE YoY +2.68% unch.: CPI YoY +2.49% unch.
• 10-Year TIPS Spread 2.29 +6.0 basis points
• Highest target rate probability for June 18th FOMC meeting: 60.3% (+9.7 percentage points) chance of 3.75%-4.0%. Highest target rate probability for July 30th meeting: 42.7%(-7.1 percentage points) chance of 3.75%-4.0%. (current target rate is 4.25-4.5%)
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +2,786 open in Japan 
• China A50 Futures: Indicating -88 open in China

• DAX Futures: Indicating +1,585 open in Germany

Portfolio:

• Higher: On gains in my tech/industrial/consumer discretionary/utility sector longs
• Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges and some of my emerging market shorts
• Market Exposure: Moved to 75% net long