Stocks Slightly Lower into Final Hour on Higher Long-Term Rates, US Global Tariff Uncertainty, Profit-Taking, Energy/Alt Energy Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Modestly Higher
  

• Sector Performance: Mixed

• Volume: Below Average

• Market Leading Stocks: Outperforming

Equity Investor Angst:

• Volatility(VIX) 23.0 +1.5%
• S&P 500 Intraday % Swing .71 -26.5%
• Bloomberg Global Risk On/Risk Off Index 61.8 +.2% 
• Swiss Franc/Offshore Chinese Renminbi Cross 8.75 +.26%

• Euro/Yen Carry Return Index 182.9 -.5%

• Emerging Markets Currency Volatility(VXY) 9.33 +4.6%

• CBOE S&P 500 Implied Correlation Index 32.6 -1.2% 

• ISE Sentiment Index 140.0 27.0

• Total Put/Call .89 +6.0%

• NYSE Arms .84 +16.7%
• NYSE Non-Block Money Flow -$167.1M 
  

Credit Investor Angst:

• North American Investment Grade CDS Index 63.2 -1.9%
  

• US Energy High-Yield OAS 479.4 +1.5%
• Bloomberg TRACE # Distressed Bonds Traded 271.0 -16.0

• European Financial Sector CDS Index 69.3 -.21%
  
• Deutsche Bank Subordinated 5Y Credit Default Swap 161.6 -1.0%
  

• Italian/German 10Y Yld Spread 109.0 basis points -1.0 basis point

• Asia Ex-Japan Investment Grade CDS Index 95.4 +1.0%
  

• Emerging Market CDS Index 197.9 +.4%
• Israel Sovereign CDS 106.6 +1.9%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 23.67 -.21%

• 2-Year SOFR Swap Spread -23.75 basis points unch.

• 3M T-Bill Treasury Repo Spread -2.0 basis point -.25 basis point

• 3-Month EUR/USD Cross-Currency Basis Swap -1.75 -.25 basis point
• MBS  5/10 Treasury Spread 158.0 +1.0 basis point
• Bloomberg CMBS Investment Grade Bbb Average OAS 642.0 -1.0 basis point
• Avg. Auto ABS OAS 75.0 -1.0 basis point

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 37.1 +.19% 
• US 10-Year T-Note Yield 4.35% +4.0 basis points
• 3-Month T-Bill Yield 4.31% unch.

• China Iron Ore Spot 96.3 USD/Metric Tonne -.27%
• Dutch TTF Nat Gas(European benchmark) 32.9 euros/megawatt-hour -.45%

• Citi US Economic Surprise Index -8.6 +4.3 points

• Citi Eurozone Economic Surprise Index -3.4 +.8 point

• Citi Emerging Markets Economic Surprise Index 20.5 -2.1 points
• S&P 500 Current Quarter EPS Growth Rate YoY(364 of 500 reporting) +12.4% -.9 percentage point
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 275.91 +.09:  Growth Rate +11.9% unch., P/E 20.6 -.1
• S&P 500 Current Year Estimated Profit Margin 13.34% -4.0 basis points
• NYSE FANG+ Current Quarter EPS Growth Rate YoY(7 of 10 reporting) +29.1% unch.
• NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 423.89 +.07: Growth Rate +22.6% unch., P/E 30.2 -.2
• Bloomberg US Financial Conditions Index .00 +16.0 basis points
• Bloomberg Euro-Zone Financial Conditions Index 1.17 -25.0 basis points
• Bloomberg Global Trade Policy Uncertainty Index 10.5 -.2
• US Yield Curve 50.25 basis points (2s/10s) +.25 basis point
• US Atlanta Fed GDPNow Q2 Forecast +1.1% unch.
• US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 41.0% -4.7 percentage points

• Cleveland Fed Inflation Nowcast Core PCE YoY +2.61% unch.: CPI YoY +2.34% unch.
• 1-Year TIPS Spread 3.0 -4.0 basis points
  
• 10-Year TIPS Spread 2.28 unch.
• Highest target rate probability for June 18th FOMC meeting: 71.7% (-6.6 percentage points) chance of 4.25%-4.5%. Highest target rate probability for July 30th meeting: 55.9%(+.7 percentage point) chance of 4.0%-4.25%. (current target rate is 4.25-4.5%)
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +550 open in Japan 
• China A50 Futures: Indicating +147 open in China

• DAX Futures: Indicating +180 open in Germany

Portfolio:

• Higher: On gains in my utility/tech/consumer discretionary/industrial sector longs
• Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges
  
• Market Exposure: Moved to 100% Net Long