Stocks Falling into Afternoon on China Bubble-Bursting Worries, European/Emerging Markets/US High-Yield Debt Angst, Yen Strength, Transport/Financial Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Lower
  

• Sector Performance: Almost Every Sector Declining
  

• Volume: Above Average

• Market Leading Stocks: Underperforming

Equity Investor Angst:

• Volatility(VIX) 20.7 +9.2%

• Euro/Yen Carry Return Index 137.51 -.82%

• Emerging Markets Currency Volatility(VXY) 11.38 +.89%

• S&P 500 Implied Correlation 62.80 +1.70%

• ISE Sentiment Index 64.0 -13.51%

• Total Put/Call .99 +3.13%

• NYSE Arms 1.71 -45.90% 

Credit Investor Angst:

• North American Investment Grade CDS Index 95.25 +.92%

• America Energy Sector High-Yield CDS Index 1,800.0 +2.77%

• European Financial Sector CDS Index 76.54 +2.24%

• Western Europe Sovereign Debt CDS Index 17.32 -.20%

• Asia Pacific Sovereign Debt CDS Index 74.47 +1.43%

• Emerging Market CDS Index 357.13 +1.45%
  

• iBoxx Offshore RMB China Corporate High Yield Index 123.54 +.04%

• 2-Year Swap Spread 13.5 +3.5 basis points

• TED Spread 31.0 -4.0 basis points

• 3-Month EUR/USD Cross-Currency Basis Swap -29.25 -2.25 basis points

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 69.31 +.24%
• 3-Month T-Bill Yield .18% -4.0 basis points

• Yield Curve 123.0 -1.0 basis point

• China Import Iron Ore Spot $40.10/Metric Tonne +1.70%

• Citi US Economic Surprise Index -23.9 unch.

• Citi Eurozone Economic Surprise Index 18.7 -.3 point

• Citi Emerging Markets Economic Surprise Index 18.10 +.3 basis point

• 10-Year TIPS Spread 1.50 unch.
• 67.6% chance of next Fed rate hike at June 15 meeting

Overseas Futures:

• Nikkei 225 Futures: Indicating -111 open in Japan 
• China A50 Futures: Indicating -140 open in China

• DAX Futures: Indicating -37 open in Germany

Portfolio: 

• Slightly Lower: On losses in my retail/tech/medical sector longs 

• Disclosed Trades: None

• Market Exposure: 25% Net Long