Stocks Falling into Afternoon on US Policy-Induced Stagflation Fears, Rising Fed Rate-Hike Odds, Earnings Outlook Worries, Commodity/Tech Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Lower
  

• Sector Performance: Most Sectors Declining
  

• Volume:  Around Average

• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• Volatility(VIX) 20.6 +2.1%
• DJIA Intraday % Swing .83%
  
• Bloomberg Global Risk On/Risk Off Index 61.1 -1.7%

• Euro/Yen Carry Return Index 149.0 +.37%

• Emerging Markets Currency Volatility(VXY) 10.8 +.7%

• CBOE S&P 500 Implied Correlation Index 35.4 +4.0% 

• ISE Sentiment Index 101.0 +5.0 points
  

• Total Put/Call 1.11 +26.1%

• NYSE Arms 1.29 +20.6%

Credit Investor Angst:

• North American Investment Grade CDS Index 74.3 +2.0%
  

• US Energy High-Yield OAS 380.07 +3.2%
• Bloomberg TRACE # Distressed Bonds Traded 322.0 -4.0
  

• European Financial Sector CDS Index 85.70 +2.21% 
• Credit Suisse Subordinated 5Y Credit Default Swap 386.02 +.79%
  

• Italian/German 10Y Yld Spread 186.0 basis points unch.
  

• Asia Ex-Japan Investment Grade CDS Index 112.26 +3.53%
  

• Emerging Market CDS Index 239.26 +2.22%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 27.44 -.40%

• 2-Year Swap Spread 32.0 basis points +.25 basis point
  

• TED Spread 11.5 basis points +1.25 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -7.75 +.25 basis point
  
• MBS  5/10 Treasury Spread  148.0 +6.0 basis points
  
• Bloomberg US Agg CMBS Avg OAS 100.0 unch.
  
• Avg. Auto ABS OAS .60 -2.0 basis points
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 47.8 +.2%
• 3-Month T-Bill Yield 4.79% +2.0 basis points
  

• China Iron Ore Spot 126.3 USD/Metric Tonne -.2%
• Dutch TTF Nat Gas(European benchmark) 49.0 euros/megawatt-hour -5.7%

• Citi US Economic Surprise Index 29.0 unch.

• Citi Eurozone Economic Surprise Index 79.4 -1.8 points
  

• Citi Emerging Markets Economic Surprise Index 3.8 -2.7 points
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 224.02 +.06:  Growth Rate +.2% unch., P/E 18.1 -.3
• S&P 500 Current Year Estimated Profit Margin 12.42% unch.
  
• Bloomberg US Financial Conditions Index .32 -16.0 basis points
  
• Yield Curve -80.0 basis points (2s/10s) -2.0 basis points
• US Atlanta Fed 1Q GDPNow Forecast +2.50% unch.
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +4.30% unch.: CPI YoY +6.24% unch.
  
• 10-Year TIPS Spread 2.37 -1.0 basis point
  
• Highest target rate probability for May 3rd FOMC meeting: 74.6%(+5.7 percentage points) chance of 5.0%-5.25%. Highest target rate probability for June 14th meeting: 54.7%(+9.8 percentage points) chance of 5.25%-5.5%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -88 open in Japan 
• China A50 Futures: Indicating -103 open in China

• DAX Futures: Indicating +31 open in Germany

Portfolio:

• Higher:  On gains in my industrial/medical sector longs and emerging market shorts
  

• Disclosed Trades:  Added to my (IWM)/(QQQ) hedges, then covered some
  

• Market Exposure: 25% Net Long