Stocks Higher into Afternoon on Less European/Emerging Markets/US High-Yield Debt Angst, Dovish US Fed Hopes, Short-Covering, Energy/Financial Sector Strength

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Higher
  

• Sector Performance: Most Sectors Rising
  

• Volume:  Above Average

• Market Leading Stocks: Outperforming
  

Equity Investor Angst:

• Volatility(VIX) 21.6 -10.8%
• DJIA Intraday % Swing 1.46%
  
• Bloomberg Global Risk On/Risk Off Index 48.02 +13.4%

• Euro/Yen Carry Return Index 148.6 +1.3%

• Emerging Markets Currency Volatility(VXY) 12.0 unch.

• CBOE S&P 500 Implied Correlation Index 37.9 -7.0% 

• ISE Sentiment Index 83.0 -5.0 points
  

• Total Put/Call 1.03 +25.6%

• NYSE Arms .73 +2.8%

Credit Investor Angst:

• North American Investment Grade CDS Index 82.5 -6.8%
  

• US Energy High-Yield OAS 427.4 -5.8%
• Bloomberg TRACE # Distressed Bonds Traded 437.0 -27
  

• European Financial Sector CDS Index 107.57 -10.8% 
• Credit Suisse Subordinated 5Y Credit Default Swap 329.64 -27.4%
  

• Italian/German 10Y Yld Spread 182.0 basis basis points -4.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 142.9 -6.3%
  

• Emerging Market CDS Index 256.1 -3.5%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 26.9 +.04%

• 2-Year Swap Spread 30.25 basis points +4.75 basis points
  

• TED Spread 25.25 basis points -41.0 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -19.25 -9.25 basis points
  
• MBS  5/10 Treasury Spread  160.0 -3.0 basis points
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 643.0 +12.0 basis points
  
• Avg. Auto ABS OAS 81.0 +9.0 basis points
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 47.4 +.11%
• 3-Month T-Bill Yield 4.64% +7.0 basis points
  

• China Iron Ore Spot 123.9 USD/Metric Tonne +.33%
• Dutch TTF Nat Gas(European benchmark) 42.4 euros/megawatt-hour +7.8%

• Citi US Economic Surprise Index 52.7 +2.8 points

• Citi Eurozone Economic Surprise Index 45.1 -1.4 points
  

• Citi Emerging Markets Economic Surprise Index 19.3 -.7 point
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 225.94 -.03:  Growth Rate +1.6% unch., P/E 17.6 +.2
  
• S&P 500 Current Year Estimated Profit Margin 12.29% -7.0 basis points
  
• Bloomberg US Financial Conditions Index -.36 +93.0 basis points
  
• Yield Curve -57.75 basis points (2s/10s) -10.0 basis points
• US Atlanta Fed 1Q GDPNow Forecast +3.25% unch.
  

• Cleveland Fed Inflation Nowcast Core PCE YoY +4.73% unch.: CPI YoY +5.22% unch.
  
• 10-Year TIPS Spread 2.23 +8.0 basis points
  
• Highest target rate probability for May 3rd FOMC meeting: 55.4%(+16.1 percentage points) chance of 5.0%-5.25%. Highest target rate probability for June 14th meeting: 45.4%(+38.8 percentage points) chance of 5.0%-5.25%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating +183 open in Japan 
• China A50 Futures: Indicating +16 open in China

• DAX Futures: Indicating +161 open in Germany

Portfolio:

• Slightly Higher:  On gains in my industrial//medical/tech sector longs
  

• Disclosed Trades:  Covered some of my (IWM)/(QQQ) hedges
  

• Market Exposure: Moved to 50% Net Long