Stocks Reversing Lower into Afternoon on Global/US Regional Bank Contagion Fears, US Policy-Induced Stagflation Worries, Escalating European/US High-Yield Debt Angst, Financial/Energy Sector Weakness

 Broad Equity Market Tone:

• Advance/Decline Line: Modestly Higher
  

• Sector Performance: Mixed
  

• Volume:  Above Average

• Market Leading Stocks: Underperforming
  

Equity Investor Angst:

• Volatility(VIX) 22.0 -1.2%
• DJIA Intraday % Swing 1.27%
  
• Bloomberg Global Risk On/Risk Off Index 47.5 -2.6%

• Euro/Yen Carry Return Index 148.4 -.28%

• Emerging Markets Currency Volatility(VXY) 11.7 -.2%

• CBOE S&P 500 Implied Correlation Index 38.8 -2.9% 

• ISE Sentiment Index 85.0 +4.0 points
  

• Total Put/Call 1.06 +17.8%

• NYSE Arms 1.08 -65.9%

Credit Investor Angst:

• North American Investment Grade CDS Index 85.4 +3.7%
  

• US Energy High-Yield OAS 440.6 +.8%
• Bloomberg TRACE # Distressed Bonds Traded 440.0 unch.
  

• European Financial Sector CDS Index 114.3 +8.5% 
• Deutsche Bank Subordinated 5Y Credit Default Swap 460.8 +12.8%
  

• Italian/German 10Y Yld Spread 187.0 basis basis points +3.0 basis points
  

• Asia Ex-Japan Investment Grade CDS Index 139.77 -.26%
  

• Emerging Market CDS Index 255.66 -.14%
  

• China Corp. High-Yield Bond USD ETF(KHYB) 26.85 -.31%

• 2-Year Swap Spread 31.75 basis points -.75 basis point
  

• TED Spread 37.0 basis points +3.25 basis points
  

• 3-Month EUR/USD Cross-Currency Basis Swap -18.25 +1.25 basis points
  
• MBS  5/10 Treasury Spread  152.0 +4.0 basis points
  
• Bloomberg CMBS Investment Grade Bbb Average OAS 649.0 +3.0 basis points
  
• Avg. Auto ABS OAS 90.0 +5.0 basis points
  

Economic Gauges:

• Bloomberg Emerging Markets Currency Index 47.7 +.42%
• 3-Month T-Bill Yield 4.61% -6.0 basis points
  

• China Iron Ore Spot 117.9 USD/Metric Tonne -.23%
• Dutch TTF Nat Gas(European benchmark) 43.2 euros/megawatt-hour +8.0%

• Citi US Economic Surprise Index 51.3 -.9 point

• Citi Eurozone Economic Surprise Index 44.0 -.5 point
  

• Citi Emerging Markets Economic Surprise Index 20.6 +1.4 points
  
• S&P 500 Blended Forward 12 Months Mean EPS Estimate 226.20 +.07:  Growth Rate +1.7% unch., P/E 17.7 unch.
  
• S&P 500 Current Year Estimated Profit Margin 12.30% unch.
  
• Bloomberg US Financial Conditions Index -.61 -29.0 basis points
  
• Yield Curve -42.5 basis points (2s/10s) +10.25 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 2.27 -1.0 basis point
  
• Highest target rate probability for June 14th FOMC meeting: 54.5%(+4.6 percentage points) chance of 4.75%-5.0%. Highest target rate probability for July 26th meeting: 53.8%(+10.3 percentage points) chance of 4.50%-4.75%.
  

Overseas Futures:

• Nikkei 225 Futures: Indicating -214 open in Japan 
• China A50 Futures: Indicating +17 open in China

• DAX Futures: Indicating +62 open in Germany

Portfolio:

• Slightly Lower:  On losses in my utility sector longs, index hedges and emerging market shorts
  

• Disclosed Trades:  Added to my (IWM)/(QQQ) hedges
  

• Market Exposure: Moved to Market Neutral