North American Investment Grade CDS Index 84.25 bps -.86%
European Financial Sector CDS Index 73.82 bps +94%
Western Europe Sovereign Debt CDS Index 67.58 bps +.37%
Emerging Market CDS Index 218.96 bps -.71%
2-Year Swap Spread 19.0 bps -.5 basis point
TED Spread 11.0 bps -1 basis point
Economic Gauges:
3-Month T-Bill Yield .15% +1 basis point
Yield Curve 274.0 bps -2 bps
Copper Days Demand 15.12 days -.40%
Citi US Economic Surprise Index +36.60 +.3 point
10-Year TIPS Spread 2.25% -1 basis point
Overseas Futures:
Nikkei Futures: Indicating +70 open in Japan
DAX Futures: Indicating +1 open in Germany
Portfolio:
Higher: On strength in my Financial, Retail and Tech long positions
Disclosed Trades: None
Market Exposure: 100% Net Long
BOTTOM LINE: Today's overall market action is bullish as the major averages are trading at session highs and the S&P 500 is breaking above technical resistance. On the positive side, (XLF) and (IYR) have outperformed throughout the day. Education, Gaming, REIT, Semi, Gold and Coal shares are especially strong, rising 2.0%+. Weekly retail sales rose +3.2% this week versus a 3.1% gain the prior week. This is the best showing since April 10th, 2007 and is up from an avg. +1.7% weekly increase during February, which is a large positive. Despite today's commodity surge and slightly more dovish Fed commentary, inflation expectations aren't moving higher and the 10-year yield is falling another 4 bps. On the negative side, Medical and Airline stocks are slightly lower on the day. Breadth is lacking and gauges of investor angst are lower than I would like to see. However, if stocks can sustain today's technical breakout through tomorrow, we could see a more meaningful advance on further short-covering and technical buying. I expect US stocks to trade mixed-to-higher into the close from current levels on short-covering, lower long-term rates, diminishing financial sector pessimism and technical buying.
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