North American Investment Grade CDS Index 90.36 bps +.1%
European Financial Sector CDS Index 103.96 bps +4.21%
Western Europe Sovereign Debt CDS Index 114.66 bps -1.15%
Emerging Market CDS Index 211.54 bps -4.56%
2-Year Swap Spread 25.0 +1 bp
TED Spread 19.0 unch.
Economic Gauges:
3-Month T-Bill Yield .16% unch.
Yield Curve 269.0 -1 b
China Import Iron Ore Spot $172.90/Metric Tonne unch.
Citi US Economic Surprise Index +20.30 unch.
10-Year TIPS Spread 2.40% unch.
Overseas Futures:
Nikkei Futures: Indicating +83 open in Japan
DAX Futures: Indicating +25 open in Germany
Portfolio:
Higher: On Gains in my Financial, Retail, Biotech and Tech long positions
Disclosed Trades: None
Market Exposure: 75% Net Long
BOTTOM LINE: Today's overall market action is very bullish as equities trade near session highs despite mounting headwinds. On the positive side, Oil Tanker, REIT, Disk Drive, Road & Rail and Gaming stocks are especially strong, rising 2.5%+. (IYR) has traded very well throughout the day. The euro remains heavy despite the Greece bailout. On the negative side, Coal, Oil Service, Gold and Steel shares are down on the day. Despite the rally in equities, the major CDS indices aren't falling much and the euro financial sector cds is rising meaningfully. As well, most commodities are trading poorly today. The market's resilience to recent negative developments remains very impressive. We have been stuck in a relatively volatile, but tight range over the last few weeks. I want to see the S&P 500 break free from this range before getting more aggressive on the long side. I expect US stocks to trade modestly higher into the close from current levels on short-covering, less financial sector pessimism and declining economic fear.
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