North American Investment Grade CDS Index 107.77 bps +3.85%
European Financial Sector CDS Index 121.71 bps +5.51%
Western Europe Sovereign Debt CDS Index 155.99 bps -.17%
Emerging Market CDS Index 241.19 bps unch.
2-Year Swap Spread 21.0 unch.
TED Spread 14.0 -1 bp
Economic Gauges:
3-Month T-Bill Yield .15% unch.
Yield Curve 225.0 -3 bps
China Import Iron Ore Spot $140.0/Metric Tonne unch.
Citi US Economic Surprise Index -13.70 -5.8 unch.
10-Year TIPS Spread 1.79% +1 bp
Overseas Futures:
Nikkei Futures: Indicating +84 open in Japan
DAX Futures: Indicating +21 open in Germany
Portfolio:
Higher: On gains in my Tech, Retail, Biotech, Ag and Medical long positions
Disclosed Trades: Covered all of my (IWM)/(QQQQ) hedges and some of my (EEM) short
Market Exposure: Moved to 100% Net Long
BOTTOM LINE: Today's overall market action is bullish as the S&P 500 breaks out of a multi-month trading range on mediocre volume despite rising sovereign debt angst and more weak US housing data. On the positive side, Education, Homebuilding, Coal, Airline, REIT and Oil Service shares are especially strong, rising 2.0%+. Small-cap shares are outperforming. Lumber is rising +3.21%. (IYR) and (XHB) have traded well throughout the day. On the negative side, Paper, Oil Tanker, Steel, Semi, Wireless and Road & Rail shares are underperforming, rising less than 1%. Cyclicals are underperforming, as well. The Ireland sovereign cds is surging another +4.06%, hitting another record high at 429.06 bps and is continuing its recent parabolic move higher. The US sovereign cds is rising +2.91% to 47.02 bps. Furthermore, key credit default swap indices continue to trend higher, even as equities rally, which is a major negative. Commodities, in general, aren't participating in today's equity rally and the 10-year yield has dropped -10 bps from Friday's high in yield. The Shanghai Composite was unable to bounce again overnight after breaking below its 50-day moving average for the first time since April last week, falling another -.34%. The market is breaking out despite an abundance of red flags, which is a major positive. As well, some key growth stocks are gaining significant upside traction as it appears investors are finally rewarding stocks that can grow in a poor economic environment with higher multiples. While today's action is encouraging, I remain on high alert for a meaningful reversal lower in stocks over the next few days. I expect US stocks to trade mixed-to-higher into the close from current levels on short-covering, technical buying, investment manager performance anxiety and buyout speculation.
No comments:
Post a Comment