North American Investment Grade CDS Index 110.23 bps -2.71%
European Financial Sector CDS Index 119.33 bps -6.13%
Western Europe Sovereign Debt CDS Index 134.0 bps -1.66%
Emerging Market CDS Index 243.11 bps +1.90%
2-Year Swap Spread 23.0 unch.
TED Spread 36.0 -1 bp
Economic Gauges:
3-Month T-Bill Yield .15% +1 bp
Yield Curve 232.0 -3 bps
China Import Iron Ore Spot $121.60/Metric Tonne unch.
Citi US Economic Surprise Index -35.60 -1.5 points
10-Year TIPS Spread 1.71% unch.
Overseas Futures:
Nikkei Futures: Indicating -53 open in Japan
DAX Futures: Indicating -27 open in Germany
Portfolio:
Slightly Lower: On losses in my Medical and Technology long positions
Disclosed Trades: Added (IWM)/(QQQQ) hedges, added to my (EEM) short
Market Exposure: Moved to 75% Net Long
BOTTOM LINE: Today's overall market action is very bearish as the S&P 500 reverses to session lows despite some key positive earnings reports and diminishing sovereign debt angst. On the positive side, Steel, Oil Tanker and Coal stocks are rising on the day. Gold is falling -.5%, despite the equity market and euro declines. Copper is rising +2.3%. The Spain sovereign cds is falling -3.9% to 204.45 bps and the Portugal cds is falling -3.7% to 275.0 bps. On the negative side, Education, REIT, Insurance, HMO, Hospital, Medical Equipment, Disk Drive, Computer and Oil Service shares are under significant pressure, falling more than -2.0%. Tech shares are underperforming. The 10-year yield is falling too much again, declining -9 bps to the lowest level since April 2009. The S&P 500 was turned away again at its 50-day moving average, but is holding its low of yesterday so far. If that low holds we should see a push higher through the 50-day, however a break below that level will likely lead to further losses. I expect US stocks to trade mixed-to-lower into the close from current levels on more shorting, rising economic fear, increasing financial sector pessimism, tax hike worries and regulatory concerns.
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