North American Investment Grade CDS Index 87.16 -.99%
European Financial Sector CDS Index 154.43 bps +11.30%
Western Europe Sovereign Debt CDS Index 186.67 bps +2.19%
Emerging Market CDS Index 209.10 bps -2.52%
2-Year Swap Spread 24.0 unch.
TED Spread 20.0 +2 bps
Economic Gauges:
3-Month T-Bill Yield .10% -3 bps
Yield Curve 271.0 -10 bps
China Import Iron Ore Spot $169.10/Metric Tonne +.18%
Citi US Economic Surprise Index +17.80 +3.5 points
10-Year TIPS Spread 2.28% -3 bps
Overseas Futures:
Nikkei Futures: Indicating +22 open in Japan
DAX Futures: Indicating +36 open in Germany
Portfolio:
Higher: On gains in my Tech, Ag, Biotech and Medical long positions
Disclosed Trades: None
Market Exposure: 75% Net Long
BOTTOM LINE: Today's overall market action is mildly bullish as the S&P 500 trades slightly higher despite recent stock gains, rising eurozone sovereign debt angst and weakness in some overseas equity markets. On the positive side, Education, Homebuilding, Biotech, Medical, Bank, Software and Paper shares are especially strong, rising more than 1.0%. Cyclicals are outperforming. (XLF)/(IYR) have also outperformed throughout the day. Lumber is rising another +2.64% and copper is rebounding +1.25%. The 10-year yield is falling another -10 bps despite positive Leading Indicators data. The US Muni cds index is falling -3.50% to 205.90 bps. On the negative side, Oil Tanker, Internet, Telecom, Drug, Hospital and Road & Rail shares are under mild pressure. The Transports are relatively weak today and "value" shares are significantly underperforming "growth" stocks. Singapore Electronics Exports rose +10.8% during November, which was the slowest growth since November 2009. The Greece sovereign cds is climbing +2.87% to 985.33 bps, the Portugal sovereign CDS is rising +2.58% to 463.38 bps, the Belgium sovereign cds is increasing +2.07% to 211.25 bps, the Spain sovereign cds is climbing +2.41% to 331.86 bps and the Ireland sovereign cds is jumping 2.10% to 571.50 bps. The Euro Financial Sector CDS Index is breaking out to the highest level since June and the Emerging Markets sovereign cds index is rising +2.92% to 194.91 bps, which is also a big negative. Short/intermediate-term gauges of investor sentiment remain overly bullish. Spain's IBEX 35 continues to display technical weakness, falling another -1.1% today. US stocks remain extremely resilient, which is a large positive. If the S&P 500 can convincingly break above recent highs I will cover some of my hedges. I expect US stocks to trade modestly lower into the close from current levels on China inflation worries, profit-taking, more shorting and rising eurozone debt fears.
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