North American Investment Grade CDS Index 86.0 +.55%
European Financial Sector CDS Index 152.54 bps +2.01%
Western Europe Sovereign Debt CDS Index 196.17 bps -.84%
Emerging Market CDS Index 206.10 unch.
2-Year Swap Spread 22.0 -3 bps
TED Spread 18.0 +1 bp
Economic Gauges:
3-Month T-Bill Yield .12% -1 bp
Yield Curve 268.0 -5 bps
China Import Iron Ore Spot $170.70/Metric Tonne unch.
Citi US Economic Surprise Index +11.90 -2.4 points
10-Year TIPS Spread 2.29% -3 bps
Overseas Futures:
Nikkei Futures: Indicating +5 open in Japan
DAX Futures: Indicating +21 open in Germany
Portfolio:
Slightly Higher: On gains in my Biotech, Tech and Ag long positions
Disclosed Trades: None
Market Exposure: 100% Net Long
BOTTOM LINE: Today's overall market action is bullish as the S&P 500 trades slightly higher despite recent stock gains, China inflation worries and weakness in most overseas equities. On the positive side, REIT, Homebuilding, Bank and Disk Drive shares are especially strong, rising more than 1.0%. Small-caps are outperforming. (XLF)/(IYR) are also trading very well again today. Copper is climbing +.67% despite the Chinese rate hike. Lumber is also rising +1.91%. The 10-year yield is falling -4 bps to 3.35%. On the negative side, Education, Oil Service and Oil Tanker shares are under pressure, falling more than 1.0%. The Belgium sovereign cds is climbing +2.02% to 220.83 bps. The Euro Financial Sector CDS Index remains at the highest level since mid-June and the Western Europe Sovereign CDS Index remains very near its record high set last month, which is also a big negative. The broad market continues to display exceptional resiliency as negatives are ignored. I continue to believe another short-term spike higher in equities is a distinct possibility. I expect US stocks to trade mixed-to-higher into the close from current levels on seasonal strength, less economic fear, short-covering, technical buying, buyout speculation and investment manager performance angst.
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