North American Investment Grade CDS Index 86.57 -.21%
European Financial Sector CDS Index 119.0 -1.62%
Western Europe Sovereign Debt CDS Index 179.50 bps -1.55%
Emerging Market CDS Index 215.70 +1.03%
2-Year Swap Spread 20.0 unch.
TED Spread 23.0 -1 bp
Economic Gauges:
3-Month T-Bill Yield .07% unch.
Yield Curve 275.0 -2 bps
China Import Iron Ore Spot $166.30/Metric Tonne -.66%
Citi US Economic Surprise Index +63.50 -4.8 points
10-Year TIPS Spread 2.44% -3 bps
Overseas Futures:
Nikkei Futures: Indicating -280 open in Japan
DAX Futures: Indicating +21 open in Germany
Portfolio:
Slighltly Lower: On losses in my Tech and Medical longs
Disclosed Trades: Added to my (IWM)/(QQQQ) hedges and then covered some of them
Market Exposure: 75% Net Long
BOTTOM LINE: Today's overall market action is just mildly bearish as the S&P 500 cut losses into the afternoon, despite the Japan disaster, growing Mideast unrest, rising energy prices, recent technical damage and emerging market inflation fears. On the positive side, Steel, Oil Service, Energy, Alt Energy and Coal shares are higher on the day. Small-caps are outperforming. The UBS-Bloomberg Ag Spot Index is down -1.1%. The 10-year yield is declining -5 bps to 3.35%. The Spain sovereign cds is dropping -6.26% to 240.83 bps, the Italy sovereign cds is falling -9.79% to 161.57 bps, the Portugal sovereign cds is declining -4.47% to 492.39 bps, the Greece sovereign cds is declining -5.46% to 995.31 bps, the Belgium sovereign cds is dropping -5.47% to 155.79 and the UK sovereign cds is falling -5.9% to 55.52 bps. Moreover, the US Muni CDS Index is down -3.76% to 151.19 bps. On the negative side, Airline, Gaming, Restaurant, Homebuilding, HMO, Hospital, I-Banking, Telecom, Disk Drive, Computer Hardware and Utility shares are under meaningful pressure, falling more than 1.0%. (XLF) has been weak throughout the day. Tech is also underperforming again. Lumber is falling -1.13%. China Iron Ore Spot has declined -13.3% in less than 1 month. The Ireland sovereign sovereign cds is rising +1.36% to 605.04 bps. Moreover, the Japan sovereign cds is soaring +14.05% to 95.08 bps. The avg. US price for a gallon of gas is up +.02/gallon today to $3.56/gallon. It is up .44/gallon in 27 days. For the second day in a row, the major US averages are displaying exceptional resilience in the face of several potentially damaging catalysts, which is a major positive. Several key market leaders, such as (AAPL), continue to trade well. However, breadth and volume remain poor. The market trades like it wants to bottom, but it needs a positive catalyst. I expect US stocks to trade mixed-to-higher into the close from current levels on fund inflows, short-covering, bargain-hunting, buyout speculation and a bounce in the euro.
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