North American Investment Grade CDS Index 95.77 +10.50%
European Financial Sector CDS Index 99.75 -2.84%
Western Europe Sovereign Debt CDS Index 164.58 bps -1.05%
Emerging Market CDS Index 214.26 -.83%
2-Year Swap Spread 20.0 -1 bp
TED Spread 24.0 -1 bp
Economic Gauges:
3-Month T-Bill Yield .07% +1 bp
Yield Curve 269.0 +1 bp
China Import Iron Ore Spot $163.80/Metric Tonne -.55%
Citi US Economic Surprise Index +61.60 -1.7 points
10-Year TIPS Spread 2.45% +1 bp
Overseas Futures:
Nikkei Futures: Indicating +350 open in Japan
DAX Futures: Indicating +15 open in Germany
Portfolio:
Higher: On gains in my Biotech, Tech, Retail and Medical longs
Disclosed Trades: Covered all of my (IWM)/(QQQQ) hedges and then added them back
Market Exposure: 75% Net Long
BOTTOM LINE: Today's overall market action is bullish as the S&P 500 trades meaningfully higher, despite rising energy prices, growing Mideast unrest, Japan concerns and weak US housing data. On the positive side, Road & Rail, Education, Gaming, Construction, Disk Drive, Semi, Oil Service and Energy shares are especially strong, rising more than 2.0%. Tech shares, which have lagged badly of late, are outperforming. Cyclicals and small-caps are outperforming again. The Japan sovereign cds is falling -2.19% to 106.44 bps. On the negative side, Bank shares are down on the day. (XLF) has underperformed badly throughout the day. Copper is falling -1.19%, gold is jumping +.69% and oil is rising +.35%. China Iron Ore Spot has declined -14.1% in a little more than 1 month. The avg. US price for a gallon of gas is +.01/gallon today to $3.55/gallon. It is up .43/gallon in 34 days. The Portugal sovereign cds is climbing +3.49% to 517.11 bps. The Citi Eurozone Economic Surprise Index is falling to -11.40 today and is now at the lowest since March 23rd of last year. As well, the Asia Pacific Sovereign CDS Index is climbing +2.68% to 120.82 bps. India's Sensex finished -.22% lower overnight. As well, Brazil's Bovespa, which is at a key technical juncture, gave back an +800 point morning gain to finish at session lows, down -.23%. I still suspect that global growth is slowing more than economists perceive right now and that this is not factored into most stocks. However, the market's resilience in the face of numerous mounting headwinds is very impressive. The S&P 500 is right at its 50-day moving average after a low-volume rally. If the benchmark can break convincingly above this level I will add back market exposure. I expect US stocks to trade mixed-to-lower into the close from current levels on growing Mideast unrest, rising energy prices, US housing worries, Japan concerns, more shorting, profit-taking and technical selling.
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