Broad Market Tone: - Advance/Decline Line: Lower
- Sector Performance: Mixed
- Volume: Slightly Below Average
- Market Leading Stocks: Outperforming
Equity Investor Angst: - VIX 18.97 -1.25%
- ISE Sentiment Index 190.0 +59.66%
- Total Put/Call .84 +25.37%
- NYSE Arms .87 +38.20%
Credit Investor Angst:- North American Investment Grade CDS Index 94.54 -3.03%
- European Financial Sector CDS Index 163.66 -2.21%
- Western Europe Sovereign Debt CDS Index 296.50 -1.55%
- Emerging Market CDS Index 220.11 -.60%
- 2-Year Swap Spread 27.0 -2 bps
- TED Spread 24.0 +1 bp
Economic Gauges:- 3-Month T-Bill Yield .02% unch.
- Yield Curve 256.0 +5 bps
- China Import Iron Ore Spot $174.40/Metric Tonne +.11%
- Citi US Economic Surprise Index -94.40 +.3 point
- 10-Year TIPS Spread 2.31% -1 bp
Overseas Futures: - Nikkei Futures: Indicating +45 open in Japan
- DAX Futures: Indicating +17 open in Germany
Portfolio:
- Higher: On gains in my Tech and Medical sector longs
- Disclosed Trades: None
- Market Exposure: 100% Net Long
BOTTOM LINE: Today's overall market action is mildly bearish as the S&P 500 hugs the flatline despite another decline in eurozone debt angst, more US debt ceiling optimism, financial sector strength, buyout speculation and earnings optimism. On the positive side, REIT, Bank, I-Banking, Ag and Utility shares are especially strong, rising more than +.75%. (XLF) has substantially outperformed throughout the day. The France sovereign cds is dropping -10.52% to 102.43 bps, the Spain sovereign cds is down -3.93% to 341.82 bps, the Italy sovereign cds is down -5.03% to 287.22 bps, the Belgium sovereign cds is falling -6.1% to 190.05 bps, the Ireland sovereign cds is falling -8.46% to 1,063.90 bps, the Greece sovereign cds is falling -3.82% to 2,382.90 bps and the UK sovereign cds is declining -6.1% to 68.81 bps. Moreover, the Eurozone Investment Grade CDS Index is dropping -5.5% to 99.13 bps. The US sovereign cds is falling -3.87% to 52.48 bps. Spanish and Italian equities surged +3.0% today, finishing at session highs. On the negative side, Airline, Software, Oil Tanker, Internet, Semi, Computer Service, Networking and Biotech shares are under pressure, falling more than -.75%.
Oil is rising +.42%, lumber is falling -2.15% and copper is falling -.72%. Rice is rising +1.33%, hovering near a multi-year high, and has soared almost +30.0% in about 2 weeks. The US price for a gallon of gas is unch. today at $3.68/gallon. It is up .54/gallon in less than 5 months. The Western Europe Sovereign CDS Index is still near its record high. Chinese and Indian equities were unable to rally with the rest of the world overnight. As well, Brazil's Bovespa still trades very poorly. While today's action is a bit disappointing for the bulls, with so much uncertainty regarding the Eurozone/US debt situations and recent stock gains, today's performance isn't too bad. Furthermore, the large decline in many key eurozone sovereign cds is a large positive. If this continues through tomorrow I would expect to see another push higher in stocks. One of my longs, (ISRG), is breaking to a record high today on volume after delivering a stellar earnings report. The stock is extended short-term, but I still see significant upside to the shares from current levels over the longer-term. I expect US stocks to trade mixed-to-higher into the close from current levels on less eurozone debt angst, US debt ceiling optimism, tech sector strength, short-covering, bargain-hunting and technical buying.
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