Broad Market Tone: - Advance/Decline Line: Higher
- Sector Performance: Almost Every Sector Rising
- Volume: Around Average
- Market Leading Stocks: Performing In Line
Equity Investor Angst: - VIX 32.23 -6.85%
- ISE Sentiment Index 108.0 +16.13%
- Total Put/Call 1.0 -2.91%
- NYSE Arms .42 -14.60%
Credit Investor Angst:- North American Investment Grade CDS Index 127.26 -2.25%
- European Financial Sector CDS Index 246.92 -7.16%
- Western Europe Sovereign Debt CDS Index 328.50 -3.90%
- Emerging Market CDS Index 298.83 -3.05%
- 2-Year Swap Spread 32.0 -2 bps
- TED Spread 35.0 unch.
Economic Gauges:- 3-Month T-Bill Yield .00% unch.
- Yield Curve 189.0 +6 bps
- China Import Iron Ore Spot $177.90/Metric Tonne -.61%
- Citi US Economic Surprise Index -42.20 -2.8 points
- 10-Year TIPS Spread 1.97% +4 bps
Overseas Futures: - Nikkei Futures: Indicating +82 open in Japan
- DAX Futures: Indicating +71 open in Germany
Portfolio:
- Higher: On gains in my Tech, Biotech, Medical and Retail sector longs
- Disclosed Trades: Covered all of my (IWM)/(QQQ) hedges and some of my(EEM) short, then added some back
- Market Exposure: 75% Net Long
BOTTOM LINE: Today's overall market action is bullish, as the S&P 500 builds on recent gains US tax hike concerns, some more disappointing economic data, emerging markets inflation fears and global growth worries. On the positive side, Coal, Oil Tanker, I-Bank, HMO, Education, Energy, Computer and Software shares are especially strong, rising more than +2.25%. Cyclical shares are outperforming. (XLF) has outperformed throughout the day. Moreover, tech stocks have been relatively strong again today. Gold is falling -1.7%, Copper is surging +1.71% and the UBS-Bloomberg Ag Spot Index is down -1.21%. The France sovereign cds is declining -6.64% to 169.33 bps, the UK sovereign cds is falling -5.08% to 79.33 bps, the Italy sovereign cds is falling -4.84% to 451.67 bps, the Portugal sovereign cds is declining -6.7% to 1,057.90 bps, the Ireland sovereign cds is falling -5.07% to 790.0 bps and the Belgium sovereign cds is falling -6.51% to 259.0 bps.
The European Investment Grade CDS Index is dropping -5.04% to 167.72 bps. The FRA/OIS Spread is dropping -6.4 bps to 43.0 bps. The 3-Month Euro Basis Swap is soaring +16.49 bps to -81.91 bps, which is also a large positive. On the negative side, Alt Energy and Airline shares are lower to flat on the day.
Oil is rising +.79% and Lumber is down -.87%. Rice is still very near its multi-year high, rising +36.0% in about 10 weeks. The average US price for a gallon of gas is -.01/gallon today to $3.62/gallon. It is up .48/gallon in about 7 months. The China sovereign cds is rising +1.58% to 133.17 bps, which is a multi-year high. The China Development Bank Corp. cds is continuing its recent parabolic move higher, soaring +18.2 bps to 302.7 bps, which is the highest since March 2009. The Greece sovereign cds is still near an all-time high. The Western Europe Sovereign CDS Index is also still near its all-time high. The Shanghai Composite fell another -.23% overnight, despite gains in most of the rest of Asia, and is now down -11.7% ytd. While it is a little too soon to tell, Europe may have pulled off another successful "can kicking", which could lead to more short-covering/bargain-hunting over the coming weeks. However, the intermediate-term situation is still very problematic as Europe's "solutions" of jacking up taxes and slashing spending will only further dampen economic activity and worsen budget deficits over the longer-term. As well, the technical action in some Asian indices and their higher trending cds are becoming concerns. I expect US stocks to trade modestly higher into the close from current levels on declining eurozone debt angst, short-covering, bargain-hunting, technical buying and falling food prices.
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