Stocks Rising into Final Hour on Diminished Russia/Ukraine Tensions, Buyout Speculation, Technical Buying, Biotech/Tech Sector Strength
Broad Equity Market Tone:
- Advance/Decline Line: Higher
- Sector Performance: Most Sectors Rising
- Market Leading Stocks: Outperforming
Equity Investor Angst:
- Volatility(VIX) 12.46 +.16%
- Euro/Yen Carry Return Index 145.03 +.02%
- Emerging Markets Currency Volatility(VXY) 7.13 -.97%
- S&P 500 Implied Correlation 56.47 +1.63%
- ISE Sentiment Index 112.0 +14.29%
- Total Put/Call .78 -15.22%
Credit Investor Angst:
- North American Investment Grade CDS Index 65.16 +.64%
- European Financial Sector CDS Index 79.34 +1.68%
- Western Europe Sovereign Debt CDS Index 37.24 +4.49%
- Asia Pacific Sovereign Debt CDS Index 86.26 +1.91%
- Emerging Market CDS Index 263.76 -2.07%
- China Blended Corporate Spread Index 358.99 -.20%
- 2-Year Swap Spread 15.5 +.75 basis point
- TED Spread 20.75 -.5 basis point
- 3-Month EUR/USD Cross-Currency Basis Swap -6.25 +.5 basis point
Economic Gauges:
- 3-Month T-Bill Yield .02% unch.
- Yield Curve 219.0 +3.0 basis points
- China Import Iron Ore Spot $98.50/Metric Tonne -2.18%
- Citi US Economic Surprise Index 3.0 +5.3 points
- Citi Emerging Markets Economic Surprise Index -24.60 +.6 point
- 10-Year TIPS Spread 2.16 -2.0 basis points
Overseas Futures:
- Nikkei Futures: Indicating +100 open in Japan
- DAX Futures: Indicating +11 open in Germany
Portfolio:
- Higher: On gains in my biotech/medical/tech sector longs
- Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges
- Market Exposure: Moved to 75% Net Long
1 comment:
On Monday, May 19, 2014, Global Dividend Growth Excluding The US, DNL, a Large Cap Blend ETF, likely peaked out, as Industrial Growth Stocks, FXR, PSCI, RZG, SOXX, XTN, MHK, traded higher on the day, and as Emerging Market High Dividends, EMHD, and Emerging Market Financials, EMFN, traded to new rally highs, on higher Emerging Market Currencies, CEW.
The seigniorage, that is the moneyness of the Banker Regime, started to give way today, as traders derisked from debt trades and delveraged out of currency carry trades in Australian Equity, AUSE, KROO, EWA, WBK, BHP, on the trade higher in the Yen, FXY, and a trade lower in the Australian Dollar, FXA. And likewise they took flight from the Middle East Equity, GULF, MES. All as Zero Hedge posts Conflict Between China And Vietnam Is Imminent – China Piles Troops, Tanks, Artillery And APCs Near Vietnam Border.
German Small Caps, GERJ, traded lower as Deutsche Bank, DB, traded lower.
Brazil, EWZ, EWZS, traded lower as Brazil Banks, BBD, BSBR, traded lower, as Spain’s Bank, SAN, traded lower.
High Yield Interest Rate Hedge, HYHG, Brazil Electric Utilities, EBR, CPL, ELP, PAM, DEP, and US Electric Utilities, XLU, PUI, traded lower as the bond vigilantes called the Interest Rate on the US Ten Year Note, ^TNX, higher to 2.54%, and steepened the 10 30 US Sovereign Debt Yield Curve, $TNX:$TYX, which is seen in the Steepner ETF, STPP, steepening.
Junk Bonds, JNK, and Ultra Junk Bonds, UJB, traded to new all time highs, while Aggregate Credit AGG, traded lower, on lower 30 Year US Treasury Bonds, EDV, and lower US Treasury Notes, TLT.
The bond vigilantes took control of the Benchmark Interest Rate, ^TNX, when it traded higher from 2.49%, on October 23, 3013. And today May 19, 2014, they reasserted their control over this Benchmark Interest Rate, by calling it higher yet to 2.54%, reflecting that the Rider on the White Horse, seen in Revelation 6:1-2, has the Bow of Economic Sovereignty, and is effecting economic coups throughout the world, as is seen in the political instability in SE Asia, and as is seen in the Ambrose Evans Pritchard report Putin To Give Ground In China To Seal Gas Deal. The long coveted prize would allow Russia to switch sales from Europe to the Far East and transform the Eurasian gas market. Higher interest rates globally mean economic destabilization and economic deflation, coming largely from investors derisking out of debt trades and deleveraging out of currency carry trades.
Given this model, look for High Yielding Debt, JNK, LWC, EU, EMB, HYD, EMLC, EMCD, BABS, HYXU, PZA, to trade lower in value. And look for Market Leading Banks and Financial Institutions to begin to now rapidly fall lower in value; these include, BOFI, IBN, SAN, BSBR, ITUB, BAP, BCA, SHG, WBK, GGAL, BMA, IX, CIB, RY, BNS, PUK, GNW, TMK, BANF, CBIN, TFSL, SFNC, CNS, LM, BR, VOYA
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