Stocks Falling into Final Hour on Rate Worries, Rising Eurozone Debt Angst, Increasing Mideast Unrest, Biotech/Homebuilding Sector Weakness
Broad Equity Market Tone:
- Advance/Decline Line: Substantially Lower
- Sector Performance: Almost Every Sector Declining
- Market Leading Stocks: Underperforming
Equity Investor Angst:
- Volatility(VIX) 11.50 +11.43%
- Euro/Yen Carry Return Index 144.67 -.15%
- Emerging Markets Currency Volatility(VXY) 5.90 +.86%
- S&P 500 Implied Correlation 48.49 +5.71%
- ISE Sentiment Index 113.0 unch.
- Total Put/Call 1.01 unch.
Credit Investor Angst:
- North American Investment Grade CDS Index 56.17 +1.81%
- European Financial Sector CDS Index 62.44 +3.49%
- Western Europe Sovereign Debt CDS Index 31.79 +2.28%
- Asia Pacific Sovereign Debt CDS Index 70.24 -.40%
- Emerging Market CDS Index 233.05 +.08%
- China Blended Corporate Spread Index 300.46 n/a
- 2-Year Swap Spread 14.75 +1.25 basis points
- TED Spread 22.5 -.25 basis point
- 3-Month EUR/USD Cross-Currency Basis Swap -11.25 unch.
Economic Gauges:
- 3-Month T-Bill Yield .01% unch.
- Yield Curve 210.0 -5.0 basis points
- China Import Iron Ore Spot $95.90/Metric Tonne -.62%
- Citi US Economic Surprise Index -11.20 -1.8 points
- Citi Emerging Markets Economic Surprise Index -7.60 +1.2 points
- 10-Year TIPS Spread 2.25 -1.0 basis point
Overseas Futures:
- Nikkei Futures: Indicating -44 open in Japan
- DAX Futures: Indicating +5 open in Germany
Portfolio:
- Slightly Lower: On losses in my biotech/tech/medical sector longs
- Disclosed Trades: Added to my (IWM)/(QQQ) hedges, took some profits in my biotech sector longs
- Market Exposure: Moved to 25% Net Long
1 comment:
Just after last Friday’s July 3, 2014, Bespoke Investment Group report Big Tick Higher in Bullish Sentiment, on Monday, July 7, 2014, risk-on investing turned to risk-off investing, as investors deleveraged out of Euro Yen Carry Trade, that is out of EUR/JPY carry trades, such as RYAAY, AER, TI, SNY, VE, ING, FLTX, ICLR, ASMI, ERIC, MNK, LUX, ORAN, NVO, LYB, STM, EEFT, which drove Eurozone Stocks, EZU, FEZ, and the Eurozone Nations, EWO, EWI, EWP, GREK, PGAL, EWQ, EWG, EWN, EIRL, and EFNL, lower, which led Nation Investment, EFA, lower.
In an epic socio-economic change inflationism turned tod destructionism, as risk appetite turned risk aversion, as investors Volatility, ^VIX, trade by XVZ, derisked out of the debt trade in The National Bank of Greece, NBG, Ireland’s Bank, IRE, and Banco Santander, SAN, which led European Financials, EUFN, lower; Argentina’s Bank, BBVA, and India’s Bank, IBN, HDB, led Emerging Market Financials, EMFM, lower; Regional Banks, KRE, Nasdaq Banks, QABA, and Stockbrokers, IAI, led Financial Services, lower; all of which led Global Financials, IXG, lower; this as Zero Hedge reports European Banks Are In Trouble.
A trade lower in the Risk Assets, that is the High Beta ETFs, TAN, IBB, FEZ, TAN, IBB, PJP,SOCL, RZV, RZG, FLM, FDN, PNQI, XTN, FXR, CQQQ, PBS, IGV XRT, FPX, led World Stocks, ACWX, lower.
With the failure of credit on July 1, 2014, seen in Aggregate Credit, AGG, trading lower in value as the bond vigilantes called the Interest Rate on the US Ten Year Note, ^TNX, higher from 2.49%, the world is moving through a historic economic inflection point.
The world is pivoting through peak wealth. Fiat Wealth, defined as World Stocks, VT, Global Financial Institutions, IXG, Nation Investment, EFA, and Yield Bearing Investments, DTN, together with Aggregate Credit, AGG, is is literally being sawn asunder by the failure of trust in the world central banks’ monetary authority to continue to provide investment gain, and global economic growth, as is seen in the Bloomberg report European Stocks Drop With Treasuries as Commodities Fall, and as is seen in the Zero Hedge report Peak Abenomics.
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