Friday, January 24, 2020

Stocks Reversing Sharply Lower into Final Hour on Coronavirus Fears, Gobal Growth Worries, Emerging Markets/US High-Yield Debt Angst, Energy/Transport Sector Weakness

 Broad Equity Market Tone:
  • Advance/Decline Line: Substantially Lower
  • Sector Performance: Almost Every Sector Declining
  • Volume: Around Average
  • Market Leading Stocks: Underperforming
Equity Investor Angst:
  • Volatility(VIX) 15.4 +19.0%
  • Euro/Yen Carry Return Index 125.07 -.47%
  • Emerging Markets Currency Volatility(VXY) 6.08 +.33%
  • S&P 500 Implied Correlation 42.02 +9.5%
  • ISE Sentiment Index 67.0 -37
  • Total Put/Call 1.0 +29.9%
  • NYSE Arms 2.21 97.3%
Credit Investor Angst:
  • North American Investment Grade CDS Index 47.0 +2.71%
  • America Energy Sector High-Yield CDS Index 608.0 +3.53%
  • European Financial Sector CDS Index 53.60 +1.02%
  • Italian/German 10Y Yld Spread 156.75 +.5 basis point
  • Asia Ex-Japan Investment Grade CDS Index 53.64 +.81%
  • Emerging Market CDS Index 193.29 +2.50%
  • iBoxx Offshore RMB China Corporate High Yield Index 169.65 +.02%
  • 2-Year Swap Spread 5.75 -.75 basis point
  • TED Spread 27.0 +.5 basis point
  • 3-Month EUR/USD Cross-Currency Basis Swap -4.75-.25 basis point
Economic Gauges:
  • Bloomberg Emerging Markets Currency Index 66.0 -.12%
  • 3-Month T-Bill Yield 1.53%-2.0 basis points
  • Yield Curve .23 -1.0 basis point
  • China Iron Ore Spot 89.70 USD/Metric Tonne -1.46%
  • Citi US Economic Surprise Index 9.0 -1.2 points
  • Citi Eurozone Economic Surprise Index 50.80 +8.0 points
  • Citi Emerging Markets Economic Surprise Index 9.3 +.2 basis point
  • 10-Year TIPS Spread 1.67 -5.0 basis points
  • 4.6% chance of Fed rate cut at March 18th meeting, 13.6% chance of cut at April 29th meeting
Overseas Futures:
  • Nikkei 225 Futures: Indicating -257 open in Japan 
  • China A50 Futures: Indicating -151 open in China
  • DAX Futures: Indicating -70 open in Germany
Portfolio:
  • Slightly Lower: On losses in my retail/tech/medical/industrial/biotech sector longs
  • Disclosed Trades: Added to my (IWM)/(QQQ) hedges and to my emerging market shorts
  • Market Exposure: 50% Net Long

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