Wednesday, February 26, 2020

Stocks Finish Mostly Lower on Coronavirus Fears, European/Emerging Markets/US High Yield Debt Angst, Oil Decline, Energy/Transport Sector Weakness

 Broad Equity Market Tone:
  • Advance/Decline Line: Lower
  • Sector Performance: Most Sectors Declining
  • Volume: Heavy
  • Market Leading Stocks: Underperforming 
Equity Investor Angst:
  • Volatility(VIX) 28.3 +1.5%
  • Euro/Yen Carry Return Index 124.63 +.18%
  • Emerging Markets Currency Volatility(VXY) 7.21 +.84%
  • S&P 500 Implied Correlation 52.7 -5.19%
  • ISE Sentiment Index 86.0 +7
  • Total Put/Call 1.14 -14.9%
  • NYSE Arms 1.42 +24.6%
Credit Investor Angst:
  • North American Investment Grade CDS Index 57.23 +4.17%
  • America Energy Sector High-Yield CDS Index 732.0 +4.56%
  • European Financial Sector CDS Index 59.44 +1.47%
  • Italian/German 10Y Yld Spread 150.0 unch.
  • Asia Ex-Japan Investment Grade CDS Index 54.50 +3.18%
  • Emerging Market CDS Index 214.04 +1.27%
  • iBoxx Offshore RMB China Corporate High Yield Index 171.0 -.02%
  • 2-Year Swap Spread 4.5 +3.0 basis points
  • TED Spread 12.5 -.75 basis point
  • 3-Month EUR/USD Cross-Currency Basis Swap -10.0 -1.25 basis points
Economic Gauges:
  • Bloomberg Emerging Markets Currency Index 64.05 -.26%
  • 3-Month T-Bill Yield 1.51% -2.0 basis points
  • Yield Curve .15 +3.0 basis points
  • China Iron Ore Spot 85.0 USD/Metric Tonne -.25%
  • Citi US Economic Surprise Index 49.30 +4.5 points
  • Citi Eurozone Economic Surprise Index -3.60 -1.3 point
  • Citi Emerging Markets Economic Surprise Index 17.4 +1.2 points
  • 10-Year TIPS Spread 1.54 +1.0 basis point
  • 52.0% chance of 25.0 basis point Fed rate cut at April 29th meeting, 40.7% chance of 25.0 basis point cut at June 10th meeting
Overseas Futures:
  • Nikkei 225 Futures: Indicating -176 open in Japan 
  • China A50 Futures: Indicating -31 open in China
  • DAX Futures: Indicating -159 open in Germany
Portfolio:
  • Slightly Higher: On gains in my biotech longs, index hedges and emerging market shorts
  • Disclosed Trades: None
  • Market Exposure: 25% Net Long

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