Friday, October 21, 2022

Stocks Surging into Afternoon on Less Hawkish Fed Hopes, Options Expiration, Short-Covering, Tech/Commodity Sector Strength

Broad Equity Market Tone:

  • Advance/Decline Line: Higher
  • Sector Performance: Most Sectors Rising
  • Volume:  Above Average
  • Market Leading Stocks: Performing In Line
Equity Investor Angst:
  • Volatility(VIX) 30.0 -.1%
  • DJIA Intraday % Swing 2.4%
  • Bloomberg Global Risk On/Risk Off Index 51.9 +2.3%
  • Euro/Yen Carry Return Index 150.0 -1.0%
  • Emerging Markets Currency Volatility(VXY) 12.6 +.5%
  • CBOE S&P 500 Implied Correlation Index 53.7 +4.1% 
  • ISE Sentiment Index 108.0 +17.0 points
  • Total Put/Call .95 -9.5%
  • NYSE Arms .60 -13.0%
Credit Investor Angst:
  • North American Investment Grade CDS Index 95.9 -2.8%
  • US Energy High-Yield OAS 391.97 +.78%
  • Bloomberg TRACE # Distressed Bonds Traded 426.0 -7.0
  • European Financial Sector CDS Index 135.90 -.14% 
  • Credit Suisse Subordinated 5Y Credit Default Swap 355.34 -.3%
  • Italian/German 10Y Yld Spread 233.0 basis points -2.0 basis points
  • Asia Ex-Japan Investment Grade CDS Index 217.06 +3.6%
  • Emerging Market CDS Index 314.01 -3.1%
  • China Corp. High-Yield Bond USD ETF(KHYB) 24.5 -.65%
  • 2-Year Swap Spread 38.25 basis points -.5 basis point
  • TED Spread 39.0 basis points +12.5 basis points
  • 3-Month EUR/USD Cross-Currency Basis Swap -62.75 basis points -3.25 basis points
  • MBS  5/10 Treasury Spread  172.0 -2.0 basis points
  • iShares CMBS ETF 44.91 +.19%
  • Avg. Auto ABS OAS .91 unch.
Economic Gauges:
  • Bloomberg Emerging Markets Currency Index 46.4 +.20%
  • 3-Month T-Bill Yield 3.96% -1.0 basis point
  • Yield Curve -28.0 basis points (2s/10s) +10.75 basis points
  • China Iron Ore Spot 91.60 USD/Metric Tonne +.1%
  • Dutch TTF Nat Gas(European benchmark) 113.6 euros/megawatt-hour -10.7%
  • Citi US Economic Surprise Index 25.5 unch.
  • Citi Eurozone Economic Surprise Index 22.3 +1.3 points
  • Citi Emerging Markets Economic Surprise Index -6.4 -.7 point
  • S&P 500 Blended Forward 12 Months Mean EPS Estimate 234.26 -.18:  Growth Rate +15.1% unch., P/E 15.9 +.2
  • Bloomberg US Financial Conditions Index -1.19 -7.0 basis points
  • US Atlanta Fed GDPNow Forecast +2.85% unch.
  • Cleveland Fed Inflation Nowcast Core PCE YoY +5.16% unch.: CPI YoY +8.14% unch.
  • 10-Year TIPS Spread 2.56 +8.0 basis points
  • Highest target rate probability for December 14th FOMC meeting: 51.7%(+27.5 percentage points) chance of 4.25%-4.5%. Highest target rate probability for February 1st meeting: 46.8%(-2.7 percentage points) chance of 4.75%-5.0%.
US Covid-19:
  • 126 new infections/100K people(last 7 days total). 7.2%(+2.8 percentage points) of 1/14/22 peak(1,740) +38/100K people from prior report.
  • New Covid-19 patient hospital admissions per 100K population -85.3%(-.0 percentage point) from peak 7-day avg. of 1/9/22 - 1/15/22
Overseas Futures:
  • Nikkei 225 Futures: Indicating +139 open in Japan 
  • China A50 Futures: Indicating +67 open in China
  • DAX Futures: Indicating +46 open in Germany
Portfolio:
  • Slightly Higher:  On gains in my commodity/tech/industrial/medical sector longs
  • Disclosed Trades:  Covered some of my (IWM)/(QQQ) hedges and some of my emerging market shorts
  • Market Exposure:  Moved to 75% Net Long

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