Wednesday, June 14, 2023

Stocks Finish Slightly Higher on Fed Pause, Loosening US Financial Conditions, FANG+ Stock Frenzy, Tech/Transport Sector Strength

Broad Equity Market Tone:

  • Advance/Decline Line: Substantially Lower
  • Sector Performance: Almost Sectors Declining
  • Volume: Around Average
  • Market Leading Stocks: Performing In Line
Equity Investor Angst:
  • Volatility(VIX) 14.5 -.7%
  • DJIA Intraday % Swing 1.09%
  • Bloomberg Global Risk On/Risk Off Index 62.4 +.6%
  • Euro/Yen Carry Return Index 159.1 +.1%
  • Emerging Markets Currency Volatility(VXY) 9.3 -.64%
  • CBOE S&P 500 Implied Correlation Index 20.0 -2.3% 
  • ISE Sentiment Index 111.0 -24.0 points
  • Total Put/Call .75 -5.1%
  • NYSE Arms 1.07 +72.6%
Credit Investor Angst:
  • North American Investment Grade CDS Index 70.7 +.68%
  • US Energy High-Yield OAS 376.71 +.79%
  • Bloomberg TRACE # Distressed Bonds Traded 404.0 -15.0
  • European Financial Sector CDS Index 89.67 +1.1% 
  • Deutsche Bank Subordinated 5Y Credit Default Swap 290.25 +.89%
  • Italian/German 10Y Yld Spread 164.0 basis points +1.0 basis point
  • Asia Ex-Japan Investment Grade CDS Index 112.4 -.84%
  • Emerging Market CDS Index 213.9 -.18%
  • China Corp. High-Yield Bond USD ETF(KHYB) 26.6 +.85%
  • 2-Year Swap Spread 21.0 basis points +.75 basis point
  • TED Spread 31.5 basis points -2.75 basis points
  • 3-Month EUR/USD Cross-Currency Basis Swap -20.25 -2.75 basis points
  • MBS  5/10 Treasury Spread 164.0 +6.0 basis points
  • Bloomberg CMBS Investment Grade Bbb Average OAS 729.0 -2.0 basis points
  • Avg. Auto ABS OAS 84.0 -1.0 basis point
Economic Gauges:
  • Bloomberg Emerging Markets Currency Index 45.23 +.31%
  • 3-Month T-Bill Yield 5.22% +1.0 basis point
  • China Iron Ore Spot 111.2 USD/Metric Tonne -.4%
  • Dutch TTF Nat Gas(European benchmark) 38.3 euros/megawatt-hour  +6.2%
  • Citi US Economic Surprise Index 19.5 +.8 point
  • Citi Eurozone Economic Surprise Index -91.2 -1.4 points
  • Citi Emerging Markets Economic Surprise Index 10.0 -.1 point
  • S&P 500 Current Quarter EPS Growth Rate YoY(499 of 500 reporting) -2.7% unch.
  • S&P 500 Blended Forward 12 Months Mean EPS Estimate 230.50 -.09:  Growth Rate +3.1% unch., P/E 19.0 +.1
  • S&P 500 Current Year Estimated Profit Margin 12.24% unch.
  • NYSE FANG+ Current Quarter EPS Growth Rate YoY(10 of 10 reporting) -2.7% unch.
  • NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 207.93 +.19: Growth Rate +36.6% +.1 percentage point, P/E 37.1 +.2
  • Bloomberg US Financial Conditions Index .14 +10.0 basis points
  • Bloomberg Euro-Zone Financial Conditions Index -4.10 +7.0 basis points
  • US Yield Curve -92.5 basis points (2s/10s) -6.0 basis points
  • US Atlanta Fed 2Q GDPNow Forecast +2.20% unch.
  • Cleveland Fed Inflation Nowcast Core PCE YoY +4.70% unch.: CPI YoY +3.22% unch.
  • 10-Year TIPS Spread 2.22 +1.0 basis point
  • Highest target rate probability for Sept. 20th FOMC meeting: 57.6%(-.7 percentage point) chance of 5.25%-5.5%. Highest target rate probability for  Nov. 1st meeting: 54.2%(+4.3 percentage points) chance of 5.25%-5.5%.
Overseas Futures:
  • Nikkei 225 Futures: Indicating +28 open in Japan 
  • China A50 Futures: Indicating +49 open in China
  • DAX Futures: Indicating -23 open in Germany
Portfolio:
  • Higher:  On gains in my tech/medical sector longs and index hedges
  • Disclosed Trades:  Added to my (IWM)/(QQQ) hedges, then covered some
  • Market Exposure: 50% Net Long

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