Tuesday, July 18, 2023

Stocks Rising into Close on Earnings Outlook Optimism, More Dovish Fed Hopes, AI Stock Frenzy, Tech/Financial Sector Strength

Broad Equity Market Tone:

  • Advance/Decline Line: Higher
  • Sector Performance: Most Sectors Rising
  • Volume: Around Average
  • Market Leading Stocks: Outperforming
Equity Investor Angst:
  • Volatility(VIX) 13.5 +.15%
  • DJIA Intraday % Swing 1.32%
  • Bloomberg Global Risk On/Risk Off Index 63.7 -1.8%
  • Euro/Yen Carry Return Index 164.5 +.08%
  • Emerging Markets Currency Volatility(VXY) 8.5 +1.6%
  • CBOE S&P 500 Implied Correlation Index 15.7 -5.4% 
  • ISE Sentiment Index 116.0 -13.0 points
  • Total Put/Call .75 -10.7%
  • NYSE Arms 1.0 -9.1%
Credit Investor Angst:
  • North American Investment Grade CDS Index 65.1 -1.8%
  • US Energy High-Yield OAS 340.2 -2.6%
  • Bloomberg TRACE # Distressed Bonds Traded 397.0 +7.0
  • European Financial Sector CDS Index 80.1 -2.1% 
  • Deutsche Bank Subordinated 5Y Credit Default Swap 266.8 -1.1%
  • Italian/German 10Y Yld Spread 163.0 basis points -4.0 basis points
  • Asia Ex-Japan Investment Grade CDS Index 109.8 -1.1%
  • Emerging Market CDS Index 202.5 -1.1%
  • China Corp. High-Yield Bond USD ETF(KHYB) 25.8 -.62%
  • 2-Year Swap Spread 21.75 basis points unch.
  • TED Spread 19.75 basis points -2.0 basis points
  • 3-Month EUR/USD Cross-Currency Basis Swap -12.75 unch.
  • MBS  5/10 Treasury Spread 160.0 -2.0 basis points
  • Bloomberg CMBS Investment Grade Bbb Average OAS 715.0 unch.
  • Avg. Auto ABS OAS 78.0 unch.
Economic Gauges:
  • Bloomberg Emerging Markets Currency Index 43.5 -.65%
  • 3-Month T-Bill Yield 5.38% unch.
  • China Iron Ore Spot 113.6 USD/Metric Tonne -.12%
  • Dutch TTF Nat Gas(European benchmark) 27.1 euros/megawatt-hour  +7.8%
  • Citi US Economic Surprise Index 68.4 -6.4 points
  • Citi Eurozone Economic Surprise Index -128.0 +1.5 points
  • Citi Emerging Markets Economic Surprise Index -9.2 +1.0 point
  • S&P 500 Current Quarter EPS Growth Rate YoY(36 of 500 reporting) +11.0% -1.7 percentage points
  • S&P 500 Blended Forward 12 Months Mean EPS Estimate 231.50 +.17:  Growth Rate +3.5% unch., P/E 19.6 +.1
  • S&P 500 Current Year Estimated Profit Margin 12.18% +1.0 basis point
  • NYSE FANG+ Current Quarter EPS Growth Rate YoY(0 of 10 reporting) n/a
  • NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 216.97 +.10: Growth Rate +42.6% +.1 percentage point, P/E 37.5 +.3
  • Bloomberg US Financial Conditions Index .42 unch.
  • Bloomberg Euro-Zone Financial Conditions Index -4.32 -10.0 basis points
  • US Yield Curve -97.25 basis points (2s/10s) -3.75 basis points
  • US Atlanta Fed 2Q GDPNow Forecast +2.39% +10.0 basis points
  • Cleveland Fed Inflation Nowcast Core PCE YoY +4.19% unch.: CPI YoY +3.36% +1.0 basis point
  • 10-Year TIPS Spread 2.23 -3.0 basis points
  • Highest target rate probability for Sept. 20th FOMC meeting: 84.1%(-.4 percentage point) chance of 5.25%-5.5%. Highest target rate probability for  Nov. 1st meeting: 64.9%(-5.2 percentage points) chance of 5.25%-5.5%.
Overseas Futures:
  • Nikkei 225 Futures: Indicating +332 open in Japan 
  • China A50 Futures: Indicating -70 open in China
  • DAX Futures: Indicating +120 open in Germany
Portfolio:
  • Higher:  On gains in my tech/industrial sector longs
  • Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges
  • Market Exposure: Moved to 100% Net Long

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