Tuesday, December 26, 2023

Stocks Modestly Higher into Afternoon on Stable Long-Term Rates, Year-End Window-Dressing, Short-Covering, Energy/Financial Sector Strength

Broad Equity Market Tone:
  • Advance/Decline Line: Substantially Higher
  • Sector Performance: Most Sectors Rising
  • Volume: Light
  • Market Leading Stocks: Outperforming
Equity Investor Angst:
  • Volatility(VIX) 13.2 +1.5%
  • DJIA Intraday % Swing .42% -3.5%
  • Bloomberg Global Risk On/Risk Off Index 56.2 +.8%
  • Euro/Yen Carry Return Index 168.9 +.34%
  • Emerging Markets Currency Volatility(VXY) 7.89 -.5%
  • CBOE S&P 500 Implied Correlation Index 20.0 -1.1% 
  • ISE Sentiment Index 169.0 +40.0
  • Total Put/Call .88 +1.2%
  • NYSE Arms 1.1 -3.5% 
  • NYSE Non-Block Money Flow +$171.7M 
Credit Investor Angst:
  • North American Investment Grade CDS Index 55.76 +.3%
  • US Energy High-Yield OAS 335.72 -.95%
  • Bloomberg TRACE # Distressed Bonds Traded 293 -26
  • European Financial Sector CDS Index 67.6 -1.9% 
  • Deutsche Bank Subordinated 5Y Credit Default Swap 208.35 +.01%
  • Italian/German 10Y Yld Spread 158.0 basis points unch.
  • Asia Ex-Japan Investment Grade CDS Index 90.9 +.38%
  • Emerging Market CDS Index 166.49 -.21%
  • Israel Sovereign CDS 111.2 +.82%
  • China Corp. High-Yield Bond USD ETF(KHYB) 24.0 -.12%
  • 2-Year SOFR Swap Spread -21.75 basis points +.25 basis point
  • TED Spread 23.75 basis points -2.75 basis points
  • 3-Month EUR/USD Cross-Currency Basis Swap -9.0 unch.
  • MBS  5/10 Treasury Spread 141.0 -3.0 basis points
  • Bloomberg CMBS Investment Grade Bbb Average OAS 961.0 -2.0 basis points
  • Avg. Auto ABS OAS 77.0 -2.0 basis points
Economic Gauges:
  • Bloomberg Emerging Markets Currency Index 41.7 -.07%
  • 3-Month T-Bill Yield 5.36% +1.0 basis point
  • China Iron Ore Spot 139.5 USD/Metric Tonne -.6%
  • Dutch TTF Nat Gas(European benchmark) 34.20 euros/megawatt-hour unch.
  • Citi US Economic Surprise Index 14.3 -3.9 points
  • Citi Eurozone Economic Surprise Index -42.2 +.7 point
  • Citi Emerging Markets Economic Surprise Index 16.2 -2.1 points
  • S&P 500 Current Quarter EPS Growth Rate YoY(17 of 500 reporting) +13.5% unch.
  • S&P 500 Blended Forward 12 Months Mean EPS Estimate 242.93 +.18:  Growth Rate +11.6% +.1 percentage point, P/E 19.6 unch.
  • S&P 500 Current Year Estimated Profit Margin 12.04% unch.
  • NYSE FANG+ Current Quarter EPS Growth Rate YoY(0 of 10 reporting) +0.0% -0.0 percentage points
  • NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 288.53 +.60: Growth Rate +35.3% +.3 percentage point, P/E 30.4 unch.
  • Bloomberg US Financial Conditions Index n/a
  • Bloomberg Euro-Zone Financial Conditions Index .46 +73.0 basis points
  • US Yield Curve -45.5 basis points (2s/10s) -2.25 basis points
  • US Atlanta Fed 4Q GDPNow Forecast +2.26% -42.0 basis points
  • US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 64.9% -2.8 percentage points
  • Cleveland Fed Inflation Nowcast Core PCE YoY +3.02% unch.: CPI YoY +3.33% unch.
  • 10-Year TIPS Spread 2.19 -1.0 basis point
  • Highest target rate probability for March 20th FOMC meeting: 72.7%(-2.9 percentage points) chance of 5.0%-5.25%. Highest target rate probability for May 1st meeting: 71.8%(-1.8 percentage points) chance of 4.75%-5.0%.
Overseas Futures:
  • Nikkei 225 Futures: Indicating +119 open in Japan 
  • China A50 Futures: Indicating +1 open in China
  • DAX Futures: Indicating n/a open in Germany
Portfolio:
  • Slightly Higher:  On gains in my tech/industrial/transport/utility/consumer discretionary sector longs
  • Disclosed Trades: None
  • Market Exposure: 50% Net Long

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