Thursday, February 29, 2024

Stocks Finish at Session Highs on US Economic Data, Lower Long-Term Rates, Earnings Outlook Optimism, Tech/Transport Sector Strength

Broad Equity Market Tone:

  • Advance/Decline Line: Higher
  • Sector Performance: Most Sectors Rising
  • Volume: Above Average
  • Market Leading Stocks: Outperforming
Equity Investor Angst:
  • Volatility(VIX) 13.4 -2.9%
  • DJIA Intraday % Swing .68 +32.5%
  • Bloomberg Global Risk On/Risk Off Index 71.6 -1.2%
  • Euro/Yen Carry Return Index 175.4 -.8%
  • Emerging Markets Currency Volatility(VXY) 6.2 -1.4%
  • CBOE S&P 500 Implied Correlation Index 16.0 -.7% 
  • ISE Sentiment Index 143.0 +7.0
  • Total Put/Call .94 +10.6%
  • NYSE Arms 1.29 +25.5% 
  • NYSE Non-Block Money Flow +$127.5M 
Credit Investor Angst:
  • North American Investment Grade CDS Index 52.3 -1.0%
  • US Energy High-Yield OAS 303.3 -.8%
  • Bloomberg TRACE # Distressed Bonds Traded 292 +13
  • European Financial Sector CDS Index 64.1 -1.4% 
  • Deutsche Bank Subordinated 5Y Credit Default Swap 211.4 +.9%
  • Italian/German 10Y Yld Spread 143.0 basis points unch.
  • Asia Ex-Japan Investment Grade CDS Index 98.3 -.23%
  • Emerging Market CDS Index 165.9 -1.5%
  • Israel Sovereign CDS 123.9 +3.0%
  • China Corp. High-Yield Bond USD ETF(KHYB) 24.7 +.21%
  • 2-Year SOFR Swap Spread -10.25 basis points unch.
  • Treasury Repo 3M T-Bill Spread 7.75 basis points -1.75 basis points
  • 3-Month EUR/USD Cross-Currency Basis Swap -4.75 +.75 basis point
  • MBS  5/10 Treasury Spread 156.0 unch.
  • Bloomberg CMBS Investment Grade Bbb Average OAS 826.0 unch.
  • Avg. Auto ABS OAS 65.0 +1.0 basis point
Economic Gauges:
  • Bloomberg Emerging Markets Currency Index 40.2 +.06%
  • 3-Month T-Bill Yield 5.38% -1.0 basis point
  • China Iron Ore Spot 118.0 USD/Metric Tonne +1.3%
  • Dutch TTF Nat Gas(European benchmark) 24.9 euros/megawatt-hour -2.9%
  • Citi US Economic Surprise Index 40.6 +2.8 points
  • Citi Eurozone Economic Surprise Index 37.3 +2.1 points
  • Citi Emerging Markets Economic Surprise Index 8.8 +11.0 points
  • S&P 500 Current Quarter EPS Growth Rate YoY(485 of 500 reporting) +7.8% +.1 percentage point
  • S&P 500 Blended Forward 12 Months Mean EPS Estimate 247.02 +.05:  Growth Rate +10.8% unch., P/E 20.6 unch.
  • S&P 500 Current Year Estimated Profit Margin 12.84% unch.
  • NYSE FANG+ Current Quarter EPS Growth Rate YoY(9 of 10 reporting) +57.3% +.1 percentage point
  • NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 314.63 -.28: Growth Rate +30.6% -16.9 percentage points, P/E 31.2 -.6
  • Bloomberg US Financial Conditions Index 1.08 -5.0 basis points
  • Bloomberg Euro-Zone Financial Conditions Index .92 unch.
  • US Yield Curve -37.5 basis points (2s/10s) +1.0 basis point
  • US Atlanta Fed 1Q GDPNow Forecast +3.0% -.3 percentage point
  • US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 52.4% unch.
  • Cleveland Fed Inflation Nowcast Core PCE YoY +2.72% -2.0 basis points: CPI YoY +3.12% unch.
  • 10-Year TIPS Spread 2.32 -1.0 basis point
  • Highest target rate probability for May 1st FOMC meeting: 78.9%(-2.4 percentage points) chance of 5.25%-5.5%. Highest target rate probability for June 12th meeting: 54.1%(+1.4 percentage points) chance of 5.0%-5.25%.
Overseas Futures:
  • Nikkei 225 Futures: Indicating +545 open in Japan 
  • China A50 Futures: Indicating -51 open in China
  • DAX Futures: Indicating +115 open in Germany
Portfolio:
  • Higher:  On gains in my consumer discretionary/industrial/tech/transport sector longs
  • Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges
  • Market Exposure: Moved to 100% Net Long

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