Thursday, February 22, 2024

Stocks Finish Substantially Higher on Earnings Outlook Optimism, US Economic Data, Technical Buying, Tech/Biotech Sector Strength

Broad Equity Market Tone:

  • Advance/Decline Line: Substantially Higher
  • Sector Performance: Almost Every Sector Rising
  • Volume: Around Average
  • Market Leading Stocks: Performing In Line
Equity Investor Angst:
  • Volatility(VIX) 14.6 -5.0%
  • DJIA Intraday % Swing .50 +20.3%
  • Bloomberg Global Risk On/Risk Off Index 72.8 +2.4%
  • Euro/Yen Carry Return Index 176.2 +.2%
  • Emerging Markets Currency Volatility(VXY) 6.4 -.9%
  • CBOE S&P 500 Implied Correlation Index 17.3 -3.9% 
  • ISE Sentiment Index 150.0 +13.0
  • Total Put/Call .94 -13.8%
  • NYSE Arms 1.36 +74.7% 
  • NYSE Non-Block Money Flow +$170.M 
Credit Investor Angst:
  • North American Investment Grade CDS Index 50.8 -3.6%
  • US Energy High-Yield OAS 292.50 -2.9%
  • Bloomberg TRACE # Distressed Bonds Traded 261 -10
  • European Financial Sector CDS Index 64.4 -2.8% 
  • Deutsche Bank Subordinated 5Y Credit Default Swap 207.5 -2.6%
  • Italian/German 10Y Yld Spread 148.0 basis points -1.0 basis point
  • Asia Ex-Japan Investment Grade CDS Index 96.2 -1.9%
  • Emerging Market CDS Index 168.9 -4.0%
  • Israel Sovereign CDS 119.9 -3.9%
  • China Corp. High-Yield Bond USD ETF(KHYB) 24.79 +.28%
  • 2-Year SOFR Swap Spread -14.0 basis points -1.25 basis points
  • Treasury Repo 3M T-Bill Spread 10.0 basis points +3.75 basis points
  • 3-Month EUR/USD Cross-Currency Basis Swap -5.5 -.25 basis point
  • MBS  5/10 Treasury Spread 158.0 +1.0 basis point
  • Bloomberg CMBS Investment Grade Bbb Average OAS 836.0 +2.0 basis points
  • Avg. Auto ABS OAS 65.0 unch.
Economic Gauges:
  • Bloomberg Emerging Markets Currency Index 40.3 -.1%
  • 3-Month T-Bill Yield 5.40% +4.0 basis points
  • China Iron Ore Spot 120.8 USD/Metric Tonne +.9%
  • Dutch TTF Nat Gas(European benchmark) 23.2 euros/megawatt-hour -3.3%
  • Citi US Economic Surprise Index 43.8 +3.5 points
  • Citi Eurozone Economic Surprise Index 41.4 +7.1 points
  • Citi Emerging Markets Economic Surprise Index -4.2 -1.7 points
  • S&P 500 Current Quarter EPS Growth Rate YoY(438 of 500 reporting) +6.7% +1.9 percentage points
  • S&P 500 Blended Forward 12 Months Mean EPS Estimate 246.39 +.11:  Growth Rate +11.6% +.4 percentage point, P/E 20.6 +.4
  • S&P 500 Current Year Estimated Profit Margin 12.81% +163.0 basis points
  • NYSE FANG+ Current Quarter EPS Growth Rate YoY(8 of 10 reporting) +57.2% +13.0 percentage points
  • NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 309.0 +.46: Growth Rate +44.9% +.3 percentage point, P/E 32.3 +1.4
  • Bloomberg US Financial Conditions Index 1.07 +7.0 basis points
  • Bloomberg Euro-Zone Financial Conditions Index .81 +43.0 basis points
  • US Yield Curve -39.0 basis points (2s/10s) -4.5 basis points
  • US Atlanta Fed 1Q GDPNow Forecast +2.9% unch.
  • US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 52.7% -3.5 percentage points
  • Cleveland Fed Inflation Nowcast Core PCE YoY +2.74% unch.: CPI YoY +3.11% unch.
  • 10-Year TIPS Spread 2.31 -4.0 basis points
  • Highest target rate probability for May 1st FOMC meeting: 73.4%(+5.7 percentage points) chance of 5.25%-5.5%. Highest target rate probability for June 12th meeting: 52.0%(-.9 percentage point) chance of 5.0%-5.25%.
Overseas Futures:
  • Nikkei 225 Futures: Indicating +327 open in Japan 
  • China A50 Futures: Indicating -6 open in China
  • DAX Futures: Indicating +52 open in Germany
Portfolio:
  • Higher:  On gains in my tech/industrial/biotech/consumer discretionary/transport sector longs
  • Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges and some of my emerging market shorts
  • Market Exposure: Moved to 100% Net Long

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