Tuesday, February 27, 2024

Stocks Reversing Slightly Higher into Final Hour on US Economic Data, Earnings Outlook Optimism, Short-Covering, Retail/Alt Energy Sector Strength

Broad Equity Market Tone:

  • Advance/Decline Line: Higher
  • Sector Performance: Mixed
  • Volume: Around Average
  • Market Leading Stocks: Outperforming
Equity Investor Angst:
  • Volatility(VIX) 13.6 -1.3%
  • DJIA Intraday % Swing .53 -6.7%
  • Bloomberg Global Risk On/Risk Off Index 73.2 +1.9%
  • Euro/Yen Carry Return Index 176.6 -.2%
  • Emerging Markets Currency Volatility(VXY) 6.2 -2.7%
  • CBOE S&P 500 Implied Correlation Index 15.7 -2.3% 
  • ISE Sentiment Index 200.0 +60.0
  • Total Put/Call .95 -2.1%
  • NYSE Arms .65 -35.6% 
  • NYSE Non-Block Money Flow +$6.3M 
Credit Investor Angst:
  • North American Investment Grade CDS Index 52.2 -.3%
  • US Energy High-Yield OAS 300.1 +.7%
  • Bloomberg TRACE # Distressed Bonds Traded 266 +1
  • European Financial Sector CDS Index 65.1 +1.7% 
  • Deutsche Bank Subordinated 5Y Credit Default Swap 209.1 +1.4%
  • Italian/German 10Y Yld Spread 144.0 basis points -1.0 basis point
  • Asia Ex-Japan Investment Grade CDS Index 97.3 +2.2%
  • Emerging Market CDS Index 168.6 +.48%
  • Israel Sovereign CDS 120.5 +1.3%
  • China Corp. High-Yield Bond USD ETF(KHYB) 24.6 -.3%
  • 2-Year SOFR Swap Spread -10.5 basis points +3.5 basis points
  • Treasury Repo 3M T-Bill Spread 7.5 basis points -3.0 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 828.0 +3.0 basis points
  • Avg. Auto ABS OAS 66.0 unch.
Economic Gauges:
  • Bloomberg Emerging Markets Currency Index 40.2 +.2%
  • 3-Month T-Bill Yield 5.38% -3.0 basis points
  • China Iron Ore Spot 116.9 USD/Metric Tonne -.6%
  • Dutch TTF Nat Gas(European benchmark) 24.4 euros/megawatt-hour +1.6%
  • Citi US Economic Surprise Index 38.3 -3.9 points
  • Citi Eurozone Economic Surprise Index 47.1 +2.4 points
  • Citi Emerging Markets Economic Surprise Index -3.3 +2..5 points
  • S&P 500 Current Quarter EPS Growth Rate YoY(465 of 500 reporting) +7.4% +.3 percentage point
  • S&P 500 Blended Forward 12 Months Mean EPS Estimate 247.52 +.22:  Growth Rate +11.0% +1.0 percentage point, P/E 20.5 -.1
  • S&P 500 Current Year Estimated Profit Margin 12.84% unch.
  • NYSE FANG+ Current Quarter EPS Growth Rate YoY(8 of 10 reporting) +57.2% unch.
  • NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 314.74 +.56: Growth Rate +47.6% +.3 percentage point, P/E 31.9 unch.
  • Bloomberg US Financial Conditions Index 1.14 unch.
  • Bloomberg Euro-Zone Financial Conditions Index .92 -2.0 basis points
  • US Yield Curve -39.5 basis points (2s/10s) +4.75 basis points
  • US Atlanta Fed 1Q GDPNow Forecast +3.3% +.4 percentage point
  • US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 51.3% -.9 percentage point
  • Cleveland Fed Inflation Nowcast Core PCE YoY +2.74% unch.: CPI YoY +3.12% +1.0 basis point
  • 10-Year TIPS Spread 2.32 +1.0 basis point
  • Highest target rate probability for May 1st FOMC meeting: 84.2%(-3.0 percentage points) chance of 5.25%-5.5%. Highest target rate probability for June 12th meeting: 51.7%(-2.1 percentage points) chance of 5.0%-5.25%.
Overseas Futures:
  • Nikkei 225 Futures: Indicating +61 open in Japan 
  • China A50 Futures: Indicating +17 open in China
  • DAX Futures: Indicating +47 open in Germany
Portfolio:
  • Slightly Higher:  On gains in my biotech/consumer discretionary/tech sector longs
  • Disclosed Trades: None
  • Market Exposure: 75% Net Long

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