Thursday, February 15, 2024

Stocks Rising into Final Hour on US Economic Data, Stable Long-Term Rates, Earnings Outlook Optimism, Financial/Commodity Sector Strength

Broad Equity Market Tone:

  • Advance/Decline Line: Substantially Higher
  • Sector Performance: Almost Every Sector Gaining
  • Volume: Above Average
  • Market Leading Stocks: Outperforming
Equity Investor Angst:
  • Volatility(VIX) 14.5 +.5%
  • DJIA Intraday % Swing .70 +17.5%
  • Bloomberg Global Risk On/Risk Off Index 71.9 +22.0%
  • Euro/Yen Carry Return Index 174.5 -.02%
  • Emerging Markets Currency Volatility(VXY) 6.7 -2.2%
  • CBOE S&P 500 Implied Correlation Index 16.7 -1.8% 
  • ISE Sentiment Index 147.0 -5.0
  • Total Put/Call .89 -5.3%
  • NYSE Arms 1.14 +18.8% 
  • NYSE Non-Block Money Flow +$257.3M 
Credit Investor Angst:
  • North American Investment Grade CDS Index 52.7 -2.8%
  • US Energy High-Yield OAS 307.7 -.91%
  • Bloomberg TRACE # Distressed Bonds Traded 306 +6
  • European Financial Sector CDS Index 67.3 -1.4% 
  • Deutsche Bank Subordinated 5Y Credit Default Swap 211.83 -.02%
  • Italian/German 10Y Yld Spread 150.0 basis points -2.0 basis points
  • Asia Ex-Japan Investment Grade CDS Index 101.75 -.8%
  • Emerging Market CDS Index 176.40 -2.0%
  • Israel Sovereign CDS 114.4 -1.7%
  • China Corp. High-Yield Bond USD ETF(KHYB) 24.6 +.24%
  • 2-Year SOFR Swap Spread -11.75 basis points -.75 basis point
  • Treasury Repo 3M T-Bill Spread 7.25 basis points unch.
  • 3-Month EUR/USD Cross-Currency Basis Swap -5.25 +.75 basis point
  • MBS  5/10 Treasury Spread 154.0 -5.0 basis points
  • Bloomberg CMBS Investment Grade Bbb Average OAS 842.0 -1.0 basis point
  • Avg. Auto ABS OAS 65.0 unch.
Economic Gauges:
  • Bloomberg Emerging Markets Currency Index 40.4 +.05%
  • 3-Month T-Bill Yield 5.37% unch.
  • China Iron Ore Spot 129.2 USD/Metric Tonne -.19%
  • Dutch TTF Nat Gas(European benchmark) 25.0 euros/megawatt-hour +.44%
  • Citi US Economic Surprise Index 45.8 -1.4 points
  • Citi Eurozone Economic Surprise Index 34.6 unch.
  • Citi Emerging Markets Economic Surprise Index -2.4 -2.1 points
  • S&P 500 Current Quarter EPS Growth Rate YoY(388 of 500 reporting) +4.9% -.8 percentage point
  • S&P 500 Blended Forward 12 Months Mean EPS Estimate 245.84 +.14:  Growth Rate +11.1% +.1 percentage point, P/E 20.4 +.4
  • S&P 500 Current Year Estimated Profit Margin 11.23% -1.0 basis point
  • NYSE FANG+ Current Quarter EPS Growth Rate YoY(7 of 10 reporting) +44.2% unch.
  • NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 306.74 +.35: Growth Rate +43.8% +.2 percentage point, P/E 32.0 +.3
  • Bloomberg US Financial Conditions Index 1.08 +3.0 basis points
  • Bloomberg Euro-Zone Financial Conditions Index .85 -4.0 basis points
  • US Yield Curve -32.75 basis points (2s/10s) -2.0 basis points
  • US Atlanta Fed 1Q GDPNow Forecast +3.4% unch.
  • US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 56.2% +1.1 percentage points
  • Cleveland Fed Inflation Nowcast Core PCE YoY +2.74% unch.: CPI YoY +3.06% unch.
  • 10-Year TIPS Spread 2.30 unch.
  • Highest target rate probability for May 1st FOMC meeting: 61.4%(-.3 percentage point) chance of 5.25%-5.5%. Highest target rate probability for June 12th meeting: 53.7%(-.1 percentage points) chance of 5.0%-5.25%.
Overseas Futures:
  • Nikkei 225 Futures: Indicating +440 open in Japan 
  • China A50 Futures: Indicating -23 open in China
  • DAX Futures: Indicating +160 open in Germany
Portfolio:
  • Higher:  On gains in my tech/consumer discretionary/industrial/biotech/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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