Tuesday, February 06, 2024

Stocks Slightly Higher into Final Hour on Lower Long-Term Rates, China Stimulus Hopes, Earnings Outlook Optimism, Alt Energy/Transport Sector Strength

Broad Equity Market Tone:

  • Advance/Decline Line: Higher
  • Sector Performance: Most Sectors Rising
  • Volume: Above Average
  • Market Leading Stocks: Performing In Line
Equity Investor Angst:
  • Volatility(VIX) 13.5 -1.5%
  • DJIA Intraday % Swing .51 -53.0%
  • Bloomberg Global Risk On/Risk Off Index 60.7 -.8%
  • Euro/Yen Carry Return Index 171.6 -.4%
  • Emerging Markets Currency Volatility(VXY) 7.1 -1.7%
  • CBOE S&P 500 Implied Correlation Index 18.3 +4.2% 
  • ISE Sentiment Index 149.0 unch.
  • Total Put/Call .74 -22.1%
  • NYSE Arms .79 -41.0% 
  • NYSE Non-Block Money Flow +$91.7M 
Credit Investor Angst:
  • North American Investment Grade CDS Index 55.19 +.02%
  • US Energy High-Yield OAS 326.5 +.34%
  • Bloomberg TRACE # Distressed Bonds Traded 333 +9
  • European Financial Sector CDS Index 70.6 +1.2% 
  • Deutsche Bank Subordinated 5Y Credit Default Swap 219.3 +5.1%
  • Italian/German 10Y Yld Spread 156.0 basis points -1.0 basis point
  • Asia Ex-Japan Investment Grade CDS Index 99.9 -.6%
  • Emerging Market CDS Index 178.49 -1.6%
  • Israel Sovereign CDS 124.1 -.63%
  • China Corp. High-Yield Bond USD ETF(KHYB) 24.49 unch.
  • 2-Year SOFR Swap Spread -13.75 basis points -.25 basis point
  • Treasury Repo 3M T-Bill Spread 6.0 basis points -1.5 basis points
  • 3-Month EUR/USD Cross-Currency Basis Swap -5.25 +.25 basis point
  • MBS  5/10 Treasury Spread 149.0 -4.0 basis points
  • Bloomberg CMBS Investment Grade Bbb Average OAS 858.0 -6.0 basis points
  • Avg. Auto ABS OAS 69.0 unch.
Economic Gauges:
  • Bloomberg Emerging Markets Currency Index 40.6 +.15%
  • 3-Month T-Bill Yield 5.36% -2.0 basis points
  • China Iron Ore Spot 125.5 USD/Metric Tonne +.4%
  • Dutch TTF Nat Gas(European benchmark) 28.6 euros/megawatt-hour +.9%
  • Citi US Economic Surprise Index 42.9 +.3 point
  • Citi Eurozone Economic Surprise Index 22.5 +13.5 points
  • Citi Emerging Markets Economic Surprise Index -1.7 +.7 point
  • S&P 500 Current Quarter EPS Growth Rate YoY(256 of 500 reporting) +4.2% unch.
  • S&P 500 Blended Forward 12 Months Mean EPS Estimate 244.98 -.01:  Growth Rate +10.7% unch., P/E 20.2 unch.
  • S&P 500 Current Year Estimated Profit Margin 11.40% +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 302.29 +.48: Growth Rate +41.7% +.2 percentage point, P/E 31.3 -.4
  • Bloomberg US Financial Conditions Index 1.03 +4.0 basis points
  • Bloomberg Euro-Zone Financial Conditions Index .70 -3.0 basis points
  • US Yield Curve -32.0 basis points (2s/10s) -.25 basis point
  • US Atlanta Fed 1Q GDPNow Forecast +4.2% unch.
  • US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 59.6% +1.6 percentage points
  • Cleveland Fed Inflation Nowcast Core PCE YoY +2.66% unch.: CPI YoY +2.96% unch.
  • 10-Year TIPS Spread 2.24 -2.0 basis points
  • Highest target rate probability for May 1st FOMC meeting: 54.3%(+.3 percentage point) chance of 5.0%-5.25%. Highest target rate probability for June 12th meeting: 51.5%(+4.0 percentage points) chance of 4.75%-5.0%.
Overseas Futures:
  • Nikkei 225 Futures: Indicating -200 open in Japan 
  • China A50 Futures: Indicating +17 open in China
  • DAX Futures: Indicating +87 open in Germany
Portfolio:
  • Higher:  On gains in my biotech/consumer discretionary/industrial/utility sector longs
  • Disclosed Trades: None
  • Market Exposure: 100% Net Long

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