Thursday, April 11, 2024

Stocks Higher into Final Hour on More Dovish Fed Commentary, AI-Related FANG Stock Optimism, Technical Buying, Tech/Homebuilding Sector Strength

Broad Equity Market Tone:

  • Advance/Decline Line: Higher
  • Sector Performance: Most Sectors Rising
  • Volume: Below Average
  • Market Leading Stocks: Performing In Line
Equity Investor Angst:
  • Volatility(VIX) 15. -4.8%
  • DJIA Intraday % Swing .97 +20.0%
  • Bloomberg Global Risk On/Risk Off Index 69.4 +1.7%
  • Euro/Yen Carry Return Index 178.8 -.1%
  • Emerging Markets Currency Volatility(VXY) 6.7 +1.2%
  • CBOE S&P 500 Implied Correlation Index 16.8 -5.4% 
  • ISE Sentiment Index 122.0 +15.0
  • Total Put/Call 1.0 -2.0%
  • NYSE Arms 1.08 +42.1%
  • NYSE Non-Block Money Flow +$145.9M 
Credit Investor Angst:
  • North American Investment Grade CDS Index 52.6 -.86%
  • US Energy High-Yield OAS 263.55 +.98%
  • Bloomberg TRACE # Distressed Bonds Traded 273 -11
  • European Financial Sector CDS Index 63.7 +1.9%
  • Deutsche Bank Subordinated 5Y Credit Default Swap 187.1 +2.1%
  • Italian/German 10Y Yld Spread 141.0 basis points +4.0 basis points
  • Asia Ex-Japan Investment Grade CDS Index 105.7 +2.3%
  • Emerging Market CDS Index 174.0 +2.0%
  • Israel Sovereign CDS 126.7 -.8%
  • China Corp. High-Yield Bond USD ETF(KHYB) 24.6 -.08%
  • 2-Year SOFR Swap Spread -8.5 basis points -.25 basis point
  • Treasury Repo 3M T-Bill Spread 9.5 basis points +.75 basis point
  • 3-Month EUR/USD Cross-Currency Basis Swap -3.5 unch.
  • MBS  5/10 Treasury Spread 148.0 unch.
  • Bloomberg CMBS Investment Grade Bbb Average OAS 775.0 -3.0 basis points
  • Avg. Auto ABS OAS 57.0 -2.0 basis points
Economic Gauges:
  • Bloomberg Emerging Markets Currency Index 39.6 -.01%
  • 3-Month T-Bill Yield 5.40% unch.
  • China Iron Ore Spot 107.9 USD/Metric Tonne -.34%
  • Dutch TTF Nat Gas(European benchmark) 29.4 euros/megawatt-hour +8.4%
  • Citi US Economic Surprise Index 41.1 +.2 point
  • Citi Eurozone Economic Surprise Index 34.9 -.6 point
  • Citi Emerging Markets Economic Surprise Index 33.8 +3.3 points
  • S&P 500 Current Quarter EPS Growth Rate YoY(23 of 500 reporting) +38.0% -2.1 percentage points
  • S&P 500 Blended Forward 12 Months Mean EPS Estimate 251.56 +.06:  Growth Rate +12.7% unch., P/E 20.5 unch.
  • S&P 500 Current Year Estimated Profit Margin 12.86% -1.0 basis point
  • NYSE FANG+ Current Quarter EPS Growth Rate YoY(0 of 10 reporting) +n/a
  • NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 313.13 +.44: Growth Rate +30.3% +.2 percentage point, P/E 32.4 +.4
  • Bloomberg US Financial Conditions Index 1.11 +9.0 basis points
  • Bloomberg Euro-Zone Financial Conditions Index .95 +8.0 basis points
  • US Yield Curve -38.0 basis points (2s/10s) +3.5 basis points
  • US Atlanta Fed 1Q GDPNow Forecast +2.4% -10.0 basis points
  • US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 42.2% +.5 percentage point
  • Cleveland Fed Inflation Nowcast Core PCE YoY +2.74% unch.: CPI YoY +3.43% unch.
  • 10-Year TIPS Spread 2.40 -1.0 basis point
  • Highest target rate probability for June 12th FOMC meeting: 77.4%(-6.1 percentage points) chance of 5.25%-5.5%. Highest target rate probability for July 31st meeting: 51.8%(-5.8 percentage points) chance of 5.25%-5.5%.
Overseas Futures:
  • Nikkei 225 Futures: Indicating +233 open in Japan 
  • China A50 Futures: Indicating -12 open in China
  • DAX Futures: Indicating +320 open in Germany
Portfolio:
  • Slightly Higher:  On gains in my consumer discretionary/tech/transport/industrial sector longs
  • Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges
  • Market Exposure: Moved to 50% Net Long

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