Monday, April 01, 2024

Stocks Reversing Lower into Final Hour on Surging Long-Term Rates, Dollar Strength, Technical Selling, Regional Bank/Telecom Sector Weakness

Broad Equity Market Tone:

  • Advance/Decline Line: Substantially Lower
  • Sector Performance: Most Sectors Declining
  • Volume: Below Average
  • Market Leading Stocks: Underperforming
Equity Investor Angst:
  • Volatility(VIX) 14.0 +7.5%
  • DJIA Intraday % Swing .81 +146.1%
  • Bloomberg Global Risk On/Risk Off Index 66.7 -1.0%
  • Euro/Yen Carry Return Index 176.8 -.3%
  • Emerging Markets Currency Volatility(VXY) 6.5 +.8%
  • CBOE S&P 500 Implied Correlation Index 14.2 +7.4% 
  • ISE Sentiment Index 137.0 +11.0
  • Total Put/Call .92 -24.6%
  • NYSE Arms .79 unch.
  • NYSE Non-Block Money Flow -$194.9M 
Credit Investor Angst:
  • North American Investment Grade CDS Index 52.1 +1.2%
  • US Energy High-Yield OAS 279.4 -.38%
  • Bloomberg TRACE # Distressed Bonds Traded 284 -2
  • European Financial Sector CDS Index 63.4 +.03%
  • Deutsche Bank Subordinated 5Y Credit Default Swap 186.2 +.42%
  • Italian/German 10Y Yld Spread 138.0 basis points +6.0 basis points
  • Asia Ex-Japan Investment Grade CDS Index 102.2 -.26%
  • Emerging Market CDS Index 168.4 -.15%
  • Israel Sovereign CDS 117.7 -.01%
  • China Corp. High-Yield Bond USD ETF(KHYB) 24.6 -.06%
  • 2-Year SOFR Swap Spread -8.75 basis points -1.0 basis point
  • Treasury Repo 3M T-Bill Spread 5.0 basis points -.5 basis point
  • 3-Month EUR/USD Cross-Currency Basis Swap -4.25 -.25 basis point
  • MBS  5/10 Treasury Spread 142.0 +6.0 basis points
  • Bloomberg CMBS Investment Grade Bbb Average OAS 788.0 +3.0 basis points
  • Avg. Auto ABS OAS 61.0 +1.0 basis point
Economic Gauges:
  • Bloomberg Emerging Markets Currency Index 39.6 +.01%
  • 3-Month T-Bill Yield 5.37% +1.0 basis point
  • China Iron Ore Spot 102.7 USD/Metric Tonne +1.4%
  • Dutch TTF Nat Gas(European benchmark) 27.4 euros/megawatt-hour unch.
  • Citi US Economic Surprise Index 39.0 +8.3 points
  • Citi Eurozone Economic Surprise Index 37.0 -4.8 points
  • Citi Emerging Markets Economic Surprise Index 22.8 +4.1 points
  • S&P 500 Current Quarter EPS Growth Rate YoY(16 of 500 reporting) +43.6% -4.1 percentage points
  • S&P 500 Blended Forward 12 Months Mean EPS Estimate 250.50 +.46:  Growth Rate +12.3% +.3 percentage point, P/E 20.9 unch.
  • S&P 500 Current Year Estimated Profit Margin 12.86% +2.0 basis points
  • NYSE FANG+ Current Quarter EPS Growth Rate YoY(0 of 10 reporting) +n/a
  • NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 312.12 +.48: Growth Rate +29.9% +.2 percentage point, P/E 32.1 unch.
  • Bloomberg US Financial Conditions Index 1.08 -3.0 basis points
  • Bloomberg Euro-Zone Financial Conditions Index 1.0 -5.0 basis points
  • US Yield Curve -38.75 basis points (2s/10s) -1.0 basis point
  • US Atlanta Fed 1Q GDPNow Forecast +2.8% +70.0 basis points
  • US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 55.9% -.8 percentage point
  • Cleveland Fed Inflation Nowcast Core PCE YoY +2.67% -11.0 basis points: CPI YoY +3.41% unch.
  • 10-Year TIPS Spread 2.35 +4.0 basis points
  • Highest target rate probability for June 12th FOMC meeting: 56.9%(+1.7 percentage points) chance of 5.0%-5.25%. Highest target rate probability for July 31st meeting: 48.1%(+3.5 percentage points) chance of 5.0%-5.25%.
Overseas Futures:
  • Nikkei 225 Futures: Indicating +203 open in Japan 
  • China A50 Futures: Indicating +9 open in China
  • DAX Futures: Indicating +283 open in Germany
Portfolio:
  • Slightly Lower:  On losses in my consumer discretionary/financial/industrial/transport sector longs
  • Disclosed Trades: Added to my (IWM)/(QQQ) hedges
  • Market Exposure: Moved to 75% Net Long

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