Tuesday, August 20, 2024

Stocks Slightly Lower into Final Hour on Rising China Economic Concerns, Yen Strength, Technical Selling, Energy/Financial 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) 15.8 +8.1%
  • DJIA Intraday % Swing .32 -44.5%
  • Bloomberg Global Risk On/Risk Off Index 52.8 -1.4%
  • Euro/Yen Carry Return Index 178.3 -.45%
  • Emerging Markets Currency Volatility(VXY) 8.54 +.23%
  • CBOE S&P 500 Implied Correlation Index 14.0 +4.4% 
  • ISE Sentiment Index 155.0 +1.0
  • Total Put/Call .82 +10.8%
  • NYSE Arms 1.20 +71.4%
  • NYSE Non-Block Money Flow -$159.3M 
Credit Investor Angst:
  • North American Investment Grade CDS Index 51.2 +.88%
  • US Energy High-Yield OAS 301.3 +2.4%
  • Bloomberg TRACE # Distressed Bonds Traded 268 +13
  • European Financial Sector CDS Index 61.6 +1.6%
  • Deutsche Bank Subordinated 5Y Credit Default Swap 165.1 +.44%
  • Italian/German 10Y Yld Spread 138.0 basis points +.75 basis point
  • Asia Ex-Japan Investment Grade CDS Index 92.5 -2.1%
  • Emerging Market CDS Index 163.1 +1.5%
  • Israel Sovereign CDS 142.1 -.82%
  • China Corp. High-Yield Bond USD ETF(KHYB) 25.1 -.04%
  • 2-Year SOFR Swap Spread -20.5 basis points unch.
  • Treasury Repo 3M T-Bill Spread -14.25 basis points -3.5 basis points
  • 3-Month EUR/USD Cross-Currency Basis Swap -1.75 unch.
  • MBS  5/10 Treasury Spread 140.0 +1.0 basis point
  • Bloomberg CMBS Investment Grade Bbb Average OAS 696.0 +1.0 basis point
  • Avg. Auto ABS OAS 66.0 unch.
Economic Gauges:
  • Bloomberg Emerging Markets Currency Index 39.1 -.3%
  • 3-Month T-Bill Yield 5.17% -3.0 basis points
  • China Iron Ore Spot 96.3 USD/Metric Tonne +.9%
  • Dutch TTF Nat Gas(European benchmark) 38.0 euros/megawatt-hour -4.7%
  • Citi US Economic Surprise Index -40.5 -1.3 points
  • Citi Eurozone Economic Surprise Index -60.3 -.8
  • Citi Emerging Markets Economic Surprise Index -11.8 -.7 point
  • S&P 500 Current Quarter EPS Growth Rate YoY(467 of 500 reporting) +8.4% -.1 percentage point
  • S&P 500 Blended Forward 12 Months Mean EPS Estimate 264.14 -.02:  Growth Rate +15.7% unch., P/E 21.2 +.1
  • S&P 500 Current Year Estimated Profit Margin 12.65% -1.0 basis point
  • NYSE FANG+ Current Quarter EPS Growth Rate YoY(7 of 10 reporting) +26.3% unch.
  • NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 343.54 +.26: Growth Rate +28.1% +.1 percentage point, P/E 33.3 +.4
  • Bloomberg US Financial Conditions Index .89 +1.0 basis point
  • Bloomberg Euro-Zone Financial Conditions Index .76 -5.0 basis points
  • US Yield Curve -18.25 basis points (2s/10s) +2.25 basis points
  • US Atlanta Fed 3Q GDPNow Forecast +1.99% unch.
  • US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 68.0% -.6 percentage point
  • Cleveland Fed Inflation Nowcast Core PCE YoY +2.64% unch.: CPI YoY +2.59% -1.0 basis point
  • 10-Year TIPS Spread 2.07 unch.
  • Highest target rate probability for Nov. 7th FOMC meeting: 53.8%(-7.5 percentage points) chance of 4.75%-5.0%. Highest target rate probability for Dec. 18th meeting: 44.5%(+1.4 percentage points) chance of 4.25%-4.5%.
Overseas Futures:
  • Nikkei 225 Futures: Indicating -310 open in Japan 
  • China A50 Futures: Indicating -42 open in China
  • DAX Futures: Indicating +63 open in Germany
Portfolio:
  • Slightly Lower:  On losses in my consumer discretionary/industrial sector longs
  • Disclosed Trades: None
  • Market Exposure: 100% Net Long

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