Wednesday, February 19, 2025

Stocks Reversing Modestly Higher into Final Hour on Lower Long-Term Rates, Earnings Outlook Optimism, Short-Covering, Tech/Healthcare Sector Strength

Broad Equity Market Tone:

  • Advance/Decline Line: Modestly Lower
  • Sector Performance: Most Sectors Rising
  • Volume: Above Average
  • Market Leading Stocks: Underperforming
Equity Investor Angst:
  • Volatility(VIX) 15.5 +1.1%
  • S&P 500 Intraday % Swing .39 +15.6%.
  • Bloomberg Global Risk On/Risk Off Index 77.5 -.2%
  • Euro/Yen Carry Return Index 176.7 -.5%
  • Emerging Markets Currency Volatility(VXY) 7.72 -.1%
  • CBOE S&P 500 Implied Correlation Index 11.9 unch. 
  • ISE Sentiment Index 184.0 +7.0 points
  • Total Put/Call .89 +18.7%
  • NYSE Arms .90 +31.9%
  • NYSE Non-Block Money Flow -$254.0M 
Credit Investor Angst:
  • North American Investment Grade CDS Index 46.6 +.01%
  • US Energy High-Yield OAS 288.01 +.67%
  • Bloomberg TRACE # Distressed Bonds Traded 161.0 -13
  • European Financial Sector CDS Index 56.0 +.8%
  • Deutsche Bank Subordinated 5Y Credit Default Swap 135.5 +.8%
  • Italian/German 10Y Yld Spread 108.0 basis points +3.0 basis points
  • Asia Ex-Japan Investment Grade CDS Index 68.0 +2.7%
  • Emerging Market CDS Index 151.2 +.5%
  • Israel Sovereign CDS 88.1 +.06%
  • China Corp. High-Yield Bond USD ETF(KHYB) 24.2 +.17%
  • 2-Year SOFR Swap Spread -14.5 basis points +.5 basis point
  • 3M T-Bill Treasury Repo Spread -2.0 basis point -2.5 basis points
  • 3-Month EUR/USD Cross-Currency Basis Swap -.5 +.25 basis point
  • MBS  5/10 Treasury Spread 131.0 unch.
  • Bloomberg CMBS Investment Grade Bbb Average OAS 594.0 -5.0 basis points
  • Avg. Auto ABS OAS 47.0 unch.
Economic Gauges:
  • Bloomberg Emerging Markets Currency Index 37.3 -.09%
  • 3-Month T-Bill Yield 4.32% +1.0 basis point
  • China Iron Ore Spot 106.7 USD/Metric Tonne +.2%
  • Dutch TTF Nat Gas(European benchmark) 48.2 euros/megawatt-hour -1.9%
  • Citi US Economic Surprise Index .5 +.1 point
  • Citi Eurozone Economic Surprise Index 30.8 +4.8 points
  • Citi Emerging Markets Economic Surprise Index 3.0 -.5 point
  • S&P 500 Current Quarter EPS Growth Rate YoY(403 of 500 reporting) +10.6% unch.
  • S&P 500 Blended Forward 12 Months Mean EPS Estimate 275.14 unch.:  Growth Rate +16.1% unch., P/E 22.3 +.1
  • S&P 500 Current Year Estimated Profit Margin 11.87% +3.0 basis points
  • NYSE FANG+ Current Quarter EPS Growth Rate YoY(7 of 10 reporting) +26.6% unch.
  • NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 405.93 +.71: Growth Rate +31.3% +.3 percentage point, P/E 34.2 -.1
  • Bloomberg US Financial Conditions Index .86 +5.0 basis points
  • Bloomberg Euro-Zone Financial Conditions Index 1.65 -48.0 basis points
  • US Yield Curve 26.0 basis points (2s/10s) +1.75 basis points
  • US Atlanta Fed GDPNow Q1 Forecast +2.34% unch.
  • US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 23.9% -1.1 percentage points
  • Cleveland Fed Inflation Nowcast Core PCE YoY +2.66% unch.: CPI YoY +2.82% +1.0 basis point
  • 10-Year TIPS Spread 2.46 unch.
  • Highest target rate probability for May 7th FOMC meeting: 87.3% (+1.7 percentage points) chance of 4.25%-4.5%. Highest target rate probability for June 18th meeting: 53.4%(-1.7 percentage points) chance of 4.25%-4.5%. (current target rate is 4.25-4.5%)
Overseas Futures:
  • Nikkei 225 Futures: Indicating -149 open in Japan 
  • China A50 Futures: Indicating -22 open in China
  • DAX Futures: Indicating +55 open in Germany
Portfolio:
  • Slightly Higher: On gains in my tech/utility/industrial sector longs and emerging market shorts
  • Disclosed Trades: None
  • Market Exposure: 100% Net Long

No comments: