Tuesday, February 11, 2025

Stocks Reversing Slightly Higher into Final Hour on Fed's Powell Commentary, Earnings Outlook Optimism, Dollar Weakness, Energy/Financial Sector Strength

Broad Equity Market Tone:

  • Advance/Decline Line: Modestly Lower
  • Sector Performance: Most Sectors Declining
  • Volume: Around Average
  • Market Leading Stocks: Performing In Line
Equity Investor Angst:
  • Volatility(VIX) 16.0 +1.2%
  • S&P 500 Intraday % Swing .46 -2.5%.
  • Bloomberg Global Risk On/Risk Off Index 73.7 +1.8%
  • Euro/Yen Carry Return Index 176.5 +.8%
  • Emerging Markets Currency Volatility(VXY) 8.34 -1.9%
  • CBOE S&P 500 Implied Correlation Index 13.2 -2.3% 
  • ISE Sentiment Index 169.0 +14.0 points
  • Total Put/Call .80 +3.9%
  • NYSE Arms .95 -12.0%
  • NYSE Non-Block Money Flow -$188.2M 
Credit Investor Angst:
  • North American Investment Grade CDS Index 48.0 +.14%
  • US Energy High-Yield OAS 290.0 -.06%
  • Bloomberg TRACE # Distressed Bonds Traded 184.0 +7
  • European Financial Sector CDS Index 58.80 +.08%
  • Deutsche Bank Subordinated 5Y Credit Default Swap 141.8 -.11%
  • Italian/German 10Y Yld Spread 110.0 basis points +1.0 basis point
  • Asia Ex-Japan Investment Grade CDS Index 74.74 -.75%
  • Emerging Market CDS Index 157.2 +.01%
  • Israel Sovereign CDS 88.2 +3.7%
  • China Corp. High-Yield Bond USD ETF(KHYB) 24.04 +.13%
  • 2-Year SOFR Swap Spread -15.25 basis points +.25 basis point
  • 3M T-Bill Treasury Repo Spread -.75 basis point +.25 basis point
  • 3-Month EUR/USD Cross-Currency Basis Swap -.75 +.5 basis point
  • MBS  5/10 Treasury Spread 134.0 -1.0 basis point
  • Bloomberg CMBS Investment Grade Bbb Average OAS 603.0 +1.0 basis point
  • Avg. Auto ABS OAS 47.0 unch.
Economic Gauges:
  • Bloomberg Emerging Markets Currency Index 37.15 +.10%
  • 3-Month T-Bill Yield 4.32% -1.0 basis point
  • China Iron Ore Spot 106.2 USD/Metric Tonne +.3%
  • Dutch TTF Nat Gas(European benchmark) 57.8 euros/megawatt-hour -.5%
  • Citi US Economic Surprise Index .7 -1.5 points
  • Citi Eurozone Economic Surprise Index 10.6 +1.5 points
  • Citi Emerging Markets Economic Surprise Index 8.1 -1.6 points
  • S&P 500 Current Quarter EPS Growth Rate YoY(326 of 500 reporting) +12.0% -.4 percentage point
  • S&P 500 Blended Forward 12 Months Mean EPS Estimate 274.91 +.06:  Growth Rate +16.0% unch., P/E 22.0 unch.
  • S&P 500 Current Year Estimated Profit Margin 11.85% +2.0 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 404.18 +.38: Growth Rate +30.7% +.1 percentage point, P/E 33.9 -.3
  • Bloomberg US Financial Conditions Index .81 +4.0 basis points
  • Bloomberg Euro-Zone Financial Conditions Index 1.70 -4.0 basis points
  • US Yield Curve 24.5 basis points (2s/10s) +1.75 basis points
  • US Atlanta Fed GDPNow Q1 Forecast +2.94% unch.
  • US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 24.8% -.1 percentage point
  • Cleveland Fed Inflation Nowcast Core PCE YoY +2.52% unch.: CPI YoY +2.85% unch.
  • 10-Year TIPS Spread 2.46 +2.0 basis points
  • Highest target rate probability for May 7th FOMC meeting: 78.3% (+6.3 percentage points) chance of 4.25%-4.5%. Highest target rate probability for June 18th meeting: 49.0%(+2.6 percentage points) chance of 4.25%-4.5%. (current target rate is 4.25-4.5%)
Overseas Futures:
  • Nikkei 225 Futures: Indicating +301 open in Japan 
  • China A50 Futures: Indicating +16 open in China
  • DAX Futures: Indicating +153 open in Germany
Portfolio:
  • Slightly Lower: On losses in my tech/industrial sector longs
  • Disclosed Trades: None
  • Market Exposure: 75% Net Long

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