Thursday, February 06, 2025

Stocks Slightly Higher into Final Hour on Stable Long-Term Rates, Earnings Outlook Optimism, Technical Buying, Construction/Road & Rail Sector Strength

Broad Equity Market Tone:

  • Advance/Decline Line: Modestly Lower
  • Sector Performance: Mixed
  • Volume: Above Average
  • Market Leading Stocks: Performing In Line
Equity Investor Angst:
  • Volatility(VIX) 15.5 -2.0%
  • S&P 500 Intraday % Swing .32 -56.3%.
  • Bloomberg Global Risk On/Risk Off Index 71.4 +1.4%
  • Euro/Yen Carry Return Index 175.5 -1.0%
  • Emerging Markets Currency Volatility(VXY) 8.5 -.8%
  • CBOE S&P 500 Implied Correlation Index 12.6 +2.5% 
  • ISE Sentiment Index 194.0 +42.0 points
  • Total Put/Call .79 -1.3%
  • NYSE Arms 1.21 -28.8%
  • NYSE Non-Block Money Flow -$39.0M 
Credit Investor Angst:
  • North American Investment Grade CDS Index 48.0 +.4%
  • US Energy High-Yield OAS 283.8 +.3%
  • Bloomberg TRACE # Distressed Bonds Traded 177 +3
  • European Financial Sector CDS Index 58.9 -1.3%
  • Deutsche Bank Subordinated 5Y Credit Default Swap 142.0 -.7%
  • Italian/German 10Y Yld Spread 107.0 basis points -3.0 basis points
  • Asia Ex-Japan Investment Grade CDS Index 75.8 -2.0%
  • Emerging Market CDS Index 158.0 +.3%
  • Israel Sovereign CDS 84.8 -.7%
  • China Corp. High-Yield Bond USD ETF(KHYB) 23.96 +.2%
  • 2-Year SOFR Swap Spread -15.5 basis points -.25 basis point
  • 3M T-Bill Treasury Repo Spread .5 basis point +3.0 basis points
  • 3-Month EUR/USD Cross-Currency Basis Swap -.5 +1.25 basis points
  • MBS  5/10 Treasury Spread 136.0 -1.0 basis point
  • Bloomberg CMBS Investment Grade Bbb Average OAS 606.0 -1.0 basis point
  • Avg. Auto ABS OAS 47.0 +1.0 basis point
Economic Gauges:
  • Bloomberg Emerging Markets Currency Index 37.2 +.2%
  • 3-Month T-Bill Yield 4.32% +1.0 basis point
  • China Iron Ore Spot 106.20 USD/Metric Tonne +.2%
  • Dutch TTF Nat Gas(European benchmark) 54.5 euros/megawatt-hour +2.0%
  • Citi US Economic Surprise Index 7.7 -2.5 points
  • Citi Eurozone Economic Surprise Index 5.2 +7.2 points
  • Citi Emerging Markets Economic Surprise Index 12.7 +2.7 points
  • S&P 500 Current Quarter EPS Growth Rate YoY(293 of 500 reporting) +12.2% +.2 percentage point
  • S&P 500 Blended Forward 12 Months Mean EPS Estimate 273.94 +.02:  Growth Rate +15.6% unch., P/E 22.2 +.2
  • S&P 500 Current Year Estimated Profit Margin 11.87% -4.0 basis points
  • NYSE FANG+ Current Quarter EPS Growth Rate YoY(6 of 10 reporting) +19.7% unch.
  • NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 401.91 unch.: Growth Rate +30.0% unch., P/E 34.2 +.1
  • Bloomberg US Financial Conditions Index .78 +4.0 basis points
  • Bloomberg Euro-Zone Financial Conditions Index 1.74 -2.0 basis points
  • US Yield Curve 22.75 basis points (2s/10s) -.5 basis point
  • US Atlanta Fed GDPNow Q1 Forecast +2.89% -99.0 basis points
  • US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 26.5% -.6 percentage point
  • Cleveland Fed Inflation Nowcast Core PCE YoY +2.52% unch.: CPI YoY +2.85% unch.
  • 10-Year TIPS Spread 2.41 unch.
  • Highest target rate probability for May 7th FOMC meeting: 62.2% (+3.4 percentage points) chance of 4.25%-4.5%. Highest target rate probability for June 18th meeting: 45.8%(+.1 percentage point) chance of 4.0%-4.25%. (current target rate is 4.25-4.5%)
Overseas Futures:
  • Nikkei 225 Futures: Indicating -125 open in Japan 
  • China A50 Futures: Indicating -35 open in China
  • DAX Futures: Indicating +70 open in Germany
Portfolio:
  • Higher: On gains in my tech/industrial/financial sector longs
  • Disclosed Trades: None
  • Market Exposure: 100% Net Long

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