BETWEEN THE HEDGES: April 2025

Wednesday, April 02, 2025

Thursday Watch

Posted by Gary .....at 8:54 PM

Night Trading

Asian equity indices are -2.0% to -1.0% on average.

Asia Ex-Japan Investment Grade CDS Index 89.75 +7.25 basis points.

China Sovereign CDS 53.5 +2.0 basis points.
China Iron Ore Spot 101.4 USD/Metric Tonne -1.4%

Bloomberg Emerging Markets Currency Index 36.8 +.02%.
Bloomberg Global Risk-On/Risk Off Index 66.3 +.2%.
Volatility Index(VIX) futures 22.0 +10.0%.
Euro Stoxx 50 futures -1.9%.

S&P 500 futures -2.9%.

NASDAQ 100 futures -3.6%.

Morning Preview Links

BOTTOM LINE: Asian indices are lower, weighed down by technology and consumer discretionary shares in the region. I expect US stocks to open sharply lower and to maintain losses into the afternoon. The Portfolio is 25% net long heading into the day.

Stocks Reversing Slightly Higher into Final Hour on US Economic Data, Dollar Weakness, Short-Covering, Consumer Discretionary/Transport Sector Weakness

Posted by Gary .....at 3:30 PM

Economic Gauges:

Bloomberg Emerging Markets Currency Index 36.8 -.03%
3-Month T-Bill Yield 4.30% +1.0 basis point

China Iron Ore Spot 102.5 USD/Metric Tonne -.3%
Dutch TTF Nat Gas(European benchmark) 41.3 euros/megawatt-hour -2.8%

Citi US Economic Surprise Index -4.8 +3.2 points

Citi Eurozone Economic Surprise Index 11.7 -.3 point

Citi Emerging Markets Economic Surprise Index 6.1 -.9 point
S&P 500 Current Quarter EPS Growth Rate YoY(16 of 500 reporting) +8.4% unch.
S&P 500 Blended Forward 12 Months Mean EPS Estimate 278.48 +.04: Growth Rate +13.5% +.1 percentage point, P/E 20.3 unch.
S&P 500 Current Year Estimated Profit Margin 13.57% +1.0 basis point
NYSE FANG+ Current Quarter EPS Growth Rate YoY(0 of 10 reporting) n/a
NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 418.61 +.15: Growth Rate +21.1% +.1 percentage point, P/E 28.1 +.2
Bloomberg US Financial Conditions Index .08 +2.0 basis points
Bloomberg Euro-Zone Financial Conditions Index 1.41 +6.0 basis points
US Yield Curve 28.5 basis points (2s/10s) -.5 basis point
US Atlanta Fed GDPNow Q1 Forecast -3.7% unch.
US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 37.7% unch.

Cleveland Fed Inflation Nowcast Core PCE YoY +2.68% unch.: CPI YoY +2.49% unch.
10-Year TIPS Spread 2.33 -1.0 basis point
Highest target rate probability for June 18th FOMC meeting: 57.6% (-4.7 percentage points) chance of 4.5%-4.25%. Highest target rate probability for July 30th meeting: 44.0%(+6.0 percentage points) chance of 4.0%-4.25%. (current target rate is 4.25-4.5%)

Overseas Futures:

Nikkei 225 Futures: Indicating +215 open in Japan
China A50 Futures: Indicating -36 open in China

DAX Futures: Indicating +176 open in Germany

Portfolio:

Higher: On gains in my consumer discretionary/industrial/tech/utility/financial sector longs
Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges, then added them back
Market Exposure: 75% Net Long

Tomorrow's Earnings/Economic Releases of Note; Market Movers

Posted by Gary .....at 3:12 PM

Earnings of Note
Company/Estimate

Before the Open:

(AYI)/3.69
(CAG)/.52
(LW)/.86
(LNN)/1.89
(MSM)/.68

After the Close:

(GES)/1.37
(APOG)/.88

Economic Releases

7:30 am EST

Challenger Job Cuts YoY for March.

8:30 am EST

The Trade Deficit for Feb. is estimated at --123.5B versus -$131.4B in Jan.
Initial Jobless Claims for last week is estimated to rise to 225K versus 224K the prior week.
Continuing Claims is estimated to rise to 1870K versus 1856K prior.

9:45 am EST

Final S&P Global US PMI readings for March.

10:00 am EST

ISM Services Index for March is estimated to fall to 52.9 versus 53.5 in Feb.
ISM Prices Paid for March is estimated to rise to 63.1 versus 62.6 in Feb.

Upcoming Splits

None of note

Other Potential Market Movers

The Fed's Cook speaking, Fed's Jefferson speaking, Atlanta Fed GDPNow 1Q update, OPEC meeting, weekly EIA natural gas inventory report, Fed's weekly balance sheet report and the JPMorgan Retail Round Up Conference could also impact global trading tomorrow.

US Equity Market Hours

9:30 am - 4:00 pm EST

Mid-Day Market Internals

Posted by Gary .....at 12:09 PM

NYSE Composite Index:

Volume Running -14.5% Below 100-Day Average
Nasdaq/NYSE Volume Ratio 22.9 +7.6
5 Sectors Declining, 6 Sectors Rising
56.9% of Issues Advancing, 40.4% Declining
TRIN/Arms .94 -23.6%
Non-Block Money Flow -$300.9M
20 New 52-Week Highs, 86 New Lows
35.9% (+1.0%) of Issues Above 200-day Moving Average
Average 14-Day RSI 47.2 +1.1

Other:

Bloomberg Global Risk-On/Risk-Off Index 68.2 -.4%
Bloomberg Cyclicals/Defensives Index 234.6 +.7%
Russell 1000: Growth/Value 19,379.6 +.1%
CNN Fear & Greed Index 17.0 (EXTREME FEAR) -1.0
1-Day Vix 23.3 +16.3%
Vix 21.9 +.7%
Total Put/Call .93 +3.3%

Tuesday, April 01, 2025

Wednesday Watch

Posted by Gary .....at 9:08 PM

Around X:

@elonmusk

“Do not talk about the Biden matter”. NEW INTERNAL FBI CHAT LOGS SHOW THE FBI IMPOSED A “GAG ORDER” ABOUT THE NY POST STORY ON HUNTER BIDEN’S LAPTOP THE DAY IT CAME OUT. Wow!
#BREAKING: per CNN, Democrats in Congress now have a whopping 21% approval rating. Democrats are self-combusting. (video)

@nicksortor

#BREAKING: Trump-endorsed Randy Fine has won, and will be the next Congressman for Florida’s 6th Congressional district HUGE win for the Trump agenda, as we now have an extra Republican vote in the House LFG! Democrats poured over $10 million into the race, but still got blown out of the water.
JUST IN: Epstein victim Virginia Giuffre says she has only FOUR DAYS to live after being hit by a bus. Giuffre has accused Prince Andrew of repeatedly r*ping her, via Epstein, as a teen. She’s suffering from kidney failure following the wreck. (video)

@MJTruthUltra

VINDICATED! Florida Makes History Banning Weather Modification on the State, passing Bill HB477 with Unanimous 17-0 Vote! “I’m not here to make you believe Chemtrails exist…” but it does, and they’ve been spraying harmful chemicals and heavy metals on us, our food, our crops, and it causes major health issues. Details about the bill:

@catturd2

Is there anything more worthless on planet earth than the Republican Congress? ZERO President Trump’s executive orders passed into law with the majority. Another week of rogue judges destroying our agenda. Another week of a handful of Republicans voting with Democrats. Another week off for the laziest people in the USA. All you guys care about is your own pet projects.

@LeadingReport

BREAKING: Elon Musk says the U.S. government “deleted a terabyte of financial data to cover their crimes,” but “they don’t understand technology, so we recovered it.”

@ImMeme0

BREAKING: Project Veritas’ undercover video exposes a covert rebellion within NASA and the State Department, where employees are defying President Trump’s executive orders to dismantle DEI initiatives by rebranding them under new names. “They cancelled DEI stuff, but people just did it and called it something else. Work around the rules.” (video)

@WallStreetApes

Hundreds of people showed up to the courthouse to show their outrage for Texas allowing an all Muslim City to be built called Epic City. “Locals poured in by the hundreds complaining loud, we will not accept this”. UPDATE: Epic City responded. “Nobody’s gonna stop what’s coming”. They are moving forward, “If you look at Epic City YouTube page, they've already already responded saying Nobody's gonna stop what's coming and they're not backing down and they're not gonna stop. They seem to imply that funding's in place.” “It looks like some local government, the local mayor and other local people may be involved”. (video)

@charliekirk11

A young man was just rejected from every college he applied to except for UMass Amherst despite a 1580 SAT, being valedictorian of his class, getting 18 5s on AP tests, and having his own startup website making thousands of dollars a year. Obviously, this kid is talented enough to succeed without needing any credential. But why are we giving hundreds of billions of dollars to universities so stupid they won't offer this kid an admission because of his skin color (and let's be honest, that's why he was rejected everywhere)? Defund the college scam.

@Liz_churchill10

THIS was Marine Le Pen winning her first round as France outright rejected WEF’s Macron. THIS is why they’re banning her from elections and why she’s being sent to Prison. (video)

@MikeBenzCyber

Unreal. They took out the opposition. Marine Le Pen, who is currently leading in opinion polls for the 2027 election in France, has been sentenced to 4 years in prison and banned from running in the next election. If people perceive — rightly — that democracy is a farce, & anyone who runs against the order will be arrested, they’ll not only want to tear it down, they’ll seek an honest autocracy over false democracy. (pic)

Night Trading

Asian equity indices are -.5% to +.25% on average.

Asia Ex-Japan Investment Grade CDS Index 82.5 +3.75 basis points.

China Sovereign CDS 51.5 +.5 basis point.
China Iron Ore Spot 103.0 USD/Metric Tonne +.06%

Bloomberg Emerging Markets Currency Index 36.8 -.02%.
Bloomberg Global Risk-On/Risk Off Index 68.6 +.1%.
Volatility Index(VIX) futures 20.7 +.9%.
Euro Stoxx 50 futures -.29%.

S&P 500 futures -.08%.

NASDAQ 100 futures -.09%.

Morning Preview Links

BOTTOM LINE: Asian indices are mostly lower, weighed down by industrial and financial shares in the region. I expect US stocks to open modestly lower and to rally into the afternoon, finishing mixed. The Portfolio is 75% net long heading into the day.

Stocks Slightly Lower into Final Hour on Global Growth Worries, US Economic Data, Trade War Uncertainty, Airline/Pharma Sector Weakness

Posted by Gary .....at 3:19 PM

Economic Gauges:

Bloomberg Emerging Markets Currency Index 36.8 -.05%
3-Month T-Bill Yield 4.29% -1.0 basis point

China Iron Ore Spot 103.0 USD/Metric Tonne +.11%
Dutch TTF Nat Gas(European benchmark) 42.5 euros/megawatt-hour +4.4%

Citi US Economic Surprise Index -8.0 -3.6 points

Citi Eurozone Economic Surprise Index 12.0 -6.4 points

Citi Emerging Markets Economic Surprise Index 7.0 -1.0 point
S&P 500 Current Quarter EPS Growth Rate YoY(16 of 500 reporting) +8.4% unch.
S&P 500 Blended Forward 12 Months Mean EPS Estimate 278.44 +.07: Growth Rate +13.4% unch., P/E 20.3 +.3
S&P 500 Current Year Estimated Profit Margin 13.56% -1.0 basis point
NYSE FANG+ Current Quarter EPS Growth Rate YoY(0 of 10 reporting) n/a
NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 418.46 +.19: Growth Rate +21.0% unch., P/E 27.9 +.7
Bloomberg US Financial Conditions Index .06 -3.0 basis points
Bloomberg Euro-Zone Financial Conditions Index 1.35 -2.0 basis points
US Yield Curve 29.0 basis points (2s/10s) -3.75 basis points
US Atlanta Fed GDPNow Q1 Forecast -3.7% -90.0 basis points
US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 37.7% +1.8 percentage points

Cleveland Fed Inflation Nowcast Core PCE YoY +2.68% unch.: CPI YoY +2.49% +2.0 basis points
10-Year TIPS Spread 2.34 -6.0 basis points
Highest target rate probability for June 18th FOMC meeting: 62.5% (-2.0 percentage points) chance of 4.5%-4.25%. Highest target rate probability for July 30th meeting: 44.7%(+2.1 percentage points) chance of 3.75%-4.0%. (current target rate is 4.25-4.5%)

Overseas Futures:

Nikkei 225 Futures: Indicating +26 open in Japan
China A50 Futures: Indicating -38 open in China

DAX Futures: Indicating +111 open in Germany

Portfolio:

Higher: On gains in my consumer discretionary/industrial/tech sector longs and index hedges
Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges
Market Exposure: Moved to 50% Net Long

Bear Radar

Posted by Gary .....at 2:36 PM

Style Underperformer:

Small-Cap Growth -.7%

Sector Underperformers:

1) Airlines -2.5% 2) Pharma -2.5% 3) Biotech -2.5%

Stocks Falling on Unusual Volume:

SRPT, SHC, AAL, TKR, WPP, MRUS, SRRK, EE, JNJ, RCI, HROW, PHH, PTCT, GPCR, BEAM, KYMR, DNLI, NAMS, MLYS, IDYA, NRIX, PCVX and CORT

Stocks With Unusual Put Option Activity:

1) CMPX 2) RKT 3) SMMT 4) ONON 5) PARA

Stocks With Most Negative News Mentions:

1) FDCT 2) PRGS 3) PVH 4) CLPT 5) AEO

Sector ETFs With Most Negative Money Flow:

1) IGV 2) FXD 3) XLK 4) XLI 5) IBB

Charts:

Bull Radar

Posted by Gary .....at 1:25 PM

Style Outperformer:

Large-Cap Growth +.7%

Sector Outperformers:

1) Social Media +1.7% 2) Retail +1.4% 3) Shipping +1.4%

Stocks Rising on Unusual Volume:

CRWV, PVH, HSAI, HUT, PRGS, IONQ, OKLO, FWRG, NBIS, LEU, RIVN, TSLA, CLPT, IBTA, SKBL, MNDY, RDDT, TCMD, SMR, ZIM, APLS, CBRL, DAKT, LEVI, RKT, RBLX, MSTR, SRAD, TTD, AEO, DJT, CYD, QXO, PAHC, DSP, FINV, ALGM, COOP, OS, ENVA, CAL, CAKE, WING, VRT, LLYVK, BJRI, SIG, RUSHA, ZLAB, DUOL,EZPW, INMD, CEPU, MXL, CMRE, EGO, APP, PPC, PPC, MP, MXL, RL, KAR, ESAB, VIST, SGI, GAP, PRAA, VFC and VCTR

Stocks With Unusual Call Option Activity:

1) FLUT 2) SABR 3) EWY 4) MVST 5) PRMW

Stocks With Most Positive News Mentions:

1) NUTX 2) PVH 3) CAPS 4) PRGS 5) FWRG

Sector ETFs With Most Positive Money Flow:

1) FXU 2) XLE 3) XLF 4) XLU 5) XLV