Wednesday, April 23, 2025

Stocks Higher into Final Hour on Global Trade Deal Hopes, Diminished Fed Chairman Uncertainty, Stable Long-Term Rates, Tech/Financial Sector Strength

Broad Equity Market Tone:

  • Advance/Decline Line: Substantially Higher
  • Sector Performance: Almost Every Sector Rising
  • Volume: Above Average
  • Market Leading Stocks: Outperforming
Equity Investor Angst:
  • Volatility(VIX) 28.6 -6.4%
  • S&P 500 Intraday % Swing 2.1 +9.9%
  • Bloomberg Global Risk On/Risk Off Index 56.8 +5.7% 
  • Swiss Franc/Offshore Chinese Renminbi Cross 8.78 -1.6%
  • Euro/Yen Carry Return Index 182.3 +.44%
  • Emerging Markets Currency Volatility(VXY) 9.1 -1.1%
  • CBOE S&P 500 Implied Correlation Index 39.9 -3.7% 
  • ISE Sentiment Index 94.0 -27.0
  • Total Put/Call .88 +3.5%
  • NYSE Arms 1.50 +92.3%
  • NYSE Non-Block Money Flow +$43.3M 
Credit Investor Angst:
  • North American Investment Grade CDS Index 68.5 -5.3%
  • US Energy High-Yield OAS 444.7 -4.8%
  • Bloomberg TRACE # Distressed Bonds Traded 277.0 unch.
  • European Financial Sector CDS Index 73.5 -5.0%
  • Deutsche Bank Subordinated 5Y Credit Default Swap 174.1 -5.9%
  • Italian/German 10Y Yld Spread 113.0 basis points -4.0 basis points
  • Asia Ex-Japan Investment Grade CDS Index 99.5 -5.0%
  • Emerging Market CDS Index 200.6 -3.4%
  • Israel Sovereign CDS 106.2 -3.3%
  • China Corp. High-Yield Bond USD ETF(KHYB) 23.74 +.57%
  • 2-Year SOFR Swap Spread -24.0 basis points +2.0 basis points
  • 3M T-Bill Treasury Repo Spread 2.0 basis point +.75 basis point
  • 3-Month EUR/USD Cross-Currency Basis Swap -1.25 +.25 basis point
  • MBS  5/10 Treasury Spread 160.0 -1.0 basis point
  • Bloomberg CMBS Investment Grade Bbb Average OAS 644.0 -2.0 basis points
  • Avg. Auto ABS OAS 75.0 unch.
Economic Gauges:
  • Bloomberg Emerging Markets Currency Index 36.9 -.21% 
  • US 10-Year T-Note Yield 4.39% -1.0 basis point
  • 3-Month T-Bill Yield 4.31% +1.0 basis point
  • China Iron Ore Spot 100.3 USD/Metric Tonne +.01%
  • Dutch TTF Nat Gas(European benchmark) 34.2 euros/megawatt-hour -.3%
  • Citi US Economic Surprise Index -15.1 +5.1 points
  • Citi Eurozone Economic Surprise Index -13.3 -6.4 points
  • Citi Emerging Markets Economic Surprise Index 12.7 -1.2 points
  • S&P 500 Current Quarter EPS Growth Rate YoY(109 of 500 reporting) +5.7% -.4 percentage point
  • S&P 500 Blended Forward 12 Months Mean EPS Estimate 275.76 -.21:  Growth Rate +12.2% -.1 percentage point, P/E 19.6 +.4
  • S&P 500 Current Year Estimated Profit Margin 13.45% +4.0 basis points
  • NYSE FANG+ Current Quarter EPS Growth Rate YoY(1 of 10 reporting) +23.7% unch.
  • NYSE FANG+ Blended Forward 12 Months Mean EPS Estimate 418.13 +.03: Growth Rate +20.9% unch., P/E 27.7 +1.0
  • Bloomberg US Financial Conditions Index -.53 +14.0 basis points
  • Bloomberg Euro-Zone Financial Conditions Index .65 -57.0 basis points
  • Bloomberg Global Trade Policy Uncertainty Index 12.0 -.7
  • US Yield Curve 52.75 basis points (2s/10s) -5.25 basis points
  • US Atlanta Fed GDPNow Q1 Forecast -2.2% unch.
  • US Recession Within 6 Months Probability(3M/18M Forward Yld Curve Spread) 41.8% -.3 percentage point
  • Cleveland Fed Inflation Nowcast Core PCE YoY +2.54% unch.: CPI YoY +2.35% -3.0 basis points
  • 1-Year TIPS Spread 3.18 -4.0 basis points
  • 10-Year TIPS Spread 2.30 +3.0 basis points
  • Highest target rate probability for June 18th FOMC meeting: 55.5% (-8.6 percentage points) chance of 4.0%-4.25%. Highest target rate probability for July 30th meeting: 45.4%(+8.2 percentage points) chance of 4.0%-4.25%. (current target rate is 4.25-4.5%)
Overseas Futures:
  • Nikkei 225 Futures: Indicating +650 open in Japan 
  • China A50 Futures: Indicating +17 open in China
  • DAX Futures: Indicating +106 open in Germany
Portfolio:
  • Higher: On gains in my utility/consumer discretionary/industrial/tech sector longs
  • Disclosed Trades: Added to my (IWM)/(QQQ) hedges and then covered some
  • Market Exposure: 75% Net Long

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